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

                                   FORM 10-KSB

[x]  ANNUAL REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE  SECURITIES  EXCHANGE
     ACT OF 1934

                   For the fiscal year ended December 31, 2007
                                             -----------------

                              ROYAL OIL & GAS CORP.
                              ---------------------
               (Name of Small Business Registrant in its charter)

             Utah                                        73-1083773
-------------------------------                     -------------------
(State or other jurisdiction of                      (I.R.S. Employer
incorporation or organization)                      Identification no.)

              117 - 8880 No. 1 Road
              Richmond BC, Canada                        V7C 4C3
              ----------------------------------------  ----------
              *(Address of principal executive offices) (Zip Code)

                                 (604) 202-3212 (Issuer's telephone number)

Securities to be registered under Section 12(b) of the Act:

Title of each class                                           N/A

Name of each exchange on which registered                     N/A

Securities to be registered under Section 12(g) of the Act:

                    Common Stock, $0.001 par value per share
                                (Title of class)

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports),  and (2) has been
subject to such filing requirements for the past 90 days. Yes [x] No [ ]

     Check if there is no disclosure of delinquent files in response to Item 405
of  Regulation  S-B is not  contained in this form,  and no  disclosure  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-KSB
or any amendment to this Form 10-KSB. [ ]

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

State issuer's revenues for its most recent fiscal year. $ 0
<PAGE>

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 sold,  or the average bid and asked  price of such  common  equity,  as of a
specified  date within the past 60 days.  (See  definition  of affiliate in Rule
12b-2 of the Exchange Act.) $ -0- (Shares are presently not trading )

Note:  If  determining  whether  a  person  is  an  affiliate  will  involve  an
unreasonable  effort and expense,  the issuer may calculate the aggregate market
value of the common  equity held by  non-affiliates  on the basis of  reasonable
assumptions, if the assumptions are stated.

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest  practicable date. Common Stock -- 11,355,754 shares as
of March 21, 2008

                                      -2-
<PAGE>

                                TABLE OF CONTENTS

                                     PART I

                                                                            Page
                                                                            ----

Item 1.     Description of Business.........................................   4

Item 2.     Description of Property.........................................  12

Item 3.     Legal Proceedings...............................................  12

Item 4.     Submission of Matters to a Vote of Security Holders.............  12

Item 5.     Market for Common Equity and Related Stockholder Matters........  12


                                     PART II

Item 6.     Management's Discussion and Analysis or Plan of Operation.......  14

Item 7      Financial Statements............................................  19

Item 8.     Changes In and Disagreements With Accountants
               on Accounting and Financial Disclosure.......................  19

Item 8A(T). Controls and Procedures.........................................  19

Item 8B.        Other Information...........................................  20


                                    PART III

Item 9.     Directors, Executive Officers, Promoters, Control Persons
                and Corporate Governance; Compliance With Section 16(a)
                of the Exchange ............................................  20

Item 10.    Executive Compensation..........................................  21

Item 11.    Security Ownership of Certain Beneficial Owners and Management
                 and Related Stockholder Matters............................  22

Item 12     Certain Relationships and Related Transactions,
                 and Director Independence..................................  23

Item 13.    Exhibits........................................................  23

 Item 14.   Principal Accountant Fees and Services..........................  23


Signatures..................................................................  40


                                      -3-
<PAGE>



                                     PART I

Item 1.  Description of Business

Business Development

     History
     -------

     Royal Oil & Gas Corp.  ("the  Company")  was  organized  on August 23, 1978
under the laws of the State of Utah as Price Card & Gift,  Inc.  On May 19, 1988
the Company changed its name to Kellard  Marble,  Inc. and on March 13, 1989, it
changed its name to Who's the Greatest. On May 15, 1994, the Company changed its
name to  SwissAmera  Enterprises,  Inc.  and on July 9, 2001 the  Company  again
changed its name to the current Royal Oil & Gas Corp.

     The Company's initial authorized capitalization was 50,000 shares of common
stock and  originally  issued  7,500  shares,  which  shares  were  subsequently
returned to the Company and cancelled.  During 1983 and 1984, the Company issued
7,500 shares for cash and services  rendered.  In May 1988, the Company  amended
its Articles of  Incorporation  to change its name to Kellard  Marble,  Inc. and
increase the authorized  capitalization to 5,000,000 shares of common stock. The
Company  developed  and  operated  a `Marble  Mine' in the  Province  of British
Columbia  Canada.  Operations  on the mine were ceased in late 1988. On March 2,
1989, the Company  effected a forward split of its issued shares on a forty (40)
shares for one (1) share  basis,  which  increased  the  issued and  outstanding
shares of common stock to 300,000 shares. On March 13, 1989, the Company changed
its name to Who's the  Greatest.  The  Company  planned to acquire the rights to
certain  syndicated  Television Shows, but was not able to raise the funding for
such.

     On March 14, 1994, the Company changed its name to SwissAmera  Enterprises,
Inc.  and on May 15,  1994,  it  effected  a  reverse  split of its  issued  and
outstanding  shares on a one (1) share  for  twenty  (20)  shares  basis,  which
decreased the outstanding common stock to 15,000 shares.

     In July 1994,  the Company  issued an  aggregate  of 460,333  shares of its
common stock  pursuant to Regulation D, Rule 504 of the  Securities Act of 1933,
as amended (the "Securities Act"). The shares were issued as follows:

     307,000 shares at $ 0.50 per share for cash and a note

     115,333 shares at $ 0.75 per share for cash

     20,000 shares at $ 0.75 per share for services rendered

     18,000  shares at $ 0.75 per share for a cash  advance  for the Adams Ranch
     Oil & Gas Project visibility study.

     The Company  acquired an option to the Adams Ranch  situated in the `Medina
County,  Texas' with the intent to develop and  produce the  existing  Oil & Gas
reserves on the Ranch.  The Company  engaged  the  services of `TEJAS  PETROLEUM
ENGINEERS, INC., Dallas Texas' to complete a visibility study on the Adams Ranch
Project.  Due to the fact that the Oil Reserves  were `heavy oils' and could not
be  recovered  through   conventional   methods,   and  the  Gas  Reserves  were
insufficient, the Company decided not to continue with the Project.

     On July 22,  1994,  the  Company  issued  150,000  shares  for an option to
acquire a  telecommunications  company.  The shares  were held in escrow,  which
increased the outstanding stock, including the escrowed shares to 625,333.

     In 1995,  the  Company  issued  2,000  shares of common  stock in a private
transaction for cash at $5.00 per share,  which increased the outstanding  stock
to 627,333 shares.

     In 1996,  the Company  elected not to exercise the option given in 1994 and
the shares issued in July 1994 and held in escrow were returned to the Company's
treasury and retired, decreasing the outstanding stock to 477,333 shares.

                                      -4-
<PAGE>

     Also in 1998,  the Company  issued  35,301 shares of common stock valued at
$1.00 per share in exchange for debt,  which increased the outstanding  stock to
512,635 shares.

     In 1999, the Company issued 19,323 shares of common stock for cash at $1.40
per share,  and 15,000 shares for services  rendered  valued at $1.40 per share,
increasing the total shares outstanding to 546,958.

     In 2001,  the Company  negotiated the  acquisition of certain  interests in
producing  oil and gas  properties  located  in the United  States  and  Canada.
Subsequently  on July 9, 2001,  the  Company  changed  its name from  SwissAmera
Enterprises,  Inc. to Royal Oil & Gas Corp. Upon completion of a viability study
on the oil and gas interests proposed to be acquired, the Company decided not to
continue with the acquisition. No stock was issued.

     From 1995 to 2005 the Company researched several opportunities in the Oil &
Gas Industry, but at all occasions the Company was unable to raise the necessary
funding  due to the  fact  that  the  Company's  Stock  was not  trading  on any
exchange.  Therefore the Company decided in 2005 to apply to the SEC to register
the Company and to apply for the trading  authority with quotation of it's stock
on the OTC-BB.

     On December 31, 2005 the Company caused a reverse split of its  outstanding
common stock on a one share for 10 shares basis,  reducing its outstanding stock
from  5,469,579  shares to 546,976.  All  references  to common  stock have been
retroactively restated.

     On March 28, 2006 the Company  issued  8,038,700  shares of common stock at
$0.01 per share in payment of a  shareholder  loan of  $80,387  as  recorded  at
December  31, 2005,  increasing  its issued and  outstanding  stock to 8,585,676
shares.

     On March 31,  2006,  the Company  issued  1,460,078  shares of common stock
valued  at $0.01  per share in  payment  of a  shareholder  loan of  $14,601  as
recorded  on March 31,  2006,  increasing  its issued and  outstanding  stock to
10,045,754 shares.

     On June 30, 2006 the Company  issued  1,310,000  of common  stock valued at
$0.01 per share in payment of a shareholder  loan of $13,100 as recorded at June
30, 2006, increasing its issued and outstanding stock to 11,355,754 shares.

     On June 27, 2006 the Company held its annual stockholders meeting, at which
stockholders ratified the one share for 10 shares reverse split as well as other
actions  previously  taken by the board prior to the  meeting.  At the  meeting,
stockholders elected following directors and officers:

          Delbert G. Blewett          President and director
          Fred Hefti                  Secretary and director
          Glen Buckler                Treasurer and director

     The  Company  has been  inactive  with  nominal  assets and no  significant
operations  since  1995.  All  shareholders  loans  have been paid  through  the
issuance of common stock as of June 30, 2006, valued at par value of $0.01.

     The Company is attempting to locate and  negotiate  with a business  entity
for the merger of that target company into the Company. In certain instances,  a
target  company  may wish to become a  subsidiary  of the Company or may wish to
contribute  assets to the Company  rather than merge.  No assurance can be given
that the Company will be successful in locating or  negotiating  with any target
company.

Current Business Activities
---------------------------

     The Company has a limited  operating history and no representation is made,
nor is any intended,  that the Company will be able to carry on future  business
activities  successfully.  Further,  there can be no assurance  that the Company
will have the ability to acquire or merge with an operating  business,  business
opportunity or property that will be of material value to the Company.

                                      -5-
<PAGE>

     Management  plans to investigate,  research and, if justified,  potentially
acquire or merge with one or more  businesses  or  business  opportunities.  The
Company  currently  has no  commitment  or  arrangement,  written  or  oral,  to
participate in any business opportunity and management cannot predict the nature
of any potential  business  opportunity it may ultimately  consider.  Management
will have broad discretion in its search for and negotiations with any potential
business or business opportunity.

