UNITED
STATES
 SECURITIES
AND EXCHANGE COMMISSION
 Washington,
D.C. 20549
  FORM
10-K
  (Mark
one)
  x ANNUAL REPORT UNDER
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
  For
the fiscal year ended March 31, 2009
   ̈
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:  000-30841
  UNITED
ENERGY CORP.
 (Name
of registrant as specified in its charter)
  Nevada
              
              22-3342379(State
      or other jurisdiction of
                incorporation
      or organization)
              
              (I.R.S.
      Employer
                Identification
      No.)600
      Meadowlands Parkway, #20
                Secaucus,
      New Jersey
              
              07094(Address
      of principal
                executive
      offices)
              
              (Zip
      Code)
  (201)-842-0288
 (Registrant’s telephone
number, including area code)
  Securities
registered Under Section 12(b) of the Act
 Title of each
      class
              Name of each exchange
      on which registeredNone
              None
 
 
 Securities
registered Under Section 12(g) of the Act:
  Title of each
      classCommon
      Stock, par value
                $.01
      per share
 
  Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act. Yes o No x
  Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or 15(d) of the Act. Yes o No x
  Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.    Yes x  No o
  Indicate
by check mark whether the registrant 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 during the preceding
12 months (or for such shorter period that the registrant was required to submit
and post such files).  Yes o  No x
  Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K 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.  o
  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 o
              Accelerated
      filer oNon-accelerated
      filer oÿ(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 o No x
  The
aggregate market value of approximately 24,267,782 shares held by non-affiliates
of the registrant on September 30, 2008, based on the average bid and asked
price of the common shares on the OTC Bulletin Board of $0.21 per share on
September 30, 2008 was approximately $5,338,912.
  As of
July 14, 2009, the registrant had 31,030,115 common shares
outstanding.
  
  UNITED
ENERGY CORP.
 2008
FORM 10-K ANNUAL REPORT
 TABLE
OF CONTENTS
  Page
 PART
      IITEM
      1.
              DESCRIPTION
      OF BUSINESS
              1ITEM
      1A.
              RISK
      FACTORS
              4ITEM
      1B.
              UNRESOLVED
      STAFF COMMENTS
              9ITEM
      2.
              PROPERTIES
              9ITEM
      3.
              LEGAL
      PROCEEDINGS
              9ITEM
      4.
              SUBMISSION
      OF MATTERS TO A VOTE OF SECURITY HOLDERS
              9PART
      IIITEM
      5.
              MARKET
      FOR  REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS
      AND  ISSUER PURCHASES OF EQUITY SECURITIES
              10ITEM
      6.
              SELECTED
      FINANCIAL DATA
              11ITEM
      7.
              MANAGEMENT'S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATION
              11ITEM
      7A.
              QUANTITATIVE
      AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
              16ITEM
      8.
              FINANCIAL
      STATEMENTS AND SUPPLEMENTARY DATA
              16ITEM
      9.
              CHANGES
      IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
      DISCLOSURE
              16ITEM
      9A(T).
              CONTROLS
      AND PROCEDURES
              16ITEM
      9B.
              OTHER
      INFORMATION
              17PART
      IIIITEM
      10.
              DIRECTORS,
      EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE
              18ITEM
      11.
              EXECUTIVE
      COMPENSATION
              20ITEM
      12.
              SECURITY
      OWNERSHIP OF CERTAIN BENEFICIAL OWNERS ANDMANAGEMENT AND
      RELATED STOCKHOLDER MATTERS
              22ITEM
      13.
              CERTAIN
      RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
      INDEPENDENCE
              24ITEM
      14.
              PRINCIPAL
      ACCOUNTANT FEES AND SERVICES
              26PART
      IVITEM
      15.
              EXHIBITS,
      FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
              28
  
  PART
I
  ITEM
1. DESCRIPTION OF BUSINESS
  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. (“Green Globe”), 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 Chemical Products to our customers and generated revenues of $1,206,321
for the fiscal year ended March 31, 2009 and $1,042,320 for the fiscal year
ended March 31, 2008.
  Organizational
History
  We were
originally incorporated in Nevada in 1971 as Aztec Silver Mining Co. We engaged
in the manufacturing and distribution of printing equipment from 1995 through
1998.  During that period, we began to develop specialty chemical
products for use in the printing industry.  In March 1998, we
discontinued our printing equipment operations and changed our business focus to
the development of specialty chemical products. In March 2007, we discontinued
the sale of our Uniproof proofing paper.
  Business
Operations and Principal Products
  Our
principal products include our K-Line of Chemical Products for the oil industry
and our Green Globe Chemical Products, which consist of a variety of solvents,
paint strippers and cleaners.
  K-Line
of Chemical Products
  KH-30 is
a mixture of modified oils, dispersants and oil-based surfactants designed to
control paraffin and asphaltene deposits in oil wells.  When applied
in accordance with our recommended procedures, KH-30 has resulted in substantial
production increases in paraffin-affected oil and gas wells by allowing for a
faster penetration of paraffin and asphaltene deposits. KH-30 disperses and
suspends paraffin and asphaltene in a free-flowing state and prevents solids
from sticking to each other or to oil well equipment.   KH-30 is
patented in the United States and other major oil producing
countries.
 
 KX-100 is
a proprietary formula where contact time is limited for removal of a plug of
paraffin or asphaltene. It is fast acting and an effective dispersant that can
be used in temperatures as low as –25F.  It can be used in nearly any
application.
  SR-3
Scale and Rust Remover is a fast acting corrosion inhibited product developed to
remove both calcium carbonate and calcium sulfate salt deposits.  SR-3
is a broad spectrum, water-soluble scale remover designed to rapidly alleviate
hard and soft deposits and to restore full flow capacity.  The product
is also designed to remove rust while adding protection against further rusting
by providing a phosphatized surface on ferrous metals.
 
 HPD-1
PLUS is specifically formulated to offer prompt and effective remediation of
tough clogging problems with upper medium to high molecular weight paraffin. It
performs multi-functional characteristics to impart wettability, penetration and
dispersion, and is an exceptional solvency for paraffin rich heavy sludge with
the proper treatment dosage and application.
  
 
 GSA Gun
& Bore Cleaner is a proprietary formula, which is a safer, and more
effective bore and chamber cleaner. It can be used on everything from small
handguns to 16” guns. Currently, GSA Gun & Bore Cleaner is being marketed
and distributed by TopDuck Products LLC under their trademark “Gunzilla
BC-10”.
  Green
Globe Chemical Products
  Leak
Detection Compound Type I and II is a gas leak detection compound that is
compatible with oxygen.  It is intended for use in detecting leaks in
both high and low-pressure oxygen systems in aircraft and other related oxygen
systems
  Corrosion
Inhibitor is an additive intended for use with anti-freeze in water at a
concentration of 3% to retard corrosion.
  Corrosion
Removing Compound Type I, II and III are corrosion removing and metal
conditioning compounds, which when diluted with water, will remove rust from
ferrous metal surfaces.
  Ethylene
Glycol/Water Coolant is a mixture of Ethylene Glycol and distilled water to
provide a coolant mixture for use in radar domes used by the
military.
  NPX
Powder Coating is an effective reusable paint stripper.  NPX is a
powerful blend of chemicals which we believe will out perform all other aluminum
safe strippers in the powder coat industry and provide a safe method of
stripping metals, including magnesium, zinc, high strength steel and
titanium.  NPX does not contain any methylene chloride, phenol,
chromates or caustics.
  Green
Globe products are sold under the trade name QualchemTM. 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.
  Manufacturing
and Sales
  All of
the raw materials necessary for the manufacture of our products are generally
available from multiple sources. Although we have negotiated favorable
arrangements with some of our current suppliers, (which include Pride Solvents
and Chemical Co. of NJ Inc., Hy-Test Packaging Corp, and Air Products and
Chemicals), we would have to negotiate new arrangements if one or more of our
current suppliers were no longer able to supply these raw materials to
us.  We do not own any special manufacturing
facilities.  Our chemical products are generally manufactured by
contract blenders at a number of different locations.  This method of
manufacturing has reduced the need for us to invest in facilities and to hire
the employees to staff them.  Chemical blenders are relatively easy to
replace and are bound by confidentiality agreements, where appropriate, which
obligate them not to disclose or use our proprietary information.
  We are
not responsible for any environmental expenditure with respect to the
manufacturing of our products.  First, the chemical products that we
use are generally “environmentally friendly” products in that they are low in
toxicity and rank high in biodegradability.  Further, any
environmental issues involved in manufacturing are the responsibility of the
blending facilities, provided they receive adequate and accurate information
from us as to the components of the chemicals involved, however, there can be no
assurance that we will not be liable as we are subject to various foreign,
federal, state and local law and regulations relating to the protection of the
environment.
  In the
fiscal year ending March 31, 2009, Petrobras America Inc., Nalco Company and
United Energy Petroleum Services LTD. purchased our KX-100 oil cleaning
products, which accounted for approximately 50.2% of our total customer
sales.   In the fiscal year ending March 31, 2008, Petrobras
America Inc. and Facility Solutions LTD. purchased our KX-100 oil cleaning
products, which accounted for approximately 46.9% of our total customer sales
and the U.S. military purchased our Leak Detection Compound and Corrosion
inhibitor, which accounted for 24.2% of our total customer sales.
  2
  Except
for these current customers, no other single entity has accounted for more than
10% of our sales during any of the fiscal years ended March 31, 2009 and
2008.
  All of
our products are sold in U.S. dollars and, therefore, we have had no foreign
currency fluctuation risk.
  Our
current operations do not require a substantial investment in inventory other
than minimum commitments to our distributors.  However, we anticipate
that any growth in our business will require us to maintain higher levels of
inventory.
  As of
March 31, 2009, the Company’s backlog included $198,000 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.
  Marketing
and Distribution
  We have
engaged the services of independent contractors to market our K-Line of Chemical
Products.  These contractors work under various non-exclusive
commission and distribution agreements and have substantial contacts among oil
well owners and major oil companies in the United States, Mexico, South America,
Africa, Europe and the Middle East.  These contractors earn a
commission based upon the sales value of the products that they
sell.  These independent contractors use our marketing materials,
brochures and website to interest clients and to describe the attributes of our
products.
  Although
we have not achieved the volume of sales we had anticipated for the oil
dispersant products, there have been significant barriers to entry in this
market.  Most of these potential customers require substantial testing
of our product to prove its efficacy at cleaning wells, tanks and flow
lines.  In many cases, additional laboratory testing is required to
prove that our chemical products are compatible with refinery systems and will
not interfere with certain chemical processes and safety requirements of the
potential clients.  This process of testing has taken a great deal
longer than was originally anticipated.  We believe that we have made
significant inroads and currently expect a higher volume of sales in the next
fiscal year ending March 31, 2010, although there can be no assurance that sales
will increase in fiscal 2010.
  Research
and Development
  Our
K-Line of Chemical Products for the oil industry are developed and ready for
market.  All of these products are the result of research and
development.  Expenditures were paid for research and development
costs in the amounts of $329,186 and $298,618 for the fiscal years ended March
31, 2009 and 2008, respectively.  We have had available the services
of one research chemist and one analytical chemist, as well as one petroleum
engineer, to lead in the development of our products.  A significant
amount of market adaptation has taken place in the field involving the
development of application procedures for products.  We do not
anticipate having to make significant research and development expenditures on
existing products in the future.  However, we do expect to continue to
develop new products to complement our existing product lines.
  Competition
  We
compete directly or indirectly with other producers of specialty chemical
products with similar uses, most of which are more established companies and
have greater resources than we have.  Generally, we attempt to compete
by offering what we hope to be lower prices and better
service.  However, our KH-30, KX-100, KX-91 and KH-30S products for
the oil industry are often more expensive, and with these products we attempt to
compete by emphasizing product effectiveness and environmental
safety.
  Proprietary
Technologies
  With
respect to our formulations, which are proprietary, we have patented our KH-30
oil well cleaner in the United States and other major oil producing
countries.
 
 In
addition to applying for patent protection on our KH-30 product, we have also
registered “KH-30” as a trademark.
  3
  Employees
  As of
March 31, 2009 we employed nine people on a full-time basis and had available
the services of two other individuals under consulting or product/production
cooperation arrangements.  The latter arrangement is meant to include
a situation where a chemist, engineer or significant marketing person is engaged
by an organization under contract with us to manufacture or market one or more
of our products. None of our employees are represented by a union.  We
consider our relations with our employees to be good.
  Available
Information
  We file
annual, quarterly and current reports, information statements and other
information with the Securities and Exchange Commission (the “SEC”). The public
may read and copy any materials we file with the SEC at the SEC’s Public
Reference Room at Station Place, 100 F Street, N.E., Washington, D.C.
20549. The public may obtain information on the operation of the Public
Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also
maintains an Internet site that contains reports, proxy and information
statements, and other information regarding issuers that file electronically
with the SEC. The address of that site is http://www.sec.gov.
  ITEM
1A. RISK FACTORS
  An
investment in our common stock involves a high degree of risk. You should
carefully consider the following material risks, before you decide to buy our
common stock. If any of the following risks actually occur, our business,
results of operations and financial condition would likely suffer. In these
circumstances, the market price of our common stock could decline and you may
lose all or part of your investment.
  WE
HAD A CURRENT ACCUMULATED DEFICIT OF $22,079,740 AS OF MARCH 31, 2009 AND IF WE
CONTINUE TO INCUR OPERATING LOSSES, WE MAY BE UNABLE TO SUPPORT OUR BUSINESS
PLAN, WHICH WILL HAVE A DETRIMENTAL EFFECT ON OUR STOCK.
  We
have incurred losses in each of our last three fiscal years. As of March 31,
2009, we had an accumulated deficit of $22,079,740. If we continue to incur
operating losses and fail to become a profitable company, we may be unable to
support our business plan, namely to market our K-Line of Chemical Products for
the oil and gas industry, and the Green Globe Chemical Products. We incurred net
losses from continuing operations of $1,338,237 and $2,040,390 in the fiscal
years ended March 31, 2009 and 2008, respectively. Our future profitability
depends in large part on our ability to market and support our Specialty
Chemical Products which we derive the majority of our revenues. We cannot assure
you that we will achieve or sustain significant sales or profitability in the
future.
  WE
ARE DEPENDENT ON OUR ABILITY TO RAISE CAPITAL FROM EXTERNAL FUNDING
SOURCES.  IF WE ARE UNABLE TO CONTINUE TO OBTAIN NECESSARY CAPITAL
FROM OUTSIDE SOURCES, WE WILL BE FORCED TO REDUCE OR CURTAIL
OPERATIONS.
  We have limited financial
resources.  As a result we need to obtain additional capital from
outside sources to continue operations and commercialize our business
plan.  We cannot assure that adequate additional funding will be
available.  If we are unable to continue to obtain needed capital from
outside sources, we will be forced to reduce or curtain our
operations.
  Our ability to execute our business
plan depends upon our ability to obtain financing through
  ·
              bank
      or other debt financing,
 ·
              equity
      financing,
 ·
              strategic
      relationships and/or
 ·
              other
    means.
  4
  OUR
INDEPENDENT AUDITORS HAVE EXPRESSED THAT THERE IS SUBSTANTIAL DOUBT ABOUT OUR
ABILITY TO CONTINUE AS A GOING CONCERN.
 
