UNITED STATES
                     SECURITIES AND EXCHANGE COMMISSION
                        Washington, D.C.  20549

                             Amendment 1 to
                               FORM 10-K

 [X]  15, ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended: June 30, 2010
 OR
 [ ]  15, 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:       000-51489

                        Earth Energy Reserves, Inc.
        (formerly Asian American Business Development Company)
                            (Exact name of registrant in its charter)

          Nevada                          75-3000774
  (State or other jurisdiction of                           (I.R.S. Employer
    incorporation or organization                          Identification No.)

          621 17TH Street #1640
            Denver, CO                        80293
        (Address of principal executive offices)                 (Zip Code)

Registrant's Telephone number, including area code:  (303) 297-0500

Securities registered pursuant to Section 12(b) of the Act:  None
Securities registered pursuant to Section 12(g) of the Act:  Common
Stock, $.0001 par value

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

Indicate by check mark if the registrant is not required to file
reports pursuant to Section 13 or 15(d) of the Exchange act
Yes [ ] No [x]

Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Website, if any, every
Interactive Data File required to be submitted and posted pursuant to
Rule 405 of Regulation S-T (section 232.406 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was
required to submit and post such files).  Yes [x] No [ ]

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act during the preceding 12 months (or such shorter period that Dale
the registrant was required to file such reports), and (2) has been
subject to such filing requirements for at least the part 90 days.
Yes [ ] No[x]



<PAGE>2

Indicate by check mark if disclosure of delinquent filers in response
to Item 405 of Regulation S-K is not contained hereof, and will not be
contained, to will be contained, to the best of registrant's knowledge,
in definitive proxy or information statements incorporated by reference
in Part III of this Form 10-K or any amendment to this Form 10-K.  [ ]

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

Large accelerated filer [ ] Accelerated filer         [ ]
Non-accelerated filer   [ ] Smaller reporting company [x]

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

State the aggregate market value of the voting and non-voting common
equity held by non-affiliates computed by reference to the price at
which the common equity was last sold, or the average bid and asked
price of such common equity, as of the last business day of the
registrant's most recently completed second fiscal quarter. The market
value of the registrant's voting $.0001 par value common stock held by
non-affiliates of the registrant was approximately $0.00.

Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date. The number
of shares outstanding of the registrant's only class of common stock,
as of September 30, 2010 was 11,059,982 shares of its $.0001 par value
common stock.

No documents are incorporated into the text by reference.

                         Explanatory Note

This amendment is being filed to correct the reference to the framework
used to evaluate the effectiveness of our internal control over
financial reporting and a typo in certification under Section 906 of
the Sarbanes-Oxley.



<PAGE>3
EARTH ENERGY RESERVES, INC.
Form 10-K
For the Fiscal Year Ended June 30, 2010
Table of Contents

Part I

ITEM 1.  BUSINESS                                                   4
ITEM 1A. RISK FACTORS                                               8
ITEM 1B. UNRESOLVED STAFF COMMENTS                                  8
ITEM 2.  PROPERTIES                                                 8
ITEM 3.  LEGAL PROCEEDINGS                                          8
ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS        8

Part II

ITEM 5.  MARKET FOR COMPANY'S COMMON EQUITY AND RELATED
           STOCKHOLDER MATTERS                                      9
ITEM 6.  SELECTED FINANCIAL DATA                                    9
ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
           CONDITION AND RESULTS OF OPERATIONS                     10
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
           RISK                                                    13
ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA               14
ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
           ACCOUNTING AND FINANCIAL DISCLOSURE                     36
ITEM 9A. CONTROLS AND PROCEDURES                                   36
ITEM 9B. OTHER INFORMATION                                         37

Part III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS, CONTROL
           PERSONS AND CORPORATE GOVERANCE; COMPLIANCE WITH
           SECTION 16(a) OF THE EXCHANGE ACT                       38
ITEM 11.  EXECUTIVE COMPENSATION                                   42
ITEM 12.  SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
           MANAGEMENT AND RELATED STOCKHOLDERS MATTERS             44
ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND
           DIRECTOR INDEPENDENCE                                   45
ITEM 14.  PRINCIPAL ACCOUNTING FEES AND SERVICES                   46

Part IV

ITEM 15.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES                  47



<PAGE>4
PART I

ITEM 1.   BUSINESS

Earth Energy Reserves, Inc. was incorporated in the State of Nevada on
February 12, 2002 as Wiltex First, Inc.  On March 10, 2005, Earth
Energy filed a certificate of amendment with the State of Nevada
changing its name to Asian American Business Development Company.  On
March 13, 2006, Earth Energy filed a certificate of amendment with the
State of Nevada changing its name to Earth Energy Reserves, Inc.

On December 16, 2005, Earth Energy elected to be regulated as a
Business Development Company as that term is defined in Section 54 of
the Investment Company Act.  As a BDC, Earth Energy was subject to the
laws and regulations contained in the Investment Company Act of 1940.
As a BDC, Earth Energy became subject to significant regulation of its
activities.

On February 10, 2006, the board of directors unanimously approved a
proposal to withdraw Earth Energy's election to be treated as a BDC as
soon as practicable, so that it might again conduct business as a
regular company rather than as a BDC subject to the Investment Company
Act.

Our current business plan has changed the nature of Earth Energy's
business from investing, reinvesting, owning, holding, or trading in
investment securities to an independent oil and gas company focused on
the acquisition, drilling and production of oil and gas in the United
States.  The board of directors believed that BDC regulation would be
inappropriate for such activities.

Our principal geophysical areas of interest are Louisiana, Texas,
Oklahoma, Alabama, Montana, West Virginia, New Mexico and Wyoming.

Our Business Strategy

We intend to invest primarily in domestic oil and gas interests,
including prospects, leases, wells, mineral rights, working interests,
royalty interests, overriding royalty interests, net profits interests,
production payments, farm-ins, drilling to earn arrangements,
partnerships, easements, rights of way, licenses and permits.  We
intend to produce and market production from the oil and gas interests
and may enter into operating, product marketing, and other such
arrangements in connection with such production and marketing.

Our primary strategy is to acquire leaseholds that are unexplored or
over looked in unconventional gas areas and hold low-risk promise of
large and wide-spread accumulations of natural gas reserves. We will
also target select producing gas fields that we identify as under-
developed by their current operator and will seek well-above average
returns by re-developing these unconventional opportunities.

We will also seek to be a low-cost developer of unconventional fields
by applying the latest multi-lateral horizontal drilling methods, in
combination with non-damaging under-balanced drilling techniques. Our
objective will be to optimize capital efficiency as we develop the full

<PAGE>5

reserve potential of each field. While our horizontal applications are
today more proven for a CBM reservoir, we may acquire shale gas
resources as well.

We may acquire producing properties based on our view of the pricing
cycles of oil and gas and available exploitation opportunities of
proved, probable and possible reserves.  As of September 30, 2010, we
had not acquired any such additional properties.

We intend to control our overhead expenses and up-front costs in seismic
data, hardware, software, geological and geophysical overhead and
prospect generation.  We also intend to outsource our geological,
geophysical, reservoir engineering and land functions and to maintain
tight control over general and administrative expenses.

Planned Property Acquisition.  On July 29, 2010, Earth Energy entered
into a letter of intent with an energy company to purchase various
interests in producing oil and gas leases located in the state of
Louisiana.  Until the definitive purchase agreement is executed by both
companies, either company may terminate the negotiations regarding this
proposed transaction, with or without cause.  The estimated purchase
price is $5,800,000.  There can be no assurance that the financing for
this proposed transaction can be obtained or that the proposed
transaction will be closed.

Marketing and Pricing

Our future revenues will be derived principally from the sale of CBM
natural gas.  As a result, our revenues will be determined, to a large
degree, by prevailing market prices for the gas.  We intend to sell our
gas under contractual arrangements or on the spot market at prevailing
market prices.  The price for gas is based on supply and demand, and we
cannot accurately predict or control the price we may receive for our
production.

Price decreases would adversely affect our revenues, cash flow,
profits and the value of our reserves.  Historically, and particularly
in recent times, these commodity prices have fluctuated widely.  Among
the factors that can cause this volatility are:

   -  The domestic and foreign supplies of oil and gas,
   -  Overall economic conditions,
   -  Product demand,
   -  Weather conditions,
   -  The price and availability of competitive fuels,
   -  Political and economic conditions in the Middle East and other
      producing regions,
   -  The level of oil and gas imports,
   -  Domestic and foreign governmental regulations,
   -  Potential price controls, and
   -  Environmental issues.



<PAGE>6

We may enter into hedging arrangements to reduce our exposure to
decreases in the prices of oil and gas.  Hedging arrangements may
expose us to risk of financial loss in circumstances where:

   -  There is a change in the expected differential between the hedge
price and the actual price of gas;
   -  Our production and/or sales are less than expected; and/or
   -  The counter party to the hedging contract defaults on its
contractual obligations.

In addition, hedging arrangements may limit the benefit we would
receive from increases in the prices of our production.  On the other
hand, we may choose not to engage in hedging transactions in the
future.  As a result, we may be more adversely affected by changes in
prices than producers who engage in hedging transactions.

Competition

We will compete with numerous other companies in virtually all facets
of our business.  Our competitors in the exploration, development,
acquisition and production business include major integrated companies
as well as numerous large and small independents, including many that
have significantly greater financial resources and in-house technical
personnel.

Government Regulations

   -   Federal Income Tax.  Federal income tax laws significantly
affect oil and gas operators.  The principal provisions that will
affect us are those that permit us to deduct as incurred, rather than
to capitalize and amortize, our intangible drilling and development
costs and to claim 15% depletion on a portion of our oil and gas
production.

   -  Environmental Matters.   Oil and gas operations are subject to
extensive federal regulation and, with respect to federal leases, to
interruption or termination by governmental authorities on account of
environmental and other considerations such as the Comprehensive
Environmental Response, Compensation and Liability Act (CERCLA) also
known as the "Super Fund Law."  The trend towards stricter standards
in environmental legislation and regulation could increase our costs
and others in the industry.  Oil and gas lessees are subject to
liability for the costs of clean-up of pollution resulting from a
lessee's operations, and may also be subject to liability for pollution
damages.  We intend to obtain insurance against costs of clean-up
operations, but we have no such insurance at this time and it is
unlikely that we will be able to fully insure against all such risks.  A
serious incident of pollution may also result in the Department of the
Interior requiring lessees under federal leases to suspend or cease
operation in the affected area.