     Sources of Business Opportunities
     ---------------------------------

     Management  intends to use various  resources  in its search for  potential
business opportunities including, but not limited to, the Company's officers and
directors,  consultants,  special advisors,  securities broker-dealers,  venture
capitalists,  members of the  financial  community  and  others who may  present
management  with  unsolicited  proposals.  Because of its lack of  capital,  the
Company  may  not  be  able  to  retain,  on a  fee  basis,  professional  firms
specializing in business acquisitions and reorganizations.  Rather, it will most
likely  have to rely on  outside  sources,  not  otherwise  associated  with the
Company that will accept their compensation only after the Company has finalized
a  successful  acquisition  or merger.  To date,  the Company has not engaged or
entered  into any  discussion,  agreement  or  understanding  with a  particular
consultant regarding its search for business opportunities.  Presently, no final
decision  has been made nor is  management  in a position to identify any future
prospective consultants.

     If the Company  elects to engage an  independent  consultant,  it will look
only to  consultants  that have  experience  in working with small  companies in
search of an appropriate  business  opportunity.  Also, the consultant must have
experience in locating  viable merger and/or  acquisition  candidates and have a
proven track record of finalizing  such business  consolidations.  Further,  the
Company would prefer to engage a consultant that will provide  services for only
nominal up-front  consideration  and is willing to be fully  compensated only at
the close of a business consolidation.

     The  Company  does not intend to limit its search to any  specific  kind of
industry or  business.  The Company may  investigate  and  ultimately  acquire a
venture  that  is in  its  preliminary  or  development  stage,  is  already  in
operation,  or in various  stages of its corporate  existence  and  development.
Management  cannot  predict at this time the status or nature of any  venture in
which the Company may  participate.  A potential  venture might need  additional
capital or merely  desire to have its shares  publicly  traded.  The most likely
scenario for a possible business arrangement would involve the acquisition of or
merger with an operating  business that does not need  additional  capital,  but
which  merely  desires to  establish  a public  trading  market for its  shares.
Management  believes that the Company could provide a potential  public  vehicle
for a private entity interested in becoming a publicly held corporation  without
the time and expense typically associated with an initial public offering.

     Evaluation
     ----------

     Once the Company identifies a particular entity as a potential  acquisition
or merger candidate,  management will seek to determine  whether  acquisition or
merger is  warranted,  or  whether  further  investigation  is  necessary.  Such
determination will generally be based on management's  knowledge and experience,
or with the  assistance  of outside  advisors  and  consultants  evaluating  the
preliminary  information  available  to them.  Management  may  elect to  engage
outside  independent  consultants to perform  preliminary  analysis of potential
business opportunities.  However, because of its lack of capital the Company may
not have the necessary funds for a complete and exhaustive  investigation of any
particular opportunity.


                                      -6-
<PAGE>

     In evaluating potential business  opportunities,  management will consider,
to the extent relevant to the specific opportunity, several factors including:

     o   potential benefits to the Company and stockholders;
     o   working capital;
     o   financial requirements and availability of additional financing;
     o   history of operation, if any;
     o   nature of present and expected competition;
     o   quality and experience of management;
     o   need for further research, development or exploration;
     o   potential for growth and expansion;
     o   potential for profits; and
     o   other factors deemed  relevant to the specific opportunity.

     Because the Company has not yet located or identified any specific business
opportunity,  there are certain  unidentified  risks that  cannot be  adequately
expressed prior to the identification of a specific business opportunity.  There
can be no assurance following consummation of any acquisition or merger that the
business  venture  will  develop  into a going  concern  or, if the  business is
already operating, that it will continue to operate successfully. Many potential
business  opportunities  available  to the Company may involve new and  untested
products,  processes  or  market  strategies,  which  may not  ultimately  prove
successful.

     Form of Potential Acquisition or Merger
     ---------------------------------------

     The Company  cannot  predict the manner in which it might  participate in a
particular prospective business opportunity. Each separate potential opportunity
will be reviewed and, upon the basis of that review,  a suitable legal structure
or method of participation  will be chosen.  The particular  manner in which the
Company  participates in a specific  opportunity  will depend upon the nature of
its business,  the respective needs and desires of the Company and management of
the opportunity,  and the relative negotiating strength of the parties involved.
Actual  participation  in a  business  venture  may  take  the  form of an asset
purchase,   lease,  joint  venture,   license,   partnership,   stock  purchase,
reorganization,  merger or other  form of  consolidation.  The  Company  may act
directly or indirectly  through an interest in a  partnership,  corporation,  or
other form of organization, however, it presently does not intend to participate
in an opportunity through the purchase of a minority stock position.

     Because it has no assets and a limited operating history,  in the event the
Company successfully acquires or merges with an operating business, it is likely
that current  stockholders  will  experience  substantial  dilution.  It is also
probable  that there will be a change in control of the  Company.  The owners of
the  business  that Company  acquires or mergers  with will most likely  acquire
effective control following such transaction. Management has not established any
guidelines  as to the amount of control  it will offer to  prospective  business
opportunities.  Instead,  management will attempt to negotiate the best possible
agreement for the benefit of the stockholders.

     Presently,  management  does not intend to borrow funds to  compensate  any
person,  consultant,  promoter or affiliate in relation to the consummation of a
potential  merger or  acquisition.  However,  if the Company engages any outside
advisor  or  consultant  in its  search for  business  opportunities,  it may be
necessary  to attempt to raise  additional  funds.  As of the date  hereof,  the
Company has not made any  arrangements  or definitive  agreements to use outside
advisors or consultants  or to raise any capital.  In the event the Company does
need to raise  capital,  most  likely  the only  method  available  would be the
private sale of securities.  These possible private sales would most likely have
to be to persons known by the officers and  directors or to venture  capitalists
that would be willing to accept the risks associated with investing in a company
with limited operations.  Because the Company is a development stage company, it
is unlikely  that it could make a public sale of securities or be able to borrow
any significant sum from either a commercial or private lender.  Management will
attempt to acquire funds on the best available terms.  However,  there can be no


                                      -7-
<PAGE>

assurance that the Company will be able to obtain additional funding when and if
needed, or that such funding, if available, can be obtained on reasonable and/or
acceptable  terms.  Although  not  presently  anticipated,  there  is  a  remote
possibility  that  the  Company  could  sell  securities  to its  management  or
affiliates to raise funds.

     There  exists a  possibility  that the terms of any future  acquisition  or
merger  transaction  might include the sale of shares presently held by officers
and/or directors of the Company to parties  affiliated with or designated by the
potential business  opportunity.  Presently,  management has no plans to seek or
actively negotiate such terms. However, if this situation does arise, management
is  obligated  to  follow  the  Company's  Articles  of  Incorporation  and  all
applicable  corporate  laws in  negotiating  such  an  arrangement.  Under  this
scenario  of a possible  sale by officers  and  directors,  it is unlikely  that
similar terms and conditions  would be offered to all other  stockholders of the
Company or that the stockholders  would be given the opportunity to approve such
a transaction.

     In the event of a successful  acquisition or merger, a finder's fee, in the
form of cash or securities,  may be paid to a person or persons  instrumental in
facilitating  the  transaction.  No criteria or limits have been established for
the determination of an appropriate finder's fee, although it is likely that any
fee will be based upon negotiations by management,  the business opportunity and
the  finder.  Management  cannot at this time make an estimate as to the type or
amount of a potential  finder's  fee that might be paid.  It is unlikely  that a
finder's  fee  will  be paid  to an  affiliate  of the  Company  because  of the
potential  conflict of interest that might result.  However,  if such a fee were
paid  to an  affiliate,  it  would  have  to be in  such a  manner  so as not to
compromise the affiliate's  possible fiduciary duty to the Company or to violate
the doctrine of corporate opportunity. Further, in the unlikely event a finder's
fee was to be paid to an  affiliate,  the  Company  would  likely  have  such an
arrangement ratified by the stockholders in an appropriate manner.

     The Board of Directors believes that it is highly unlikely that the Company
will  acquire  or merge  with a  business  in which  the  Company's  management,
affiliates or promoters have an ownership  interest.  Any possible related party
transaction of this type would have to be ratified by a disinterested  Board and
by the  stockholders.  Management  does not  anticipate  that the  Company  will
acquire or merge with any related  entity.  Further,  as of the date hereof,  no
officer,  director,  affiliate or associate has had any  preliminary  contact or
discussions with any specific  business  opportunity,  nor are there any present
plans, proposals, arrangements or understandings regarding the possibility of an
acquisition or merger with any specific business opportunity.

Rights of Stockholders
----------------------

     Management  anticipates  that  prior to  consummating  any  acquisition  or
merger,  the Company,  if required by relevant state laws and regulations,  will
seek to have the transaction ratified by stockholders in the appropriate manner.
However,  under Utah law,  certain  actions  that would  routinely be taken at a
meeting of stockholders,  may be taken by written consent of stockholders having
not less than the minimum  number of votes that would be  necessary to authorize
or take the action at a meeting of stockholders. Thus, if stockholders holding a
majority  of the  Company's  outstanding  shares  decide by  written  consent to
consummate an acquisition or a merger,  minority stockholders would not be given
the  opportunity  to vote on the  issue.  The Board of  Directors  will have the
discretion to consummate an  acquisition  or merger by written  consent if it is
determined  to be in the best  interest of the Company to do so.  Regardless  of
whether  an action to  acquire or merge is  ratified  by  written  consent or by
holding a stockholders'  meeting,  the Company will provide to its  stockholders
complete  disclosure   documentation  concerning  a  potential  target  business
opportunity  including  the  appropriate  audited  financial  statements  of the
target.  This information will be disseminated by proxy statement in the event a
stockholders'  meeting  is held,  or by an  information  statement  pursuant  to
Regulation 14C of the Securities  Exchange Act of 1934 if the action is taken by
written consent.


                                      -8-
<PAGE>

     Under Utah corporate  laws, the Company's  stockholders  may be entitled to
assert  dissenters'  rights if the  Company  acquires  or merges with a business
opportunity. Stockholders will be entitled to dissent from and obtain payment of
the fair value of their shares in the event of  consummation of a plan of merger
to which the Company is a party,  if approval  by the  stockholders  is required
under  applicable Utah law. Also,  stockholders  will be entitled to dissenters'
rights if the Company enters into a share  exchange if the Company's  shares are
to be acquired.  A stockholder who is entitled to assert  dissenter's rights and
obtain the fair value for their shares,  may not challenge the corporate  action
creating  this  entitlement,  unless the action is unlawful or  fraudulent  with
respect to the  stockholder  or the  Company.  A  dissenting  stockholder  shall
refrain  from voting their shares in approval of the  corporate  action.  If the
proposed  action is approved by the required vote of  stockholders,  the Company
must give notice to all  stockholders who delivered to the Company their written
notice of dissent.

Competition
-----------

     Because no potential  acquisition or merger  candidate has been identified,
the Company is unable to evaluate the type and extent of its likely competition.
The Company is aware that there are several  other  public  companies  with only
nominal  assets  that are also  searching  for  operating  businesses  and other
business  opportunities  as  potential  acquisition  or merger  candidates.  The
Company will be in direct  competition  with these other public companies in its
search for business  opportunities  and, due to the Company's lack of funds,  it
may be difficult to successfully compete with these other companies.

