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  As Of               Filer                 Filing     As/For/On Docs:Pgs              Issuer               Agent

 8/20/07  Universal Energy Corp             10QSB       6/30/07    7:41                                     RR Donnelley/FA

Document/Exhibit                   Description                      Pages   Size 

 1: 10QSB       Quarterly Report -- Small Business                  HTML    203K 
 2: EX-10.13    Agreement, Dated As of May 2, 2007                  HTML     28K 
 3: EX-10.16    Agreement, Dated As of June 11, 2007                HTML     28K 
 4: EX-31.1     Section 302 Ceo Certification                       HTML      9K 
 5: EX-31.2     Section 302 Cfo Certification                       HTML      9K 
 6: EX-32.1     Section 906 Ceo Certification                       HTML      6K 
 7: EX-32.2     Section 906 Cfo Certification                       HTML      6K 

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-QSB

(Mark One)

For the quarterly period ended June 30, 2007

For the transition period from              to             

Commission file number: 000-50284

UNIVERSAL ENERGY CORP.

(Exact name of Registrant as specified in its charter)

30 Skyline Drive

Lake Mary, Florida 32746

(800) 975-2076

(Address and telephone number of principal executive offices)

Indicate by check mark whether 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.    x  Yes    ¨  No

The number of shares of the registrant’s common stock, par value $0.0001 per share, outstanding as of August 15, 2007 was 29,588,119 and there were 499 stockholders of record.

Transitional Small Business Issuer Format:    ¨   YES    x  NO

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    ¨  YES    x  NO

Table of Contents

 UNIVERSAL ENERGY CORP.

FORM 10-QSB

INDEX

Table of Contents

 Universal Energy Corp.

And Subsidiaries

Consolidated Balance Sheet

See accompanying notes to unaudited consolidated financial statements.

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Table of Contents

 Universal Energy Corp.

And Subsidiaries

Consolidated Statements of Operations

See accompanying notes to unaudited consolidated financial statements.

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 Universal Energy Corp.

And Subsidiaries

Consolidated Statements of Cash Flows

See accompanying notes to unaudited consolidated financial statements.

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 UNIVERSAL ENERGY CORP.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements (unaudited)

June 30, 2007

NOTE 1 – ORGANIZATION AND PRINCIPLES OF CONSOLIDATION

Reporting Entity. Universal Energy Corp. and Subsidiaries (“Universal” or the “Company”) were incorporated in the State of Delaware on January 4, 2002, January 24, 2002 and February 26, 2007, respectively. The Company is authorized to issue 250,000,000 shares of common stock, par value $0.0001. The Company’s office is located in Lake Mary, Florida. Universal Energy Corp. is an independent energy company engaged in the acquisition and development of crude oil and natural gas leases in the United States and Canada.

Principles of Consolidation. The Company’s consolidated financial statements for the periods ended June 30, 2007 and 2006, include the accounts of its wholly owned subsidiaries UT Holdings, Inc. and Universal Explorations Corp. (new in 2007), both Delaware corporations. All intercompany balances and transactions have been eliminated.

Discontinued Operations. Due to our inability to expand our tanning operations, on May 21, 2006, the Board of Directors approved changing the business direction from operating our single tanning salon to fully pursuing plans to acquire and develop oil and natural gas properties. The Company sold the assets and ceased operations of its tanning business in February 2007. The results of operations from the tanning salon are included in discontinued operations on the consolidated statements of operations.

Name Change. On May 21, 2006 a majority of the stockholders approved changing the name of the Company from “Universal Tanning Ventures, Inc.” to “Universal Energy Corp.” and increasing the number of shares of our capital stock we are authorized to issue to 250,000,000 shares, of which all 250,000,000 shares will be Common Stock.

Stock-Split. On February 20, 2007, the Company declared a two and one-half-for-one stock split in the form of a stock dividend, payable March 14, 2007 to stockholders of record as of March 13, 2007. The Company retained the current par value of $0.0001 for all shares of common stock. Stockholders’ equity has been restated to give retroactive recognition to the stock split in prior periods by reclassifying from additional paid-in-capital to common stock the par value of the 16,531,285 shares arising from the split. Except where and as otherwise stated to the contrary in this annual report, all share and prices per share have been adjusted to give retroactive effect to the change in the price per share of the common stock resulting from the two and one-half-for-one forward split of the common stock that took effect on March 14, 2007.