The Oil Pollution Act of 1990 and regulations hereunder impose a
variety of regulations on "responsible parties" related to the
prevention of oil spills and liability for damages resulting from such
spills in United States waters.  The OPA assigns liability to each

<PAGE>7

responsible party for oil removal costs and a variety of public and
private damages.  While liability limits apply in some circumstances, a
party cannot take advantage of liability limits if the spill was caused
by gross negligence or willful misconduct or resulted from violation of
federal safety, construction or operating regulations.  Few defenses
exist to the liability imposed by the OPA.  In addition, to the extent
we acquire offshore leases and those operations affect state waters, we
may be subject to additional state and local clean-up requirements or
incur liability under state and local laws.  The OPA also imposes
ongoing requirements on responsible parties, including proof of
financial responsibility to cover at least some costs in a potential
spill.  We cannot predict whether the financial responsibility
requirements under the OPA amendments will adversely restrict our
proposed operations or impose substantial additional annual costs to us
or otherwise materially adversely affect us.

Our operations will be subject to numerous federal, state and local
laws and regulations controlling the discharge of materials into the
environment or otherwise relating to the protection of the environment.
Such laws and regulations, among other things, impose absolute
liability on the lessee for the cost of clean-up of pollution resulting
from a lessee's operations, subject the lessee to liability for
pollution damages, may require suspension or cessation of operations in
affected areas, and impose restrictions on the injection of liquids
into subsurface aquifers that may contaminate groundwater.  Such laws
could have a significant impact on our operating costs, as well as the
oil and gas industry in general.  Federal, state and local initiatives
to further regulate the disposal of oil and gas wastes are also pending
in certain jurisdictions, and these initiatives could have a similar
impact on us.  Our operations will also be subject to additional
federal, state and local laws and regulations relating to protection of
human health, natural resources, and the environment pursuant to which
we may incur compliance costs or other liabilities.

   Other Laws and Regulations.  Various laws and regulations often
require permits for drilling wells and also cover spacing of wells, the
prevention of waste of gas and oil including maintenance of certain
gas/oil ratios, rates of production and other matters.  The effect of
these laws and regulations, as well as other regulations that could be
promulgated by the jurisdictions in which we have production, could be to
limit the number of wells that could be drilled on our properties and
to limit the allowable production from the successful wells completed
on our properties, thereby limiting our revenues.

Employees

As of September 30, 2010, we had five employees, including the chairman
of the board of directors, president and chief executive officer,
executive vice president and chief financial officer, vice president
internal relations and vice president administration.

We intend to use the services of independent consultants and
contractors to perform various professional services, including
reservoir engineering, land, legal, accounting, environmental and tax

<PAGE>8

services.  We will also seek alliances in the areas of geological and
geophysical services and prospect generation, evaluation and prospect
leasing.  We intend to rely on third parties to drill, produce and
market our gas and oil. We believe that by limiting our personnel costs,
we should be able to better control total costs and retain project
management flexibility.  We intend to add full time management and
operations personnel in the future, as our business strategy is
implemented.


ITEM 1A.  RISK FACTORS

Not applicable


ITEM 1B.  UNRESOLVED STAFF COMMENTS

Not applicable


ITEM 2.  PROPERTIES

Our corporate headquarters office is located at 621 17th Street, #1640,
Denver, Colorado 80293.   These offices are approximately 2,357 square
feet.  These premises are leased on a 30 month basis commencing in
August 2010 for the average monthly lease payment of $2,884.


ITEM 3.  LEGAL PROCEEDINGS.

The registrant is not involved in any legal proceedings at this date.


ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

For the six months ended June 30, 2010 and during the last quarter of
the fiscal year ended December 31, 2009, no matters were submitted to a
vote of the registrant's security holders, through the solicitation of
proxies.



<PAGE>9
                              PART II

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

    Item 5(a)

a)  Market Information.  The registrant's common stock is not traded
over the counter.  We may apply for the listing of our common stock
within the next twelve months.

b)  Holders.  At September 30, 2010, there were approximately 100
shareholders of the registrant.

c)  Dividends.  Holders of the registrant's common stock are entitled
to receive such dividends as may be declared by its board of directors.
No dividends on the registrant's common stock have ever been paid, and
the registrant does not anticipate that dividends will be paid on its
common stock in the foreseeable future.

d)  Securities authorized for issuance under equity compensation plans.
    Not applicable.

e)  Performance graph.  Not applicable.

f)  Sale of unregistered securities.  During the six months ended June
30, 2010, Earth Energy engaged in a private placement equity capital
raising program to finance the initial costs of executing its business
strategy.   As of June 30, 2010, 1,466,000 Series 1 units, comprised of
one share of common stock and one three year warrant to purchase one
share of common stock at $1.50 per share were sold.  The offering was
terminated on June 30, 2010.

These securities were sold pursuant to an exemption from registration
under Rule 506, Regulation D of the Securities Act of 1933 to
accredited investors.

    Item 5(b)  Use of Proceeds.  Not applicable.


    Item 5(c)  Purchases of Equity Securities by the issuer and
affiliated purchasers.   None.


ITEM 6.  SELECTED FINANCIAL DATA

Not applicable to a smaller reporting company.




<PAGE>10

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

Trends and Uncertainties.  Earth Energy is an independent company
engaged in the acquisition, drilling and production of CBM natural gas
in the United States.  Our future operations may be adversely affected
by fluctuating oil and gas prices, changing domestic and foreign
economic and political environments and any prolonged recessionary
periods.

As long-term compensation incentive, Earth Energy has granted stock
options to its officers and directors.  As a result, these grants will
have a negative impact on our financial statements.

Investing Activities.  For the six months ended June 30, 2010 and the
year ended December 31, 2009, Earth Energy did not pursue any investing
activities.

During the year ended December 31, 2008, Earth Energy sold oil and gas
leases of $63,202 resulting in net cash flows provided by investing
activities of $63,202.

Financing Activities.  During the six months ended June 30, 2010, Earth
Energy sold common stock and common stock subscriptions representing a
total of 1,466,000 shares; issued 25,000 shares for rent; and
repurchased 15,000 shares of preferred stock resulting in net cash
provided by financing activities of $471,000 and common stock
subscription receivables of $965,000 which were subsequently collected
in cash.

During the year ended December 31, 2009, Earth Energy sold 45,000
shares of common stock for $45,000 resulting in net cash provided by
financing activities of $45,000.

During the year ended December 31, 2008, Earth Energy sold 25,000
shares of common stock for $25,000 and repurchased 5,000 shares of
common stock for $5,000 resulting in aggregate net cash provided by
financing activities of $65,000.

Results of Operations.  During the six months ended June 30, 2010,
Earth Energy engaged in a private placement equity capital raising
program to finance the initial costs of executing its business
strategy.  As of June 30, 2010, 1,466,000 Series 1 units, comprised of
one share of common stock and one three year warrant to purchase one
share of common stock at $1.50 per share were sold.  The offering was
terminated on June 30, 2010.

The total net cash proceeds of $1,466,000 received from this equity
financing are being used to fund:
   -  geological and geophysical research expenses;
   -  legal, accounting and other professional services;
   -  salaries;
   -  and general and administrative expenses.


<PAGE>11

These expenses are related to the identification, evaluation and
acquisition of CBM natural gas properties for development and on-going
capital raising activities.

In addition, $100,000 was used for a deposit related to the planned
property acquisition of two Northern Louisiana working interest
leaseholds.

Earth Energy has not had any material revenue since its inception.  All
expenses prior to December 31, 2009 were paid by the majority
shareholder or a related party owned by the majority shareholder and
from capital raised from private investors in 2007 and 2006.

Total general and administrative expenses of $208,460 were incurred
during the six months ended June 30, 2010 relating to the new Earth
Energy business strategy, including:
   - $78,000 of legal and professional services,
   - $49,000 of travel,
   - compensation of $30,000,
   - two years advance office rent of $26,000,
   - telephone of $5,000 and
   - other general office and supplies of $20,000.

The 118% increase in these expenses of $113,000 over the prior year
ended December 31, 2009 was directly attributable to the increased
level of business activity.

For the year ended December 31, 2009, Earth Energy did not earn any
revenues.  For the year ended December 31, 2008, Earth Energy earned
revenues of $3,592.  General and administrative expenses for the year
ended December 31, 2009 consisted mainly of travel of $33,000,
management fees of $12,000 and consulting fees of $41,000.  General and
administrative expenses decreased from $150,577 for the year ended
December 31, 2008 to $95,700 for the year ended December 31, 2009.  The
decrease in general and administrative expenses was due mainly to a
significant reduction in business activities.

Interest expense increased slightly from $16,939 for the year ended
December 31, 2008 to $18,332 for the year ended December 31, 2009.  The
increase of $1,393 was due to interest expense payable to a related
party and majority shareholder.

Earth Energy, together with its new management group, is presently in the
process of raising additional capital which effort, if successful, will
be used to partially finance its contemplated future gas and oil business
activities.

Recent Accounting Pronouncements

In January 2010, the Financial Accounting Standards Board issued
Accounting Standards Update 2010-06, "Fair Value Measurements and
Disclosures (Topic 820) - Improving Disclosures about Fair Value
Measurements."  This ASU requires some new disclosures and clarifies



<PAGE>12

some existing disclosure requirements about fair value measurement as
set forth in Accounting Standards Codification 820.  ASU 2010-06 amends
ASC 820 to now require: (1) a reporting entity should disclose
separately the amounts of significant transfers in and out of Level 1
and Level 2 fair value measurements and describe the reasons for the
transfers; and (2) in the reconciliation for fair value measurements
using significant unobservable inputs, a reporting entity should
present separately information about purchases, sales, issuances, and
settlements. In addition, ASU 2010-06 clarifies the requirements of
existing disclosures. ASU 2010-06 is effective for interim and annual
reporting periods beginning after December 15, 2009, except for the
disclosures about purchases, sales, issuances, and settlements in the
roll forward of activity in Level 3 fair value measurements. Those
disclosures are effective for fiscal years beginning after December 15,
2010, and for interim periods within those fiscal years. Early
application is permitted. The Company will comply with the additional
disclosures required by this guidance upon its adoption in January
2010.

In June 2009, the FASB issued guidance under ASC 105, "Generally
Accepted Accounting Principles." This guidance established a new
hierarchy of GAAP sources for non-governmental entities under the FASB
Accounting Standards Codification. The Codification is the sole source
for authoritative U.S. GAAP and supersedes all accounting standards in
U.S. GAAP, except for those issued by the SEC. The guidance was
effective for financial statements issued for reporting periods ending
after September 15, 2009. The adoption had no impact on the Company's
financial position, cash flows or results of operations.

In August 2009, the FASB issued ASU No. 2009-05, "Fair Value
Measurements and Disclosures (Topic 820) - Measuring Liabilities at
Fair Value," related to fair value measurement of liabilities. This
update provides clarification that in circumstances in which a quoted
price in an active market for an identical liability is not available,
a reporting entity is required to measure fair value using one or more
valuation techniques. This guidance is effective for the first
reporting period beginning after issuance

In April 2009, the FASB updated its guidance under ASC 820, "Fair Value
Measurements and Disclosures," related to estimating fair value when
the volume and level of activity for an asset or liability have
significantly decreased and identifying circumstances that indicate a
transaction is not orderly. The guidance was effective for interim and
annual reporting periods ending after June 15, 2009 with early adoption
permitted for periods ending after March 15, 2009. The adoption of this
guidance did not have any impact on the Company's results of operations

Also in April 2009, the FASB updated its guidance under ASC 825,
"Financial Instruments," which requires disclosures about fair value of
financial instruments for interim reporting periods of publicly traded
companies as well as in annual financial statements. This guidance also
requires those disclosures in summarized financial information at
interim reporting periods. The guidance was effective for interim
reporting periods ending after June 15, 2009 with early adoption
permitted for periods ending after March 15, 2009.