Employees
---------

     As of the date hereof,  the Company does not have any  employees and has no
plans for retaining employees until such time as the Company's business warrants
the  expense,  or until the  Company  successfully  acquires  or merges  with an
operating  business.  The Company may find it  necessary  to  periodically  hire
part-time clerical help on an as-needed basis.

Facilities
----------

     The Company is  currently  using as its  principal  place of  business  the
office of its  President,  Delbert G. Blewett,  located in Richmond,  BC Canada.
Although the Company has no written agreement and currently pays no rent for the
use of its  facilities,  it is  contemplated  that  at such  future  time as the
Company acquires or merges with an operating  business,  the Company will secure
commercial office space from which it will conduct its business.  However, until
such  time as the  Company  completes  an  acquisition  or  merger,  the type of
business in which the  Company  will be engaged and the type of office and other
facilities that will be required is unknown. The Company has no current plans to
secure such commercial office space.

Industry Segments
-----------------

     No information is presented  regarding  industry  segments.  The Company is
presently a development  stage  company  seeking a potential  acquisition  of or
merger with a yet to be identified  business  opportunity.  Reference is made to
the  statements of income  included  herein in response to Part F/S of this Form
10-SB for a report of the  Company's  operating  history for the past two fiscal
years.

Risk Factors Related to the Company's Business
----------------------------------------------

     The Company is, and will be,  subject to  substantial  risks  specific to a
particular  business or business  opportunity,  which  specific  risks cannot be
ascertained  until  a  potential   acquisition  or  merger  candidate  has  been
identified.  However, at a minimum,  the Company's present and proposed business
operations will be highly  speculative and be subject to the same types of risks
inherent  in any new or  unproven  venture,  and will  include the types of risk
factors outlined below.

                                      -9-
<PAGE>


     The Company Has Nominal Assets and No Source of Revenue.
     ---------------------------------------------------------------------------
     The Company  currently has only nominal  assets and has had no revenues for
several  years.  It is unlikely that the Company will realize any revenues until
it  completes  an  acquisition  or merger.  There can be no  assurance  that any
acquired  business  will  produce any  material  revenues for the Company or its
stockholders or that any such business will operate on a profitable basis.

     The Company's Proposed Business is Speculative and there is No Assurance of
     Success.
     ---------------------------------------------------------------------------
     The success of the Company's  proposed plan of operation will depend,  to a
great extent,  on the  operations,  financial  condition  and  management of the
identified target company that may be acquired by the Company.  While management
will prefer business  combinations  with entities having  established  operating
histories,  there can be no  assurance  that the Company will be  successful  in
locating candidates meeting such criteria.  In the event the Company completes a
business  combination,  of which there can be no  assurance,  the success of the
Company's operations will be dependent upon management of the target company and
numerous other factors beyond the Company's control.

     No Substantive Disclosure Relating to Prospective Acquisitions.
     ---------------------------------------------------------------------------
     Because the Company has not yet identified any specific industry, assets or
business that it may seek an acquisition or merger,  potential  investors in the
Company  will have no  substantive  information  upon  which to base a  decision
whether  to  invest  in the  Company  until  such a  transaction  is  completed.
Prospective  investors currently have no basis to evaluate the comparative risks
and merits of  investing  in the  industry  or business in which the Company may
acquire. Potential investors would have access to significantly more information
if  the  Company  had  already  identified  a  potential  acquisition  or if the
acquisition  target  had made an  offering  of its  securities  directly  to the
public.  The Company gives no assurance that it will  ultimately  raise funds or
that if it does, any  investment in the Company will not ultimately  prove to be
less favorable than a direct investment.

     Scarcity of and Competition for Business Opportunities and Combinations.
     ---------------------------------------------------------------------------
     The Company is and will continue to be an insignificant  participant in the
business of seeking mergers with and acquisitions of business entities.  A large
number of established  and  well-financed  entities,  including  venture capital
firms, are active in mergers and acquisitions of companies that may be merger or
acquisition  target  candidates  for the Company.  Nearly all such entities have
significantly  greater financial  resources,  technical expertise and managerial
capabilities  than the  Company  and,  consequently,  the  Company  will be at a
competitive   disadvantage  in  successfully   identifying   possible   business
opportunities and successfully completing a business combination.  Moreover, the
Company will also compete with numerous other small public  companies in seeking
merger or acquisition candidates.

     No Agreement for Business Combination  or Other Transaction -- No Standards
     for Business Combination.
     ---------------------------------------------------------------------------
     The Company has no current  arrangement,  agreement or  understanding  with
respect to  engaging  in a merger  with or  acquisition  of a specific  business
entity.  There  can be no  assurance  that the  Company  will be  successful  in
identifying and evaluating  suitable  business  opportunities or in concluding a
business  combination.  Management has not identified any particular industry or
specific business within an industry for evaluation by the Company.  There is no
assurance  that the Company will be able to negotiate a business  combination on
terms  favorable  to the  Company.  The Company has not  established  a specific
length of operating history or a specified level of earnings,  assets, net worth
or other  criteria that it will require a target  company to have  achieved,  or
without  which the Company would not consider a business  combination  with such
business entity. Accordingly,  the Company may enter into a business combination


                                      -10-
<PAGE>

with a business entity having no significant operating history,  losses, limited
or no potential for immediate  earnings,  limited assets,  negative net worth or
other negative characteristics.

     Reporting Requirements May Delay or Preclude Acquisition.
     ---------------------------------------------------------------------------
     Section 13 of the  Securities  Exchange  Act of 1934 (the  "Exchange  Act")
requires  companies  subject  thereto  to  provide  certain   information  about
significant  acquisitions  including  certified  financial  statements  for  the
company  acquired  covering one or two years,  depending on the relative size of
the  acquisition.  The time and  additional  costs that may be  incurred by some
target companies to prepare such financial statements may significantly delay or
essentially preclude  consummation of an otherwise desirable  acquisition by the
Company.  Acquisition  prospects  that do not have or are  unable to obtain  the
required  audited  statements may not be appropriate  for acquisition so long as
the reporting requirements of the Exchange Act are applicable.

     Lack of Market Research or Marketing Organization.
     ---------------------------------------------------------------------------
     The Company has neither  conducted,  nor have others made  available to it,
market research indicating that demand exists for the transactions  contemplated
by the Company.  Even in the event demand exists for a merger or  acquisition of
the type contemplated by the Company,  there is no assurance the Company will be
successful in completing any such business combination.

     Lack of Diversification.
     ---------------------------------------------------------------------------
     The  Company's  proposed  operations,  even  if  successful,  will  in  all
likelihood  result in the Company  engaging in a business  combination with only
one business entity.  Consequently,  the Company's activities will be limited to
those  engaged in by the  business  entity,  which the  Company  merges  with or
acquires.  The Company's inability to diversify its economic fluctuations within
a particular  business or industry and therefore  increase the risks  associated
with the Company's operations.

     Future Acquisition or Merger May Result in Substantial Dilution.
     ---------------------------------------------------------------------------
     The Company is currently  authorized  to issue 50 million  shares of common
stock, of which  11,355,754  shares are  outstanding as of the date hereof.  The
issuance of  additional  shares in  connection  with any  acquisition  or merger
transaction or the raising of capital may result in substantial  dilution of the
holdings of current stockholders.

     The Company's Auditors Have Expressed a Going Concern Opinion.
     ---------------------------------------------------------------------------
     The Company's  independent  auditors include a statement in their report to
the Company's  financial  statements that certain matters  regarding the Company
raise  substantial  doubt as to the  Company's  ability to  continue  as a going
concern.  Note 3 to the  financial  statements  states that the "Company has not
established  revenues  sufficient to cover its  operating  costs and allow it to
continue as a going concern."  Thus, as recognized by the Company's  independent
auditors,  there is  substantial  doubt that the Company can continue as a going
concern.

     Discretionary Use of Proceeds.
     ---------------------------------------------------------------------------
     The Company is not currently engaged in any substantive business activities
other than looking for and investigating  business  opportunities.  Accordingly,
management  has broad  discretion  with respect to the potential  acquisition of
assets, property or business.  Although management intends to apply any proceeds
it may  receive  through  the  future  issuance  of stock or debt to a  suitable
acquired  business,  the Company will have broad  discretion  in applying  these
funds.  There can be no assurance  that the  Company's use or allocation of such
proceeds will allow it to achieve its business objectives.

                                      -11-
<PAGE>

     Management Will Devote Only Minimal Time to the Company.
     ---------------------------------------------------------------------------
     Presently,  the Company's three directors have other full time  obligations
and will  devote  only such time to the Company as  necessary  to  maintain  its
viability.  The Company's President,  Delbert Blewett, will primarily handle the
general and administrative duties of the Company.  Thus, because of management's
other time commitments,  together with the fact that the Company has no business
operations,  management  anticipates that they will devote only a minimal amount
of time to the  activities  of the  Company,  at least  until  such  time as the
Company has identified a suitable acquisition candidate.

     Effective Voting Control Held by Directors and Principal Stockholders.
     ---------------------------------------------------------------------------
     The Company's  directors and  principal  stockholders  own in the aggregate
approximately 92% of the outstanding voting securities of the Company.  No other
person owns as much as of 5% of the outstanding shares. Accordingly, the current
directors and two principal  stockholders  will have the ability to elect all of
the  Company's  directors,  who in turn elect all  executive  officers,  without
regard to the votes of other stockholders.

     No Active Market for Company's Common Stock.
     ---------------------------------------------------------------------------
     Presently,  the  Company's  common stock is not traded in any public market
and  there  is  no  active  trading   market  for  the  shares.   Following  the
effectiveness  of its  registration  statement,  the  Company  has  applied  for
inclusion  of its common  stock on the OTC Bulletin  Board  ("OTCBB").  However,
there can be no  assurance  that any  trading  market  will ever  develop  or be
maintained on the pink sheets,  OTCBB, or any other recognized trading market or
exchange. Any trading market for the common stock that may develop in the future
will most likely be very  volatile,  and numerous  factors beyond the control of
the Company may have a significant  effect on the market.  Only  companies  that
report their current financial  information to the SEC may have their securities
included  on  the  OTCBB.  Therefore,  only  upon  the  effective  date  of  its
registration  statement may the Company apply to have its  securities  quoted on
the OTCBB.  In the event that the  Company  loses  this  status as a  "reporting
issuer,"  any  future  quotation  of  its  common  stock  on  the  OTCBB  may be
jeopardized.

Item 2.      Description of Property
             -----------------------

     The Company has no properties and at this time has no agreements to acquire
any properties.  The Company  currently uses office space for  administration at
117 -8880 No. 1 Road, Richmond British Columbia, V7C 43C.