 Our
independent auditors issued an explanatory paragraph expressing substantial
doubt about our ability to continue as a going concern on our financial
statements for fiscal 2009, based on the significant operating losses and a lack
of external financing. Neither our March 31, 2009 nor March 31, 2008 financial
statements include any adjustments that resulted from the outcome of this
uncertainty.  Our inability to continue as a going concern would
require a restatement of assets and liabilities on a liquidation basis, which
would differ materially and adversely from the going concern basis on which our
consolidated financial statements have been prepared.
  THERE
ARE SIGNIFICANT OBSTACLES TO ENTERING THE OIL AND GAS PRODUCING INDUSTRY THAT
HAVE CONTRIBUTED TO THE SLOW PACE AT WHICH OUR K-LINE OF CHEMICAL PRODUCTS ARE
BEING INTRODUCED TO THE MARKET.
  Our
business plan is focused largely on marketing efforts for our K-Line of Chemical
Products for the oil and gas industry. Although we believe that the application
of our K-Line of Chemical Products for the oil and gas industry on a continuous
basis will result in higher production and lower operating costs, the
introduction of our K-Line of Chemical Products into the oil and gas producing
industry has been extremely difficult. Many entrenched players such as the “hot
oilers” and the major oil service companies that benefit from high markups on
their proprietary products have no incentive to promote the use of our chemical
products. Moreover, oil production engineers are extremely reluctant to risk
damage to a well from a product that does not have the endorsement of a major
enterprise. Consequently, the pace of introduction of our K-Line of Chemical
Products has been much slower than we initially anticipated. If we and our
K-Line of Chemical Products marketing partners are unable to successfully
achieve market acceptance our products, our future results of operations and
financial condition will be adversely affected.
  THE
SUCCESS OF OUR K-LINE OF CHEMICAL PRODUCTS WILL BE HIGHLY DEPENDENT UPON THE
LEVEL OF ACTIVITY AND EXPENDITURES IN THE OIL AND NATURAL GAS INDUSTRIES AND A
DECREASE IN THE LEVELS THEREOF WOULD, IN ALL LIKELIHOOD, ADVERSELY IMPACT SALES
OF OUR K-LINE OF CHEMICAL PRODUCTS.
  We anticipate that demand for our oil
and gas-cleaning product will depend on the levels of activity and expenditures
in the industry, which are directly affected by trends in oil and natural gas
prices. We anticipate that demand for our K-Line of Chemical Product sales will
be particularly sensitive to the level of development, production and
exploration activity of, and corresponding capital spending by, oil and natural
gas companies. Prices for oil and gas are subject to large fluctuations in
response to relatively minor changes in the supply of and demand for oil and
gas, market uncertainty, political stability and a variety of other factors that
are beyond our control. Any prolonged reduction in oil and natural gas prices
will depress the level of exploration, and development and production activity.
Lower levels of activity are expected to result in a corresponding decline in
the demand for our oil and gas well products, which could have an adverse impact
on our prospects, results of operations and financial condition. Factors
affecting the prices of oil and natural gas include:
  •
              worldwide
      political, military and economic conditions, including the ability of OPEC
      (the Organization of Petroleum Exporting Countries) to set and maintain
      production levels and prices for oil and gas;•
              overall
      levels of global economic growth and activity;•
              global
      weather conditions;•
              the
      level of production by non-OPEC countries;•
              the
      policies of governments regarding the exploration for and production and
      development of their oil and natural gas reserves; and•
              actual
      and perceived changes in the supply of and demand for oil and natural
      gas.
  5
  WE
MAY NOT BE ABLE TO GENERATE SUBSTANTIAL REVENUES FROM OUR GREEN GLOBE CHEMICAL
PRODUCTS.
  Our sales
to date have been substantially dependent on sales of our K-Line of Chemical
Products. Sales of Green Globe Chemical Products accounted for approximately 5%
of revenues for the fiscal year ended March 31, 2009.  The U.S.
military represented approximately 40% of such revenues from the sales of our
Green Globe Chemical Products for the fiscal year ended March 31,
2009.  If we fail to develop significant revenue from Green Globe
Chemical Products or the U.S. military ceases or decreases its use of our Green
Globe Chemical Products, our business plan and financial condition will be
adversely affected.
  IF
OUR STRATEGIC PARTNERS DO NOT EFFECTIVELY MARKET OUR PRODUCTS, WE WILL NOT
GENERATE SIGNIFICANT SALES OR PROFITS AND WE DO NOT CURRENTLY HAVE THE INTERNAL
RESOURCES TO MARKET OUR PRODUCTS DIRECTLY.
  We
utilize third parties to assist in marketing, selling and distributing our
products. We believe that the establishment of a network of third party
strategic partners, particularly abroad, with extensive and specific knowledge
of the various applications in the oil and gas industry is important for our
success. We cannot assure you that our current or future strategic partners will
purchase our products at sufficient levels or provide us with adequate support.
If one or more of our partners under performs or if any of our strategic
relationships are terminated or otherwise disrupted, our operating performance,
results of operations and financial condition will be adversely
affected.
  WE
DEPEND ON A SMALL NUMBER OF CUSTOMERS FOR A SUBSTANTIAL PORTION OF OUR REVENUES,
BUT WE HAVE NO LONG TERM CONTRACTS OR BINDING PURCHASE COMMITMENTS FROM THESE
CUSTOMERS.
  We
currently have a limited number of recurring customers for our products, none of
whom have entered into long-term contracts or binding purchase commitments with
us. Our three largest customers accounted for 50% and 71% of our revenues for
the fiscal years ended March 31, 2009 and 2008, respectively.
  WE
RELY ON THIRD PARTIES FOR THE RAW MATERIALS NECESSARY TO MAKE OUR PRODUCTS,
LEAVING US POTENTIALLY VULNERABLE TO SUBSTANTIAL COST INCREASES AND
DELAYS.
  All of
the raw materials necessary for the manufacture of our products are generally
available from multiple sources. We have negotiated favorable arrangements with
our current suppliers. If one or more of our current suppliers were no longer
able to supply the raw materials that we need, we would be required to negotiate
arrangements with alternate suppliers, which would likely include some cost or
delay and could be substantial. In addition, no assurance can be given that any
alternative arrangements that we secure would be on terms as favorable as our
current arrangements.
  WE
DEPEND ON INDEPENDENT MANUFACTURERS OF OUR PRODUCTS; ANY PROLONGED INTERRUPTION
IN THEIR BUSINESS COULD CAUSE US TO LOSE OUR CUSTOMERS.
  We do not
own any manufacturing facilities. Our chemical products are generally
manufactured by contract blenders at a number of different facilities. Chemical
blenders are relatively easy to replace. While we believe these facilities have
the capacity to meet our current production needs and also meet applicable
environmental regulations, we cannot be certain that these facilities will
continue to meet our needs or continue to comply with environmental laws. In
addition, these facilities are subject to certain risks of damage, including
fire, which would disrupt production of our products. To the extent we are
forced to find alternate facilities, it would likely involve delays in
manufacturing and potentially significant costs.
  The
chemical blenders that manufacture our products are bound by confidentiality
agreements that obligate them not to disclose or use our proprietary
information. A breach of one or more of these agreements could have a
detrimental effect on our business and prospects.
  6
  ENVIRONMENTAL
PROBLEMS AND LIABILITIES COULD ARISE AND BE COSTLY FOR US TO CLEAN
UP.
  We are
subject to various foreign, federal, state and local laws and regulations
relating to the protection of the environment, including the Industrial Site
Recovery Act, a New Jersey statute requiring clearance by the state prior to the
sale of any industrial facility. These laws provide for retroactive strict
liability for damages to natural resources or threats to public health and
safety, rendering a party liable without regard to its negligence or fault.
Sanctions for noncompliance may include revocation of permits, corrective action
orders, and administrative or civil penalties or even criminal prosecution. We
have not, to date, incurred any serious liabilities under environmental
regulations and believe that we are in substantial compliance therewith.
Nevertheless, we cannot be certain that we will not encounter environmental
problems or incur environmental liabilities in the future that could adversely
affect our business.
  BECAUSE
WE ARE SMALLER AND HAVE FEWER FINANCIAL AND MARKETING RESOURCES THAN MANY OF OUR
COMPETITORS, WE MAY NOT BE ABLE TO SUCCESSFULLY COMPETE IN THE EXTREMELY
COMPETITIVE CHEMICAL INDUSTRIES.
  We
compete directly or indirectly with other producers of specialty chemical
products, most of which are or have aligned themselves with more established
companies, have greater brand recognition and greater financial and marketing
resources. Generally, we attempt to compete by offering what we hope to be lower
prices and better service. However, the prices for our K-Line of Chemical
Products and Green Globe Chemical Products are higher than competing products;
therefore, we attempt to compete by emphasizing product effectiveness and
environmental safety.
  WE
MAY NOT BE ABLE TO RETAIN OUR EXECUTIVE OFFICERS WHO WE NEED TO SUCCEED, AND
ADDITIONAL QUALIFIED PERSONNEL ARE EXTREMELY DIFFICULT TO ATTRACT.
  Our
performance depends, to a significant extent, upon the efforts and abilities of
our executive officers.  We do not maintain any key man insurance on
their lives for our benefit. The loss of the services of our executive officers
could have a serious and adverse effect on our business, financial condition and
results of operations. Our success will also depend upon our ability to recruit
and retain additional qualified senior management personnel. Competition is
intense for highly skilled personnel in our industry, and accordingly, no
assurance can be given that we will be able to hire or retain sufficient
personnel.
  OUR
MANAGEMENT OWNS A SUBSTANTIAL AMOUNT OF OUR STOCK AND IS CAPABLE OF INFLUENCING
OUR BUSINESS AND AFFAIRS.
  Our
directors and executive officers beneficially own approximately 33.3% of our
outstanding common stock. As such, they will be able to significantly influence
the election of the members of our board of directors and the outcome of
corporate actions that require shareholder approval, such as mergers and
acquisitions. In addition, Pursuant to the terms of the Company’s Series A
Convertible Preferred Stock (the “Preferred Stock”) and an agreement with
Sherleigh Associates Profit Sharing Plan (“Sherleigh”), as holder of all of the
outstanding shares of Preferred Stock, Sherleigh has the right to and has
designated a majority of the members of our board of directors.  Jack
Silver, one of our directors, as the trustee of Sherleigh, has voting control
over the shares of Preferred Stock held by Sherleigh.  The level of
ownership by our directors and executive officers, together with particular
provisions of our articles of incorporation, bylaws and Nevada law, may have a
significant effect in delaying, deferring or preventing any change in control
and may adversely affect the voting and other rights of our other
shareholders.
  IF
WE CANNOT PROTECT OUR PROPRIETARY RIGHTS AND TRADE SECRETS OR IF WE WERE FOUND
TO BE INFRINGING ON THE PROPRIETARY RIGHTS OF OTHERS, OUR BUSINESS WOULD BE
SUBSTANTIALLY HARMED.
  Our
success depends in large part on our ability to protect the proprietary nature
of our products, preserve our trade secrets and operate without infringing the
proprietary rights of third parties. If other companies obtain and copy our
technology or claim that we are making unauthorized use of their proprietary
technology, we may become involved in lengthy and costly disputes. If we are
found to be infringing on the proprietary rights of others, we could be required
to seek licenses to use the necessary technology. We cannot assure you that we
could obtain these licenses on acceptable terms, if at all. In addition, the
laws of some foreign countries may not provide adequate protection for our
proprietary technology.
  7
  To
protect our intellectual property, we seek patents and enter into
confidentiality agreements with our employees, manufacturers and marketing and
distribution partners. We cannot assure you that our patent applications will
result in the successful issuance of patents or that any issued patents will
provide significant protection for our technology and products. In addition, we
cannot assure you that other companies will not independently develop competing
technologies that are not covered by our patents. There is also no assurance
that confidentiality agreements will provide adequate protection of our trade
secrets, know-how or other proprietary information. Any unauthorized disclosure
and use of our proprietary technology, whether in breach of an agreement or not,
could have an adverse effect on our business, prospects, results of operations
and financial condition.
  THE
PUBLIC MARKET FOR OUR COMMON STOCK HAS BEEN CHARACTERIZED BY A LOW VOLUME OF
TRADING AND OUR STOCKHOLDERS MAY NOT BE ABLE TO RESELL THEIR SHARES AT OR ABOVE
THE PRICE AT WHICH THEY PURCHASED THEIR SHARES, IF AT ALL.
  Historically,
the volume of trading in our common stock has been low. A more active public
market for our common stock may not develop or, even if it does in fact develop,
may not be sustainable. The market price of our common stock may fluctuate
significantly in response to factors, some of which are beyond our control.
These factors include:
  •
              product
      liability claims and other litigation;•
              the
      announcement of new products or product enhancements by us or our
      competitors;•
              developments
      concerning intellectual property rights and regulatory
      approvals;•
              quarterly
      variations in our competitors’ results of operations;•
              developments
      in our industry; and•
              general
      market conditions and other factors, including factors unrelated to our
      own operating performance.
  Recently,
the stock market in general has experienced extreme price and volume
fluctuations. In particular, market prices of securities of specialty chemical
products companies have experienced fluctuations that are often unrelated to or
disproportionate from the operating results of these companies. Continued market
fluctuations could result in extreme volatility in the price of shares of our
common stock, which could cause a decline in the value of our shares. Price
volatility may be worse if the trading volume of our common stock is
low.
  WE
HAVE OUTSTANDING WARRANTS AND OPTIONS, AND WE ARE ABLE TO ISSUE “BLANK CHECK”
PREFERRED STOCK, THAT COULD BE ISSUED RESULTING IN THE DILUTION OF COMMON STOCK
OWNERSHIP.
  As of June 30, 2009, we had outstanding
Preferred Stock, warrants and options that, when exercised and converted, could
result in the issuance of up to 15,036,833 additional shares of common
stock.  In addition, our Articles of Incorporation allow the board of
directors to issue up to 100,000 shares of preferred stock and to fix the
rights, privileges and preferences of those shares without any further vote or
action by the shareholders. We currently have 3 shares of Preferred Stock
outstanding. To the extent that outstanding warrants, options and preferred
stock or similar instruments or convertible preferred stock issued in the future
are exercised or converted, these shares will represent a dilution to the
existing shareholders.  The preferred stock could hold dividend
priority and a liquidation preference over shares of our common
stock.   Thus, the rights of the holders of common stock are and will
be subject to, and may be adversely affected by, the rights of the holders of
any preferred stock. Any such issuance could be used to discourage an
unsolicited acquisition proposal by a third party.
  8
  OUR
COMMON STOCK IS CONSIDERED A “PENNY STOCK” AND MAY BE DIFFICULT TO SELL WHEN
DESIRED.
  The SEC
has adopted regulations that define a “penny stock”, generally, to be an equity
security that has a market price of less than $5.00 per share or an exercise
price of less than $5.00 per share, subject to specific exemptions. The market
price of our common stock has been less than $5.00 per share. This designation
requires any broker or dealer selling our securities to disclose certain
information concerning the transaction, obtain a written agreement from the
purchaser and determine that the purchaser is reasonably suitable to purchase
the securities. These rules may restrict the ability of brokers or dealers to
sell our common stock and may affect the ability of stockholders to sell their
shares. In addition, since our common stock is currently quoted on the OTC
Bulletin Board, stockholders may find it difficult to obtain accurate quotations
of our common stock, may experience a lack of buyers to purchase our shares or a
lack of market makers to support the stock price.
  A
SIGNIFICANT NUMBER OF OUR SHARES ARE ELIGIBLE FOR SALE AND THEIR SALE OR
POTENTIAL SALE WILL PROBABLY DEPRESS THE MARKET PRICE OF OUR STOCK.
  Sales of
a significant number of shares of our common stock in the public market could
harm the market price of our common stock.  Some or all of the shares
of our common stock may be offered from time to time in the open market without
registration pursuant to Rule 144, and these sales could have a depressive
effect on the market for our common stock.
  WE
DO NOT ANTICIPATE PAYING DIVIDENDS ON OUR COMMON STOCK IN THE FORESEEABLE
FUTURE; THEREFORE, YOU SHOULD NOT BUY THIS STOCK IF YOU WISH TO RECEIVE CASH
DIVIDENDS.
  We
currently intend to retain our future earnings in order to support operations
and finance expansion; therefore, we do not anticipate paying any cash dividends
on our common stock in the foreseeable future.
  ITEM 1B. UNRESOLVED STAFF
COMMENTS None.
  ITEM
2. PROPERTIES
  We lease
9,600 square feet of office space at 600 Meadowlands Parkway, #20, Secaucus, New
Jersey 07094.  Under the terms of the lease, which runs through June
2010, the monthly rent is $10,710. In addition, we leased office and warehouse
space on a month-to-month basis in Odessa, TX, at a rate of $535 per month
through September 2008.
  We use
independent non-affiliated contract chemical blending and manufacturing
facilities in various locations around the United States for the manufacture of
our products.  We contract the production of our products to
independent manufacturers and blenders and our products are therefore produced
at the manufacturing facilities of those entities.  We do not own any
manufacturing facilities.
  ITEM
3. LEGAL PROCEEDINGS
  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, punitive damages in an amount treble 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 yet been scheduled.  We believe 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.
  No other
legal proceedings are currently pending or threatened against us.
  ITEM
4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  No
matters were submitted to a vote of security holders during the fourth quarter
of our fiscal year ended March 31, 2009.
  9
  PART
II
  ITEM
      5.
              MARKET
      FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
      PURCHASES OF EQUITY SECURITIES
  As of
July 14, 2009 there were approximately 453 record holders of our common stock
and there were 31,030,115 shares of our common stock outstanding.  We
have not previously declared or paid any dividends on our common stock and do
not anticipate declaring any dividends in the foreseeable future.
  The
following table shows the high and low bid prices of our common stock as quoted
on the OTC Bulletin Board by quarter during each of our last two fiscal years
ended March 31, 2009 and 2008 and for each quarter after March 31,
2009.  These quotes reflect inter-dealer prices, without retail
markup, markdown or commissions and may not represent actual transactions. The
information below was obtained from those organizations, for the respective
periods.
  Fiscal
      Year
                ended March
      31
              Quarter
              