<PAGE>13

On December 31, 2008, the SEC published final rules and interpretations
updating its oil and gas reporting requirements.  Many of the revisions
are updates to definitions in the existing oil and gas rules to make
them consistent with the Petroleum Resource Management System, which is
a widely accepted standard for the management of petroleum resources
that was developed by several industry organizations.  Key revisions
include the ability to include nontraditional resources in reserves,
the use of new technology for determining reserves, permitting
disclosure of probable and possible reserves, and changes to the
pricing used to determine reserves based on a 12-month average price
rather than a period end spot price.  The average is to be calculated
using the first day-of-the-month price for each of the 12 months that
make up the reporting period.  The new rules are effective for annual
reports for fiscal years ending on or after December 31, 2009.  Early
adoption is not permitted.

In the opinion of management, these statements will have no material
effect on the financial statements of the registrant.


ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable




<PAGE>14

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

EARTH ENERGY RESERVES, INC.
Index to the Financial Statements


Report of Independent Registered Public Accounting Firm        15
Financial Statements of Earth Energy Reserves, Inc.:
  Balance Sheets
   June 30, 2010 and December 31, 2009 and 2008                16
  Statements of Operations for the six month period ended
   June 30, 2010 and for the years ended December 31, 2009
   and 2008                                                    17
  Statements of Changes of Stockholders' Equity (Deficit) For
    the six months period ended June 30, 2010 and for the
    years Ended December 31, 2009 and 2008                     18
  Statements of Cash Flows for the six month period ended
    and for the years ended December 31, 2009 and 2008         20
  Notes to Financial Statements                                22



<PAGE>15

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and
Stockholders of Earth Energy Reserves, Inc.
Estes Park, Colorado

We have audited the accompanying balance sheets of Earth Energy
Reserves, Inc. as of June 30, 2010, December 31, 2009 and 2008, and the
related statements of operations, changes of stockholders' equity
(deficit), and cash flows for the six month period ended June 30, 2010
and the years ended December 31, 2009 and 2008. Earth Energy Reserves,
Inc.'s management is responsible for these financial statements. Our
responsibility is to express an opinion on these financial statements
based on our audits.

We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. The company is not required to have, nor were we engaged
to perform, an audit of its internal control over financial reporting.
Our audit included consideration of internal control over financial
reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the company's internal control over
financial reporting. Accordingly, we express no such opinion. An audit
also includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for
our opinion.

In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Earth
Energy Reserves, Inc. as of June 30, 2010, December 31, 2009 and 2008,
and the results of its operations and its cash flows for the six month
period ended June 30, 2010 and the years ended December 31, 2009 and
2008 in conformity with accounting principles generally accepted in the
United States of America.

The accompanying financial statements have been prepared assuming the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company has generated minimal revenues from
operations, has accumulated deficit and working capital deficiency at
December 31, 2009 and 2008, which raises substantial doubt about its
ability to continue as a going concern. Management's plans in regard to
these matters are also described in Note 2. These financial statements
do not include any adjustments that might result from the outcome of
this uncertainty.

/s/Killman, Murrell & Company, P.C.
Killman, Murrell & Company, P.C.
Odessa, Texas
October 13, 2010

<PAGE>16
                       Earth Energy Reserves, Inc.
                             Balance Sheets
<TABLE>
                                ASSETS
                                ------
                                                                December 31,
                                             June 30,        -----------------
                                              2010           2009         2008
                                              ----           ----         ----

                                            <c>           <c>            <c>
Current Assets
  Cash                                     $  329,773     $      940    $    8,394
                                           ----------     ----------    ----------
    Total Current Assets                      329,773            940         8,394
                                           ----------     ----------    ----------
    Total Assets                           $  329,773     $      940    $    8,394
                                           ==========     ==========    ==========

          LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
          ---------------------------------------------
Current Liabilities:
  Compensation Payable                     $        -     $   75,000    $   75,000
  Note Payable, Related Party                       -         96,960        78,223
  Advances from Majority Shareholder                -         32,450        32,450
  Accrued Expenses                            103,426         62,134        30,893
  Accrued Interest                                  -         24,732        15,732
  Accrued Interest - Majority Shareholder           -          5,192         2,596
                                           ----------     ----------    ----------
    Total Current Liabilities                 103,426        296,468       234,894
                                           ----------     ----------    ----------
Stockholders' Equity (Deficit)
  Series A Preferred Stock $.0001 Par
    Value, Authorized 10,000,000 shares,
    123,191 Shares Issued and Outstanding         12              -             -
  Common Stock, $.0001 Par Value,
   Authorized 90,000,000 Shares
   Issued and Outstanding 11,059,982,
   9,467,000 and 9,422,000 Shares in 2010,
   2009 and 2008, respectively                  1,106            947           942
  Additional Paid-In Capital                7,248,355      5,547,353     5,502,358
  Retained Deficit                         (6,058,126)    (5,843,828)   (5,729,800)
                                           ----------     ----------    ----------
                                            1,191,347       (295,528)     (226,500)
  Less Common Stock Subscriptions
   Receivable                                (965,000)             -             -
                                           ----------     ----------    ----------
    Total Stockholders' Equity (Deficit)      226,347       (295,528)     (226,500)
                                           ----------     ----------    ----------
    Total Liabilities and Stockholders'
     Equity (Deficit)                      $  329,773     $      940     $    8,394
                                           ==========     ==========     ==========
</TABLE>
               The accompanying notes are an integral
                 part of these financial statements.



<PAGE>17

                      EARTH ENERGY RESERVES, INC.
                       STATEMENTS OF OPERATIONS
<TABLE>
                                          Six Months        Years Ended December 31,
                                            Ended           -----------------------
                                         June 30, 2010      2009               2008
                                         -------------      ----               ----

                                           <c>            <c>               <c>
INCOME
  Oil and Gas Income                    $        -       $        -       $    3,592
                                        ----------       ----------       ----------
EXPENSES
  Production Taxes                               -                -              143
  General and Administrative               208,460           95,696          150,577
                                        ----------       ----------       ----------
  Total Operating Expenses                 208,460           95,696          150,720
                                        ----------       ----------       ----------
NET OPERATING LOSS                        (208,460)         (95,696)        (147,128)

OTHER INCOME (EXPENSE)
  Impairment Loss on Unproved Property           -                -          (53,747)
  Loss on Sale of Proved Property                -                -           (9,948)
  Interest Expense                          (5,838)         (18,332)         (16,939)
                                        ----------       ----------       ----------
LOSS BEFORE INCOME TAXES                  (214,298)        (114,028)        (227,762)
                                        ----------       ----------       ----------
INCOME TAXES                                     -                -                -
                                        ----------       ----------       ----------
NET LOSS                                $ (214,298)      $ (114,028)      $ (227,762)
                                        ----------       ----------       ----------

BASIC AND DILUTED LOSS PER SHARE        $    (0.02)      $    (0.01)      $    (0.02)
                                        ----------       ----------       ----------
WEIGHTED AVERAGE NUMER OF
  COMMON SHARES OUTSTANDING -
  BASIC AND DILUTED                      9,797,000        9,456,000       10,051,000
                                        ==========       ==========       ==========
</TABLE>

The accompanying notes are an integral part
of these financial statements.



<PAGE>18
EARTH ENERGY RESERVES, INC.
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
Years ended December 31, 2008 and 2009 and
Six Months ended June 30, 2010
<TABLE>
                             Series A Preferred              Common
                          -----------------------   -----------------------
                            Number     Par Value      Number     Par Value
                          ----------   ----------   ----------   ----------

                           <c>        <c>          <c>          <c>
BALANCE, December 31, 2007         -  $       -     10,927,000    $   1,093
  Stock Re-purchase                -          -         (5,000)          (1)
  Sale of Common Shares            -          -         25,000            2
  Common Shares returned to
    the Company                    -          -     (1,525,000)        (152)
  Net Loss                         -          -              -            -
                          ----------  ---------    -----------   ----------
BALANCE, December 31, 2008         -          -      9,422,000          942

  Sale of Common Shares            -          -         45,000            5
  Net Loss                         -          -              -            -
                          ----------  ---------     ----------   ----------
BALANCE, December 31, 2009         -          -      9,467,000          947
  Common Shares Issued
   for Rent                        -          -         25,000            3
  Sale of Common Shares as
   part of Private Placement
   Memorandum, Net of Sales
   Commissions of $15,000          -          -        501,000           49
  Debt Settlement for
   Common Shares                   -          -        101,982           10
  Debt Settlement for
   Preferred Shares          138,191         14              -            -
  Re-purchased and Retired
   Preferred Treasury Shares (15,000)        (2)             -            -
  Common Stock Subscriptions
   Receivable                      -          -        965,000           97
  Net Loss                         -          -              -            -
                          ----------  ---------     ----------   ----------
Balance, June 30, 2010       123,191  $      12     11,059,982   $    1,106
                          ==========  =========     ==========   ==========
</TABLE>
The accompanying notes are an integral part
of these financial statements.



<PAGE>19
EARTH ENERGY RESERVES, INC.
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
Years ended December 31, 2009 and 2008 and
Six Months ended June 30, 2010 (Continued)
<TABLE>
                                  Additional
                                   Paid-In      Retained
                                   Capital      Deficit      Totals
                                  ----------   ----------  ---------

                                   <c>          <c>         <c>
BALANCE, December 31, 2007       $5,482,207   $(5,502,038) $  (18,738)
  Stock Re-purchase                  (4,999)            -      (5,000)
  Sale of Common Shares              24,998             -      25,000
  Common Shares returned to
    the Company                         152             -           -
  Net Loss                                -      (227,762)   (227,762)
                                 ----------   -----------  ----------
BALANCE, December 31, 2008        5,502,358    (5,729,800)   (226,500)
  Sale of Common Shares              44,995             -      45,000
  Net Loss                                -      (114,028)   (114,028)
                                 ----------   -----------  ----------
BALANCE, December 31, 2009        5,547,353    (5,843,828)   (295,528)
  Common Shares Issued
   for Rent                          24,997             -      25,000
  Sale of Common Shares as
   part of Private Placement
   Memorandum, Net of Sales
   Commissions of $15,000           485,951             -     486,000
  Debt Settlement for
   Common Shares                    101,972             -     101,982
  Debt Settlement for
   Preferred Shares                 138,177             -     138,191
  Re-purchased and Retired
   Preferred Treasury Shares        (14,998)            -     (15,000)
  Common Stock Subscriptions
   Receivable                       964,903             -     965,000
  Net Loss                                -      (214,298)   (214,298)
                                 ----------   -----------  ----------
Balance, June 30, 2010           $7,248,355   $(6,058,126) $1,191,347
                                 ==========   ===========  ==========
</TABLE>
The accompanying notes are an integral part
of these financial statements.