Item 3.      Legal Proceedings.
             ------------------

     There are  presently no material  pending  legal  proceedings  to which the
Company is a party or to which any of its  property is subject  and, to the best
of its  knowledge,  no such  actions  against the Company  are  contemplated  or
threatened.

Item 4.      Submission of Matters to a Vote of Security Holders.
             ----------------------------------------------------

     No matters were submitted to a vote of securities holders during the fourth
quarter of the fiscal year ended December 31, 2007.

Item 5.      Market for Common Equity and Related Stockholder Matters.
             ---------------------------------------------------------

     There is not currently a public  trading  market for the  Company's  common
stock.  The Company has made application to have its shares quoted on the OTCBB.
The application consist of current corporate  information,  financial statements
and other documents as required by Rule 15c2-11 of the Exchange Act.

     Inclusion  on the OTCBB would  permit price  quotations  for the  Company's
shares to be published by that service.  Although the Company  intends to submit
an application to the OTCBB, management does not anticipate the Company's shares
to immediately be traded in the public market.  Also,  secondary  trading of the


                                      -12-
<PAGE>

Company's  common stock may be subject to certain  state  imposed  restrictions.
Except  for  the  application  to the  OTCBB,  there  are no  plans,  proposals,
arrangements or  understandings  with any person concerning the development of a
trading  market in any of the  Company's  securities.  There can be no assurance
that the Company's shares will be accepted for trading on the OTCBB or any other
recognized trading market. Also, there can be no assurance that a public trading
market will develop  following  acceptance  by the OTCBB or at any other time in
the future or, that if such a market does develop, that it can be sustained.

     The  ability  of  individual  stockholders  to trade  their  shares  of the
Company's common stock in a particular state may be subject to various rules and
regulations  of that  state.  A  number  of  states  require  that  an  issuer's
securities  be  registered  in  their  state  or  appropriately   exempted  from
registration  before  the  securities  are  permitted  to trade  in that  state.
Presently,  there  are no plans to  register  the  Company's  securities  in any
particular state.

     It is most  unlikely that the  Company's  securities  will be listed on any
national or regional  exchange or on The Nasdaq Stock Market in the near future.
Therefore the Company's  shares most likely will be subject to the provisions of
Section  15(g) and Rule 15g-9 of the Exchange Act,  commonly  referred to as the
"penny  stock"  rule.   Section  15(g)  sets  forth  certain   requirements  for
broker-dealer transactions in penny stocks and Rule 15g-9(d)(1) incorporates the
definition of penny stock as that used in Rule 3a51-1 of the Exchange Act.

     The SEC generally  defines penny stock to be any equity security that has a
market  price  less than $5.00 per share,  subject to certain  exceptions.  Rule
3a51-1  provides  that any equity  security  is  considered  to be a penny stock
unless that security is:

     o   registered  and  traded  on  a  national  securities  exchange  meeting
         specified criteria set by the SEC;
     o   authorized for quotation on The NASDAQ Stock Market;
     o   issued by a registered investment company;
     o   excluded from the  definition on the basis of price (at least $5.00 per
         share) or the issuer's net tangible assets; or
     o   exempted from the definition by the SEC.

     Broker-dealers  who sell  penny  stocks to persons  other than  established
customers and accredited  investors  (generally persons with assets in excess of
$1,000,000 or annual income exceeding $200,000,  or $300,000 together with their
spouse), are subject to additional sales practice  requirements.  Broker-dealers
must also make a special  suitability  determination  for the  purchase  of such
securities  and must  have  received  the  purchaser's  written  consent  to the
transaction prior to the purchase. Additionally, for any transaction involving a
penny stock,  unless exempt, the rules require the delivery,  prior to the first
transaction, of a risk disclosure document relating to the penny stock market. A
broker-dealer   also  must  disclose  the   commissions   payable  to  both  the
broker-dealer and the registered representative,  and current quotations for the
securities.  Finally,  monthly  statements  must be sent to  clients  disclosing
recent  price  information  for  the  penny  stocks  held  in  the  account  and
information on the limited market in penny stocks.

     Consequently,  these rules may  restrict the ability of  broker-dealers  to
trade and/or maintain a market in the Company's  common stock and may affect the
ability  of  stockholders  to  sell  their  shares.  These  requirements  may be
considered  cumbersome by  broker-dealers  and could impact the willingness of a
particular broker-dealer to make a market in the Company's shares, or they could
affect the value at which the  Company's  shares  trade.  Classification  of the
shares as penny stocks  increases  the risk of an  investment  in the  Company's
shares.

     As of December 31, 2007, there were  approximately 150 holders of record of
the Company's  common  stock.  Because all of the  outstanding  shares of common
stock were issued  pursuant to  exemptions  under the 1933 Act,  for purposes of
this report, all of the shares are considered restricted securities.

                                      -13-
<PAGE>

     Under Rule 144(k) of the 1933 Act, the requirements of paragraphs (c), (e),
(f),  and (h) of Rule 144 do not  apply to  restricted  securities  sold for the
account of a person who is not an affiliate of an issuer at the time of the sale
and has not been an affiliate  during the preceding  three months,  provided the
securities have been  beneficially  owned by the seller for a period of at least
two years prior to their sale.  Thus,  in reliance on Rule  144(k),  the Company
considers 969,161 shares to be free of restriction,  unless held by an affiliate
or  controlling  stockholder.  For purposes of this report  only, a  controlling
stockholder is considered to be a person owning ten percent (10%) or more of the
Company's total  outstanding  shares,  or is otherwise  deemed an affiliate.  No
individual  person  owning a portion of the  969,161  shares owns more than five
percent (5%) of the total outstanding  shares.  The remaining  10,386,593 shares
are considered restricted securities and presently held by six stockholders.

     Under the provisions of Rule 144 of the Securities Act of 1933,  restricted
securities may be sold into the public market, subject to holding period, volume
and other  limitations  set forth under the Rule. In general,  under Rule 144 as
currently in effect,  a person (or persons whose shares are  aggregated) who has
beneficially owned restricted shares for at least one year, including any person
who may be deemed to be an "affiliate" (as the term "affiliate" is defined under
the Securities  Act), is entitled to sell,  within any  three-month  period,  an
amount of shares that does not exceed the greater of

     o   the average  weekly  trading  volume in the common  stock,  as reported
         through  the  automated  quotation  system of a  registered  securities
         association, during the four calendar weeks preceding such sale, or

     o   1% of the shares then outstanding.

     In order for a  stockholder  to rely on Rule  144,  the  Company  must have
available  adequate  current  public  information  with respect to the Company's
business and financial  status.  A person who is not deemed to be an "affiliate"
and has not been an affiliate for the most recent three months, and who has held
restricted  shares for at least two years  would be entitled to sell such shares
under Rule 144(k) without regard to the various resale limitations of Rule 144.

Dividend Policy
---------------

     The Company has not declared or paid cash  dividends or made  distributions
in the past on its common stock,  and does not anticipate  paying cash dividends
or making distributions in the foreseeable future. The Company currently intends
to retain and invest any future earnings to finance operations.

Transfer Agent
--------------

     The Company has  designated as its transfer  agent,  Standard Registrar &
Transfer Company, Inc. (Former: Atlas Stock  Transfer), 12528 South 1840 East,
Draper, Utah 84020.

                                     PART II

Item 6.  Management's Discussion and Analysis or Plan of Operation
         ---------------------------------------------------------

     The following  information should be read in conjunction with the financial
statements and notes thereto appearing as Item 7 of this Form 10-KSB.

     The Company is considered a development  stage company with nominal  assets
and/or  capital and with no material  operations  or income.  Ongoing  expenses,
including  the  costs   associated  with  the  preparation  and  filing  of  its
registration statement, have been paid for by advances from stockholders,  which
are evidenced on the Company's financial statements as accounts  payable-related
parties. It is anticipated that the Company will require only nominal capital to
maintain the corporate viability of the Company. Additional necessary funds will
most likely be provided by the Company's officers and directors,  although there
is no agreement  related to future  funds and there is no  assurance  such funds
will be  available.  However,  unless  the  Company  is able  to  facilitate  an


                                      -14-
<PAGE>

acquisition  of or  merger  with an  operating  business  or is  able to  obtain
significant  outside financing,  there is substantial doubt about its ability to
continue as a going concern.

Results of Operations

     The  Company  has not  reported  any  revenues  and  incurred a net loss of
$50,730 for the year ended  December 31, 2007  compared to a loss of $45,730 for
the year ended  December  31,  2006.  The  losses for both years are  attributed
primarily to professional expenses, general and administration expenses and loan
interest charged to the shareholders loan account.

Liquidity and Capital Resources
-------------------------------

     Expenses  incurred  during 2006 and 2007,  were paid by  stockholders.  The
Company  expects to continue  to rely on the  stockholder  to pay its  expenses,
because it has no cash reserves or sources of revenues, until such time that the
Company  completes a merger with an  existing,  operating  company.  There is no
assurance  that the Company will complete such a merger or that the  stockholder
will continue indefinitely to pay its expenses.

     In the  opinion  of  management,  inflation  has not and  will  not  have a
material  effect on the operations of the Company until such time as the Company
successfully  completes an acquisition or merger. At that time,  management will
evaluate the possible effects of inflation on the Company related to it business
and operations following a successful acquisition or merger.

Plan of Operation
-----------------

     General Business Plan
     ---------------------

     The Company's  purpose is to seek,  investigate and, if such  investigation
warrants,  acquire an interest in an operating business entity. The Company will
not restrict  its search to any specific  business,  industry,  or  geographical
location and the Company may participate in a business  venture of virtually any
kind or nature.  Management  anticipates  that it will be able to participate in
only one potential  business venture because the Company has only nominal assets
and  limited  financial  resources.  This  lack  of  diversification  should  be
considered a substantial risk to the shareholders of the Company because it will
not permit the Company to offset potential losses from one venture against gains
from another.

     The  Company  may seek a  business  opportunity  with  entities  that  have
recently  commenced  operations,  or that wish to use the public  marketplace in
order to raise  additional  capital,  to expand  into new  products  or markets,
develop a new product or service, or for other corporate  purposes.  The Company
may acquire  assets and  establish  one or more  wholly  owned  subsidiaries  in
various businesses or acquire existing businesses as subsidiaries.

     The Company  anticipates  that the selection of a business  opportunity  in
which to participate may be complex and extremely  risky.  Management  believes,
but has not conducted any research to confirm,  that there are business entities
seeking  the  perceived  benefits  of a publicly  registered  corporation.  Such
perceived  benefits may include  facilitating  or  improving  the terms on which
incentive  stock  options  or  similar  benefits  to  key  employees,  providing
liquidity for  shareholders  and other factors.  Business  opportunities  may be
available in many different industries and at various stages of development, all
of which will make the task of opportunities difficult and complex.