              High
              
              
              Low2008
              First
      Quarter (April-June 2007)
              
              $
              .77
              
              
              $
              .42Second
      Quarter (July-September 2007)
              
              
              .68
              
              
              
              .45Third
      Quarter (October-December 2007)
              
              
              .59
              
              
              
              .40Fourth
      Quarter (January-March 2008)
              
              
              .54
              
              
              
              .352009
              First
      Quarter (April-June 2008)
              
              $
              .42
              
              
              $
              .25Second
      Quarter (July-September 2008)
              
              
              .38
              
              
              
              .15Third
      Quarter (October-December 2008)
              
              
              .25
              
              
              
              .05Fourth
      Quarter (January-March 2009)
              
              
              .21
              
              
              
              .062010
              First
      Quarter (April-June 2009)
              
              $
              .20
              
              
              $
              .09Second
      Quarter (through July 6)
              
              
              .16
              
              
              
              .12
  The high
and low bid prices for shares of our common stock on July 6, 2009 were $.16 and
$.12 per share, respectively, based upon bids that represent prices quoted by
broker-dealers on the OTC Bulletin Board.  These quotations reflect
inter-dealer prices, without retail mark-up, mark-down or commissions, and may
not represent actual transactions.
  Dividend
Policy
  While
there are no restrictions on the payment of dividends, we have not declared or
paid any cash or other dividends on shares of our common stock in the last two
years, and we presently have no intention of paying any cash dividends in the
foreseeable future.  Our current policy is to retain earnings, if any,
to finance the expansion of our business.  The future payment of
dividends will depend on the results of operations, financial condition, capital
expenditure plans and other factors that we deem relevant and will be at the
sole discretion of our board of directors.
  We intend
to pay regular semi-annual dividends on our preferred stock outstanding in an
amount not to exceed $1,440 per year. Any decision to declare and pay dividends
in the future will be made at the discretion of our board of directors and will
depend on, among other things, our results of operations, cash requirements,
financial condition, contractual restrictions and other factors our board of
directors may deem relevant.
 
 On June
30, 2008 and December 31, 2008 we declared dividends on our preferred common
stock at a rate of $0.06 per share. The dividends were paid for a total amount
of $1,440 on July 3, 2008 and January 13, 2009, respectively.
  Related
Party Loans
  In March 2009, Ronald Wilen, Martin
Rappaport, a director, and Sherleigh provided the Company with a short term loan
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 Jack Silver, a director and the trustee of Sherleigh, 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 July 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
June 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.  The Company intends to use the proceeds of all such loans for
general working capital needs.
  10
  Martin
Rappaport, one of our directors, owned the building through September 2007 in
which we lease our principal executive offices in Secaucus, New Jersey. We paid
$115,200 per year under the lease, excluding real estate taxes. We believe that
this transaction was advantageous to us and was on terms no less favorable to us
than could have been obtained from unaffiliated third parties.
  Equity
Compensation Plan Information
  Pursuant to the terms of an employment
agreement dated April 17, 2007, with Ronald Wilen, Chief Executive Officer,
President and Secretary, for each of the next five (5) years of the term of the
agreement (commencing with April 17, 2008), Mr. Wilen is to 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 is to be the fair market value of the common stock underlying such
option on the date such option was granted.  The initial grant of
50,000 stock options is to be granted out of the 2001 Equity Incentive Plan at
the one-year anniversary. In addition, the stock option to purchase 200,000
shares has been reserved for Mr. Wilen out of the 2001 Equity Incentive
Plan.
 
 In January 2009, the Company issued a
Convertible Note to its legal counsel in the amount of $35,000 to satisfy fees
for legal services owed to such legal counsel.  The Convertible Note
is convertible at $.12 per share and is due June 30,
2009.  Subsequently, in June 2009, the assignee of such Convertible
Note agreed to convert the entire amount thereof in exchange for being granted
warrants to purchase up to 140,000 shares of common stock at an exercise price
of $.12 per share, which warrants are exercisable for a period of five (5)
years.
  In February 2009, the Company awarded
each of the six (6) directors of the Company warrants to purchase up to 150,000
shares of common stock at an exercise price of $.12 per share.  The
warrants are exercisable for a period of ten (10) years.  Also in
February 2009, the Company issued to an employee warrants to purchase up to
200,000 shares of common stock at an exercise price of $.12 per share, which
warrants are exercisable for a period of five (5) years and to a former employee
in connection with his termination of employment, warrants to purchase up to
100,000 shares of common stock at an exercise price of $.30 per share, which
warrants are exercisable for a period of three (3) years from the date of
termination.
  ITEM
      6.   SELECTED FINANCIAL
DATA
  Because
we are a smaller reporting company, we are not required to provide the
information called for by this item.
  ITEM
      7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
      CONDITION AND RESULTS OF OPERATION
  You
should read the following description of our financial condition and results of
operations in conjunction with the consolidated financial statements and
accompanying notes included in this Annual Report beginning on page F-1.
  Overview
  We
develop and distribute environmentally friendly specialty chemical products with
applications in several industries and markets. Our current line of products
includes K-Line of Chemical products for the oil industry and related
products.
  11
  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 Chemical Products to
our customers and generated revenues of $1,206,321 for the fiscal year ended
March 31, 2009 and $1,042,320 for the fiscal year ended March 31,
2008.
  Critical
Accounting Policies and Estimates
  The
preparation of consolidated financial statements in accordance with accounting
principles generally accepted in the United States of America requires us 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
ongoing basis, we evaluate our estimates, including those related to product
returns, bad debts, inventories, valuation of options and warrants, intangible
assets, long-lived assets and contingencies and litigation. We base our
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.
  Revenue
Recognition
  Our
primary source of revenue is from sales of our products.  We recognize
revenue upon shipment and transfer of title.
  Allowance
for Doubtful Accounts
  We
monitor our accounts and note receivable balances on a monthly basis to ensure
they are collectible.  On a quarterly basis, we use our historical
experience to determine our accounts receivable reserve.  Our
allowance for doubtful accounts is an estimate based on specifically identified
accounts, as well as general reserves.  We evaluate specific accounts
where we have information that the customer may have an inability to meet its
financial obligations.  In these cases, management uses its judgment,
based upon the best available facts and circumstances, and records a specific
reserve for that customer against amounts due to reduce the receivable to the
amount that is expected to be collected.  These specific reserves are
re-evaluated and adjusted as additional information is received that impacts the
amount reserved.  We also establish a general reserve for all
customers based upon a range of percentages applied to aging categories. These
percentages are based on historical collection and write-off
experience.  If circumstances change, our estimate of the
recoverability of amounts due to us could be reduced or increased by a
significant amount.  A change in estimated recoverability would be
accounted for in the period in which the facts that give rise to the change
become known.
  Results
of Operations
  Comparison
of Fiscal Year Ended March 31, 2009 to Fiscal Year Ended March 31,
2008
  Revenues. Revenuesfor the year ended
March 31, 2009 were $1,206,321, a $164,001 or 16% increase from revenues of
$1,042,320 for the year ended March 31, 2008. The increase was primarily related
to a 51% increase in the level of our K-Line of Chemical Products reflecting a
higher level of orders, offset by 92% decrease in the level of our Green
Globe/Qualchem military sales during the year.  Our three largest
customers accounted for 50.2% of revenues for the year ended March 31, 2009
compared with 71% for the comparable period in 2008.
  12
 
 Cost of Goods
Sold.Cost of goods sold increased to $567,758 or 47% of
sales, for the year ended March 31, 2009 from $469,237, or 45% of sales, for the
year ended March 31, 2008. The increase in cost of goods sold was due to the
increased level of sales compared to the prior year.
 
 Gross Profit.Gross profit
increased to $638,563 or 53% of sales, for the year ended March 31, 2009 from
$573,083, or 55% of sales, for the year ended March 31, 2008.  The
increase in gross profit was due to an increase in the level of
sales.
 
 Selling, General and Administrative
Expenses.Selling, general and administrative expenses
decreased to $1,586,355, or 132% of sales, for the year ended March 31, 2009
from $2,310,725, or 222% of sales, for the year ended March 31,
2008.  The decrease in selling, general and administrative expenses
was primarily related to a decrease in salaries, professional fees, option costs
charged for employees and bad debts partially offset by an increase in marketing
and rent.
  Research and Development.
Research and development expenses increase to $329,186, or 27% of sales for the
year ended March 31, 2009 from $298,618, or 29% of sales for the year ended
March 31, 2008. The slight increase in research and development expenses was
primarily related to increased lab supplies, special projects and
salaries.
  Depreciation and
Amortization.  Depreciation and amortization decreased to
$59,795 for the year ended March 31, 2009 from $69,171 for the year ended March
31, 2008, reflecting the Company’s use of an accelerated method of depreciation,
offset by an increase in fixed assets.
  Interest
Income.  Interest income decreased to $950 for the year ended
March 31, 2009 from $67,504 for the year ended March 31, 2008. The decrease was
due to the use of cash received in connection with the private placement
completed in March 2006.
  Interest
Expense.  Interest expense remained relatively constant for the
year ended March 31, 2009 as compared to the year ended March 31,
2008.
 
 Net Loss.  For the
year ended March 31, 2009, we incurred a net loss of $1,338,237 or $0.04 per
share, as compared to a net loss of $2,040,390 for the year ended March 31,
2008, or $0.07 per share. The average number of shares of common stock used in
calculating earnings per share remained at 31,030,115 shares.
 
 Preferred Dividends,Preferred dividends of $1,440 were paid at a rate of $0.06 per share for
the fiscal years ended March 31, 2009 and 2008.
 
 Liquidity
and Capital Resources
 
 Since
1995, operations have been financed primarily through loans and equity
contributions from directors, executive officers and third parties supplemented,
by funds generated by our business. As of March 31, 2009, we had $56,372 in cash
and cash equivalents.
 
 Net Cash Used in Continuing
Operations.  During the fiscal year ended March 31, 2009, net
cash used in continuing operations was $858,846 compared with $1,915,584 for the
fiscal year ended March 31, 2008.
 
 Net Cash Used in Investing
Activities. During the fiscal year ended March 31, 2009, net cash used in
investing activities decreased to $91,917 compared with $92,814 for the year
ended March 31, 2008.  The decrease was primarily a result of
repayment of loans, and a decrease in payment for patents, offset by an increase
in the level of expenditures for the purchase of fixed assets.
 
 Net Cash Provided by (Used in)
Financing Activities. During the fiscal year ended March 31, 2009, net
cash provided by financing activities consisted of related party loans of
$150,000, offset by $1,440 of preferred stock dividends. This compares to net
cash used in financing activities consisting of $1,440 in preferred stock
dividends during the fiscal year ended March 31, 2008.
  13
 
 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 in 2009. For the year ended March
31, 2009 the Company incurred net loss approximating $1,338,237. Further, the
Company has inadequate working capital to maintain or develop its operations,
and is dependent upon funds from private investors and the support of certain
stockholders.
 
 These
factors raise substantial doubt about the ability of the Company to continue as
a going concern. The consolidated financial statements do not include any
adjustments that might result from the outcome of these uncertainties. In this
regard, the Company may need to raise 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. There is no assurance
that the Company will be successful in raising additional capital.
 
 Concentration
of Credit Risk
 
 Sales to
three of our customers, Petrobras America Inc., Nalco Company and United Energy
Petroleum Services LTD. accounted for approximately 50.2% of our sales for the
fiscal year ended March 31, 2009 and sales to three of our customers, Petrobras
America Inc., the U.S. Military and Facility Solutions accounted for
approximately 71% of our sales for the fiscal year ended March 31,
2008.
  Contractual
Obligations
 
 Below is
a table, which presents our contractual obligation commitments at March 31,
2009:
  Less
      than
                
                
                
                
                
                
                
                
                AfterContractual Obligation
                
                Total
                
                
                1 Year
                
                
                1-3 Years
                
                
                3-5 Years
                
                
                5 YearsShort-term
      debtObligations(1)
                
                $
                185,000
                
                
                $
                185,000
                
                
                $
                --
                
                
                $
                --
                
                
                $
                --Operating
      leases
                
                
                178,462
                
                
                
                134,681
                
                
                
                43,781
                
                
                
                --
                
                
                
                --Total
      contractualcash
      obligations
                
                $
                363,462
                
                
                $
                319,681
                
                
                $
                43,781
                
                
                $
                --
                
                
                $
                --
 (1) Short-term debt
obligations include amounts due to the Sherleigh, the President and Chief
Executive Officer, Ron Wilen and one of our directors, Martin Rappaport. The
amount due as of March 31, 2009 is $150,000. The loans were unsecured, and bear
an interest rate of 12% for a term of 60 days.  At March 31, 2008, the
Company had a due to related party totaling $244,141. During fiscal year 2009,
this amount was written off.
  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.
  Inflation
  We do not
believe that inflation in the cost of our raw materials has had in the past or
will have in the future any significant negative impact on our operations.
However, no assurance can be given that we will be able to offset such
inflationary cost increases in the future.
  14
  Recent
Accounting Pronouncements
 
 Recent
accounting pronouncements that the Company has adopted or that will be required
to adopt in the future are summarized below.
 
 Subsequent
Events
 
 In May
2009, the FASB issued Statement of SFAS No. 165, Subsequent Events. 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. This Statement is effective for interim and annual periods ending
after June 15, 2009 and as such, we will adopt this standard in the first
quarter of fiscal year 2010. We are currently assessing the impact of the
adoption of SFAS 165, if any, on our financial position, results of operations
or cash flows.
 
 Interim
Disclosure about Fair Value of Financial Instruments
 
 In April
2009, the FASB issued FSP No. FAS 107-1 and APB 28-1, Interim Disclosures about Fair Value
of Financial Instruments.  This FSP amends FASB Statement 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 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.
  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.
  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.
  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
is required to adopt SFAS No. 161 on January 1, 2009. The impact of adoption of
SFAS No. 161 was not material to the Company’s consolidated financial condition
or results of operations.
  Fair
Value Measurements
  In
September 2006, the Financial Accounting Standards Board issued Statement 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.
  15
  Quantitative
and Qualitative Disclosures About Market Risk
  The market risk inherent in our market
risk sensitive instruments and positions are the potential losses arising from
adverse changes in foreign currency exchange rates.
 