<PAGE>20

EARTH ENERGY RESERVES, INC.
STATEMENTS OF CASH FLOWS

<TABLE>
                                                 Six Months          Years Ended
                                                   Ended             December 31,
                                                  June 30,        -----------------
                                                   2010           2009         2008
                                                   ----           ----         ----

                                                 <c>           <c>           <c>

CASH FLOWS FROM
 OPERATING ACTIVITIES
  Net Loss                                      $(214,298)     $(114,028)   $(227,762)
  Adjustments to Reconcile Net Loss
    to Net Cash Used by Operating
    Activities
      Interest Expense - Related Party              1,939         6,737         5,350
      Interest Expense - Majority Shareholder       1,650         2,596         2,596
      Interest Expense - Compensation Payable       2,250         9,000         9,000
      Impairment of Unproved Property                   -             -        53,747
      Loss on Sale of Proved Property                   -             -         9,948
      Common Shares Issued for Rent                25,000             -             -
  Changes in Operating Assets and Liabilities
    Accounts Receivable                                 -             -         2,204
    Advance from Related Party                          -        12,000        12,000
    Accrued Expenses                               41,292        31,241        13,020
                                               ----------   -----------     ---------
        Net Cash Used By Operating
          Activities                             (142,167)      (52,454)     (119,897)
CASH FLOWS FROM INVESTING ACTIVITIES
  Proceeds from Sale of Proved Property                 -             -        63,202
                                               ----------   -----------     ---------
        Net Cash Provided by
         Investing Activities                           -             -        63,202
                                               ----------   -----------     ---------
CASH FLOWS FROM FINANCING ACTIVITIES
  Sale of Common Shares                           486,000        45,000        25,000
  Re-purchase and Retirement of Series A
   Preferred Stock                                (15,000)            -             -
  Re-purchase of Common Shares                          -             -        (5,000)
                                               ----------   -----------     ---------
        Net Cash Provided By
          Financing Activities                    471,000        45,000        20,000
                                               ----------   -----------     ---------
NET INCREASE (DECREASE) IN CASH                   328,833        (7,454)      (36,695)

CASH AT BEGINNING OF PERIOD                           940         8,394        45,089
                                               ----------   -----------     ---------
CASH AT END OF PERIOD                          $  329,773   $       940     $   8,394
                                               ==========   ===========     =========



<PAGE>21

SUPPLEMENTAL CASH FLOW DISCLOSURES
  Cash Paid During the Year for
    Interest                                   $        -   $         -    $        -
                                               ----------   -----------    ----------
    Income taxes                               $        -   $         -    $        -
                                               ----------   -----------    ----------

Non-cash Investing and Financing Activities
  Common Stock Par Value                       $       10   $         -    $     (152)
  Preferred Stock Par Value                            14             -             -
  Additional Paid in Capital                      240,149             -           152
  Notes Payable Related Party                    (129,410)            -             -
  Compensation Payable                            (75,000)            -             -
  Accrued Interest-Related Party                   (8,780)            -             -
  Accrued Interest                                (26,983)            -             -
  Common Stock Subscriptions Receivable          (965,000)            -             -
  Common Shares                                        97             -             -
  Additional Paid in Capital for Sale of
   Stock Subscriptions                            964,903             -             -
                                               ----------   -----------    ----------
                                               $        -   $         -    $        -
                                               ----------   -----------    ----------
</TABLE>




The accompany notes are an integral part
of these financial statements.




<PAGE>22

EARTH ENERGY RESERVES, INC.
NOTES TO FINANCIAL STATEMENTS
June 30, 2010

NOTE 1: ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization
Earth Energy Reserves, Inc., (the "Company") formerly Asian American
Business Development Company was incorporated in the State of Nevada on
February 12, 2002 as Wiltex First, Inc.  On March 10, 2005, the Company
filed a certificate of amendment with the State of Nevada changing its
name to Asian American Business Development Company and on March 13,
2006, the Company's name was changed to Earth Energy Reserves, Inc.

On August 11, 2010, the Company changed its fiscal year to June 30.
These financial statements include the audited financial statements for
the years ended December 31, 2009 and 2008, and the six month
transition period ended June 30, 2010.

A related company owned by the major shareholder and the major
shareholder of the Company, have managed and financed the Company since
inception.

Purpose
In July 2007, the management of the Company made the decision to
concentrate its efforts to enter the oil and gas industry.  The Company
intends to become an independent oil and natural gas company engaged in
the acquisition, drilling and production of oil and gas, with areas of
interest primarily in Texas, Oklahoma, Louisiana, Montana, and Wyoming.
In 2007 the Company purchased two oil and gas leases and recognized its
first oil revenues in November 2007.  In 2008 these leases were either
sold or impaired.

Basis of Presentation
The accompanying financial statements have been prepared in accordance
with accounting principles generally accepted in the United States for
annual and transitional financial information and with the instructions
to Form 10-K and Article 3 and 3-A of Regulations S-X.

Income Taxes
The Company provides for income taxes by utilizing the asset and
liability approach to financial accounting and reporting for income
taxes.  Deferred income tax assets and liabilities are computed for
differences between the financial statement and tax basis of assets and
liabilities that will result in taxable or deductible amounts in the
future based on enacted tax laws and rates applicable to the period in
which the differences are expected to effect taxable income.  Valuation
allowances are established when necessary to reduce deferred tax assets
to the amount expected to be realized.  Income tax expense is the tax
payable or refundable for the period plus or minus the change during
the period in deferred tax assets and liabilities.



<PAGE>23
                       EARTH ENERGY RESERVES, INC.
                      NOTES TO FINANCIAL STATEMENTS
                             JUNE 30, 2010

NOTE 1: ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)

Use of Estimates and Assumptions
Management uses estimates and assumptions in preparing financial
statements in accordance with generally accepted accounting principles.
Those estimates and assumptions affect the reported amounts of assets
and liabilities, the disclosure of contingent assets and liabilities,
and the reported amounts of revenue and expenses.  Actual results could
vary from the estimates used.

Net Loss Per Common Share
Diluted net (loss) earnings per share reflects the potential dilution
of securities by adding common stock equivalents, including warrants in
the weighted-average number of common shares outstanding for a period,
if dilutive.  All potentially dilutive securities have been excluded
from the computation, as their effect is anti-dilutive for the six
month transition period ended June 30, 2010 and for the years ended
December 31, 2009 and 2008.

Cash and Cash Equivalents
The Company considers any highly liquid investments with maturities of
three months or less on the date of purchase to be cash equivalents.
The Company had no cash equivalents at June 30, 2010.

Concentration of Credit Risk and Fair Value of Financial Instruments
The Company maintains cash balances at financial institutions, which at
times exceed federally insured amounts.  The Company has not
experienced any losses in such accounts.

The carrying amounts of financial instruments including cash,
compensation payables, advances from shareholder and notes payables
approximate fair values at June 30, 2010, December 31, 2009 and 2008.

In 2008, the Company adopted ASC 820 to increase consistency and
comparability in fair value measurements and to expand disclosures
about fair value measurements.  ASC 820 defines fair value, establishes
a framework for measuring fair value in generally accepted accounting
principles, and expands disclosures about fair value measurements.  ASC
820 applies under other accounting pronouncements that require or
permit fair value measurements and does not require any new fair value
measurements.

ASC 820 specifies a valuation hierarchy based on whether the inputs to
those valuation techniques are observable or unobservable.  Observable
inputs reflect market data obtained from independent sources, while
unobservable inputs reflect the Company's own assumptions.  These three
types of inputs have created the following fair value hierarchy:

Level 1   Quoted prices in active markets for identical assets or
liabilities.


<PAGE>24
                       EARTH ENERGY RESERVES, INC.
                      NOTES TO FINANCIAL STATEMENTS
                             JUNE 30, 2010

NOTE 1: ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)

Concentration of Credit Risk and Fair Value of Financial Instruments -
(continued)

Level 2   Observable inputs other than quoted prices included in Level
1, such as quoted prices for similar assets and liabilities in active
markets; quoted price for identical or similar assets and liabilities
in markets that are not active; or other input that are observable or
can be corroborated by observable market date.

Level 3   Unobservable inputs that are supported by little or no market
activity and that are significant to the fair value of the assets or
liabilities.  This includes certain pricing models, discounted cash
flow methodologies and similar techniques that use significant
unobservable inputs.

The following table summarizes our financial assets and liabilities
measured and reported in the Company's statement of financial position
at fair value as of June 30, 2010 segregated among the appropriate
levels within the fair value hierarchy:
<TABLE>
		                      Fair Value Measurements June 30, 2010
                                  -------------------------------------
		               Quoted Prices in
                          Active Markets for  Significant Other      Significant
                           Identical Assets   Observable Inputs  Unobservable Inputs
                               (Level 1)          (Level 2)           (Level 3)
                          ------------------  -----------------  -------------------

                             <c>                  <c>                  <c>
Common Stock Issued
  for Rent                  $            -        $   25,000          $        -
</TABLE>
The common shares issued for rent expense were priced at $1.00 per
share which represented the current selling price of such shares to new
investors.

Revenue Recognition
Oil, gas, and natural gas liquid revenues are recognized when the
products are sold and delivery to the purchaser has occurred.

Oil and Gas Properties
The Company has adopted the full cost method of accounting for oil and
gas properties.  Accordingly, all costs associated with acquisition,
exploration, development of oil and gas reserves, including directly
related overhead costs and related asset retirement costs, are
capitalized.




<PAGE>25
                       EARTH ENERGY RESERVES, INC.
                      NOTES TO FINANCIAL STATEMENTS
                             JUNE 30, 2010

NOTE 1: ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)

Oil and Gas Properties(continued)
All capitalized costs of oil and gas properties, including the
estimated future costs to develop proved reserves, are amortized on the
unit-of-production method using estimates of proved reserves.
Investments in unproved properties and major development projects are
not amortized until proved reserves associated with the projects can be
determined or until impairment occurs.  If the results of an assessment
indicate that the properties are impaired, the amount of the impairment
is added to the capitalized costs to be amortized.

In addition, the capitalized costs are subject to a "ceiling test",
which basically limits such costs to the aggregate of the "estimated
present value," discounted at a 10 percent interest rate of future net
revenues from proved reserves, based on current economic and operating
conditions, plus the lower of cost or fair market value of unproved
properties.

Sales of proved and unproved properties are accounted for as
adjustments of capitalized costs with no gain or loss recognized,
unless such adjustments would significantly alter the relationship
between capitalized costs and proved reserves of oil and gas, in which
case the gain or loss is recognized in income.