     The Company has, and will continue to have,  nominal  capital with which to
provide the owners of a business entity with any cash or other assets.  However,
management  believes the Company will be able to offer owners of an  acquisition
candidate  the  opportunity  to acquire a  controlling  ownership  interest in a
public  company  without  incurring  the cost and time  required  to  conduct an
initial public offering. Management has not conducted market research and is not
aware of  statistical  data to support  the  perceived  benefits  of a merger or
acquisition transaction for the owners of a business opportunity.

                                      -15-
<PAGE>

     The analysis of new business  opportunities will be undertaken by, or under
the  supervision  of, the  officers and  directors  of the Company,  who are not
professional business analysts. In analyzing prospective business opportunities,
management will consider such matters as:

     o   available  technical,  financial and  managerial  resources;  o working
         capital and other financial requirements;
     o   history of  operations,  if any;
     o   prospects for future growth and development;
     o   nature of present and expected competition;
     o   quality and  experience of management  services  which may be available
         and the depth of that management;
     o   potential for further research, development, or exploration;
     o   specific risk factors not now foreseeable, but which then may be
         anticipated to impact the proposed activities of the
         Company;
     o   potential for growth or expansion;
     o   potential for profit;
     o   perceived  public  recognition or acceptance  of products,  services or
         trades;
     o   name identification; and
     o   other relevant factors.

     This discussion of the proposed  criteria is not meant to be restrictive of
the  Company's  virtually  unlimited  discretion  to research for and enter into
potential business opportunities.

     The Exchange Act requires that any merger or acquisition  candidate  comply
with certain reporting  requirements,  which include providing audited financial
statements to be included in the reporting  filings made under the Exchange Act.
The  Company  does not  intend to  acquire  or merge  with any  entity for which
audited financial statements cannot be obtained at or within a reasonable period
of time after closing of the proposed transaction.

     The Company may enter into a business  combination  with a business  entity
that  desires to  establish a public  trading  market for its  shares.  A target
company  may  attempt  to  avoid  what it deems to be  adverse  consequences  of
undertaking its own public offering by seeking a business  combination  with the
Company.  Such consequences may include,  but are not limited to, time delays of
the  registration  process,  significant  expenses  to be  incurred  in  such an
offering,  loss of voting  control to public  shareholders  of the  inability to
obtain an underwriter or to obtain an underwriter on satisfactory terms.

     The Company will not restrict its search for any specific  kind of business
entity,  but may acquire a venture  that is in its  preliminary  or  development
stage, that is already in operation, or in essentially any stage of its business
life.  It is  impossible  to predict at this time the status of any  business in
which the Company may become  engaged,  in that such  business  may need to seek
additional capital, perceived advantages which the Company may offer.

     Management,  which in all  likelihood  will not be  experienced  in matters
relating to the business of a target company,  will rely upon its own efforts in
accomplishing  the business  purposes of the  Company.  Outside  consultants  or
advisors may be used by the Company to assist in the search for qualified target
companies. If the Company does retain such an outside consultant or advisor, any
cash fee earned by such person will need to be assumed by the target company, as
the Company has limited cash assets with which to pay such obligation.

     Following a successful business  combination,  the Company may benefit from
the services of others in regard to accounting,  legal  services,  underwritings
and corporate public relations. If requested by a target company, management may
recommend one or more  underwriters,  financial  advisors,  accountants,  public
relations firms or other consultants to provide such services.


                                      -16-
<PAGE>


     A  potential  target  entity may have an  agreement  with a  consultant  or
advisor  providing that services of the consultant or advisor be continued after
any business combination. Additionally, a target company may be presented to the
Company only on the  condition  that the services of a consultant  or advisor be
continued after a merger or acquisition.  Such preexisting  agreements of target
companies  for the  continuation  of the  services  of  attorneys,  accountants,
advisors or consultants could be a factor in the selection of a target company.

    Acquisition of a Business Opportunity
    -------------------------------------

     In  implementing  a structure for a particular  business  acquisition,  the
Company  may become a party to a merger,  consolidation,  reorganization,  joint
venture,  or licensing agreement with another corporation or entity. It may also
acquire  stock or assets of an existing  business.  Upon the  consummation  of a
transaction,  it is likely  that  present  management  and  shareholders  of the
Company will no longer be in control of the Company.  In addition,  it is likely
that the  Company's  officers and  directors  will,  as part of the terms of the
acquisition transaction,  resign and be replaced by one or more new officers and
directors.

     It is  anticipated  that any securities  issued in any such  reorganization
would be issued in reliance upon an available  exemption from registration under
applicable federal and state securities laws. In some circumstances, however, as
a negotiated  element of its transaction,  the Company may agree to register all
or a part of such securities immediately after the transaction is consummated or
at specified times thereafter.  If such registration  occurs, of which there can
be no assurance, it will be undertaken by the surviving entity after the Company
has entered into an agreement for a business  combination  or has  consummated a
business  combination and the Company is no longer a blank check company.  Until
such  time  as this  occurs,  the  Company  will  not  register  any  additional
securities.  The issuance of additional securities and their potential sale into
any trading market which may develop in the Company's securities may depress the
market  value  of the  Company's  securities  in the  future  if  such a  market
develops, of which there is no assurance.

     While the terms of a business  transaction  to which the  Company  may be a
party  cannot be  predicted,  it is expected  that the  parties to the  business
transaction  will desire to avoid the  creation  of a taxable  event and thereby
structure the acquisition in a "tax-free"  reorganization  under Sections 351 or
368 of the Internal Revenue Code of 1986, as amended.

     With  respect  to any  merger  or  acquisition  negotiations  with a target
company,  management  expects to focus on the percentage of the Company a target
company's  shareholders would acquire in exchange for their shareholdings in the
target company.  Depending upon, among other things, the target company's assets
and  liabilities,  the  Company's  shareholders  will in all  likelihood  hold a
substantially  lesser percentage ownership interest in the Company following any
merger or acquisition. The percentage of ownership may be subject to significant
reduction in the event the Company  acquires a target  company with  substantial
assets.  Any merger or  acquisition  effected  by the Company can be expected to
have a  significant  dilutive  effect on the  percentage  of shares  held by the
Company's shareholders at such time.

     The  Company  will  participate  in a business  opportunity  only after the
negotiation and execution of appropriate agreements.  Although the terms of such
agreements  cannot be predicted,  generally such agreements will require certain
representations  and  warranties of the parties  thereto,  will specify  certain
events of default,  will detail the terms of closing  and the  conditions  which
must be satisfied by the parties prior to and after such  closing,  will outline
the manner of bearing  costs,  including  costs  associated  with the  Company's
attorneys and accountants, and will include miscellaneous other terms.

     The Company  will not acquire or merge with any entity that cannot  provide
audited  financial  statements  at or within a  reasonable  period of time after
closing  of the  proposed  transaction.  The  Company  will  be  subject  to the
reporting  requirements  under the  Exchange  Act. One such  requirement  is the


                                      -17-
<PAGE>

Company's duty to file with the SEC audited financial statements of the acquired
entity as part of its  current  report on Form 8-K  within  four days  following
consummation of the acquisition.  If such audited  financial  statements are not
available at closing,  or within the requisite four day filing period, or if the
audited financial statements provided do not conform to the representations made
by the target  company,  the closing  documents  may provide  that the  proposed
transaction will be voidable at the discretion of the present  management of the
Company.

     Competition
     -----------

     The Company will remain an insignificant  participant  among the firms that
engage in the search for and  acquisition of business  opportunities.  There are
many established venture capital and financial concerns which have significantly
greater  financial and personnel  resources  and  technical  expertise  than the
Company. In view of the Company's combined extremely limited financial resources
and  limited  management  availability,  the  Company  will  continue to be at a
significant competitive disadvantage compared to its competitors.

Net Operating Loss
------------------

     The Company has  accumulated  approximately  $540,000 of net operating loss
carryforwards  as of December  31, 2007.  This loss carry  forward may be offset
against  future taxable income from the year 2006 through 2026. The use of these
losses to reduce future income taxes will depend on the generation of sufficient
taxable income prior to the expiration of the net operating loss  carryforwards.
In the event of certain changes in control,  there will be an annual  limitation
on the  amount of net  operating  loss  carryforwards  that can be used.  No tax
benefit  has been  reported  in the  financial  statements  for the  year  ended
December 31, 2007 because it has been fully offset by a valuation  reserve.  The
use of future tax benefit is undeterminable because the Company presently has no
operations.

Recent Accounting Pronouncements
--------------------------------

         In June 2006, the Financial  Accounting Standards Board ("FASB") issued
FASB  Interpretation  No. 48 ("FINA 48"),  Accounting for  Uncertainty in Income
Taxes  -  an   interpretation  of  FASB  Statement  No.  109,  which  prescribes
comprehensive guidelines for recognizing,  measuring,  presenting and disclosing
in the financial  statement  tax positions  taken or expected to be taken on tax
returns.  FIN 48,  effective for fiscal years  beginning after December 15 2006,
seeks to reduce the diversity in practice associated with certain aspects of the
recognition and measurement  related to accounting for income taxes. The Company
is  currently  assessing  the  impact  of FIN 48 on its  consolidated  financial
position and results of operations.

         In  September   2006,   the  FASB  issued  SFAS  No.  157,  Fair  Value
Measurements. SFAS 157 defines fair value, establishes a framework for measuring
fair value in accordance  with U.S.  GAAP,  and expands  disclosures  about fair
value measurements. The statement clarifies that the exchange price is the price
in an  orderly  transaction  between  market  participants  to sell an  asset or
transfer a liability at the measurement date. The statement emphasizes that fair
value is a market-based measurement and not an entity-specific  measurement.  It
also  establishes a fair value  hierarchy  used in fair value  measurements  and
expands the  required  disclosures  of assets and  liabilities  measured at fair
value.  SFAS 157 is effective for financial  statements  issued for fiscal years
beginning after November 15, 2007. The adoption of this standard is not expected
to have a material  impact on our financial  condition,  results of operation or
liquidity.

         In September 2006, the FASB issued SFAS No. 158, Employers'  Accounting
for Defined  Benefit  Pension and Other  Postretirement  Plans.  This  Statement
requires an employer to recognize  the over funded or under  funded  status of a
defined benefit post  retirement  plan (other than a  multiemployer  plan) as an
asset or liability in its  statement  of  financial  position,  and to recognize
changes in that  funded  status in the year in which the changes  occur  through
comprehensive  income.  SFAS No. 158 is effective  for fiscal years ending after
December 15, 2006 which for the Company  would be February 1, 2007.  The Company
does not expect that the  implementation  of SFAS No. 158 will have any material
impact on its financial position and results of operations.