 Foreign
Currency Exchange Rates
 
 Although
our business is international in scope, to date our product sales have been all
U.S. dollar-denominated.  As we expand, we may be affected by exchange
rate fluctuations in foreign currencies relative to the U.S.
dollar.  We do not currently use derivative financial instruments to
hedge our exposure to changes in foreign currency exchange rates.
  SPECIAL
NOTE ON FORWARD-LOOKING STATEMENTS
  Certain
statements in this Annual Report on Form 10-K (the “Form 10-K”), including
statements under “Item 1. Business,” “Item 3. Legal Proceedings” and “Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of
Operation”, constitute “forward-looking statements” within the meaning of
Section 27A of the Securities Act of 1933, as amended (the “Securities Act”),
and Section 21E of the Securities Exchange Act of 1934, as amended, and the
Private Securities Litigation Reform Act of 1995 (collectively, the “Reform
Act”). Certain, but not necessarily all, of such forward-looking statements can
be identified by the use of forward-looking terminology such as “believes,”
“expects,” “may,” “will,” “should,” or “anticipates” or the negative thereof or
other variations thereon or comparable terminology, or by discussions of
strategy that involve risks and uncertainties. All statements other than
statements of historical fact included in this Form 10-K regarding our financial
position, business strategy and plans or objectives for future operations are
forward-looking statements.
  Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors which may cause the actual results, performance or achievements to
be materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements and other factors
referenced in this Form 10-K. We do not undertake and specifically decline any
obligation to publicly release the results of any revisions which may be made to
any forward-looking statement to reflect events or circumstances after the date
of such statements or to reflect the occurrence of anticipated or unanticipated
events.
  ITEM
7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  Because we are a smaller reporting
company, we are not required to provide the information called for by this
item.
  ITEM
8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
  The
response to this item is submitted as a separate section of this Report
beginning on page F-1.
  ITEM
      9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
      ACCOUNTING AND FINANCIAL DISCLOSURE
  None
  ITEM
9A(T).  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
March 31, 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.
  16
  Management’s
Annual Report on Internal Control Over Financial Reporting
 
 Our management is responsible for
establishing and maintaining adequate internal control over financial reporting,
as defined in Rules 13a-15(f) and 15d-15(f) of the Securities Exchange Act of
1934, as amended.  Internal control over financial reporting is
designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation and fair presentation of financial statements for
external purposes, in accordance with generally accepted accounting
principles.  The effectiveness of any system of internal control over
financial reporting is subject to inherent limitations and therefore, may not
prevent or detect misstatements.  Also, projections of any evaluation
of effectiveness of future periods are subject to the risk that the controls may
become inadequate due to change in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.
 
 Our management conducted an evaluation
of the effectiveness of internal control over financial reporting using the
criteria set forth by the Committee of Sponsoring Organizations of the Treadway
Commission.  Based on this evaluation, our management concluded that
as of March 31, 2009, our internal control over financial reporting was not
effective.   Specifically, the Company’s management and its
auditors determined that a material weakness existed in our internal control
over financial reporting.  The material weakness relates to the lack
of segregation of duties in financial reporting, as our financial reporting and
all accounting functions are performed by our Interim Chief Financial
Officer.  Due to our lack of funds, the Company has an insufficient
number of personnel having adequate knowledge, experience and training, and the
Company does not anticipate having the ability to retain such qualified
personnel until it is able to obtain adequate funding.
 
 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.
 
 Changes
in Control Over Financial Reporting
 
 Management
has not identified any change in our internal control over financial reporting
that occurred during the fourth quarter of the fiscal year ended March 31, 2009
that has materially affected, or is reasonably likely to materially affect, the
Company’s internal control over financial
reporting.
 
 ITEM
9B. OTHER INFORMATION
 
 None
  17
 PART
III
  ITEM
10.  DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE
GOVERNANCE
  The
following table shows the positions held by our board of directors and executive
officers and their ages as of July 14, 2009.
  Name
              Age
              PositionRonald
      Wilen
              70
              Director,
      Chief Executive Officer, President and SecretaryJack
      Silver
              65
              Director
      and Chairman of the BoardJames
      McKeever, CPA
              43
              Interim
      Chief Financial OfficerAdam
      Hershey
              36
              DirectorPeter
      Garson-Rappaport
              26
              DirectorMartin
      Rappaport
              72
              DirectorJohn
      A. Lack
              64
              Director
 
  The
principal occupations for the past five years (and, in some instances, for prior
years) of each of our executive officers and directors are as
follows:
  Ronald Wilen.  Mr.
Wilen has served as a member of our board since October 1995, our Chief
Executive Officer since November 2007, and Secretary since May 2006.
Mr. Wilen also served as our Chief Executive Officer from October 1995 to
September 2004, our President from October 1995 to August 2001, our Executive
Vice President of Research and Development from October 1995 to November 2007
and as our Chairman of the Board from August 2001 to January 2008.
  Jack Silver.Mr. Silver has
served as a member of the Board as its Chairman since January 2008. Mr. Silver
is the principal investor and manager of SIAR Capital, LLC, an independent
investment fund that invests primarily in undervalued, emerging growth
companies, and is the trustee of Sherleigh.
  James McKeever, CPA.Mr. McKeever
has been our Interim Chief Financial Officer since January 2004.  He
also continues to be a partner in the accounting firm of Abrams & McKeever
CPA’s, which he joined in January 2000.  Mr. McKeever has more than 19
years’ experience in public accounting and financial reporting, and is a member
of the New Jersey Society of Certified Public Accountants.
  Adam Hershey.  Mr.
Hershey has served as a member of the Board since January 2008. Mr. Hershey has
been a partner at SIAR Capital, LLC since September 2007. From March 2005 until
joining SIAR, Mr. Hershey was a Vice President and Portfolio Manager of
Neuberger Berman, LLC, a subsidiary of Lehman Brothers, managing capital for
institutions and high net worth individuals. From 2003 to March 2005, Mr.
Hershey was a Partner and Portfolio Manager at Sloate, Weisman, Murray &
Company, a registered investment advisor that was acquired by Neuberger Berman,
LLC in March 2005.
  Peter Garson-Rappaport. Mr.
Rappaport has served as a member of the Board since March 2008.  He is
an associate at Ledgemont Capital, a merchant bank.   From
December 2006 to May 2009, Mr. Rappaport was an analyst at SIAR Capital,
LLC.  He previously was a co-owner and manager of Wash U Wash, a third
party provider of laundry and dry-cleaning services.
  Martin Rappaport. Mr.
Rappaport has served as a member of our board since June 2001. Mr. Rappaport is
self-employed.  For more than 30 years, he has developed and managed
commercial and residential real estate.  Mr. Rappaport is an
active supporter and contributor to Blythedale Children’s Hospital in Valhalla,
New York.
  John A. Lack.Mr. Lack has
served as a member of our board since June 2008. Since 1998, Mr. Lack has been
the managing general partner of Digitar, a media investment and consulting
company. In his 35-year career in the media and entertainment industries, Mr.
Lack is best known for creating MTV. Most recently Mr. Lack was a founding
partner & CEO of Firebrand, the first multi-platform network dedicated to
commercial culture. Mr. Lack is also the Chairman of the Guardian’s Council at
the Pollock-Krasner House and Study Center in East Hampton, NY and Chairman of
the ASGOG Foundation.
  18
  Directors
are elected annually and serve until the next annual meeting of the Company’s
stockholders, and until their successors have been elected and have
qualified.  Officers are appointed to their positions, and continue in
such positions, at the discretion of the directors.
  Committees
of the Board
  The Board
of Directors is the acting Audit Committee. Our Board of Directors has
determined that there is no person on our Board of Directors who qualifies as an
audit committee financial expert as that term is defined by applicable
Securities and Exchange Commission rules. The Board of Directors believes that
obtaining the services of an audit committee financial expert is not
economically rational at this time in light of the costs associated with
identifying and retaining an individual who would qualify as an audit committee
financial expert.
  Indebtedness
of Executive Officers and Directors
  No
executive officer, director or any member of these individuals’ immediate
families or any corporation or organization with whom any of these individuals
is an affiliate is or has been indebted to us since the beginning of our last
fiscal year.
  Family
Relationships
  There are
no family relationships among our executive officers and directors.
  Legal
Proceedings
  During
the past five years, none of our executive officers, directors, promoters or
control persons has been involved in a legal proceeding material to an
evaluation of the ability or integrity of such person.
  Compliance
with Section 16(a) of the Securities Exchange Act of 1934
  Section 16(a) of the Securities Act of
1934, as amended, requires our directors and executive officers, and persons who
own more than 10% our outstanding common stock, to file with the SEC, initial
reports of ownership and reports of changes in ownership of our equity
securities.  These persons are required by SEC regulations to furnish
us with copies of all the reports they file.
  To our knowledge, based solely on a
review of the copies of the reports furnished to us and written or oral
representations that no other reports were required for those persons during the
fiscal year ended March 31, 2009, we believe that all of our officers, directors
and greater than 10% beneficial owners complied with the reporting requirements
of Section 16(a) of the Securities Exchange Act of 1934, as amended, other than
as follows:
  ·
              John
      Lack, a director, failed to timely file a Form 3 indicating that he did
      not own any securities of the Company as of the date he became a director
      and failed to timely file a Form 4 with respect to warrants granted to him
      in February 2009;
  ·
              Martin
      Rappaport, a director, failed to timely file Form 4s with respect to
      warrants granted to him in February 2009 and warrants acquired by him in
      March 2009; and
  ·
              Ronald
      Wilen, a director and our chief executive officer, president and
      secretary, failed to timely file Form 4s with respect to six (6) gifts of
      common stock made by him in 2006, with respect to six (6) gifts of common
      stock made by him in 2008, with respect to two (2) grants of warrants to
      him in 2007, with respect to two (2) grants of warrants to him in 2008,
      with respect to warrants granted to him in 2009, and with respect to
      amendment to five (5) grants of options to him in
  2009.
  19
  Code
of Ethics
  We have
adopted a Code of Business Conduct and Ethics (the “Code”) that applies to all
of our employees (including executive officers) and directors. The Code is
available on our website at www.unitedenergycorp.net
under the heading “Investor Information”.  We intend to satisfy the
disclosure requirement regarding any waiver of a provision of the Code
applicable to any executive officer or director, by posting such information on
such website.
 
 ITEM
11.  EXECUTIVE COMPENSATION
  The
following Summary Compensation Table sets forth, for the years indicated, all
cash compensation paid, distributed or accrued for services, including salary
and bonus amounts, rendered in all capacities by our Chief Executive Officer and
all other executive officers who received or are entitled to receive
remuneration in excess of $100,000 during the stated periods.
  Summary
      Compensation TableName
      and
                Principal
      Position
              
              Fiscal
                Year
              
              Salary
              
              
              Option
      Awards
              
              
              All
      other
                Compensation
              
              
              Total($)
              
              
              ($)
              
              
              ($)(1)
              
              
              ($)Ronald
      Wilen
              
              2009
              
              
              205,385
              
              
              
              26,535
              (2)
              
              
              9,335
              (3)
              
              
              241,255Chief
      Executive Officerand
      President
              
              2008
              
              
              200,769
              
              
              
              98,700
              
              
              
              7,935
              (3)
              
              
              307,404Brian
      King (4)
              
              2008
              
              
              130,769
              
              
              
              -
              
              
              
              11,088
              (5)
              
              
              141,857Former
      President andChief
      Executive Officer
 
  (1)
              We
      pay for medical insurance for all employees.  Included in the
      table is the amount of the premiums paid by us dependent on the coverage
      provided.
  (2)
              Includes
      150,000 warrants valued at $26,535, which was awarded to Mr. Wilen for his
      services as a director.
  (3)
              During
      the fiscal years ended March 31, 2009 and 2008, we paid for the lease on
      one automobile used by Mr. Wilen under monthly lease
      payments.  We also paid for medical insurance for Mr. Wilen at a
      rate of $349.57 per month.
  (4)
              Mr.
      King resigned as our Chief Executive Officer in November
    2007.
  (5)
              We
      paid for Mr. King’s medical insurance at a rate of $1,400.30 per month
      through November 2007.
  Employment
Agreement
 
 Effective
as of April 16, 2007, we entered into an employment agreement with Ronald Wilen
that provides for his continued employment through April 16, 2012, which
agreement was amended and restated as of December 31, 2008 for the purposes of
making it more compliant with the provisions of Section 409A of the Internal
Revenue Code.  Under the terms of the employment agreement, Mr. Wilen
receives annual base compensation in the amount of $200,000 per year, subject to
a 2.5% increase each year.  Mr. Wilen is also entitled to receive
benefits (including health, disability and life insurance benefits) provided to
other employees of the Company.  In addition, Mr. Wilen is entitled to
receive options to purchase 50,000 shares of our common stock for each year of
employment.
 
 If Mr. Wilen is terminated without
cause, as defined in the his employment agreement, or by Mr. Wilen for good
reason, as defined in the employment agreement, he will receive (i) his then
current base salary for the lesser of twelve (12) months or the remainder of the
employment term under his employment agreement and (ii) health and disability
insurance for a period of eighteen (18) months.
  20
 
 The agreement also contains covenants
governing confidentiality, non-competition and non-solicitation.  The
non-competition continues for a period of two (2) years following termination of
Mr. Wilen’s employment.
 
 Director
Compensation
 
 Each
director receives warrants to purchase 150,000 shares of our common stock in
lieu of an annual retainer and meeting fees.  Other than the warrants
to purchase 150,000 shares of our common stock there are no special fees,
contracts entered into, or payments made in consideration of any director’s
service as a director.
  The following table shows compensation
paid to all directors who are not also employees during fiscal year ended March
31, 2009.
 
 Name
              
              Option
                Awards
      ($)
              
              
              Total
      ($)Jack
      Silver (1)
              
              
              26,535
              
              
              
              26,535Adam
      Hershey (2)
              
              
              26,535
              
              
              
              26,535John
      A. Lack (3)
              
              
              26,535
              
              
              
              26,535Peter
      Garson-Rappaport (4)
              
              
              26,535
              
              
              
              26,535Martin
      Rappaport (5)
              
              
              26,535
              
              
              
              26,535
 
 (1)
              As
      of March 31, 2009, the aggregate number of options and/or warrants
      outstanding held by Mr. Silver, for which he was granted for his services
      as a director, was 150,000
warrants.
  (2)
              As
      of March 31, 2009, the aggregate number of options and/or warrants
      outstanding held by Mr. Hershey, for which he was granted for his services
      as a director, was 150,000
warrants.
  (3)
              As
      of March 31, 2009, the aggregate number of options and/or warrants
      outstanding held by Mr. Lack, for which he was granted for his services as
      a director, was 150,000 warrants.
  (4)
              As
      of March 31, 2009, the aggregate number of options and/or warrants
      outstanding held by Mr. Garson-Rappaport, for which he was granted for his
      services as a director, was 150,000
warrants.
  (5)
              As
      of March 31, 2009, the aggregate number of options and/or warrants
      outstanding held by Mr. Rappaport, for which he was granted for his
      services as a director, was 150,000 warrants and 80,000
      options.
  Outstanding
Equity Awards at Fiscal Year End
 
 Option
      AwardsName
              
              Number
      of Securities
                Underlying
      Unexercised Options (#) Exercisable
              
              
              Option
      Exercise Price ($)
              
              Option
                Expiration
      DateRonald
      Wilen,
              
              
              40,000
              
              
              
              .12
              
              3/31/2010Chief
      Executive Officer,
              
              
              10,000
              
              
              
              .12
              
              1/1/2011and
      President
              
              
              10,000
              
              
              
              .12
              
              3/30/201750,000
              
              
              
              .12
              
              4/10/1710,000
              
              
              
              .12
              
              3/31/201850,000
              
              
              
              .12
              
              4/10/18150,000
              
              
              
              .12
              
              2/13/2019Brian
      King,
              
              
              500,000
              
              
              
              1.00
              
              9/15/2014Former
      President and
              
              
              500,000
              
              
              
              1.06
              
              4/1/2015Chief
      Executive Officer
              
              
              250,000
              
              
              
              2.05
              
              4/1/2016
  21
  Stock
Option Plan
  In August
2001, our stockholders approved the 2001 Equity Incentive 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 our board’s
discretion.  Under the 2001 Equity Incentive Plan, 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 date of the grant to up to five years.
  An
amendment and restatement of the 2001 Equity Incentive Plan increasing the
number of shares issuable under the plan to a total of 4,000,000 was approved by
the Board of Directors on May 29, 2002 and was approved by our 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, non-employee director stock
options shall be exercisable in full twelve months after the date of grant
unless determined otherwise by the compensation committee.
  There
were stock options to purchase 400,000 shares of our common stock available for
future grant as of March 31, 2009 under the 2001 Equity Incentive
Plan.
  ITEM
      12.
              SECURITY
      OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
      STOCKHOLDER MATTERS
  Beneficial
Ownership Information
  The following table sets forth
information regarding the number of shares of our common stock beneficially
owned on July 14, 2009, by each of our directors, each of our executive officers
named in the Summary Compensation Table above, all of our executive officers and
directors as a group, and by any person or “group,” as that term is used in
Section 13(d)(3) of the Securities Exchange Act of 1934, known to us to own
beneficially more than 5% of the outstanding shares of our common
stock.  Except as otherwise set forth below, the address of each of
the persons listed below is c/o United Energy Corp., 600 Meadowlands Parkway,
#20, Secaucus, New Jersey 07094.
  Amount
      and

                    Nature
      ofName
      and Address
                
                Beneficial
                
                
                Percent
      ofof
      Beneficial Owner
                
                Ownership(1)
                
                
                Class
      (1)Ronald
      Wilen
                
                
                3,797,806
                (2)
                
                
                11.7
                %James
      McKeever, CPA
                
                
                3,000
                
                
                
                *Jack
      Silver
                
                
                3,555,139
                (3)
                
                
                11.0
                %SIAR
      Capital LLC660
      Madison AvenueNew
      York, NY 10021Martin
      Rappaport
                
                
                3,680,417
                (4)
                
                
                11.3
                %Adam
      Hershey
                
                
                450,000
                (5)
                
                
                1.4
                %Peter
      Garson-Rappaport
                
                
                300,000
                (6)
                
                
                1.0
                %John
      A. Lack
                
                
                300,000
                (7)
                
                
                1.0
                %All
      current executive officers and directorsas
      a group (7 persons)
                
                
                12,086,362
                
                
                
                33.3
                %5%
      or Greater Stockholders:Joseph
      J. Grano, Jr.
                