Reclassifications. Certain prior periods’ balances have been reclassified to conform to the current year consolidated financial statement presentation. These reclassifications had no impact on previously reported consolidated results of operations or stockholders’ equity.

NOTE 2 – BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements have been prepared by Universal Energy Corp. (the “Company”) without audit, pursuant to the rules and regulations of the U. S. Securities and Exchange Commission for Form 10-QSB. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. The unaudited consolidated financial statements included herein reflect all adjustments (consisting only of normal recurring adjustments) which are, in the opinion of management, necessary for a fair presentation of the financial position and operating results for the interim period. Interim results are not necessarily indicative of the results that may be expected for the year. The unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto, together with management’s discussion and analysis of financial condition and results of operation, for the year ended December 31, 2006, contained in the Company’s December 31, 2006 Annual Report on Form 10-KSB.

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UNIVERSAL ENERGY CORP.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements (unaudited)

NOTE 2 – BASIS OF PRESENTATION, CONTINUED

The Company’s consolidated financial statements have been prepared assuming the Company will continue as a going concern. The Company has experienced net losses since January 4, 2002 (date of inception), which losses have caused an accumulated deficit of approximately $4,094,000 as of June 30, 2007. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern.

Management has been able, thus far, to finance the losses, as well as the growth of the business, mostly through private placements of our common stock and promissory notes. The Company continues to seek other sources of financing and is attempting to increase revenues by acquiring additional domestic oil and gas prospects while completing the drilling on the prospects the Company currently has an interest in.

In view of these conditions, the Company’s ability to continue as a going concern is dependent upon its ability to obtain additional financing or capital sources, to meet its financing requirements, and ultimately to achieve profitable operations. Management believes that its current and future plans provide an opportunity to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that may be necessary in the event the Company cannot continue as a going concern.

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Income Taxes. The Company accounts for income taxes utilizing the asset and liability method. This approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enacted date. The Company has net operating loss carryforwards that may be offset against future taxable income. Due to the uncertainty regarding the success of future operations, management has valued the deferred tax asset allowance at 100% of the related deferred tax assets.

Loss per Share. The Company utilizes Financial Accounting Standards Board Statement No. 128, “Earnings Per Share.” Statement No. 128 requires the presentation of basic and diluted loss per share on the face of the statement of operations. Basic loss per share has been calculated using the weighted average number of common shares outstanding during the period. The Company’s common stock warrants and options have been excluded from the diluted loss per share computation since their effect is anti-dilutive.

Full Cost Method. The Company utilizes the full-cost method of accounting for petroleum and natural gas properties. Under this method, the Company capitalizes all costs associated with acquisition, exploration and development of oil and natural gas reserves, including leasehold acquisition costs, geological and geophysical expenditures, lease rentals on undeveloped properties and costs of drilling of productive and non-productive wells into the full cost pool. When the Company obtains proven oil and gas reserves, capitalized costs, including estimated future costs to develop the reserves proved and estimated abandonment costs, net of salvage, will be depleted on the units-of-production method using estimates of proved reserves. The costs of unproved properties are not amortized until it is determined whether or not proved reserves can be assigned to the properties. Until such determination is made, the Company assesses quarterly whether impairment has occurred, and includes in the amortization base drilling exploratory dry holes associated with unproved properties.

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UNIVERSAL ENERGY CORP.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements (unaudited)

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED

Stock Based Compensation. Effective January 1, 2006, the Company adopted SFAS No. 123(R), “Share-Based Payment,” which requires the Company to record as an expense in its financial statements the fair value of all stock-based compensation awards. The Company currently utilizes a standard option pricing model (i.e., Black-Scholes) to measure the fair value of stock options granted to employees using the “modified prospective” method. Under the “modified prospective” method, compensation cost is recognized in the financial statements beginning with the effective date, based on the requirements of SFAS No. 123(R) for all share-based payments granted after that date, and based on the requirements of SFAS No. 123(R) for all unvested awards granted prior to the effective date of SFAS No. 123(R). During 2005, no share-based payments were granted under the Company’s stock option plan and therefore the Company did not have any share-based compensation expense under the modified prospective method for that period.