         In February  2007,  the FASB issued SFAS No. 159, The Fair Value Option
for Financial Assets and Financial Liabilities. SFAS 159 provides companies with
an option to report  selected  financial  assets and  liabilities at fair value.
SFAS 159 also establishes  presentation and disclosure  requirements designed to
facilitate  comparisons  between  companies  that choose  different  measurement
attributes for similar types of assets and liabilities and to provide additional
information that will help investors and other financial statement users to more
easily  understand  the effect of the Company's  choice to use fair value on its
earnings. Finally, SFAS 159 requires entities to display the fair value of those
assets and liabilities for which the Company has chosen to use fair value on the


                                      -18-
<PAGE>

face of the balance  sheet.  SFAS 159 is  effective  as of the  beginning  of an
entity's first fiscal year  beginning  after November 15, 2007. The Company does
not  believe  that SFAS No.  159 will have a  material  impact on its  financial
position, results of operations or cash flows.

         In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interest
In Consolidated  Financial Statements.  SFAS 160 requires all entities to report
noncontrolling (minority) interests in subsidiaries in the same way as equity in
the  consolidated  financial  statement.   Moreover,  SFAS  160  eliminates  the
diversity that currently exists in accounting for transactions between an entity
and   noncontrolling   interests  by   requiring   they  be  treated  as  equity
transactions.  This  statement is effective  for fiscal  years  beginning  after
December  15,  2008.  The Company does not believe that SFAS No. 160 will have a
material impact on its financial position, results of operations, or cash flows.

Item 7.      Financial Statements
             --------------------

     The Company's financial  statements for the fiscal years ended December 31,
2007 and 2006, have been examined to the extent  indicated in their reports by H
J & Associates,  LLC,  independent  certified public accountants.  The financial
statements have been prepared in accordance with generally  accepted  accounting
principles,  pursuant  to  Regulation  S-B as  promulgated  by the  SEC  and are
attached following Item. 14, of this Form 10-KSB.

Item 8.      Changes in and Disagreements with Accountants on Accounting
             and Financial Disclosure
             -----------------------------------------------------------

      This Item is not Applicable.

Item 8A(T). Controls and Procedures
            -----------------------

         Evaluation of Disclosure Controls and Procedures
         ------------------------------------------------

         As of the end of the period covered by this annual report,  management,
with the participation of our chief executive  officer and principal  accounting
officer,  carried  out an  evaluation  of the  effectiveness  of the  design and
operation  of our  "disclosure  controls  and  procedures",  as  defined  in the
Securities Exchange Act of 1934, Rules 13a-15(e) and 15-d-15(e). Based upon that
evaluation,  our  chief  executive  officer  and  principal  accounting  officer
concluded that as of December 31, 2007,  our disclosure  controls and procedures
are effective to ensure that  information  required to be disclosed by us in the
reports that we file or submit under the Exchange Act is:

     (i) recorded,  processed,  summarized and reported, within the time periods
     specified in the SEC's rules and forms; and

     (ii)  accumulated and  communicated to our management,  including our chief
     executive  officer and principal  accounting  officer,  as appropriate,  to
     allow timely decisions regarding required disclosure.

         In designing and  evaluating the  disclosure  controls and  procedures,
management  recognizes that there are inherent  limitations to the effectiveness
of any system of disclosure  controls and procedures,  including the possibility
of  human  error  and  the  circumvention  or  overriding  of the  controls  and
procedures.  A control  system,  no matter how well conceived and operated,  can
provide only  reasonable,  not absolute,  assurance  that the  objectives of the
control system are met. Further, the design of a control system must reflect the
fact that there are resource  constraints  and the benefits of controls  must be
considered  relative to their  costs.  Accordingly,  even  effective  disclosure
controls and procedures can only provide reasonable assurance of achieving their
desired  control  objectives.   Additionally,  in  evaluating  and  implementing
possible controls and procedures, management is required to apply its reasonable
judgment.

         Management's Annual Report on Internal Control Over Financial Reporting
         -----------------------------------------------------------------------

         Management  of Royal  Oil & Gas is  responsible  for  establishing  and
maintaining  adequate internal control over financial reporting for our company.
Our control  system is designed to provide  reasonable  assurance  regarding the
reliability of financial  reporting and the preparation of financial  statements


                                      -19-
<PAGE>

for external  purposes in accordance  with U.S.  generally  accepted  accounting
principals.  Our  internal  control  over  financial  reporting  includes  those
policies and procedures that:

     o   pertain to the  maintenance  of records  that,  in  reasonable  detail,
         accurately and fairly reflect the  transactions  and disposition of our
         assets;

     o   provide  reasonable  assurance  that the  transactions  are recorded as
         necessary  to  permit  preparation  of  the  financial   statements  in
         accordance  with  generally  accepted  accounting  principles  and that
         receipts   and   expenditures   are  being   made   only  with   proper
         authorizations; and

     o   provide reasonable  assurance regarding  prevention or timely detection
         of  unauthorized  acquisition,  use or  disposition  of our assets that
         could have a material effect on the financial statements.

         Because  of  inherent  limitations,  internal  control  over  financial
reporting  may not prevent or detect  misstatements.  Also,  projections  of any
evaluation  of  effectiveness  to future  periods  are  subject to the risk that
controls may become  inadequate  because of changes in  conditions,  or that the
degree of compliance with the policies or procedures may deteriorate.

         Management,  including  our principal  executive  officer and principal
financial  officer,  assessed the  effectiveness  of our  internal  control over
financial  reporting  as of  December  31,  2007.  In  making  this  assessment,
management   used  the  criteria  set  forth  by  the  Committee  of  Sponsoring
Organizations  of the  Treadway  Commission  (COSO)  in  Internal  Control  Over
Financial  Reporting  - Guidance  for  Smaller  Public  Companies.  Based on our
assessment  and those  criteria,  our  management  concluded  that our  internal
control over financial reporting was effective as of December 31, 2007.

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

         Changes in Internal Control over Financial Reporting
         ----------------------------------------------------

            There have been no significant changes in our internal controls over
financial  reporting or in other factors that could materially  affect, or would
be likely to materially affect,  our internal controls over financial  reporting
subsequent to the date we carried out our evaluation.

Item 8B.  Other Information
          -----------------

      This Item is not Applicable.

                                    PART III

Item 9. Directors, Executive Officers, Promoters Control Persons and Corporate
        Governance; Compliance with Section 16(a) of the Exchange Act

     The Directors and Officers of the Company are:

Name:                  Age:    Position:            Served as a Director since:
-----                  ----    ---------            ---------------------------
Delbert G. Blewett     73      President/Director   May 25, 1995
Fred Hefti             75      Secretary/Director   April 20, 1995
Glen Buckler           65      Treasurer/Director   August 14, 2000

     The position of President has been held by Delbert Blewett since January 1,
2005. Previously, he served as Secretary since 1995.

     The  Company's  directors  do not hold any  position  in any other  company
having a class of equity securities registered under the Exchange Act.

                                      -20-
<PAGE>

     All  directors  of the  Company  will hold  offices  until the next  annual
meeting  of  stockholders  or until  their  successors  have  been  elected  and
qualified.  Officers  who are  appointed  at the annual  meeting of the Board of
Directors,  hold office until their  successors  are elected and  qualified,  or
until their death,  resignation or removal.  The Company presently has no audit,
nominating or executive committee performing substantially similar functions.

     The business  experience  and  principal  occupations  of each director and
officer of the Company for at least the past five years are as follows.

     Delbert Blewett B.Sc.Ll.B. Mr. Blewett completed his Bachelor of Science in
Agriculture  as well as Bachelor of Laws at the  University of  Saskatchewan  in
Canada.  For 30 years Mr.  Blewett  managed his own private law practices in the
Provinces of Saskatchewan; Alberta and British Columbia specializing in business
law. Upon retiring from active law practice in 1994,  Mr.  Blewett became active
in the funding and development of various  business  ventures.  Mr. Blewett is a
past member of the Law Society of British Columbia and a  non-practicing  member
of the Law Societies of Alberta and British  Columbia.  Mr.  Blewett has several
years of experience in the practice of business law and the development, funding
and consulting of various business ventures.

     Fred Hefti.  Mr.  Hefti was born and  educated in  Switzerland.  During the
1960s and early 1970s,  Mr. Hefti owned and managed a restaurant  in  Vancouver,
Canada.  Mr.  Hefti  has  experience  in  the  agricultural,  food  and  tourist
industries.  From 1980 to 1986 he owned and operated a meat processing  plant in
Kamloops, British Columbia., Canada. From 1987 to 1998, Mr. Hefti was Department
Manager of Fleetwood  Sausage in Vancouver,  Canada, as well as the Manager of a
sales agency in the  Interior of British  Columbia.  Mr. Hefti  retired from his
previous occupations in 1998.

     Glen Buckler. Mr. Buckler completed a management program with Alberta Power
and worked in management and supervision  from 1965 to 1975. In 1975 Mr. Buckler
acquired a campground and motel in Kelowna British  Columbia,  Canada,  which he
owned and managed  until 1985. In 1985 Mr.  Buckler  bought a moving and hauling
company,  "Two  Small Men With Big  Hearts,"  which he owns and  manages to this
date.  During the past 20 years he expanded the Company from three small offices
and ten  trucks  to over 30  offices  with 150  trucks  and 7  Tractor  Trailers
operating across Canada with offices from Vancouver to Toronto.

     No family  relationship  exists  between or among any of the persons  named
above.

Compliance With Section 16(a) of the Exchange Act
-------------------------------------------------

      Section  16(a) of the Exchange Act requires our  directors  and  executive
officers,  and persons who own more than 10% of our common  stock,  to file with
the SEC initial  reports of ownership and reports of changes in ownership of our
common stock and other equity securities. We believe that these reports were not
filed during the fiscal year 2006.

Code of Ethics
--------------

     We currently do not have a code of ethics.  During the current fiscal year,
we do intend to adopt a code of ethics that applies to our  principal  executive
officer, principal financial officer, principal accounting officer or controller
or persons performing similar functions.

Item 10.  Executive Compensation.
          -----------------------

     The following table sets forth information regarding executive compensation
for the  Company's  officers and  directors.  No executive  officer has received
compensation in excess of $100,000.


     The  directors  have  received  the  following  stock  awards for  services
rendered.

                                      -21-
<PAGE>

Names and                                                             Stock
Principal            Fiscal                           Other           Awards
Position             Year        Salary     Bonus     Compensation    or Options
---------            ------      ------     -----     ------------    ----------
Delbert Blewett
President            2000           --      5,000         N/A             N/A

Fred Hefti           2000           --      5,000          --
Secretary            2003        600,000                180,000           N/A

Glen Buckler         2000           --       --          10,000
Treasurer            2002        600,000                150,000           N/A

*    Delbert  G.  Blewett,   President  was  in  charge  of  management   and
administration  since 1995 with some  interruptions  in 2002 and 2003. The
stock for above  services was issued to EMAC Holdings Ltd., a Company owned
and controlled solely by Mr. Blewett. In addition,  he advanced funding for
ongoing operations from time to time.