                
                3,087,916
                (8)
                
                
                9.2
                %c/o
      Centurion Holdings LLC1185
      Avenue of the Americas, Suite 2250New
      York, NY 10036
 ________________
 * Less
than 1% of outstanding shares.
  (1)
              As
      of June 30, 2009, the Company had 31,030,115 shares of common stock and
      three shares of Preferred Stock outstanding. Unless otherwise indicated in
      these footnotes, each stockholder has sole voting and investment power
      with respect to the shares beneficially owned.  All share
      amounts reflect beneficial ownership determined pursuant to Rule 13d-3
      under the Exchange Act.  All information with respect to
      beneficial ownership has been furnished by the respective director,
      executive officer or stockholder, as the case may
  be.
  22
  (2)
              Includes
      (i) 2,236,000 shares of common stock, (ii) stock options to purchase
      170,000 shares at an exercise price of $.12 per share, (iii) warrants to
      purchase 550,000 shares at an exercise price of $.12 per share and (iv)
      convertible notes which are convertible into 841,806 shares at a
      conversion price of $.12 per share, but excludes (i) warrants to purchase
      150,000 shares at an exercise price of $.12 per share and (ii) warrants to
      purchase 200,000 shares at an exercise price of $.125 per share, which
      warrants provide that they cannot be exercised to the extent following
      such exercise the holder or its affiliates would beneficially own more
      than 9.99% of the total number of outstanding shares of common
      stock.
  (3)
              Includes
      (i) 2,313,333 shares of common stock held by Sherleigh, a trust of which
      Mr. Silver is the trustee, (ii) warrants to purchase 400,000 shares at an
      exercise price of $.12 per share held by Mr. Silver and (iii) convertible
      note which is convertible into 841,806 shares at a conversion price of
      $.12 per share held by Mr. Silver, but excludes (i) warrants to purchase
      5,682,667 shares at an exercise price of $.12 per share held by Sherleigh;
      (ii) 200,000 shares issuable upon conversion of 3 shares of preferred
      stock held by Sherleigh; (iii) warrants to purchase 200,000 shares at an
      exercise price of $.125 per share held by Sherleigh and (iv) warrants to
      purchase 150,000 shares at an exercise price of $.12 per share held by Mr.
      Silver, which warrants and preferred stock provide that they cannot be
      exercised or converted to the extent following such exercise or conversion
      the holder or its affiliates would beneficially own more than 9.99% of the
      total number of outstanding shares of common stock. The three shares of
      preferred stock constitute 100% of the class of such voting equity
      securities.
  (4)
              Includes
      (i) 2,210,000 shares of common stock, (ii) stock options to purchase
      10,000 shares at an exercise price of $0.70 per share,  (iii)
      stock options to purchase 10,000 shares at an exercise price of $1.30 per
      share, (iv) stock options to purchase 10,000 shares at an exercise price
      of $1.18 per share, (v) stock options to purchase 40,000 shares at an
      exercise price of $1.00 per share, (vi) stock options to purchase 10,000
      shares at an exercise price of $1.60 per share, which are currently
      exercisable, (vii) warrants to purchase 550,000 shares at an exercise
      price of $.12 per share and (viii) convertible notes which are convertible
      into 840,417 shares at a conversion price of $.12 per share, but excludes
      (i) warrants to purchase 150,000 shares at an exercise price of $.12 per
      share and (ii) warrants to purchase 200,000 shares at an exercise price of
      $.125 per share, which warrants provide that they cannot be exercised to
      the extent following such exercise the holder or its affiliates would
      beneficially own more than 9.99% of the total number of outstanding shares
      of common stock.
  (5)
              Includes
      warrants to purchase 450,000 shares at an exercise price of $.12 per
      share.
  (6)
              Includes
      warrants to purchase 300,000 shares at an exercise price of $.12 per
      share.
  (7)
              Includes
      warrants to purchase 300,000 shares at an exercise price of $.12 per
      share.
  (8)
              Includes
      1,791,665 shares of common stock and warrants to purchase 1,296,251 shares
      of common stock.
  23
  Equity
Compensation Plan Information
  The
following table provides information regarding the status of our existing equity
compensation plans at March 31, 2009.
  Plan Category
              
              Number
      of securities to be issued upon exercise of outstanding options, warrants and rights
              
              
              Weighted-average
      exercise price of outstanding option, warrants and rights
              
              
              Number
      of securities remaining available for future issuance under equity
      compensation plans (excluding securities reflected in column (a))(a)
              
              
              (b)
              
              
              (c)Equity
      compensation plans approved by security holders
              
              
              3,187,500
              
              
              $
              1.22
              
              
              
              400,000Equity
      compensation plans not approved by security holders
              
              
              1,100,000
              
              
              $
              1.65
              
              
              
              --Total
              
              
              4,287,500
              
              
              
              
              
              
              
              --
 
 Change
of Control
  Pursuant to a Securities Purchase
Agreement, dated March 18, 2005, among the Company and the Purchasers identified
therein, including Sherleigh, as amended by the First Amendment to Securities
Purchase Agreement, dated as of January 26, 2006, and by the Second Amendment to
Securities Purchase Agreement, dated as of March 9, 2006 (as amended, the
“Purchase Agreement”), during the period of March 2005 through March 2006,
Sherleigh purchased from the Company (a) 1,333,333 shares of common stock, (b)
warrants to acquire 5,682,667 shares of common stock, and (c) three shares of
the Company’s Preferred Stock for an aggregate purchase price of
$1,090,331.
  The Purchase Agreement and the
Preferred Stock provide that, upon the occurrence of a “Triggering Event” and
during the “Period of Triggering Event”, the holders of the majority of the
outstanding shares of Preferred Stock have the right to designate up to a
majority of the members of our board of directors.  “Triggering Event”
is defined as (i) failure of the Company to have gross revenues of at least $5
million for the six month period ending September 30, 2006 or (ii) material
breach by the Company of any of its representations, warranties, agreements or
covenants contained in the Purchase Agreement and certain other agreements and
instruments entered into in connection therewith.  The Company failed
to have gross revenues of at least $5 million during the six months ended
September 30, 2006, and thus, a Triggering Event has
occurred.  “Period of the Triggering Event” is defined as date
commencing upon the occurrence of a Triggering Event and ending on the date the
purchasers under the Purchase Agreement no longer hold in the aggregate at least
1,500,000 shares of common stock issued pursuant to the Purchase Agreement and
issuable upon the exercise of any warrants issued pursuant to the Purchase
Agreement or upon conversion of the Preferred Stock.  Accordingly,
pursuant to the terms of the Purchase Agreement and the Preferred Stock,
Sherleigh, as the holder of all outstanding shares of Preferred Stock, has the
right to designate a majority of the members of our board of
directors.
  As of June 30, 2009, three of our six
directors have been designated by Sherleigh.  Such designees of
Sherleigh are Jack Silver, Adam Hershey and Peter Garson-Rappaport.
  ITEM
13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
  In March
2009, Mr. Wilen, Martin Rappaport, a director, and Sherleigh provided the
Company with a short term loan 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 Jack Silver, a director and the trustee of Sherleigh, 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 July 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
June 2009, 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.  The
Company intends to use the proceeds of all such loans for general working
capital needs.
  24
  Martin
Rappaport owned the building through September 2007 in which we lease our
principal executive offices in Secaucus, New Jersey. We paid $115,200 per year
under the lease, excluding real estate taxes. We believe that this transaction
was advantageous to us and was on terms no less favorable to us than could have
been obtained from unaffiliated third parties.
  Securities
Purchase Agreement
  Pursuant
to the Purchase Agreement, in March 2005, Sherleigh purchased from the Company
533,333 shares of common stock and Series A Warrants to acquire 266,667 shares
of common stock for a purchase price of $426,664.  Thereafter, during
the period of August 2005 through January 2006, Sherleigh purchased, pursuant to
the Purchase Agreement, 800,000 additional shares of common stock and additional
Series A Warrants to acquire 400,000 shares of common stock for an aggregate
purchase price of $639,667.  Then in March 2006, pursuant to the
Purchase Agreement, Sherleigh purchased 3 shares of Preferred Stock, Series B
Warrants to acquire 12,000 shares of common stock and Series C Warrants to
acquire 5,004,000 shares of common stock for a purchase price of
$24,000.
  In
addition, pursuant to the Purchase Agreement, and the Preferred Stock, upon the
occurrence of a “Triggering Event” and during the “Period of Triggering Event”,
the holders of the majority of the outstanding Preferred Stock have the right to
designate up to a majority of the members of the Company’s board of
directors.  “Triggering Event” is defined as (i) failure of the
Company to have gross revenues of at least $5 million for the six month period
ending September 30, 2006 or (ii) material breach by the Company of any of its
representations, warranties, agreements or covenants contained in the Purchase
Agreement and certain other agreements and instruments entered into in
connection therewith. The Company failed to have gross revenues of at least $5
million for the six months ended September 30, 2006, and thus a Triggering Event
has occurred. “Period of the Triggering Event” is defined as date commencing
upon the occurrence of a Triggering Event and ending on the date the purchasers
under the Purchase Agreement no longer hold in the aggregate at least 1,500,000
shares of common stock issued pursuant to the Purchase Agreement or issuable
upon the exercise of any warrants issued pursuant to the Purchase Agreement or
upon conversion of the Preferred Stock.
  The
Purchase Agreement also provides that until March 18, 2009, the purchasers have
the right to participate in any future equity financing, including securities
convertible into or exchangeable into equity securities.
  Series
A, Series B and Series C Warrants
  Each of
the Series A, Series B and Series C Warrants provide that they may be exercised
at any time prior to the five year anniversary date of the issuance of such
warrants.  In June 2008, the Company agreed to extend the exercise
period of such warrants to June 30, 2013.  The warrants also provide
for cashless exercise at the option of the holder and anti-dilution protection
in the event the Company is deemed to have issued shares of common stock for a
price less than the exercise price.  In connection with the issuance
of warrants to employees and directors, the issuance of a convertible note and
the reduction of exercise price of certain options in February 2009, the Company
and Sherleigh entered into an anti-dilution waiver (the “Waiver”) whereby the
exercise price of the Series A, Series B and Series C Warrants held by Sherleigh
were reduced from $1.00 to $.12 per share.  In addition, Sherleigh
agreed not to increase the number of shares underlying such
warrants.  Without the waiver, the number of shares underlying such
warrants would have been increased to 47,355,558 shares.
  25
  Series
A Convertible Preferred Stock
  Each
share of Preferred Stock earns dividends at the rate of 6% per annum of the
Stated Value of $8,000.  Such dividends are payable from legally
available funds on June 30th and December 30th of each year, or at the option of
the holder, in shares of common stock of the Company at the applicable
conversion rate.
  Each
share of Preferred Stock is convertible into 200,000 shares of common stock at
the option of the holder.  Such conversion rate is subject to
anti-dilution protections in the event the Issuer is deemed to have issued
shares of common stock at a price less than the conversion price.
  The
holders of the Preferred Stock have no voting rights except as required by law
and except the right to designate and elect a majority of the Company’s board of
directors upon the occurrence of a Triggering Event, as described
above.
  In the
event of a liquidation, dissolution or winding up of the Company’s business, the
holders of the Preferred Stock have a liquidation preference equal to $8,000 per
share of Preferred Stock plus all accrued but unpaid dividends
thereon.
  Registration
Rights Agreements
  In
connection with the Purchase Agreement the Company entered into a Registration
Rights Agreement, wherein it agreed to file a registration statement registering
the common stock issued pursuant to the Purchase Agreement and the common stock
underlying the Series A Warrants, the Series B Warrants and the Preferred
Stock.
  In connection with the Second Amendment
to the Purchase Agreement, the Company entered into a Registration Rights
Agreement, wherein it agreed to file a registration statement registering the
common stock underlying the Series C Warrants.
  Consulting
Agreement
  In September 2008, the Company entered
into a consulting agreement with SIAR Capital, LLC (“SIAR”) pursuant to which
the Company retained SIAR to provide management consulting services for a period
of five (5) years.  Mr. Silver is the principal of SIAR.  In
addition, Adam Hershey, a director, is employed by SIAR and Peter
Garson-Rappaport, a director, is a former employ of SIAR.  The rights
and obligations of SIAR under the consulting agreement were subsequently
assigned to Mr. Silver.
  As
compensation of the consulting services, the Company agreed to pay an amount
equal to two percent of the annual increase in the market capitalization of the
Company during each twelve (12) month period of the consulting term, as
determined by the average closing price for the thirty trading days preceding
the end of each such twelve month period as compared to the higher of (i) the
average closing price for the thirty trading days preceding the end of the prior
twelve month period (the “Base Year”) and (ii) the highest average closing price
for the thirty trading days preceding the end of any prior Base Year, except
that the market capitalization at the commencement of the consulting term shall
be based on a price of $.50 per share.  The compensation payable is
limited to a maximum aggregate increase in market capitalization during the term
of $200 million.
  Director
Independence
  The board of directors have determined
that Messrs Silver, Hershey, Garson-Rappaport, Rappaport and Lack are
independent directors as defined in NASDAQ Marketplace Rule
4200(a)(15).
  ITEM
14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES
  Audit
Fees
  The aggregate fees billed or expected
to billed by Jewett Schwartz Wolfe & Associates for professional services
rendered for the audit of our annual financial statements for the fiscal year
ended March 31, 2009 and for the reviews of the interim financial statements
included in our Quarterly Reports on Form 10-Q for the fiscal year was
approximately $35,500 and the fees billed by Imowitz, Koenig & Co., LLP
(“Imowitz”) for professional services rendered for the audit of our annual
financial statements for the fiscal year ended March 31, 2008 and for the
reviews of the interim financial statements included in our Quarterly Reports on
Form 10-QSB for the fiscal years were approximately $75,000.
  26
  Audit-Related
Fees
  Fees of $22,500 and $7,088 were billed
by Jewett Schwartz Wolfe & Associates and Imowitz, respectively, for
audit-related services for the fiscal year ended March 31, 2009 and March 31,
2008.
  Tax
Fees
  No fees were billed by Jewett Schwartz
Wolfe & Associates and Imowitz for tax services rendered for the fiscal
years ended March 31, 2009 and 2008.
  All
Other Fees
  Jewett Schwartz Wolfe & Associates
and Imowitz did not render any other services, other than the services described
above under “Audit Fees,” “Audit-Related Fees” and “Tax Fees” for the fiscal
year ended March 31, 2009 or for the fiscal year ended March 31,
2008.
  Audit
Committee
  Our board of directors has established
a policy requiring it’s pre-approval of all audit services and permissible
non-audit services provided by the independent auditors, along with the
associated fees for those services.  The policy requires the specific
pre-approval of all permitted services.  When considering the
pre-approval of non-audit services, our board considers whether the provision of
such non-audit service is consistent with the auditor’s independence and the
Securities and Exchange Commission rules regarding auditor
independence.  Additionally, our board considers whether the
independent auditors are best positioned and qualified to provide the most
effective and efficient service, based on factors such as the independent
auditors’ familiarity with our business, personnel, systems or risk profile and
whether provision of the service by the independent auditors would enhance our
ability to manage or control risk or improve audit quality or would otherwise be
beneficial to us.
  27
  PART
IV
  ITEM
15.  EXHIBITS
  Exhibit
                Number
              