Abandonments of properties are accounted for as adjustments of
capitalized costs with no loss recognized.

Reclassification
Certain previously reported financial information has been reclassified
to conform to the current year's presentation.  The impact of such
reclassification was not significant to the prior years' overall
presentation.

Impairment of Long-Lived Assets
The Company adheres to guidance under ASC 360 in accounting for the
impairment or disposal of long-lived assets.   The guidance evaluates
the carrying value of its oil and gas leases and equipment whenever a
change in circumstances indicates that the carrying value may not be
recoverable from the undiscounted future cash flows.  If an impairment
exists, the net book values are reduced to fair values as warranted.
During 2008, the Company recorded an impairment charge of $53,747 to
write down the value of an undeveloped oil and gas lease.

Recent Accounting Pronouncements
In January 2010, the Financial Accounting Standards Board ("FASB")
issued Accounting Standards Update ("ASU") 2010-06, "Fair Value
Measurements and Disclosures (Topic 820) - Improving Disclosures about
Fair Value Measurements." This ASU requires some new disclosures and


<PAGE>26
                       EARTH ENERGY RESERVES, INC.
                      NOTES TO FINANCIAL STATEMENTS
                             JUNE 30, 2010

NOTE 1: ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)

Recent Accounting Pronouncements (continued)
clarifies some existing disclosure requirements about fair value
measurement as set forth in Accounting Standards Codification ("ASC")
820. ASU 2010-06 amends ASC 820 to now require: (1) a reporting entity
should disclose separately the amounts of significant transfers in and
out of Level 1 and Level 2 fair value measurements and describe the
reasons for the transfers; and (2) in the reconciliation for fair value
measurements using significant unobservable inputs, a reporting entity
should present separately information about purchases, sales,
issuances, and settlements. In addition, ASU 2010-06 clarifies the
requirements of existing disclosures. ASU 2010-06 is effective for
interim and annual reporting periods beginning after December 15, 2009,
except for the disclosures about purchases, sales, issuances, and
settlements in the roll forward of activity in Level 3 fair value
measurements. Those disclosures are effective for fiscal years
beginning after December 15, 2010, and for interim periods within those
fiscal years. Early application is permitted. The Company has complied
with the additional disclosures required by this guidance upon its
adoption in January 2010.

In June 2009, the FASB issued guidance under ASC 105, "Generally
Accepted Accounting Principles." This guidance established a new
hierarchy of GAAP sources for non-governmental entities under the FASB
Accounting Standards Codification. The Codification is the sole source
for authoritative U.S. GAAP and supersedes all accounting standards in
U.S. GAAP, except for those issued by the SEC. The guidance was
effective for financial statements issued for reporting periods ending
after September 15, 2009. The adoption had no impact on the Company's
financial position, cash flows or results of operations.

In August 2009, the FASB issued ASU No. 2009-05, "Fair Value
Measurements and Disclosures (Topic 820) - Measuring Liabilities at
Fair Value," related to fair value measurement of liabilities. This
update provides clarification that in circumstances in which a quoted
price in an active market for an identical liability is not available,
a reporting entity is required to measure fair value using one or more
valuation techniques. This guidance is effective for the first
reporting period beginning after issuance.

In April 2009, the FASB updated its guidance under ASC 820, "Fair Value
Measurements and Disclosures," related to estimating fair value when
the volume and level of activity for an asset or liability have
significantly decreased and identifying circumstances that indicate a
transaction is not orderly. The guidance was effective for interim and
annual reporting periods ending after June 15, 2009 with early adoption
permitted for periods ending after March 15, 2009. The adoption of this
guidance had no impact on the Company's results of operations.



<PAGE>27
                       EARTH ENERGY RESERVES, INC.
                      NOTES TO FINANCIAL STATEMENTS
                             JUNE 30, 2010

NOTE 1: ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)

Recent Accounting Pronouncements (continued)
Also in April 2009, the FASB updated its guidance under ASC 825,
"Financial Instruments," which requires disclosures about fair value of
financial instruments for interim reporting periods of publicly traded
companies as well as in annual financial statements. This guidance also
requires those disclosures in summarized financial information at
interim reporting periods. The guidance was 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
guidance had no impact on the Company's results of operations.

On December 31, 2008, the SEC published final rules and interpretations
updating its oil and gas reporting requirements.  Many of the revisions
are updates to definitions in the existing oil and gas rules to make
them consistent with the Petroleum Resource Management System, which is
a widely accepted standard for the management of petroleum resources
that was developed by several industry organizations.  Key revisions
include the ability to include nontraditional resources in reserves,
the use of new technology for determining reserves, permitting
disclosure of probable and possible reserves, and changes to the
pricing used to determine reserves based on a 12-month average price
rather than a period end spot price.  The average is to be calculated
using the first day-of-the-month price for each of the 12 months that
make up the reporting period.  The new rules are effective for annual
reports for fiscal years ending on or after December 31, 2009.  Early
adoption is not permitted.

In the opinion of management, these topics have no impact on the
financial statements of the Company.

NOTE 2: GOING CONCERN

The accompanying financial statements have been prepared in conformity
with accounting principles generally accepted in the United States,
which contemplates continuation of the Company as a going concern.
Since inception, the Company has incurred net operating losses.  The
future success of the Company will depend on its ability to attain
additional capital, or to find an acquisition to add value to its
present shareholders and ultimately, upon its ability to attain future
profitable operations.  Although the Company has sold common stock with
proceeds of $1,466,000 in a private placement as of October 13, 2010,
there can be no assurance that the Company will be successful in
obtaining additional financing, or that it will attain positive cash
flow from operations.



<PAGE>28
                       EARTH ENERGY RESERVES, INC.
                      NOTES TO FINANCIAL STATEMENTS
                             JUNE 30, 2010

NOTE 3: LEON RIVER ENERGY AND WALKER CREEK UNIT LEASEHOLDS

As of December 31, 2007, the Company owned a 26.37% working interest
and a 19.78% net revenue interest in the Leon River Energy leasehold
and a 20% interest in the Walker Creek Unit leasehold for a total of
$126,897.

In February 2008, the Company sold the Walker Creek Unit back to its
original owner due to poor production and recognized a $9,948 loss.

The Leon River Energy leasehold, an unproved property, was reviewed for
impairment.  After the review of pertinent facts surrounding the lease,
the management of the Company determined that the leasehold was
impaired.  The Company recorded an impairment loss of $53,747 at
December 31, 2008.

NOTE 4: RELATED PARTY TRANSACTIONS

In March 2010, the Company issued 138,191 of its Series A Preferred
Stock in settlement of outstanding related party debt of $129,411 plus
accrued interest of $8,780. In the six month period ended June 30,
2010, 15,000 shares of Series A Preferred Stock were re-purchased at
$1.00 per share.  The preferred shares were issued to the Company's
majority shareholder and an entity wholly owned by that same
shareholder.  The preferred shares were valued and are redeemable at $1
per share.  Valuation of these shares was based on the subscription
price of common shares sold.

The following is a detail of that transaction:
<TABLE>
                                                             Accrued
                                             Advances from  Interest-
                              Note Payable     Majority     Majority     Series A
                              Related Party   Shareholder  Shareholder   Preferred
Stock
                              -------------   -----------  -----------  -------------

                                 <c>            <c>         <c>            <c>
Balance, December 31, 2007      $  60,873      $  32,450    $       -
  Management Fees                  12,000              -            -
  Accrued Interest at 8%            5,350              -        2,596
                                ---------      ---------    ---------
Balance, December 31, 2008         78,223         32,450        2,596
  Management Fees                  12,000              -            -
  Accrued Interest at 8%            6,737              -        2,596
                                ---------      ---------    ---------
Balance, December 31, 2009         96,960         32,450        5,192
  Accrued Interest at 8%                -              -        3,589
                                ---------      ---------    ---------
Related Party Debt Converted
  to Series A Preferred Stock   $  96,960      $  32,450    $   8,781     $ 138,191
                                =========      =========    =========     =========
</TABLE>


<PAGE>29
                       EARTH ENERGY RESERVES, INC.
                      NOTES TO FINANCIAL STATEMENTS
                             JUNE 30, 2010

NOTE 5: FEDERAL INCOME TAXES

Total income tax benefit is less than the amount computed by
multiplying the loss before income taxes by the statutory federal
income tax rate.  The reasons for the difference and the related tax
effects for the six month period ended June 30, 2010 and for the years
ended December 31, 2009 and 2008 are:
<TABLE>
                                                 2010       2009      2008
                                                 ----       ----      ----

                                               <c>       <c>        <c>
Tax Benefit at statutory rates of 34%         $ 72,861   $ 38,770   $ 77,439
Non-deductible expense                          (8,500)         -          -
Change in valuation allowance                  (64,361)   (38,770)   (77,439)
                                              --------   --------   --------
Net income tax benefit                        $      -   $      -   $      -
                                              ========   ========   ========
</TABLE>
The components of the deferred tax assets are as follows:
<TABLE>
                                                                    December 31,
                                               June 30,             -----------
                                                2010             2009         2008
                                               -------           ----         ----

                                              <c>              <c>          <c>
Deferred Tax Assets
  Net Operating Loss Carryforward              $ 342,169       $ 277,808   $ 239,038
  Other                                           18,274          18,274      18,274
                                               ---------       ---------   ---------
	Total Deferred Tax Assets                  360,443         296,082     257,312
	Less Valuation Allowance                  (360,443)       (296,082)   (257,312)
                                               ---------       ---------   ---------
                                               $       -       $       -   $       -
                                               =========       =========   =========
</TABLE>
The Company has no deferred tax liabilities.

At June 30, 2010, the Company had federal income tax net operating loss
carryforwards of approximately $1,006,000 to offset future taxable
income, which begins to expire in 2024; therefore, there was no income
tax expense or payable as of June 30, 2010.



<PAGE>30
                       EARTH ENERGY RESERVES, INC.
                      NOTES TO FINANCIAL STATEMENTS
                             JUNE 30, 2010

NOTE 6: STOCK HOLDERS' EQUITY

In March 2005, the Company amended its charter to provide for
90,000,000 authorized shares of common stock with a par value of
$0.0001 and 10,000,000 authorized shares of Series A preferred stock
with a par value of $0.0001. The Series A preferred shares are
redeemable at the option of the Company at $1.00 per share. At December
31, 2009 and 2008 there were no outstanding shares of preferred stock.

In 2008 the Company sold 25,000 shares of its $0.0001 par value common
stock to one individual and repurchased 5,000 shares of its common
stock from one individual.  All shares sold and repurchased were priced
at $1.00 per share.

In April 2008 an executive officer of the Company returned 1,000,000
shares of the Company's common stock due to not being able to provide
services to the Company.  In addition another 525,000 shares of common
stock, previously issued for services, was returned to the Company by
various shareholders.

In 2009 the Company sold 45,000 shares of its $0.0001 par value common
stock to three individuals.  All shares sold were priced at $1.00 per
share.