Fair Value of Financial Instruments. The carrying amount of accounts payable, accrued expenses and promissory notes approximates fair value because of the short maturity of those instruments.

NOTE 4 – OIL AND GAS PROPERTIES, UNPROVEN

The total costs incurred and excluded from amortization are summarized as follows:

All of the Company’s oil and gas properties are unproven and are located in Louisiana and Alberta, Canada

Alberta, Canada. In September 2006, we acquired an interest in a property located in the Pembina Nisku oil field. We have an agreement to earn a 95% working interest in 480 acres of leased lands by drilling a test well to the base of the Nisku formation, subject to a convertible 15.0% GORR (gross overriding royalty) to the lease holder. The allowable 160 acre spacing does permit for up to three wells to be drilled on this prospect. The costs of this property will not be amortized until it is determined whether or not proved reserves can be assigned to the properties. Until such determination is made, the Company assesses quarterly whether impairment has occurred, and includes in the amortization base drilling exploratory dry holes associated with unproved properties. As of June 30, 2007, no impairment has occurred.

Plaquemines Parish, Louisiana - Caviar. In March 2007, we signed a participation agreement with Yuma Exploration and Production Company to expand our oil and gas exploration and production segment of the Company into Southeastern Louisiana. The agreement allows us to earn a 10% working interest before casing point and a 7.5% interest after casing point based on the participation in the drilling of a test well. This obligation will allow us to participate on three remaining wells within the prospect. This prospect, named Caviar, lies in the prolific Middle Miocene Trend, which is located in the Plaquemines Parish of Southeastern Louisiana. Drilling is scheduled to begin on this project in September 2007 to achieve wells between 9,000 and 11,000 feet deep. As of June 30, 2007, no impairment has occurred.

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Table of Contents

UNIVERSAL ENERGY CORP.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements (unaudited)

NOTE 4 – OIL AND GAS PROPERTIES, UNPROVEN, CONTINUED

Plaquemines Parish, Louisiana – Amberjack. In May 2007, we signed a participation agreement to earn a 7.5% working interest before casing point and a 5.625% interest after casing point based on the participation in the drilling of a test well. This prospect, named Amberjack, is a quality through-peak amplitude anomaly which ties numerous analogous productive amplitudes to the immediate area. Amberjack also lies in the prolific Middle Miocene Trend. Drilling is scheduled to begin on this project in August 2007 to achieve wells between 10,200 and 10,600 feet deep. As of June 30, 2007, no impairment has occurred.

Plaquemines Parish, Louisiana –Lake Campo. In May 2007, we signed a participation agreement to earn a 12.5% working interest before casing point and a 9.375% interest after casing point based on the participation in the drilling of a test well. This prospect, named Lake Campo, is a established productive structure that produces gas from water drive sands down-dip to the proposed drill location. Lake Campo also lies in the prolific Middle Miocene Trend. Drilling is scheduled to begin on this project in November 2007 to achieve wells between 8,200 and 9,800 feet deep. As of June 30, 2007, no impairment has occurred.

NOTE 5 – PROMISSORY NOTES

Promissory Note with Stockholder - $250,000. On June 12, 2007, the Company issued an unsecured promissory note in the amount of $250,000 to a stockholder. Interest accrues on the outstanding principal balance from and after June 12, 2007 at a rate of 11 percent per annum. Interest shall be calculated on the basis of a 360-day year, and shall be charged on the principal outstanding from time to time for the actual number of days elapsed. The Company shall pay the Holder all accrued interest and the outstanding principal on the maturity date. The maturity date of the note is December 12, 2007.

Promissory Notes - $750,000. On or about June 12, 2007, the Company issued unsecured promissory notes in the amount of $750,000 to certain investors. Interest accrues on the outstanding principal balance from and after June 12, 2007 at a rate of 11 percent per annum. Interest shall be calculated on the basis of a 360-day year, and shall be charged on the principal outstanding from time to time for the actual number of days elapsed. The Company shall pay the Holders all accrued interest and the outstanding principal on the maturity date. The maturity date of the notes is December 12, 2007.