              Description
      of Document3.1
              
              Articles
      of Incorporation of United Energy Corp. (1)3.2
              
              Amendment
      to the Articles of Incorporation. (2)3.3
              
              Articles
      of Incorporation: Articles Fourth, Fifth and Seventh.
  (1)3.6
              
              By-Laws
      of United Energy Corp. (1)3.7
              
              By-Laws:
      Article I: Sections: Six, Seven, Eight, Nine, Ten; Article II: Section
      Nine: Article IV: Section Two. (1)3.8
              
              New
      Article V of the Bylaws. (13)3.9
              
              Amendment
      to Articles of Incorporation of United Energy Corp.
(10)3.10
              
              Certificate
      of Designations, Preferences and Rights of Series A Convertible Preferred
      Stock. (13)4.1
              
              Form
      of Stock Certificate of United Energy Corp. (1)4.2
              
              Common
      Stock Purchase Warrant, dated March 24, 2004. (3)4.3
              
              Form
      of March 2005 Series A Purchase Warrant. (7)4.4
              
              Form
      of March 2005 Series B Purchase Warrant. (7)4.5
              
              Warrant
      Certificate, dated April 27, 2005. (8)4.6
              
              2002
      Common Stock Purchase Warrant. (9)4.7
              
              Common
      Stock Purchase Warrant, dated February 28, 2005. (6)4.8
              
              Form
      of Series C Warrant. (13)4.9
              
              Form
      of Warrant between United Energy Corp. and Connie Kristan.
      (15)4.10
              
              Form
      of Warrant between United Energy Corp. and Joseph Grano.
    (15)4.11
              
              Form
      of Director warrants issued February 13, 2009 (19)10.1
              
              2001
      Equity Incentive Plan, as amended on May 29, 2002. (4)10.2
              
              Securities
      Purchase Agreement dated March 18, 2005, between United Energy Corp. and
      the Purchasers identified therein. (7)10.3
              
              Registration
      Rights Agreement dated March 18, 2005, between United Energy Corp. and the
      Purchasers identified therein. (7)10.4
              
              Consulting
      Services Agreement dated April 27, 2005, between United Energy Corp. and
      Ben Barnes. (8)10.5
              
              2002
      Common Stock and Warrant Purchase Agreement. (9)10.6
              
              United
      Energy Corp. 2001 Equity Incentive Plan, Amended and Restated Effective
      May 29, 2002. (10)10.7
              
              Form
      of Incentive Stock Option Agreement. (11)10.8
              
              Form
      of Stock Option Agreement. (11)10.9
              
              First
      Amendment to Securities Purchase Agreement, dated January 26, 2006, by and
      among United Energy Corp., Sherleigh Associates, Inc. Profit Sharing Plan
      and Joseph J. Grano, Jr. (12)10.10
              
              Second
      Amendment to Securities Purchase Agreement, dated as of March 9, 2006, by
      and among United Energy Corp., Sherleigh Associates, Inc. Profit Sharing
      Plan and Joseph J. Grano, Jr. (13)10.11
              
              Registration
      Rights Agreement, dated as of March 9, 2006, by and between United Energy
      Corp. and Sherleigh Associates, Inc. Profit Sharing Plan.
    (13)10.12
              
              Form
      of Securities Purchase Agreement dated as of March 24, 2006.
      (14)10.13
              
              Form
      of Registration Rights Agreement dated as of March 24, 2006.
      (14)10.14
              
              Form
      of First Amendment to Securities Purchase Agreement and Registration
      Rights Agreement dated as of March 24, 2006. (14)10.15
              
              Employment
      Agreement with Ronald Wilen dated April 17, 2007. (16)10.16
              
              Master
      Purchase Agreement, dated February 23, 2006, between Petrobras America
      Inc. and the Company. (18)10.17
              
              Anti-Dilution
      Waiver Agreement, dated February 13, 2009 by and between the Company and
      Joseph Grano. (19)10.18
              
              Anti-Dilution
      Waiver Agreement, dated February 13, 2009 by and between the Company and
      Sherleigh Associates Inc. Profit Sharing Plan. (19)10.19
              
              Consulting
      Agreement, dated as of June 27, 2008, by and between the Company and SIAR
      Capital, LLC. (17)
  28
  21.1
              
              Subsidiaries
      of Small Business Issuer (15)31.1
              
              Chief
      Executive Officer’s Certificate, pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002. *31.2
              
              Interim
      Chief Financial Officer’s Certificate, pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002. *32.1
              
              Chief
      Executive Officer’s and Interim Chief Financial Officer’s Certificate,
      pursuant to 18 U.S.C., Section 1350, as adopted pursuant to section 906 of
      the Sarbanes-Oxley Act of 2002. *
  *
              Filed
      herewith(1)
              Incorporated
      by reference from the exhibits filed with the Form 10 on June 20,
      2000.(2)
              Incorporated
      by reference from the exhibits filed with the Form 10-Q for the period
      ended September 30, 2001.(3)
              Incorporated
      by reference from the exhibits filed with the Form 8-K filed on March 30,
      2004.(4)
              Incorporated
      by reference from the exhibits filed with the Schedule 14A for the year
      ended March 31, 2003.(5)
              Incorporated
      by reference from the exhibits filed with the Registration Statement on
      Form SB-2 (No. 333 115484).(6)
              Incorporated
      by reference from the exhibits filed with the Form 8-K filed on April 12,
      2005.(7)
              Incorporated
      by reference from the exhibits filed with the Form 8-K filed on March 23,
      2005.(8)
              Incorporated
      by reference from the exhibits filed with the Form 8-K filed on June 3,
      2005.(9)
              Incorporated
      by reference from the exhibits filed with the Form S-3 filed on September
      13, 2005.(10)
              Incorporated
      by reference from the exhibits filed with the Definitive Schedule 14A
      filed on July 18, 2005(11)
              Incorporated
      by reference from the exhibits filed with the Form S-8 filed on September
      29, 2005.(12)
              Incorporated
      by reference from the exhibits filed with the Form 8-K filed on January
      27, 2006.(13)
              Incorporated
      by reference from the exhibits filed with the Form 8-K filed on March 9,
      2006.(14)
              Incorporated
      by reference from the exhibits filed with the Form SB-2 filed on April 24,
      2006.(15)
              Incorporated
      by reference from the exhibits filed with the Form 10-KSB filed on May 29,
      2006.(16)
              Incorporated
      by reference from the exhibits filed with the Form 10-QSB filed on August
      14, 2007.(17)
              Incorporated
      by reference from the exhibits filed with the Form 8-K filed on September
      26, 2008.(18)
              Incorporated
      by reference from the exhibits filed with the Form 10-KSB filed on July
      14, 2008.(19)
              Incorporated
      by reference from the exhibits filed with Form 10-Q filed on February 17,
      2009.
 
 29
  SIGNATURES
  Pursuant
to the requirements of Section 13 or 15(d) 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.
  UNITED ENERGY
      CORP.Date:  July
      14, 2009
                By:
                /s/ Ronald
      WilenRonald
      WilenChief
      Executive OfficerBy:
                /s/ James
      McKeeverJames
      McKeeverInterim
      Chief Financial Officer
  Pursuant
to the requirements of the Securities Exchange Act of 1934, this Report has been
signed below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.
   /s/ Ronald Wilen
                
                Chief
      Executive Officer, President and
                July
      14, 2009Ronald
      Wilen
                
                Secretary
      (principal executive officer)/s/ James McKeever
                
                Interim
      Chief Financial Officer
                July
      14, 2009James
      McKeever
                
                (principal
      financial and accounting officer)/s/ Adam
      Hershey
                
                Director
                July
      14, 2009Adam
      Hershey/s/ Peter Garson-Rappaport
                
                Director
                July
      14, 2009Peter
      Garson-Rappaport/s/ John
      Lack
                
                Director
                July
      14, 2009John
      Lack/s/ Martin Rappaport
                
                Director
                July
      14, 2009Martin
      Rappaport/s/ Jack
      Silver
                
                Director,
      Chairman of the Board of Directors
                July
      14, 2009Jack
      Silver
 
  UNITED
ENERGY CORP. AND SUBSIDIARIES
  FORM
10-K
  ITEM
8
  INDEX
OF FINANCIAL STATEMENTS AND SCHEDULES
  The
following financial statements of United Energy Corp. and its subsidiaries
required to be included in Item 7 are listed below:
  PageReport
      of independent registered public accounting firm
                  
                  F-2Report
      of prior year independent registered public accounting
firm
                  
                  F-3Consolidated
      balance sheets as of March 31, 2009 and March 31, 2008
                  
                  F-4-5For
      the periods ended March 31, 2009 and 2008:Consolidated
      statements of operations
                  
                  F-6Consolidated
      statements of stockholders' equity
                  
                  F-7Consolidated
      statements of cash flows
                  
                  F-8-9Notes
      to consolidated financial statements
                  
                  F-10-20
 REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
  To the
Board of Directors and Stockholders of
 UNITED
ENERGY CORP. AND SUBSIDIARIES
 
 We have
audited the accompanying consolidated balance sheet of United Energy, Corp. and
Subsidiaries as of March 31, 2009 and the related consolidated statements of
operations, changes in shareholders' equity and cash flows for the year then
ended. These consolidated 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 audit 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
consolidated financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the consolidated financial statements. An audit also includes
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 provided a reasonable basis for our
opinion.
 
 In our
opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the financial position of United Energy, Corp. and
Subsidiaries, as of March 31, 2009, and the results of their operations and
their cash flows for the year then ended in conformity with accounting
principles generally accepted in the United States of America.
 
 These
consolidated financial statements have been prepared assuming that the Company
will continue as a going concern. As discussed in Note 2 to the consolidated
financial statements, the Company has operating and liquidity concerns, has
incurred net losses approximating $22,000,000 as of March 31, 2009. These
factors raise substantial doubt about the ability of the Company to continue as
a going concern. The consolidated financial statements do not include any
adjustments that might result from the outcome of these uncertainties. In this
regard, Management is proposing to raise any necessary additional funds through
loans, additional sales of its common stock and increased sales volumes and the
ability to achieve profitability from the sales of our products lines. There is
no assurance that the Company will be successful in raising additional
capital.
 
 /s/
      Jewett, Schwartz, Wolfe & AssociatesJewett,
      Schwartz, Wolfe & Associates
 
 Hollywood,
Florida
 July 13,
2009
  F-2
  REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
  
 To the
Board of Directors of United Energy Corp.:
 
 We have
audited the accompanying consolidated balance sheet of United Energy Corp. (a
Nevada corporation) and subsidiaries as of March 31, 2008 and the related
consolidated statements of operations, cash flows and stockholders' equity for
the year then ended.  These consolidated financial statements are the
responsibility of the Company's management.  Our responsibility is to
express an opinion on these consolidated financial statements based on our
audit.
 
 We
conducted our audit 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 consolidated financial statements are free of material misstatement. The
Company is not required to have, nor have we been 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 purposes of expressing an opinion on the effectiveness of the Company’s
internal control over financial reporting. Accordingly, we express no such
opinion. An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the consolidated financial statements. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall consolidated financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
 
 In our
opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the consolidated financial position of United Energy
Corp. and subsidiaries as of March 31, 2008 and the consolidated results of
their operations and their consolidated cash flows for the year then ended, in
conformity with accounting principles generally accepted in the United States of
America.
 
 The
accompanying consolidated financial statements have been prepared assuming the
Company will continue as a going concern.  As discussed in Note 2 to
the consolidated financial statements, the Company has incurred recurring losses
and negative cash flows from operations. These matters raise substantial doubt
about the Company’s ability to continue as a going concern.  The
consolidated financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
 
 
 /s/
IMOWITZ, KOENIG & CO., LLP
 New York,
New York
 July 14,
2008
 
 F-3
  UNITED
ENERGY CORP.  AND SUBSIDIARIES
 CONSOLIDATED
BALANCE SHEETS
 MARCH
31, 2009 AND 2008
  March
      31,
                
                
                March
      31,2009
                
                
                2008ASSETSCURRENT
      ASSETS:Cash
      and cash equivalents
                
                $
                56,372
                
                
                $
                858,575Accounts
      receivable, net of allowance for doubtfulaccounts
      of $7,032 and $25,329, respectively
                
                
                140,531
                
                
                
                247,747Inventory
                
                
                155,427
                
                
                
                141,667Prepaid
      expenses and other current assets
                
                
                79,237
                
                
                
                162,255Loan
      receivable, net of reserve of $25,000
                
                
                25,000
                
                
                
                25,000Total
      current assets
                
                
                456,567
                
                
                
                1,435,244PROPERTY
      AND EQUIPMENT, net of accumulateddepreciation
                
                
                108,094
                
                
                
                51,356OTHER
      ASSETS:Goodwill,
      net of accumulated amortization of $17,704
                
                
                15,499
                
                
                
                15,499Patents,
      net of accumulated amortization of$242,000
      and $193,330, respectively
                
                
                347,661
                
                
                
                386,687Loans
      receivable
                
                
                3,843
                
                
                
                5,023Deposits
                
                
                1,385
                
                
                
                1,385Total
      assets
                
                $
                933,049
                
                
                $
                1,895,194
 
 The
accompanying notes are an integral part of these consolidated
statements
  F-4
 
 UNITED
ENERGY CORP.  AND SUBSIDIARIES
 CONSOLIDATED
BALANCE SHEETS
 MARCH
31, 2009 AND 2008
 
 March
      31,
                
                
                March
      31,2009
                
                
                2008LIABILITIES
      AND STOCKHOLDERS' EQUITYCURRENT
      LIABILITIES:Accounts
      payable
                
                $
                189,609
                
                
                $
                167,913Accrued
      expenses
                
                
                107,622
                
                
                
                113,698Convertible
      term note payable
                
                
                35,000
                
                
                
                -Due
      to related parties
                
                
                150,000
                
                
                
                244,141Total
      current liabilities
                
                
                482,231
                
                
                
                525,752STOCKHOLDERS'
      EQUITY:Series
      A Convertible Preferred Stock:$8,000
      stated value; 100,000 sharesauthorized;
      3 shares issued and outstandingas
      of March 31, 2009 and 2008
                
                
                24,000
                
                
                
                24,000Common
      Stock: $0.01 par value; 100,000,000shares
      authorized; 31,030,115  sharesissued
      and outstanding as of  March 31,2009
      and 2008
                
                
                310,301
                
                
                
                310,301Additional
      paid-in capital
                
                
                22,196,257
                
                
                
                21,775,204Accumulated
      deficit
                
                
                (22,079,740
                )
                
                
                (20,740,063
                )Total
      stockholders' equity
                
                
                450,818
                
                
                