The Company had the following stock transactions during the six month
period ended June 30, 2010.

   -  Issued 101,982 shares of the Company's common stock in settlement
of accrued compensation of $75,000 plus accrued interest $26,982.
   -  Issued 138,191 shares of Company's Series A Preferred Stock in
settlement of outstanding related party debt of ($129,411) plus accrued
interest ($8,780). The shares were issued to the Company's majority
shareholder and an entity which is one hundred percent (100%) owned by
the majority shareholder.  The preferred shares are redeemable at the
option of the Company in the future at $1.00 per share.
   -  The Company repurchased and retired 15,000 shares of its Series A
Preferred Stock.  The preferred shares were re-purchased at $1.00 per
share.
   -  The Company issued 25,000 of its Series 1 units for office rent
valued at $1.00 per unit ($25,000).  Each unit consists of one common
share and one warrant to purchase one common share at an exercise price
of $1.50 per common share.
   -  In order to raise additional capital in 2010, the Company sold
1,466,000 Series 1 units at $1 per unit to accredited investors.  Each
unit consisted of one common share and one warrant to purchase one
common share at an exercise price of $1.50 per common share.  The
warrants were immediately exercisable for a term of three years.
   -  As of June 30, 2010, the Company had recorded proceeds of
$501,000 from stock sales and recorded another $965,000 in common stock
subscriptions. Cash proceeds from the common stock subscriptions were
received by the Company subsequent to year end.



<PAGE>31
                       EARTH ENERGY RESERVES, INC.
                      NOTES TO FINANCIAL STATEMENTS
                             JUNE 30, 2010

NOTE 6: STOCK HOLDERS' EQUITY (continued)

Warrants
In 2006 and thereafter when the Company sold common stock to investors,
each investor also received three year warrants to purchase an equal
number of shares of common stock for a price of $1.50 per share.  The
following is a summary of warrant activity:

                                                    Number
                                                  of Warrants
                                                  -----------
Warrants Outstanding, December 31, 2007             522,000
  Issuances                                          25,000
  Expirations                                        (5,000)
                                                  ---------
Warrants Outstanding, December 31, 2008             542,000
  Issuances                                          45,000
  Expirations                                      (482,000)
                                                  ---------
Warrants Outstanding, December 31, 2009             105,000
  Issuances                                       1,491,000
  Expirations                                       (10,000)
                                                  ---------
Warrants Outstanding, June 30, 2010               1,586,000
                                                  =========

The 482,000 warrants issued in 2006 expired in calendar year 2009.
Warrants issued in 2007 expire in 2010 and warrants issued in 2008,
2009 and 2010 expire in 2011, 2012, and 2013 respectively.

NOTE 7: STOCK OPTION PLAN

On May 1, 2005, the Board of Directors adopted the Company's 2005 non-
statutory stock option plan ("Plan") whereby the Company reserved
5,000,000 of its authorized but un-issued common stock for issuance
under the Plan.  As of June 30, 2010, December 31, 2009 and 2008, no
stock options were granted under the Plan.


NOTE 8: UNAUDITED FINANCIAL STATEMENTS FOR JUNE 30, 2009

In August 2010, the Company changed its year end from a calendar year
end to a June 30 fiscal year end.  The following unaudited financial
statements are to be used in comparison with these June 30, 2010
transitional financial statements.



<PAGE>32
                       EARTH ENERGY RESERVES, INC.
                      NOTES TO FINANCIAL STATEMENTS
                             JUNE 30, 2010

NOTE 8:  UNAUDITED FINANCIAL STATEMENTS FOR JUNE 30, 2009 (continued)

                       EARTH ENERGY RESERVES, INC.
                            BALANCE SHEET
                            JUNE 30, 2009

CURRENT ASSETS - Cash                                 $   12,864
                                                      ==========
CURRENT LIABILITIES
  Other Debt                                          $  126,125
  Related Party Debt                                     123,806
                                                      ----------
    TOTAL CURRENT LIABILITIES                            249,931
                                                      ----------
STOCKHOLDERS' (DEFICIT)
  Series A Preferred Stock, $0.0001 Par Value,
   Authorized 10,000,000 Shares, None Issued                   -
  Common Stock, $0.0001 Par Value,
   Authorized 90,000,000 Shares, Issued and
    Outstanding 9,467,000 in 2009                            947
  Additional Paid-in Capital                           5,547,353
  Accumulated (Deficit)                               (5,785,367)
                                                      ----------
      TOTAL STOCKHOLDERS' (DEFICIT)                     (237,067)
                                                      ----------
      TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT)   $   12,864
                                                      ==========

                 EARTH ENERGY RESERVES, INC.
                   STATEMENT OF OPERATIONS
            FOR THE SIX MONTHS ENDED JUNE 30, 2009

INCOME                                                $        -
EXPENSES                                                  46,531
                                                      ----------
  NET OPERATING (LOSS)                                   (46,531)
                                                      ----------
OTHER (EXPENSE)                                           (9,035)
                                                      ----------
  LOSS BEFORE INCOME TAXES                               (55,566)
                                                      ----------
INCOME TAXES                                                   -
                                                      ----------
  NET LOSS                                            $  (55,566)
                                                      ==========
BASIC AND DILUTED LOSS PER SHARE                      $    (0.01)
                                                      ==========
WEIGHTED AVERAGE NUMBER OF COMMON
 SHARES OUTSTANDING - BASIC AND DILUTED               $9,447,000
                                                      ==========

<PAGE>33
                       EARTH ENERGY RESERVES, INC.
                      NOTES TO FINANCIAL STATEMENTS
                             JUNE 30, 2010

NOTE 9:	SUBSEQUENT EVENTS

In May 2009, the FASB issued SFAS No. 165 (ASC 855), subsequent events
("ASC 855"). ASC 855 establishes general standards of accounting for
and disclosure of events after the balance sheet date but before
financial statements are issued or are available to be issued. The
adoption of ASC 855 in the fourth quarter of 2009 did not have any
impact on the Company's financial statements. Accordingly, the Company
evaluated subsequent events through October 13, 2010, the date the
financial statements were issued.

The following is a summary of significant events affecting the Company
subsequent to June 30, 2010:

   -  Effective July 1, 2010 and with shareholder approval, the Company
entered into a quasi-reorganization (also referred to as a corporate
adjustment). As a result of the quasi-reorganization all prior period
losses charged to retained deficit were eliminated against additional
paid-in capital. A quasi-reorganization requires that retained earnings
be dated for ten years after the quasi-reorganization takes place.




<PAGE>34
                       EARTH ENERGY RESERVES, INC.
                      NOTES TO FINANCIAL STATEMENTS
                             JUNE 30, 2010

NOTE 9:   SUBSEQUENT EVENTS (continued)

The following is an example of the effect of a quasi-reorganization of
the Company if the quasi-reorganization had occurred on June 30, 2010:
<TABLE>
                                                                 Subsequent
                                 Prior to Quasi-                  to Quasi-
                                 Reorganization    Adjustment  Reorganization
                                 ---------------   ----------  --------------
                                      
               <c>          <c>
Series A Preferred Stock          $        12     $         -    $       12
Common Stock                            1,106               -         1,106
Additional Paid-In Capital          7,248,355      (6,058,126)    1,190,229
Retained Deficit                   (6,058,126)      6,058,126             -
Retained Earnings - Since
  Quasi-Reorganization
  of June 30, 2010                          -                -            -
                                  -----------     ------------   ----------
Total Stockholders' Equity        $ 1,191,347     $          -   $1,191,347
                                  ===========     ============   ==========
</TABLE>
   -  On August 1, 2010, the Company changed its year end from a
calendar year end to a fiscal year end of June 30.  This financial
statement includes the audited financial statements for the years ended
December 31, 2009 and 2008, and the six month transition period ended
June 30, 2010.
   -  Effective on July 1, 2010 the Company entered into an employment
agreement with its new President and Chief Executive Officer.  The
employment agreement has a four year term and provides the following:
   1.  Base annual salary of $260,000 plus potential incentives to be
determined in the future.
   2.  A grant of nonqualified incentive stock options to purchase
1,000,000 shares of the Company's common stock at an exercise price of
$1 per share.  100,000 options vest immediately and 100,000 of the
options vests on January 1, 2011, and each January 1 thereafter until
all such incentive options are vested.  Options fully vest on the date
of his termination if not vested before.
   3.  A grant of 4,000,000 shares of the Company's common stock at a
purchase price of $400 subject to certain vesting and termination
restrictions.

   -  Effective July 1, 2010, the Company entered into an Offer of
Employment letter with its Executive Vice President and Chief Financial
Officer.  The Offer of Employment letter was signed and accepted on
July 31, 2010.



<PAGE>35
                       EARTH ENERGY RESERVES, INC.
                      NOTES TO FINANCIAL STATEMENTS
                             JUNE 30, 2010

NOTE 9:   SUBSEQUENT EVENTS (continued)

The Offer of Employment letter provides for the following:
   1.  Beginning base salary of $125,000 per year until the Company has
successfully raised $5 million in capital, at which time the salary
will be raised to $175,000.
   2.  An initial grant of 2,000,000 shares of restricted Company
common stock to vest over a four year period.
   3.  A grant of stock options for 75,000 shares of Company common
stock with an exercise price of $1.00 expiring in ten years.  Options
vest quarterly over three years of service.

   -  Effective July 1, 2010, the Company entered into an Offer of
Employment letter with the Vice President of Administration. The Offer
of Employment letter was signed and accepted on September 14, 2010.
The Offer of Employment letter provides for an annual salary of
$120,000, 50,000 stock options, and a grant of 200,000 shares of the
Company's restricted common shares to be earned over a two year vesting
schedule. Stock options have a ten year expiration, a $1.00 exercise
price, and a three year vesting schedule.

   -  Effective July 1, 2010, the Company granted 75,000 stock options
to its Chairman of the Board and 50,000 stock options to a Company Vice
President.  Stock options have a ten year expiration, a $1.00 exercise
price, and a three year vesting schedule.

   -  On July 29, 2010 the Company entered into a letter of intent with
an energy company to purchase various interests in producing oil and
gas leases located in the state of Louisiana.  Until the definitive
purchase agreement is executed by both companies, either company may
terminate the negotiations regarding this proposed transaction, with or
without cause.  The estimated purchase price is $5,800,000.




<PAGE>36

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

None.

ITEM 9A.  CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures:

James E. Hogue, chairman of the board, who was chief executive officer
and chief financial officer and, therefore, responsible for all
financial and accounting matters during this reporting period has
concluded that the disclosure controls and procedures were not
effective as of June 30, 2010.  These controls are meant to ensure that
information required to be disclosed by the issuer in the reports that
it files or submits under the Act is recorded, processed, summarized
and reported, within the time periods specified in the Commission's
rules and forms and to ensure that information required to be disclosed
by an issuer in the reports that it files or submits under the Act is
accumulated and communicated to the issuer's management, including its
principal executive and principal financial officers, or persons
performing similar functions, as appropriate to allow timely decisions
regarding required disclosure.