     Glen Buckler, was in charge of management and administration for six months
in 2002. In addition he advanced funding for operations from time-to-time.

     Peter  Thaler  (Company's  Accountant),  was in  charge of  management  and
administration  for six months in 2002.  In  addition  he  advanced  funding for
ongoing operations from time-to-time.

     Fred Hefti, was in charge of management and  administration  for six months
in  2003.  In  addition  he  advanced   funding  for  ongoing   operations  from
time-to-time.

     Peter  Thaler  (Company's  Accountant)  was in  charge  of  management  and
administration  for six months in 2002.  In  addition  he  advanced  funding for
ongoing operations from time-to-time.

     There is no annuity,  pension or retirement benefits proposed to be paid to
officers,  directors or employees of the Company in the event of  retirement  at
normal  retirement  date  pursuant to any  presently  existing  plan provided or
contributed to by the Company.

     No  remuneration  except,  to EMAC Holdings Ltd., is proposed to be paid in
the future  directly  or  indirectly  by the  Company to any officer or director
under any plan presently existing. The Company, in its discretion, may adopt one
or more of such remuneration programs in the future.

Item 11.  Security Ownership of Certain Beneficial Owners and Management
          and Related Stockholder Matters
          --------------------------------------------------------------

     The following  table sets forth  information,  to the best of the Company's
knowledge,  as of March 21,  2008,  with  respect  to each  person  known by the
Company to own beneficially  more than 5% of the outstanding  common stock, each
director and all directors and officers as a group.
                                                       Amount of
Name and Address                                       Beneficial     Percentage
of Beneficial Owner                                    Ownership      of Class
-------------------                                    ----------     ----------
Directors & Officers
--------------------
Delbert G. Blewett         117-8880 No. 1 Road           5,000           0.04%
                           Richmond BC, Canada

Emac Holdings Ltd. (controlled by D. Blewett)        6,926,593          61.00%



Fred Hefti                 1663 Canford Rd.            785,000           6.91%
                           Merritt BC, Canada

                                      -22-
<PAGE>

Glen Buckler               305 15895-84th Ave.         760,000           6.69%
                           Surrey BC, Canada        ----------           -----

All directors and executive officers
  As a group (3 persons)                             8,476,593          74.64%
                                                    ----------          ------
     5% Shareholders

Berta Furrer              Schmerikonerstr. 29          625,000           5.50%
                          8733-Eschenbach,
                          Switzerland

Margrit Kaelin            Stutzstrasse 18              624,334           5.50%
                          8834-Schindellegi,
                          Switzerland

Peter Thaler              Sommerlistr. 3               764,487           6.73%
+Thaler Consultants       9000-St.Gallen, Switzerland

Item 12.  Certain Relationships and Related Transactions
          and Director Independence
          ----------------------------------------------

     No director or officer, nominee for election as a director, security holder
who is known to the Company to own of record or beneficially more than 5% of any
class of the Company's  voting  securities,  or any relative or spouse of any of
the foregoing persons,  or any relative of such spouse, who has the same home as
such person or who is a director or officer of any parent or  subsidiary  of the
Company,  has had any transaction or series of  transactions  since inception of
the Company, or has any presently proposed transactions to which the Company was
or is to be a party during 2007,  in which any of such persons had or is to have
any direct or material interest.

Item 13. Exhibits

Exhibit No.     Exhibit Name
-----------     ------------

3.1*            Articles of Incorporation and Amendments

3.2*            By-Laws

4.1*            Instrument  defining  rights of holders  (See  Exhibit  No. 3.1,
                Articles of Incorporation)

31.1            Certification  of Chief  Executive  Officer and Chief  Financial
                Officer  Pursuant  to Section 302 of the  Sarbanes-Oxley  Act of
                2002

32.1            Certification of Chief Accounting  Officer Pursuant to 18 U.S.C.
                Section  1350,  as  Adopted  Pursuant  to  Section  906  of  the
                Sarbanes-Oxley Act of 2002
-----------------

      *   Filed as Exhibit to Form 10-SB registration statement filed August 31,
          2006.

Item 14. Principal Accountant Fees and Services
         --------------------------------------

     The  following  are the fees billed us by our  auditors,  H J & Associates,
LLC, a professional  corporation,  respectively,  for services  rendered thereby
during 2006 and 2005:

                                     2007                  2006
                                  ----------           ----------
Audit Fees                        $   13,250           $    6,140
                                  ----------           ----------
Audit Related Fees                $     --             $     --
                                  ----------           ----------
Tax Fees                          $    3,250           $     --
                                  ----------           ----------
All Other Fees                    $     --             $     --
                                  ----------           ----------
Total                             $   16,500           $    6,140
                                  ----------           ----------


                                      -23-
<PAGE>

Audit Fees
----------

            Consist  of the  aggregate  fees  billed for  professional  services
rendered for the audit of our annual financial statements and the reviews of the
financial  statements  included in our Forms  10-QSB and for any other  services
that were  normally  provided by HJ &  Associates,  LLC in  connection  with our
statutory and regulatory filings or engagements.

Audit Related Fees
------------------

N/A

Tax Fees
--------

N/A

All Other Fees
--------------

N/A

Before the auditors are engaged to provide us audit or non-audit services,  such
engagement  is  (without  exception,  required  to be)  approved  by  the  Audit
Committee of our Board of Directors.


                                      -24-
<PAGE>





                              ROYAL OIL & GAS CORP.
                          (A Development Stage Company)


                              FINANCIAL STATEMENTS

                                December 31, 2007


<PAGE>






                                    CONTENTS

Report of Independent Registered Accounting Firm............................  26

Balance Sheet...............................................................  27

Statements of Operations....................................................  28

Statements of Stockholders' Equity (Deficit)................................  29

Statements of Cash Flows ...................................................  33

Notes to the Financial Statements ..........................................  35




                                      -25-
<PAGE>




             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders of
Royal Oil & Gas Corporation
(A Development Stage Company)
Vancouver, British Columbia

We have audited the accompanying balance sheet of Royal Oil & Gas Corporation (a
development stage company) as of December 31, 2007 and the related statements of
operations,  stockholders  equity (deficit),  and cash flows for the years ended
December 31, 2007 and 2006 and from inception of the development stage on August
23,  1978  through  December  31,  2007.  These  financial  statements  are  the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and  perform  the  audits to  obtain  reasonable  assurance  about  whether  the
financial  statements  are free of  material  misstatement.  An  audit  includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial  statements.  An audit also  includes  assessing  the  accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating the overall  financial  statement  presentation.  We believe that our
audits 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 Royal Oil & Gas Corporation (a
development  stage  company)  as of  December  31,  2007 and the  results of its
operations and its cash flows for the years ended December 31, 2007 and 2006 and
from inception of the development  stage on August 23, 1978 through December 31,
2007 in conformity with U.S. generally accepted accounting principles.

We were not engaged to examine management's assertion about the effectiveness of
Royal Oil & Gas  Corporation's  (a development  stage company)  internal control
over  financial  reporting as of December 31, 2007 included in the  accompanying
"Management's  Annual Report on Internal Control Over Financial  Reporting" and,
accordingly, we do not express an opinion thereon.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in  Note 3 to the
financial  statements,  the Company has not established  revenues  sufficient to
cover  its  operating  costs  and  allow  it to  continue  as a  going  concern.
Management's  plans in regard to these matters are also described in Note 3. The
financial  statements do not include any adjustments  that might result from the
outcome of this uncertainty.



HJ & Associates, LLC
Salt Lake City, Utah
April 14, 2008


                                      -26-
<PAGE>



                              ROYAL OIL & GAS CORP.
                          (A Development Stage Company)
                                  Balance Sheet


                                     ASSETS

                                                                   December 31,
                                                                      2007

CURRENT ASSETS

   Cash                                                            $       270

     Total Current Assets                                                  270
                                                                   -----------

     TOTAL ASSETS                                                  $       270
                                                                   ===========


                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES

   Accounts payable                                                $    24,630
   Accounts payable - related parties (Note 2)                          41,984
                                                                   -----------

     Total Current Liabilities                                          66,614
                                                                   -----------

     Total Liabilities                                                  66,614
                                                                   -----------

STOCKHOLDERS' EQUITY (DEFICIT)

   Common stock, $0.001 par value, 50,000,000 shares
    authorized; 11,355,754 shares issued and outstanding                11,356
   Additional paid-in capital                                          492,819
   Deficit accumulated during the development stage                   (570,519)
                                                                   -----------

     Total Stockholders' Equity (Deficit)                              (66,344)
                                                                   -----------

     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)          $       270
                                                                   ===========





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


                                      -27-
<PAGE>


<TABLE>
<CAPTION>

                                          ROYAL OIL & GAS CORP.
                                      (A Development Stage Company)
                                        Statements of Operations




                                                                                          From
                                                                                      Inception on
                                                           For the Years Ended          August 23,
                                                               December 31            1978 Through
                                                      ----------------------------    December 31,
                                                          2007            2006            2007
                                                      ------------    ------------    ------------

<S>                                                   <C>             <C>             <C>
REVENUE                                               $       --      $       --      $       --
                                                      ------------    ------------    ------------

OPERATING EXPENSES

   General and administrative                               47,930          43,068         409,912
   Depreciation expense                                       --              --             1,095
                                                      ------------    ------------    ------------


     Total Operating Expenses                               47,930          43,068         410,507
                                                      ------------    ------------    ------------

LOSS FROM OPERATIONS                                       (47,930)        (43,068)       (410,507)
                                                      ------------    ------------    ------------


                            OTHER INCOME (EXPENSES)

   Interest expense                                         (2,800)         (2,662)        (29,871)
   Interest income                                            --              --            15,708
   Gain (loss) on settlement of debt                          --              --           (59,495)
   Loss on disposal of asset                                  --              --           (64,454)
   Loss on investment                                         --              --           (21,900)
                                                      ------------    ------------    ------------

     Total Other Income (Expense)                           (2,800)         (2,662)       (160,012)
                                                      ------------    ------------    ------------


   NET LOSS                                           $    (50,730)   $    (45,730)   $   (570,519)
                                                      ============    ============    ============

BASIC LOSS PER SHARE                                  $      (0.00)   $      (0.01)
                                                      ============    ============

WEIGHTED AVERAGE SHARES OUTSTANDING                     11,355,754       8,430,045
                                                      ============    ============



           The accompanying notes are an integral part of these financial statements.
</TABLE>