                1,369,442Total
      liabilities and stockholders' equity
                
                $
                933,049
                
                
                $
                1,895,194
 
 The
accompanying notes are an integral part of these consolidated
statements
  F-5
  UNITED
ENERGY CORP. AND SUBSIDIARIES
 CONSOLIDATED
STATEMENTS OF OPERATIONS
 FOR
THE YEARS ENDED MARCH 31, 2009 AND 2008
 
 2009
                  
                  
                  2008REVENUES,
      net
                  
                  $
                  1,206,321
                  
                  
                  $
                  1,042,320COST
      OF GOODS SOLD
                  
                  
                  567,758
                  
                  
                  
                  469,237Gross
      profit
                  
                  
                  638,563
                  
                  
                  
                  573,083OPERATING
      EXPENSES:Selling,
      general and administrative
                  
                  
                  1,586,355
                  
                  
                  
                  2,310,725Research
      and deveolpment
                  
                  
                  329,186
                  
                  
                  
                  298,618Depreciation
      and amortization
                  
                  
                  59,795
                  
                  
                  
                  69,171Total
      operating expenses
                  
                  
                  1,975,336
                  
                  
                  
                  2,678,514Loss
      from operations
                  
                  
                  (1,336,773
                  )
                  
                  
                  (2,105,431
                  )OTHER
      INCOME (EXPENSE), net:Interest
      income
                  
                  
                  950
                  
                  
                  
                  67,504Interest
      expense
                  
                  
                  (2,414
                  )
                  
                  
                  (2,463
                  )Total
      other income, net
                  
                  
                  (1,464
                  )
                  
                  
                  65,041Net
      loss
                  
                  
                  (1,338,237
                  )
                  
                  
                  (2,040,390
                  )PREFERRED
      DIVIDENDS
                  
                  
                  (1,440
                  )
                  
                  
                  (1,440
                  )Net
      loss applicable to common shareholders
                  
                  $
                  (1,339,677
                  )
                  
                  $
                  (2,041,830
                  )BASIC
      AND DILUTED LOSS PER SHARE,
                  
                  $
                  (0.04
                  )
                  
                  $
                  (0.07
                  )BASIC
      AND DILUTED WEIGHTED AVERAGENUMBER
      OF SHARES OUTSTANDING:
                  
                  
                  31,030,115
                  
                  
                  
                  31,030,115
 
 The
accompanying notes are an integral part of these consolidated
statements.
 F-6
  UNITED
ENERGY CORP. AND SUBSIDIARIES
 CONSOLIDATED
STATEMENT OF STOCKHOLDERS' EQUITY
 FOR
THE YEARS ENDED MARCH 31, 2009 AND 2008
  Common
      Stock
                  
                  
                  
                  
                  
                  Additional
                  
                  
                  AccumulatedPreferred
                  
                  
                  Paid-InShares
                  
                  
                  Amount
                  
                  
                  Stock
                  
                  
                  Capital
                  
                  
                  Deficit
                  
                  
                  TotalBALANCE,
      April 1, 2007
                  
                  
                  31,030,115
                  
                  
                  $
                  310,301
                  
                  
                  $
                  24,000
                  
                  
                  $
                  21,540,041
                  
                  
                  $
                  (18,698,233
                  )
                  
                  
                  3,176,109Compensation
      expense associatedwith
      options
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  235,163
                  
                  
                  
                  -
                  
                  
                  
                  235,163Dividends
      paid on preferred shares
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (1,440
                  )
                  
                  
                  (1,440
                  )Net
      loss
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (2,040,390
                  )
                  
                  
                  (2,040,390
                  )BALANCE,
      March 31, 2008
                  
                  
                  31,030,115
                  
                  
                  
                  310,301
                  
                  
                  
                  24,000
                  
                  
                  
                  21,775,204
                  
                  
                  
                  (20,740,063
                  )
                  
                  
                  1,369,442Compensation
      expense associatedwith
      options
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  17,702
                  
                  
                  
                  -
                  
                  
                  
                  17,702Compensation
      expense associatedwith
      warrants
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  159,210
                  
                  
                  
                  -
                  
                  
                  
                  159,210Related
      party payable write off
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  244,141
                  
                  
                  
                  -
                  
                  
                  
                  244,141Dividends
      paid on preferred shares
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (1,440
                  )
                  
                  
                  (1,440
                  )Net
      loss
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (1,338,237
                  )
                  
                  
                  (1,338,237
                  )BALANCE,
      March 31, 2009
                  
                  
                  31,030,115
                  
                  
                  $
                  310,301
                  
                  
                  $
                  24,000
                  
                  
                  $
                  22,196,257
                  
                  
                  $
                  (22,079,740
                  )
                  
                  $
                  450,818
 
 The
accompanying notes are an integral part of this consolidated
statements
  F-7
  UNITED
ENERGY CORP. AND SUBSIDIARIES
 CONSOLIDATED
STATEMENTS OF CASH FLOWS
 FOR
THE YEARS ENDED MARCH 31, 2009 AND 2008
 
 2009
                    
                    
                    2008CASH
      FLOWS FROM OPERATING ACTIVITIES:CASH
      FLOWS FROM CONTINUING OPERATIONS:Net
      loss from continuing operations
                    
                    $
                    (1,338,237
                    )
                    
                    $
                    (2,040,390
                    )Adjustments
      to reconcile net loss to net cash used in operating
    activitiesDepreciation
      and amortization
                    
                    
                    75,384
                    
                    
                    
                    80,578Allowance
      for doubtful accounts
                    
                    
                    (18,297
                    )
                    
                    
                    19,450Compensation
      expense associated with options
                    
                    
                    17,702
                    
                    
                    
                    235,163Compensation
      expense associated with warrants
                    
                    
                    159,210
                    
                    
                    
                    -Asset
      transferred in legal settlement
                    
                    
                    -
                    
                    
                    
                    5,003Changes
      in operating assets and liabilitiesAccounts
      receivable
                    
                    
                    125,513
                    
                    
                    
                    (202,731
                    )Inventory
                    
                    
                    (13,760
                    )
                    
                    
                    (2,870
                    )Loan
      receivable, net
                    
                    
                    -
                    
                    
                    
                    (25,000
                    )Prepaid
      expenses and other current assets
                    
                    
                    83,018
                    
                    
                    
                    (34,038
                    )Accounts
      payable and accrued expenses
                    
                    
                    50,621
                    
                    
                    
                    49,251Net
      cash used in continuing operations
                    
                    
                    (858,846
                    )
                    
                    
                    (1,915,584
                    )CASH
      FLOWS FROM DISCONTINUED OPERATIONS:Accounts
      receivable
                    
                    
                    -
                    
                    
                    
                    31Note
      receivable, net
                    
                    
                    -
                    
                    
                    
                    4,476Net
      cash provided by discontinuing operations
                    
                    
                    -
                    
                    
                    
                    4,507Net
      cash
      used in operating activities
                    
                    
                    (858,846
                    )
                    
                    
                    (1,911,077
                    )CASH
      FLOWS FROM INVESTING ACTIVITIES:Proceeds
      on loans receivable
                    
                    
                    2,400
                    
                    
                    
                    313Payment
      on loans receivable
                    
                    
                    (1,220
                    )
                    
                    
                    (3,473
                    )Payments
      for acquisition of property and equipment
                    
                    
                    (83,453
                    )
                    
                    
                    (6,387
                    )Payments
      for patent
                    
                    
                    (9,644
                    )
                    
                    
                    (83,267
                    )Cash
      used in investing activities
                    
                    
                    (91,917
                    )
                    
                    
                    (92,814
                    )CASH
      FLOWS FROM FINANCING ACTIVITIES:Payments
      of related party payable
                    
                    
                    150,000
                    
                    
                    
                    -Preferred
      stock dividend
                    
                    
                    (1,440
                    )
                    
                    
                    (1,440
                    )Net
      cash provided by (used in) financing activities
                    
                    
                    148,560
                    
                    
                    
                    (1,440
                    )Net
      decrease in cash and cash equivalents
                    
                    
                    (802,203
                    )
                    
                    
                    (2,005,331
                    )CASH
      AND CASH EQUIVALENTS, beginning of period
                    
                    
                    858,575
                    
                    
                    
                    2,863,906CASH
      AND CASH EQUIVALENTS, end of period
                    
                    $
                    56,372
                    
                    
                    $
                    858,575
 
 The
accompanying notes are an integral part of these consolidated
statements
 
 F-8
  UNITED
ENERGY CORP. AND SUBSIDIARIES
 CONSOLIDATED
STATEMENTS OF CASH FLOWS
 FOR
THE YEARS ENDED MARCH 31, 2009 AND 2008
 
 2009
                      
                      
                      2008SUPPLEMENTAL
      DISCLOSURES OF CASH FLOW INFORMATION:Cash
      paid during the periodInterest
                      
                      $
                      1,691
                      
                      
                      $
                      2,463Income
      taxes
                      
                      $
                      2,860
                      
                      
                      $
                      3,680SUPPLEMENTAL
      DISCLOSURES OF NON-CASH INVESTING AND FINANCING
ACTIVITIES:Note
      payable issued in conversion of accounts payable
                      
                      $
                      35,000
                      
                      
                      $
                      -Related
      party payable write off
                      
                      $
                      244,141
                      
                      
                      $
                      -
 
 The
accompanying notes are an integral part of these consolidated
statements.
 F-9
 UNITED
ENERGY CORP. AND SUBSIDIARIES
 
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 MARCH
31, 2009 AND 2008
  1.
                DESCRIPTION
      OF BUSINESS
 
 United
Energy Corp. (“United Energy” or the “Company”) considers its primary business
focus to be the development, manufacture and sale of environmentally friendly
specialty chemical products with applications in several industries and
markets.  Our current line of products includes K-Line of Chemical
Products for the oil industry and related products.
  Through
our wholly owned subsidiary, Green Globe Industries, Inc. (“Green Globe”), 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.
  2.
              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 in 2009.  For the year
ended March 31, 2009 the Company incurred net loss approximating $1,338,237.
Further, the Company has inadequate working capital to maintain or develop its
operations, and is dependent upon funds from private investors and the support
of certain stockholders.
 
 These
factors raise substantial doubt about the ability of the Company to continue as
a going concern. The consolidated financial statements do not include any
adjustments that might result from the outcome of these uncertainties. In this
regard, the Company may need to raise 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.  There is
no assurance that the Company will be successful in raising additional
capital.
 
 3.
              SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES
 
 Principles
of Consolidation
 
 The consolidated financial statements
include the accounts of United Energy and its wholly-owned subsidiary Green
Globe and currently inactive subsidiaries, Nor-Graphic Industries and United
Energy Oil.  All intercompany transactions and accounts have been
eliminated in consolidation.
 
 Use
of Estimates
 
 The preparation of consolidated
financial statements in accordance with accounting principles generally accepted
in the United States of America requires United Energy 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, United Energy
evaluates its estimates, including those related to valuation of options and
warrants, bad debts, inventories, intangible assets, contingencies and
litigation. United Energy 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.
  F-10
  Revenue
Recognition
 
 Revenue includes product sales. The
Company recognizes revenue from product sales in accordance with Staff
Accounting Bulletin (SAB) No. 104, “Revenue Recognition in Financial Statement”
which is at the time customers are invoiced at shipping point, provided title
and risk of loss has passed to the customer, evidence of an arrangement exists,
fees are contractually fixed or determinable, collection is reasonably assured
through historical collection results and regular credit evaluations, and there
are no uncertainties regarding customer acceptance
 
 Cash
and Cash Equivalents
 
 Cash and cash equivalents consist of
cash and highly liquid investments with original maturities of three months or
less.
  Inventories
 
 The Company inventory is carried at the
lower of cost or net realizable value using the first-in, first-out (“FIFO”)
method.  The Company evaluates the need to record adjustments for
inventory on a regular basis.  Our policy is to evaluate all
inventories including raw materials, and finished goods.  These
inventories consisted of chemical products.  At March 31, 2009 and
2008, the value of the company’s inventory was $ 155,427 and $141,667,
respectively.
 
 Allowance
for Doubtful Accounts
 
 The Company monitors its accounts and
note receivable balances on a monthly basis to ensure they are
collectible.  On a quarterly basis, the Company uses its historical
experience to determine its accounts receivable reserve.  The
Company’s allowance for doubtful accounts is an estimate based on specifically
identified accounts as well as general reserves.  The Company
evaluates specific accounts where it has information that the customer may have
an inability to meet its financial obligations.  In these cases,
management uses its judgment, based upon the best available facts and
circumstances, and records a specific reserve for that customer against amounts
due to reduce the receivable to the amount that is expected to be
collected.  These specific reserves are reevaluated and adjusted as
additional information is received that impacts the amount
reserved.  The Company also establishes a general reserve based upon a
range of percentages applied to aging categories.  These percentages
are based on historical collection and write-off experience. If circumstances
change, the Company’s estimate of the recoverability of amounts due the Company
could be reduced or increased by a material amount.  Such a change in
estimated recoverability would be accounted for in the period in which the facts
that give rise to the change become known.
 
 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 expense for the years ended March
31, 2009 and 2008 was $26,714 and $38,108, respectively.
 
 Property
and equipment consists of the following at March 31, 2009 and 2008:
  2009
                
                
                2008Furniture
      and fixtures
                
                $
                83,355
                
                
                $
                81,642Machinery
      and equipment
                
                
                418,626
                
                
                
                336,887Vehicles
                
                
                42,001
                
                
                
                42,001Leasehold
      improvements
                
                
                26,203
                
                
                
                26,203570,185
                
                
                
                486,733Less-
      Accumulated depreciation
                
                
                (462,091
                )
                
                
                (435,377
                )Property
      and equipment, net
                
                $
                108,094
                
                
                $
                51,356
  Goodwill
 
 The Company capitalized goodwill
related to the acquisition of Green Globe in September of 1998. Goodwill
represents cost in excess of fair value on the net assets
acquired.  Goodwill was amortized over a 15 year period using a
straight line amortization method until the adoption of Statement of Financial
Accounting Standards (“SFAS”) No. 142 “Goodwill and Other Intangible Assets,” on
April 1, 2002.  Under SFAS No. 142, goodwill and intangible assets
with indefinite lives are no longer amortized but are reviewed annually (or more
frequently if impairment indicators arise) for impairment.  Separable
intangible assets that are not deemed to have indefinite lives will continue to
be amortized over their useful lives (but with no maximum life).
  F-11
 
 As required by SFAS No. 142, the
Company completed its transitional impairment testing of intangible assets.
Under SFAS No. 142, a goodwill impairment exists if the net book value of a
reporting unit exceeds its estimated fair value. The impairment testing is
performed in two steps:  (i) the Company determines impairment by
comparing fair value of a reporting unit with its carrying value, and (ii) if
there is an impairment the Company measures the amount of impairment loss by
comparing the implied fair value of goodwill with the carrying amount of that
goodwill.
 
 As of March 31, 2009 the Company
completed its annual impairment testing of goodwill. The Company estimated the
fair value of its goodwill by using discounted cash flow analysis. As a result
of the impairment tests, the Company did not record a goodwill impairment charge
related to Green Globe, during the year ended March 31, 2009.
 
 Research
& Development
 
 Our products are the result of
research and development expenditures. The Company’s policy is to expense any
research and development costs as they are incurred.  The Company
incurred research and development costs of $329,186 and $298,618 for the fiscal
years ended March 31, 2009 and 2008, respectively.
 
 Patents
 
 The Company capitalizes legal costs
incurred to obtain patents. Amortization begins when the patent is approved
using the straight-line basis over the estimated useful life of 15
years.
 
 Accounting
for Long-Lived Assets
 
 The
Company’s long-lived assets include property and equipment and patents. In
accordance with SFAS No. 144, long-lived assets other than goodwill are reviewed
on a periodic basis for impairment whenever events or changes in circumstances
indicate that the carrying amounts of the assets may not be
recoverable.  Recoverability of assets to be held and used is measured
by a comparison of the carrying amount of an asset to future undiscounted net
cash flows expected to be generated by the asset.  If such assets are
considered to be impaired, the impairment to be recognized is measured by the
amount by which the carrying amount of the assets exceeds the fair value of the
assets.
 