Earth Energy had not filed its SEC filings since the third quarter of
2008.  Management has only recently prepared and filed the required SEC
reports.  Management intends to implement internal controls to ensure
that similar situations do not occur in the future and that required
SEC filings will be timely.

Management's Annual Report on Internal Control over Financial
Reporting:

Our management is responsible for establishing and maintaining adequate
internal control over financial reporting. Our internal control over
financial reporting is the process designed by and under the
supervision of James Hogue, chairman of the board, who was chief
executive officer and chief financial officer, or the persons
performing similar functions, to provide reasonable assurance regarding
the reliability of our financial reporting and the preparation of our
financial statements for external reporting in accordance with
accounting principles generally accepted in the United States of
America.  Mr. Hogue has evaluated the effectiveness of our internal
control over financial reporting using the criteria set forth by the
Committee of Sponsoring Organizations of the Treadway Commission in
Internal Control - Integrated Framework.

Mr. Hogue assessed the effectiveness of our internal control over
financial reporting as of June 30, 2010, and concluded that it is not
effective for the reasons discussed above.

This annual report does not include an attestation report of the
registrant's registered public accounting firm regarding internal
control over financial reporting.  Management's report was not subject

<PAGE>37

to attestation by the registrant's registered public accounting firm
pursuant to temporary rules of the Securities and Exchange Commission
that permit the registrant to provide only management's report in this
annual report.

Evaluation of Changes in Internal Control over Financial Reporting:

James Hogue, chairman of the board, who was chief executive officer and
chief financial officer has evaluated changes in our internal controls
over financial reporting that occurred during the six months ended June
30, 2010.  Based on that evaluation, Mr. Hogue, or those persons
performing similar functions, did not identify any change in our
internal control over financial reporting that has materially affected,
or is reasonably likely to materially affect, our internal control over
financial reporting.

Important Considerations:

The effectiveness of our disclosure controls and procedures and our
internal control over financial reporting is subject to various
inherent limitations, including cost limitations, judgments used in
decision making, assumptions about the likelihood of future events, the
soundness of our systems, the possibility of human error, and the risk
of fraud. Moreover, projections of any evaluation of effectiveness to
future periods are subject to the risk that controls may become
inadequate because of changes in conditions and the risk that the
degree of compliance with policies or procedures may deteriorate over
time. Because of these limitations, there can be no assurance that any
system of disclosure controls and procedures or internal control over
financial reporting will be successful in preventing all errors or
fraud or in making all material information known in a timely manner to
the appropriate levels of management.

ITEM 9B.  OTHER INFORMATION

None


<PAGE>38
PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS, CONTROL
           PERSONS AND CORPORATE GOVERANCE; COMPLIANCE WITH
           SECTION 16(a) OF THE EXCHANGE ACT

Our management consists of:

Name                               Title                   Term
----                               -----                   ----
James E. Hogue, age 74      Chairman of the Board        Inception
                                                         to present
                            Chief Executive Officer,
                             Controller, Chief          Inception to
                              Financial Officer        June 30, 2010
James R. Phillips, age 62  Vice President, Secretary/   Inception to
                             Treasurer and Director        present

Steven A. Kranker, age 49  Chief Executive Officer,     July 1, 2010
                             President and Director      to present

Doyle Pennington, age 65     V.P. of Administration
                             and Investor Relations     July 1, 2010
                                  and Director           to present
                            Interim Chief Financial   November 2, 2010
                                  Officer                to present

James E. Hogue, Chairman and President

Mr. Hogue has served as chairman and president of Earth Energy since
inception.  From 1991 to 1996, Mr. Hogue has served as president of
Martex Oil and Gas, Inc.  From 1996 to 1999, Mr. Hogue became
president, chief operating officer and a director of Cotton Valley
Resources Corporation, a publicly traded AMEX company (KTN).  Mr. Hogue
has served as chairman, president and chief financial officer of Galaxy
Partners Ltd. Corporation, a consulting firm, since 1995.

James R. Phillips, Jr., Vice President, Secretary, Treasurer and
Director

Mr. Phillips has served as vice president, secretary, treasurer and
director of Earth Energy since March 2005.  From 1993 to 2004, Mr.
Phillips was a financial consultant, registered investment advisor of
E.F. Hutton and Raymond James and Associates, Inc., Waco, Texas.

Mr. Phillips graduated from Texas Tech University in 1970 with a
Bachelor of Business Administration in Finance & Banking.

Steven A. Kranker, Chief Executive Officer, President and Director

Mr. Kranker has over 25 years of broad oil and gas experience with
major and large independent E&P companies in roles of increasing
responsibility. Prior to joining EER, he served as the Corporate
Engineering Manager for Forest Oil Corp., with expertise in acquisition



<PAGE>39

and divestiture evaluation, petroleum property optimization and
valuation studies, SEC reserve reporting and associated bank credit
facilities. Mr. Kranker was responsible for the oil and gas reserves
and economic evaluations in $4 billion in acquisition transactions and
$3 billion in divestitures during the past five years, with recent
emphasis on the assessment of horizontal drilling in unconventional gas
plays. Previous service includes Senior Reservoir Engineer in numerous
locations with exposure to a variety of petroleum reservoirs with
Brunei Shell Petroleum, Arco Alaska, Maxus Exploration, Conoco and
Shell. He holds a Bachelor of Science degree in Petroleum Engineering
from the Colorado School of Mines.

Doyle Pennington, Interim Chief Financial Officer, Vice President of
Administration and Investor Relations and Director

Mr. Pennington specializes in strategic planning and management of
domestic and international special projects for non-profit
organizations. He has worked for agencies of the Southern Baptist
Convention and other non-profit organizations including the Religious
Heritage of America Foundation, Mission America Coalition, the
Consortium for Global Education, the International Evangelism
Association, Touch the World Ministries, Global Resources Ministries,
and the National Christian Foundation. Mr. Pennington has established
mission funds to ten state conventions and has managed and coordinated
numerous projects and special events for various agencies of the
Southern Baptist Convention.  He has been a hotel owner-operator of
Holiday Inns and apartment complexes, and has developed, owned and
managed commercial real estate properties for many years.
Mr. Pennington holds a BBA from the University of Mississippi.

All directors hold office until the completion of their term of office,
which is not longer than three years, or until their successors have
been elected and have been qualified.  All officers are appointed
annually by the board of directors and, subject to existing employment
agreements, serve at the discretion of the board.  Currently, directors
receive no compensation.

Committees of the Board of Directors

Concurrent with having sufficient members and resources, Earth Energy's
board of directors will establish an audit committee, investment
committee and a compensation committee.  The audit committee will
review the results and scope of the audit and other services provided
by the independent auditors and review and evaluate the system of
internal controls.  The investment committee will review and approve
all investments in excess of $25,000 and assist in determining the
carrying values of portfolio investments.  The compensation committee
will manage the stock option plan and review and recommend compensation
arrangements for the officers.  No final determination has yet been
made as to the memberships of these committees or when we will have
sufficient members to establish committees.



<PAGE>40

All directors will be reimbursed by Earth Energy for any expenses
incurred in attending directors' meetings provided that Earth Energy
has the resources to pay these fees.  Earth Energy will consider
applying for officers and directors liability insurance at such time
when it has the resources to do so.

Stock Option Plan

On May 1, 2005, the board of directors adopted Earth Energy 2005 non-
statutory stock option plan whereby Earth Energy reserved 5,000,000 of
its authorized but un-issued common stock for issuance under the Plan.
As of June 30, 2010, December 31, 2009 and 2008, no stock options were
granted under the plan.

Section 16(a) Beneficial Ownership Reporting Compliance

Under Section 16(a) of the Securities Exchange Act of 1934, as amended,
an officer, director, or greater-than-10% shareholder of the registrant
must file a Form 4 reporting the acquisition or disposition of
registrant's equity securities with the Securities and Exchange
Commission no later than the end of the second business day after the
day the transaction occurred unless certain exceptions apply.
Transactions not reported on Form 4 must be reported on Form 5 within
45 days after the end of the registrant's fiscal year.  Such persons
must also file initial reports of ownership on Form 3 upon becoming an
officer, director, or greater-than-10% shareholder.  To our knowledge,
based solely on a review of the copies of these reports furnished to
it, our officers, directors and 10% control persons have not complied
with applicable Section 16(a) filing requirements during the six months
ended June 30, 2010.  The officers, directors and 10% control persons
have represented that the required reports will be filed on or before
March 31, 2011

Code of Ethics Policy

We have not yet adopted a code of ethics that applies to our principal
executive officer, principal financial officer, principal accounting
officer or controller or persons performing similar functions.

Corporate Governance

There have been no changes in any state law or other procedures by
which security holders may recommend nominees to our board of
directors.  In addition to having no nominating committee for this
purpose, we currently have no specific audit committee and no audit
committee financial expert.  Based on the fact that our current
business affairs are simple, any such committees are excessive and
beyond the scope of our business and needs.

Indemnification

The registrant shall indemnify to the fullest extent permitted by, and
in the manner permissible under the laws of the State of Nevada, any
person made, or threatened to be made, a party to an action or
proceeding, whether criminal, civil, administrative or investigative,

<PAGE>41

by reason of the fact that he is or was a director or officer of the
registrant, or served any other enterprise as director, officer or
employee at the request of the registrant.  The board of directors, in
its discretion, shall have the power on behalf of the registrant to
indemnify any person, other than a director or officer, made a party to
any action, suit or proceeding by reason of the fact that he/she is or
was an employee of the registrant.

Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the
registrant, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or paid
by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceedings) is asserted by
such director, officer, or controlling person in connection with any
securities being registered, the registrant will, unless in the opinion
of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issues.

INDEMNIFICATION OF OFFICERS OR PERSONS CONTROLLING THE REGISTRANT FOR
LIABILITIES ARISING UNDER THE SECURITIES ACT OF 1933, IS HELD TO BE
AGAINST PUBLIC POLICY BY THE SECURITIES AND EXCHANGE COMMISSION AND IS
THEREFORE UNENFORCEABLE.


ITEM 11. EXECUTIVE COMPENSATION

As of June 30, 2010, no officer, director or employee had received any
cash compensation, and no director, officer or employee had a contract
or commitment to receive annual compensation in excess of $100,000.