Contemporaneous with the issuance of the promissory notes, a total of 750,000 warrants were issued at an exercise price of $1.25. The warrants have 5 year term from the date of the promissory note. If at any time after one year from the Initial Exercise Date there is no effective registration statement (“Registration Statement”) registering, or no current prospectus available for, the resale of the Warrant Shares by the Holder, then this Warrant may also be exercised at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive a certificate for the number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where (A) = the Volume Weighted Average Price (“VWAP”) on the Trading Day immediately preceding the date of such election; (B) = the Exercise Price of this Warrant, as adjusted; and (X) = the number of Warrant Shares issuable upon exercise of this Warrant in accordance with the terms of this Warrant by means of a cash exercise rather than a cashless exercise.

The fair value of the warrants issued was estimated at the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions: risk-free interest rate of 5.13%; no dividend yields; volatility factors of the expected market price of our common stock of 23.12; an estimated forfeiture rate of 15%; and an expected life of the warrants of 5 years. This generates a price of $0.39 per warrants based on a strike price of $1.25 at the date of grant, which was June 12, 2007. As a result, approximately $187,500 of discount on promissory notes and additional paid-in capital was recorded during the six month period ended June 30, 2007 relating to the issuance of promissory notes.

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UNIVERSAL ENERGY CORP.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements (unaudited)

NOTE 6 – COMMITMENTS AND CONTINGENCIES

On September 14, 2006, the Company entered into a three-year employment agreement with Mr. Dyron Watford to be its chief financial officer and chairman. The employment agreement provides for a base salary of $6,000 per month subject to certain increases throughout the term of the contract. Pursuant to the agreement, Mr. Watford received 6,250,000 options to purchase common stock in the company at a price of $0.78 per share. The options will vest monthly over the term of the employment agreement and will expire five years after the vesting date. The Board of Directors amended Mr. Watford’s annual base salary to $180,000 in March 2007.

On September 15, 2006, the Company entered into a three-year employment agreement with Mr. Billy Raley to be its chief executive officer. The employment agreement provides for a base salary of $8,000 per month subject to certain increases throughout the term of the contract. Pursuant to the agreement, Mr. Raley received 6,250,000 options to purchase common stock in the company at a price of $0.78 per share. The options will vest monthly over the term of the employment agreement and will expire five years after the vesting date. The Board of Directors amended Mr. Raley’s annual base salary to $225,000 in March 2007.

On October 6, 2006, the Company entered into a two-year employment agreement with Mr. Kevin Tattersall to be its chief exploration officer. The employment agreement provides for a base salary of $5,000 per month. Pursuant to the agreement, Mr. Tattersall received 812,500 shares of common stock in the company. The stock issued to Mr. Tattersall is restricted as defined by the Securities Act of 1933, as amended. The shares will vest monthly over the term of the employment agreement and vesting is contingent upon continued employment with the Company. Any remaining unvested shares of common stock at the time of termination or resignation from the Company will be forfeited by the executive.

NOTE 7 – CAPITAL DEFICIENCY

On February 20, 2007, the Company declared a two and one-half-for-one stock split in the form of a stock dividend, payable March 14, 2007 to stockholders of record as of March 13, 2007. The Company retained the current par value of $0.0001 for all shares of common stock. Stockholders’ equity has been restated to give retroactive recognition to the stock split in prior periods by reclassifying from additional paid-in-capital to common stock the par value of the 16,531,285 shares arising from the split. Except where and as otherwise stated to the contrary in this report, all share and prices per share have been adjusted to give retroactive effect to the change in the price per share of the common stock resulting from the two and one-half-for-one forward split of the common stock that took effect on March 14, 2007.

Between January 2007 and May 2007, the Company issued 976,038 shares of restricted common stock to offshore investors and was exempt from registration pursuant to Regulation S for net proceeds of $283,886.

On October 15, 2006 we offered for sale $1,500,000 in $15,000 units. The offering closed in February 2007 and the all of the warrants were redeemed in April 2007. Pursuant to this offering, the Company sold 2,070,000 shares of restricted stock to investors for net proceeds of $773,000 between January and April 2007. Each investor had access to and was provided with relevant information concerning the company. The securities were exempt from registration pursuant to Rule 506 of Regulation D and Section 4(2) of the Securities Act of 1933, as amended.

On October 6, 2006,