 Income
Taxes
 
 The Company accounts for income taxes
using the asset and liability method. Under this method, deferred tax assets and
liabilities are determined based on the temporary differences between the
financial statement and the income tax bases of assets and liabilities and for
net operating loss carry forwards existing at the balance sheet date using
enacted tax rates in effect for the years in which the taxes are expected to be
paid or recovered. A valuation allowance is established when it is considered
more likely than not that such assets will not be realizable.  The
effect on deferred tax assets or liabilities of a change in tax rates is
recognized in the period in which the tax change occurs.
 
 Stock-Based
Compensation
 
 In
accordance with SFAS No. 123 (revised 2004), “Share-based payments”, the Company
records compensation expense for all stock-based payment awards made to
employees based on estimated fair value.
  F-12
 
 Recent
Accounting Pronouncements
 
 Recent
accounting pronouncements that the Company has adopted or that will be required
to adopt in the future are summarized below.
  Subsequent
Events
 
 In May
2009, the FASB issued Statement of SFAS No. 165, Subsequent Events. 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. This Statement is effective for interim and annual periods ending
after June 15, 2009 and as such, we will adopt this standard in the first
quarter of fiscal year 2010. We are currently assessing the impact of the
adoption of SFAS 165, if any, on our financial position, results of operations
or cash flows.
  Interim
Disclosure about Fair Value of Financial Instruments
 
 In April
2009, the FASB issued FSP No. FAS 107-1 and APB 28-1, Interim Disclosures about Fair Value
of Financial Instruments.  This FSP amends FASB Statement 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 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.
 
 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.
  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.
  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
is required to adopt SFAS No. 161 on January 1, 2009. The impact of adoption of
SFAS No. 161 was not material to the Company’s consolidated financial condition
or results of operations.
  Fair
Value Measurements
  In
September 2006, the Financial Accounting Standards Board issued Statement 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.
  F-13
  Per
Share Data
 
 SFAS No. 128 establishes
standards for computing and presenting earnings per share ("EPS"). The standard
requires the presentation of basic EPS and diluted EPS. Basic EPS is calculated
by dividing income/loss available to common shareholders by the weighted average
number of shares of common stock outstanding during the period. Diluted EPS is
calculated by dividing income/loss available to common shareholders by the
weighted average number of common shares outstanding adjusted to reflect
potentially dilutive securities.  Diluted loss per share for the years
ended March 31, 2009 and 2008 does not include 15,036,833 and 11,802,500 stock
options, warrants and convertible preferred stock, respectively, since the
inclusion would have been antidilutive.
 
 Concentrations
of Risk
 
 Cash
and Cash Equivalents
 
 The Company maintains cash balances at
financial institutions insured up to $250,000 by the Federal Deposit Insurance
Corporation. Balances exceeded these insured amounts during the
year.
 
 Accounts
Receivable
 
 The Company had three customers that
accounted for 84% of the total accounts receivable at March 31, 2009 and two
customers that accounted for 82% of the total accounts receivable at March 31,
2008. One company accounted for 42% and 61%, the second accounted for 32% and
21%, and the last accounted for 10% and 0% at March 31, 2009 and 2008
respectively. Credit losses, if any, have been provided for in the consolidated
financial statements and are based on management's expectations.
 
 Significant
Customers
 
 The Company's revenues from major
customers, as a percentage of revenues, for the years ended March 31, 2009 and
2008, are as follows:
 
 2009
                
                
                2008Customer
      A
                
                
                0
                %
                
                
                25
                %Customer
      B
                
                
                29
                %
                
                
                22
                %Customer
      C
                
                
                0
                %
                
                
                24
                %Customer
      D
                
                
                11
                %
                
                
                0
                %Customer
      E
                
                
                10
                %
                
                
                0
                %
  Vendors
 
 The Company purchased supplies from
major venders for the years ended March 31, 2009 and 2008 as
follows:
 
 2009
                
                
                2008Vendor
      A
                
                
                46
                %
                
                
                27
                %Vendor
      B
                
                
                37
                %
                
                
                24
                %




Fair
Value of Financial Instruments
 
 The carrying amounts of cash and cash
equivalents, accounts receivable, note and loan receivable, inventory, accounts
payable and accrued expenses approximate their fair values due to the short-term
maturity of these instruments.
  F-14
 
 Reclassifications
  Certain
amounts in the March 31, 2008 consolidated financial statements have been
reclassified to conform to the March 31, 2009 presentation
 
 4.
              INVENTORY
 
 Inventory consists of the following as
of March 31, 2009 and 2008:


2009
                
                
                2008Blended
      chemicals
                
                $
                92,944
                
                
                $
                85,615Raw
      materials
                
                
                62,483
                
                
                
                56,052Total
      inventory
                
                $
                155,427
                
                
                $
                141,667
  5.
              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 June 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.
  Martin
Rappaport, a major shareholder and director of the Company, owned the property
through September 2007 from which United Energy leases the 9,600 square foot
facility it occupies in Secaucus, New Jersey. The Company paid $115,200 per year
under the lease, excluding real estate taxes.
  6.
              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.
 
 7.
              COMMITMENTS
      AND CONTINGENCIES
 
 Litigation
 
 
 In July
2002, an action was commenced against the Company in the Court of Common Pleas
of South Carolina, Pickens County, brought by Quantum International Technology,
LLC and Richard J. Barrett.  The plaintiffs allege that they were
retained as the sales representatives of the Company and in that capacity made
sales of the Company’s products to the United States government and to
commercial entities.  The plaintiffs further allege that the Company
failed to pay to the plaintiffs agreed commissions at the rate of 20% of gross
sales of the Company’s products made by the plaintiffs.  The complaint
seeks an accounting, compensatory damages in the amount of all unpaid
commissions plus interest thereon, punitive damages in an amount treble the
compensatory damages, plus legal fees and costs. The 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 yet been scheduled.  The Company believes to have meritorious
defenses to the claims asserted in the action and intends to vigorously defend
the case.  The outcome of this matter cannot be determined at this
time.
  F-15
  In March
2007, the Company commenced an action against Applied Force and Samuel Miller
III in the Superior Court of New Jersey, Law Division - Bergen County for the
recovery of two of the Company’s vehicles and certain additional
claims.  The defendants, Applied Force and Samuel Miller III, have
filed a counterclaim for recovery of alleged storage fees in the amount of
$126,784 and certain alleged service fees in the amount of $1,275. A settlement
agreement and mutual release was entered into during August 2007 and the action
was dismissed on September 18, 2007. As part of the settlement the Company
transferred title of a truck to the defendant.
  Lease
Commitments
 
 The
Company leases office facilities, equipment and autos under operating leases
expiring on various dates through 2012. Certain leases contain renewal
options.  The following is a schedule of future minimum lease payments
under operating leases having remaining terms in excess of one year as of March
31, 2009.
  Year2010
                
                $
                134,6812011
                
                
                40,0472012
                
                
                3,734Total
      minimum lease payments
                
                $
                178,462
  Operating
lease expense was $135,899 and $133,953 for the years ended March 31, 2009 and
2008, respectively.
 
 8.
              STOCKHOLDERS’
      EQUITY
 
 Preferred
Stock
 
 The Company is authorized to issue up
to 100,000 shares of preferred stock in one or more series, with such voting
powers, designations, preferences, limitations, restrictions and relative rights
as may be established by resolution of the Board of Directors.
 
 The Company has issued three shares of
Series A Convertible Preferred Stock (the “Preferred Stock”), with a par value
of $0.01 per share and a stated value of $8,000 per share. The Preferred Stock
is non redeemable and is convertible at the election of the holder into shares
of Common Stock, based on the stated value per share, at an initial conversion
price of $1.00 per share. The Preferred Stock pays a dividend at a rate of 6%
per annum. Upon any liquidation of the Company, the holder of the Preferred
Stock will be entitled to be paid, prior to the Common Stock or any other
security that by their terms are junior to the Preferred Stock. The Preferred
Stock has no voting rights, however upon the occurrence of a Triggering Event
(as defined in the agreement), the holder of the Preferred Stock has the right,
at their option, to designate and elect a majority of the Company’s Board of
Directors. The Triggering Event occurred during the fiscal year ended March 31,
2007 and the holder of the Preferred Stock exercised the option during the
fiscal year ended March 31, 2008.
 
 On February 13, 2009, the company
modified the conversion price per share from $1.00 to $0.12, upon approval of
the Board of Directors subject to the terms of the anti-dilution adjustment
pursuant to the Series A Convertible Preferred Stock.
  F-16
 
 Warrants
  The
Company has issued warrants in conjunction with various private placements of
its stock, convertible notes and
as compensation to directors and employees. All warrants are currently
exercisable.
  The
following table summarizes warrant information for the years ended March 31,
2009 and 2008.
  Number
      of
              
              
              Weighted
      AverageWarrants
              
              
              Exercise
      PriceOutstanding
      April 1, 2007
              
              
              10,991,000
              
              
              $
              1.41Expired
              
              
              (3,000,000
              )
              
              $
              2.00Outstanding
      March 31, 2008
              
              
              7,991,000
              
              
              $
              1.14Issued
              
              
              3,833,333
              
              
              $
              0.126Expired
              
              
              (275,000
              )
              
              $
              1.32Outstanding
      March 31, 2009
              
              
              11,549,333
              
              
              $
              0.80
 As of
March 31, 2009, outstanding common stock warrants are as follows:
 
 
 Number
      of
              
              
              ExerciseWarrants
              
              
              Price
              
              Expiration
      Date50,000
              
              
              $
              1.000
              
              May
      17, 200950,000
              
              
              $
              2.000
              
              May
      17, 2009100,000
              
              
              $
              1.250
              
              March
      24, 2011100,000
              
              
              $
              1.500
              
              March
      24, 2011100,000
              
              
              $
              1.750
              
              March
      24, 2011100,000
              
              
              $
              0.300
              
              August
      24, 2011100,000
              
              
              $
              1.250
              
              February
      28, 2012100,000
              
              
              $
              1.500
              
              February
      28, 2012100,000
              
              
              $
              1.750
              
              February
      28, 20126,016,000
              
              
              $
              0.120
              
              June
      30, 20132,033,333
              
              
              $
              0.120
              
              June
      30, 2013200,000
              
              
              $
              0.120
              
              February
      13, 2014600,000
              
              
              $
              1.125
              
              March
      13, 2014500,000
              
              
              $
              1.340
              
              April
      27, 2015500,000
              
              
              $
              2.000
              
              April
      27, 2015900,000
              
              
              $
              0.120
              
              February
      13, 201911,549,333
              
              
              $
              0.340
  F-17
 
  9.
              INCOME
      TAXES
 
 The
provision (benefit) for income taxes from continued operations for the years
ended March 31, 2009 and 2008 consist of the following:
  March
      31,2009
              
              
              2008Current:Federal
              
              $
              -
              
              
              $
              -State
              
              
              -
              
              
              
              --
              
              
              
              -Deferred:Federal
              
              $
              407,939
              
              
              $
              591,600State
              
              
              106,784
              
              
              
              154,860514,723
              
              
              
              746,460Valuation
      allowance
              
              
              (514,723
              )
              
              
              (746,460
              )Provision
      benefit for income taxes, net
              
              $
              -
              
              
              $
              -
 
 
 The
difference between income tax expense computed by applying the federal statutory
corporate tax rate and actual income tax expense is as follows:
  March
      31,2009
              
              
              2008Statutory
      federal income tax rate
              
              
              34.0
              %
              
              
              34.0
              %State
      income taxes and other
              
              
              8.9
              %
              
              
              8.9
              %Valuation
      allowance
              
              
              (42.9
              %)
              
              
              (42.9
              %)Effective
      tax rate
              
              
              -
              
              
              
              -
  Deferred
income taxes result from temporary differences in the recognition of income and
expenses for the financial reporting purposes and for tax purposes. The tax
effect of these temporary differences representing deferred tax asset and
liabilities result principally from the following:
 
 March
      31,2009
              
              
              2008Net
      operating loss carryforward
              
              
              514,723
              
              
              
              746.460Valuation
      allowance
              
              
              (514,723
              )
              
              
              (746,460
              )Deferred income tax
      asset
              
              $
              -
              
              
              $
              -
  The
Company has a net operating loss carryforward of approximately $17,975,000
available to offset future taxable income through 2027.
  F-18
  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.
 
 There were stock options to purchase
400,000 shares of our common stock available for future grant as of March 31,
2009 under the 2001 Equity Incentive Plan.
 
 Fair
Value of Stock Options
 
 For disclosure purposes under SFAS No.
123 and SFAS No. 123(R), the fair value of each option grant was estimated on
the date of grant using the Black-Scholes option valuation model with the
following weighted-average assumptions:
 
  2009
                
                
                2008Expected
      life (in years)
                
                
                10
                
                
                
                10Risk-free
      interest rate
                
                
                4.54
                %
                
                
                4.54
                %Volatility
                
                
                142.4
                
                
                
                79.16-
      88.50Dividend
      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
$1.33 and $1.15 for the years ended March 31, 2009 and 2008,
respectively.
  F-19
 
 Summary
Stock Option Activity
 
 The following table summarizes stock
option information with respect to all stock options for the years ended March
31, 2009 and 2008:
 
 Number
      of
                  Shares
              
              
              Weighted
                  Average
                  Exercise
                  Price
              
              
              Weighted
                  Average
                  Remaining
                  Contractual
                  Life
      (Years)
              
              
              Aggregate
      Intrinsic ValueOptions
      outstanding March 31, 2007
              
              
              3,502,500
              
              
              $
              1.17
              
              
              
              7.16Granted
              
              
              285,000
              
              
              $
              1.00Options
      outstanding March 31, 2008
              
              
              3,787,500
              
              
              $
              1.15
              
              
              
              6.36Granted
              
              
              --Cancelled
              
              
              (500,000
              )
              
              $
              1.25Options
      outstanding March 31, 2009
              
              
              3,287,500
              
              
              $
              1.24
              
              
              
              6.16Vested
      and expected to vest – end of year
              
              
              3,287,500
              
              
              $
              1.24
              
              
              
              6.16
              
              
              $
              --Exercisable
      – end of year
              
              
              3,137,500
              
              
              $
              1.09
              
              
              
              6.07
              
              
              $
              --
  Pursuant
to the terms of an employment agreement dated April 17, 2007, with Ronald Wilen,
Chief Executive Officer, President and Secretary, 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 is to be the fair market value of the
common stock underlying such option on the date such option was
granted.  The initial grant of 50,000 stock options is to be granted
out of the 2001 Equity Incentive Plan at the one-year anniversary. In addition,
the stock option to purchase 200,000 shares have been reserved for Mr. Wilen out
of the 2001 Equity Incentive Plan.
  Options
outstanding at March 31, 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 March 31, 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 March
31, 2009. This amount changes based upon changes in the fair market value of
United Energy’s stock. As of March 31, 2009, $72,513 of the total unrecognized
compensation costs related to stock options is expected to be recognized over
the next four years.
 
 11.
              SEGMENT
      REPORTING
 
 SFAS No. 131, "Disclosures about
Segments of an Enterprise and Related Information," establishes standards for
the way that public companies report information about operating segments in
annual financial statements and requires reporting of selected information about
operating segments in interim financial statements issued to the
public.  It also establishes standards for disclosures regarding
products and services, geographic areas and major customers. SFAS No. 131
defines operating segments as components of a company about which separate
financial information is available that is evaluated regularly by management in
deciding how to allocate resources and in assessing performance.
 
 Geographic
Information:
 2009
              
              
              2008U.S.
              
              $
              1,084,409
              
              
              $
              729,678Nigeria
              
              
              --
              
              
              
              255,024Trinidad
              
              
              121,912
              
              
              
              57,618Totals
              
              $
              1,206,321
              
              
              $
              1,042,320
  12.
              SUBSEQUENT
      EVENT
  Subsequent
to year-end, 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 June 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.
  F-20