Employment Agreement for Steven A. Kranker
In July 2010, we entered into an employment agreement with Mr. Steven
A. Kranker, our president and chief executive officer. Mr. Kranker's
employment agreement is a four year term and provides that he will
receive:

(1) $260,000 per annum base salary (which amount may be increased or
decreased under certain circumstances), plus bonus payments or
incentive compensation as may be determined from time to time by our
board of directors;

(2) a grant of nonqualified stock options to purchase 1,000,000 shares
of our common stock, at an exercise price of $1.00 per share. 100,000
of the options vested on the date of the agreement, and 100,000 of the
options will vest on January 1, 2011 and each January 1 thereafter
until all such nonqualified stock options are fully vested. If any



<PAGE>42

nonqualified stock options have not vested and Mr. Kranker ceases to be
employed by us, the unvested options will fully vest on the date of
such termination;

(3) 4,000,000 Earth Energy common shares, fully paid and nonassessable,
for a purchase price of $400, payable in cash at the time of issue,
which restricted shares shall remain unvested and subject to forfeiture
upon termination of Mr. Kranker's employment unless one of the
following events occurs prior to such termination:

(a) Mr. Kranker continues to be employed by us on February 1, 2013, in
which event 665,000 shares will vest on that date and become
nonforfeitable, with the remaining shares vesting in equal installments
of 667,000 shares on the first day of every third month thereafter so
long as Mr. Kranker continues to be employed by us; or

(b) Our common shares are traded on a national stock exchange and the
average reported closing price of our common shares on the principal
stock exchange or other market is $5.00 or more for 20 consecutive
trading days, in which event (i) 50% of the shares will become vested
and nonforfeitable on that date, and (ii) the remaining 50% of the
shares will become vested and nonforfeitable on the January 1
immediately following the date on which the first 50% of the shares
vested. Upon Mr. Kranker's termination or demotion coincident with a
change of control, all unvested shares shall immediate become vested
and nonforeitable.

Effective July 1, 2010, the Company entered into an offer of employment
letter with its Executive Vice President and Chief Financial Officer.

The offer of employment letter provides for the following:
1.  Beginning base salary of $125,000 per year until the Company has
successfully raised $5 million in capital, at which time the salary
will be raised to $175.000.
2.  An initial grant of 2,000,000 shares of restricted Company common
stock to vest over a four year period.
3.  A grant of nonqualified stock options for 75,000 shares of Company
stock with an exercise price of $1.00 expiring in ten years.  Options
vest quarterly over three years of service.

W.A. Sikora was terminated as Executive Vice Preesident and Chief
Financial Officer on October 28, 2010.

Effective July 1, 2010, the Company entered into an offer of employment
letter with its Chairman of the Board.  The terms of the offer of
employment letter provide for an annual salary of $175,000 and a grant
of 75,000 nonqualified stock options.  Stock options have a 10 year
expiration, a $1.00 exercise price, and a 3 year vesting schedule.

Effective July 1, 2010, the Company entered into an offer of employment
letter with the Vice President of Administration.  The offer of
employment letter provides for an annual salary of $120,000, 50,000
nonqualified stock options, and a grant of 200,000 shares of the



<PAGE>43

Company's restricted common shares to be earned over a 2 year vesting
schedule. Stock options have a 10 year expiration, a $1.00 exercise
price, and a 3 year vesting schedule.

Board of Directors Compensation.  Currently board members receive no
special compensation for meetings or time incurred.  Director liability
insurance may be provided to all members of the board of directors.

Outstanding Equity Awards
The following table sets forth the outstanding stock options to the
registrant's officers and directors:

Option Awards
In July 2010, we issued incentive stock options to purchase 1,250,000
common shares to our officers and directors.

Outstanding Equity Awards at September 30, 2010
<TABLE>
                     Number of            Number of
                     Securities           Securities
                     Underlying           Underlying
                     Unexercised          Unexercised       Option         Option
                       Options/            Options/         Exercise     Expiration
Name                 Exercisable          Unexercisable      Price          Date
----                 -----------          -------------     --------     ----------

                     <c>                   <c>             <c>           <c>
James E. Hogue           75,000                     -        1.00            -
James Phillips           50,000                     -        1.00            -
Steven A. Kranker     1,000,000                              1.00           (1)
W.A. Sikora(2)           75,000                     -        1.00
Doyle Pennington         50,000                              1.00
</TABLE>
(1)100,000 of the options vested on date of agreement and 100,000 of
the options will vest on January 1, 2011 and each January 1 thereafter
until all options are vested.
(2)W.A. Sikora was terminated as Executive Vice President and Chief
Financial Officer on October 28, 2010
The registrant does not compensate its directors for their services as
such.  The registrant reimburses the directors for their reasonable
out-of pocket expenses for attending meetings of the board of
directors.

ITEM 12.  SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDERS MATTERS

The following table sets forth certain information regarding the
beneficial ownership of common shares as of September 30, 2010 by: (i)
each current director and nominee for director; (ii) all executive
officers and current directors of Earth Energy as a group; and (iii)
all stockholders known by Earth Energy to be beneficial owners of more
than five percent of the outstanding common shares or preferred shares.
The information in this table is based solely on a review by Earth



<PAGE>44

Energy of its capital stock transfer records and on publicly available
filings made with the SEC by or on behalf of the stockholders listed
below, and is based on 11,059,982 outstanding common shares.
<TABLE>
Name and Address of           Number of Shares
Beneficial Owner           Beneficially Owned       Percent of Class

                               <c>                      <c>
James E. Hogue
671 Heinz Parkway
Estes Park, CO 80517          4,000,000                   36.2%

James R. Phillips
6801 Sanger Avenue
Suite 101
Waco, TX 76710                1,540,000                   13.9%

Steven Kranker(1)
621 17th Street
Denver, CO 80293                      0                    0.0%

Doyle Pennington(2)
2850 Wildwood Lane
Estes Park, CO 80517            101,000                     .9%

Officers and Directors
as a group (4 members)        5,641,000                   51.0%
</TABLE>
 (1)In July 2010, Earth Energy authorized a restricted stock grant to
Mr. Kranker of 4,000,000 common shares subject to vesting terms over a
four year period and forfeiture in the even of certain employment
termination conditions.
 (2)In July 2010, Earth Energy authorized a restricted stock grant to
Mr. Pennington of 200,000 common shares subject to vesting terms over a
four year period and forfeiture in the even of certain employment
termination conditions.

Unless otherwise indicated, Earth Energy believes that all persons
named in the table have sole voting and investment power with respect
to all common shares beneficially owned by them.  A person is deemed to
be the beneficial owner of securities which may be acquired by such
person within 60 days from the date indicated above upon the exercise
of options, warrants or convertible securities.  Each beneficial
owner's percentage ownership is determined by assuming that options,
warrants or convertible securities that are held by such person (but
not those held by any other person) and which are exercisable within 60
days of the date indicated above, have been exercised.

Warrants. There are 1,586,000 warrants issued and outstanding at June
30, 2010, held by approximately 100 warrant holders.  The warrants
enable holders to purchase common stock at $1.50 per share at any time
prior to expiration 35,000 warrants expire in 2010, 25,000 warrants
expire in 2011, 45,000 warrants expire in 2012; and 1,481,000 warrants
expire in 2013.


<PAGE>45

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

The note payable to a related party and major shareholder represents
amounts paid by the related party for general and administrative
expenses.  The note is due on demand and bears interest at the rate of
eight percent calculated on the average outstanding monthly balance.

The advance from the major shareholder represents cash advanced to the
Company from the major shareholder of the Company.  The advance is due
on demand and interest was accrued on the $32,450 balance at eight per
cent in 2009 and 2008.  The debt was converted to 138,191 preferred
stock during the six months ended June 30, 2010.

The detail of the activity in the note payable to related party is as
follows:
                                          2009           2008
                                          ----           ----
Balance, beginning of period             $78,233       $60,873

General and administrative expenses
  advanced
    Management fees                       12,000        12,000
                                         -------       -------
      Total general and administrative
        Expenses                          12,000        12,000

Interest expense                           6,727         5,350
                                         -------       -------
Total change during period                18,727        17,350
                                         -------       -------
Balance, end of period                   $96,960       $78,223
                                         =======       =======

Director Independence

Earth Energy's board of directors consists of James Hogue, James
Phillips, Steven Kranker and Doyle Pennington.  None of the directors are
independent as such term is defined by a national securities exchange or
an inter-dealer quotation system.  For the six months ended June 30, 2010
and for fiscal years ended December 31, 2009 and 2008, there were no
transactions with related persons other than as described in the section
above entitled "Item 11.  Executive Compensation".


ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.

Audit Fees.  We incurred aggregate fees and expenses of approximately
$0, $27,293 and $49,728 respectively, from Killman, Murrell & Company,
PC for the 2009 and 2008 fiscal years and for the six months ended June
30, 2010.  Such fees included work completed for our annual audits and
for the review of our financial statements included in our Forms 10-Q.



<page>46

Tax Fees. We did not incur any aggregate tax fees and expenses from
Killman, Murrell & Company, PC for the six months ended June 30, 2010,
2009 and 2008 fiscal years for professional services rendered for tax
compliance, tax advice, and tax planning.

All Other Fees. We did not incur any other fees from Killman, Murrell &
Company, PC for the six months ended June 30, 2010, fiscal 2009 and
2008.

The board of directors, acting as the Audit Committee considered
whether, and determined that, the auditor's provision of non-audit
services was compatible with maintaining the auditor's independence.
All of the services described above for the six months ended June 30,
2010, fiscal years 2009 and 2008 were approved by the board of
directors pursuant to its policies and procedures.



<PAGE>47
Part IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

(a)(1)  List of Financial statements included in Part II hereof

Balance Sheets, June 30, 2010, December 31, 2009 and 2008
Statements of Operations for the six months ended June 30, 2010 and
years ended December 31, 2009 and 2008
Statements of Stockholders' Equity (Deficit) for the six months ended
June 30, 2010 and years ended December 31, 2009 and 2008
Statements of Cash Flows for the six months ended June 30, 2010 and
years ended December 31, 2009 and 2008
Notes to the Financial Statements

(a)(2) List of Financial Statement schedules included in Part IV
hereof:  None

(a)(3) Exhibits

The following of exhibits are filed with this report:

(31) 302 certification

(32) 906 certification



<PAGE>48

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, Earth Energy has duly caused this
Report to be signed on its behalf by the undersigned duly authorized
person.

Date:    February 16, 2010

Earth Energy Reserves, Inc.

/s/Steven A. Kranker
------------------------------
By: Steven A. Kranker, President

Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this report has been signed below by the following persons on
behalf of Earth Energy and in the capacities and on the dates
indicated.
<TABLE>

                                                               <c>
/s/James E. Hogue            Chairman of the Board             2/16/11
------------------------
James E. Hogue(1)

/s/Steven A. Kranker        Chief Executive Officer            2/16/11
------------------------          Director
Steven A. Kranker(2)

/s/James R. Phillips, Jr.    Vice President, Secretary         2/16/11
------------------------        Treasurer and Director
James R. Phillips, Jr.

/s/Doyle Pennington          Interim Chief Financial           2/16/11
------------------------       V.P. of Administration
                             and Investor Relations
                                     Director

</TABLE>
 (1)Mr. Hogue was Chief Executive Officer and Chief Financial Officer
during this reporting period.
(2)Appointed officer of Earth Energy Reserves effective July 1, 2010
(3)Appointed interim chief financial officer of Earth Energy Reserves
effective November 2, 2010