                                      -28-
<PAGE>

<TABLE>
<CAPTION>
                              ROYAL OIL & GAS CORP.
                          (A Development Stage Company)
                  Statements of Stockholders' Equity (Deficit)
           From Inception on August 23, 1978 through December 31, 2007


                                                                                       Deficit
                                                                                     Accumulated
                                                Common Stock          Additional     During the
                                        --------------------------      Paid-in      Development
                                           Shares         Amount        Capital         Stage
                                        -----------    -----------    -----------    -----------
<S>                                          <C>       <C>            <C>            <C>
Balance, August 23,1978 through
 December 31, 1993                           15,000    $        15    $     7,485    $    (7,500)

Common stock issued for cash and a
 note at $0.50 per share                    307,000            307        148,693           --

Common stock issued for cash
 at $0.75 per share                         115,333            115         86,385           --

Common stock issued for services
 at $0.75 per share                          20,000             20         14,980           --

Common stock issued for investment
 at $0.75 per share                          18,000             18         13,482           --

Common stock issued and held in
 escrow in option to purchase               150,000            150           (150)          --
 company

Net loss for the year ended
 December 31, 1994                             --             --             --          (58,609)
                                        -----------    -----------    -----------    -----------

Balance, December 31, 1994                  625,333            625        270,875        (66,109)

Common stock issued for cash
 at $0.50 per share (Note 4)                  2,000              2          9,998           --

Net loss for the year ended
 December 31, 1995                             --             --             --          (77,715)
                                        -----------    -----------    -----------    -----------

Balance, December 31, 1995                  627,333            627        280,873       (143,824)

Cancellation of shares held in escrow
 in option to purchase company             (150,000)          (150)           150           --

Net loss for the year ended
 December 31, 1996                             --             --             --         (157,370)
                                        -----------    -----------    -----------    -----------

Balance December 31, 1996                   477,333    $       477    $   281,023    $  (301,194)
                                        -----------    -----------    -----------    -----------

           The accompanying notes are an integral part of these financial statements.
</TABLE>


                                      -29-
<PAGE>



<TABLE>
<CAPTION>

                                     ROYAL OIL & GAS CORP.
                                 (A Development Stage Company)
                   Statements of Stockholders' Equity (Deficit) (Continued)
                  From Inception on August 23, 1978 through December 31, 2007



                                                                                   Deficit
                                                                                 Accumulated
                                               Common Stock         Additional    During the
                                       --------------------------    Paid-in     Development
                                          Shares        Amount       Capital         Stage
                                       -----------   -----------   -----------   -----------
<S>                                    <C>           <C>           <C>           <C>

Balance December 31, 1996                  477,333   $       477   $   281,023   $  (301,194)

Net loss for the year ended
 December 31, 1997                            --            --            --         (14,040)
                                       -----------   -----------   -----------   -----------

Balance December 31, 1997                  477,333           477       281,023      (315,234)

Common stock issued for debt
 at $1.00 per share                         35,301            35        35,266          --

Contributed capital for expenses              --            --           1,000          --

Net loss for the year ended
 December 31, 1998                            --            --            --          (7,415)
                                       -----------   -----------   -----------   -----------

Balance, December 31, 1998                 512,634           512       317,289      (322,649)

Common stock issued for cash
 at $1.40 per share                         19,323            19        27,402          --

Common stock issued for services
 at $1.40 per share                         15,000            15        21,271          --

Net loss for the year ended
 December 31, 1999                            --            --            --         (53,097)
                                       -----------   -----------   -----------   -----------

Balance, December 31, 1999                 546,957           546       365,962      (375,746)

Net loss for the year ended
 December 31, 2000                            --            --            --         (10,081)
                                       -----------   -----------   -----------   -----------

Balance, December 31, 2000                 546,957           546       365,962      (385,827)

Interest expense contributed related
 to shareholder loans                         --            --           2,795          --

Net loss for the year ended
 December 31, 2001                            --            --            --         (14,879)
                                       -----------   -----------   -----------   -----------

Balance, December 31, 2001                 546,957   $       546   $   368,757   $  (400,706)
                                       -----------   -----------   -----------   -----------


          The accompanying notes are an integral part of these financial statements.
</TABLE>

                                      -30-
<PAGE>

<TABLE>
<CAPTION>

                                     ROYAL OIL & GAS CORP.
                                 (A Development Stage Company)
                   Statements of Stockholders' Equity (Deficit) (Continued)
                  From Inception on August 23, 1978 through December 31, 2007

                                                                                   Deficit
                                                                                 Accumulated
                                               Common Stock         Additional    During the
                                       --------------------------    Paid-in     Development
                                          Shares        Amount       Capital         Stage
                                       -----------   -----------   -----------   -----------
<S>                                    <C>           <C>           <C>           <C>

Balance, December 31, 2001                 546,957   $       546   $   368,757    $  (400,706)

Interest expense contributed related
 to shareholder loans                         --            --           3,466           --

Net loss for the year ended
 December 31, 2002                            --            --            --          (15,466)
                                       -----------   -----------   -----------    -----------

Balance, December 31, 2002                 546,957           546       372,223       (416,172)

Interest expense contributed related
 to shareholder loans                         --            --           4,665           --

Net loss for the year ended
 December 31, 2003                            --            --            --          (16,954)
                                       -----------   -----------   -----------    -----------

Balance, December 31, 2003                 546,957           546       376,888       (433,126)

Interest expense contributed related
 to shareholder loans                         --            --           5,902           --

Net loss for the year ended
 December 31, 2004                            --            --            --          (18,644)
                                       -----------   -----------   -----------    -----------

Balance, December 31, 2004                 546,957           546       382,790       (451,770)

Difference due to rounding                      19             1            (1)          --

Interest expense contributed related
 to shareholder loans                         --            --           7,289           --

Net loss for the year ended
 December 31, 2005                            --            --            --          (22,289)
                                       -----------   -----------   -----------    -----------

Balance, December 31, 2005                 546,976   $       547   $   390,078    $  (474,059)
                                       -----------   -----------   -----------    -----------



          The accompanying notes are an integral part of these financial statements.
</TABLE>


                                      -31-
<PAGE>

<TABLE>
<CAPTION>


                                     ROYAL OIL & GAS CORP.
                                 (A Development Stage Company)
                   Statements of Stockholders' Equity (Deficit) (Continued)
                  From Inception on August 23, 1978 through December 31, 2007


                                                                                   Deficit
                                                                                 Accumulated
                                               Common Stock         Additional    During the
                                       --------------------------    Paid-in     Development
                                          Shares        Amount       Capital         Stage
                                       -----------   -----------   -----------   -----------
<S>                                    <C>           <C>           <C>           <C>

Balance, December 31, 2005                 546,956   $       547   $   390,078   $  (474,059)
Common stock issued for debt
 Conversion at $0.01 per share
                                         8,038,700         8,039        72,348          --
Common stock issued for debt
 conversion at $0.01 per share
                                         1,460,078         1,460        13,141          --
Common stock issued for debt
 conversion at $0.01 per share
                                         1,310,000         1,310        11,790          --
Interest expense contributed related
 to shareholder loans                         --            --           2,662          --

Net loss for the year ended
 December 31, 2006                            --            --            --         (45,730)
                                       -----------   -----------   -----------   -----------

Balance, December 31, 2006              11,355,754        11,356       490,019      (519,789)
Interest expense contributed related
 to shareholder loans                         --            --           2,800          --

Net loss for the year ended
 December 31, 2007                            --            --            --         (50,730)
                                       -----------   -----------   -----------   -----------


Balance, December 31, 2007              11,355,754   $    11,356   $   492,819   $  (570,519)
                                       ===========   ===========   ===========   ===========



         The accompanying notes are an integral part of these financial statements.
</TABLE>



                                      -32-
<PAGE>



<TABLE>
<CAPTION>

                                   ROYAL OIL & GAS CORP.
                               (A Development Stage Company)
                                 Statements of Cash Flows


                                                                                  From
                                                                               Inception on
                                                    For the years ended         August 23,
                                                        December 31,           1978 Through
                                                 --------------------------    December 31,
                                                    2007            2006          2007
                                                 -----------    -----------    -----------

CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                              <C>            <C>            <C>
   Net loss                                      $   (50,730)   $   (45,730)   $  (570,519)
   Adjustments to reconcile net loss to
    net cash used by operating activities:
    Contributed capital for expenses                   2,800          2,662         30,579
    Stock for services                                  --             --           36,286
    Decline in value of assets                          --             --           21,900
    Depreciation                                        --             --            2,136
    Loss on disposal of asset                           --             --           64,454
    Loss on settlement of debt                          --             --           60,042
   Change in operating assets and liabilities:
    (Increase) decrease in loans receivable             --             --           63,872
    Increase (decrease) in accounts payable           14,781          6,802         27,916
    Increase (decrease) in accrued liabilities          --             --            1,700
                                                 -----------    -----------    -----------

      Net Cash (Used) by Operating Activities        (33,149)       (36,266)      (261,634)
                                                 -----------    -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES

   Advances on notes receivable                         --             --         (123,914)
   Collection of notes receivable                       --             --           73,000
   Purchase of investments                              --             --          (72,854)
   Sale of fixed assets                                 --             --            3,340
                                                 -----------    -----------    -----------

    Net Cash (Used) by Investing Activities             --             --         (120,428)
                                                 -----------    -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES

   Advances from related parties                      29,945         39,740        169,961
   Proceeds from loans payable                          --             --            4,950
   Net stock offering proceeds                          --             --          207,421
                                                 -----------    -----------    -----------

    Net Cash Provided by Financing Activities         29,945         39,740        382,332
                                                 -----------    -----------    -----------

(DECREASE) INCREASE IN CASH                           (3,204)         3,474            270

CASH AT BEGINNING OF PERIOD                            3,474           --             --
                                                 -----------    -----------    -----------

CASH AT END OF PERIOD                            $       270    $     3,474    $       270
                                                 ===========    ===========    ===========
</TABLE>


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


                                      -33-
<PAGE>



<TABLE>
<CAPTION>

                              ROYAL OIL & GAS CORP.
                          (A Development Stage Company)
                      Statements of Cash Flows (Continued)

                                                                                  From
                                                                               Inception on
                                                    For the years ended         August 23,
                                                        December 31,           1978 Through
                                                 --------------------------    December 31,
                                                    2007            2006          2007
                                                 -----------    -----------    -----------

SUPPLEMENTAL CASH FLOW INFORMATION:

CASH PAID FOR:
<S>                                               <C>           <C>            <C>
   Taxes                                          $     --      $     --       $      475
   Interest                                       $     --      $     --       $     --


NON-CASH FINANCING ACTIVITIES:

   Common stock issued for debt                   $     --      $  108,088     $  216,389
   Common stock issued for investment             $     --      $     --       $   13,500
   Fixed assets for debt                          $     --      $     --       $    3,888
   Fixed assets for receivable                    $     --      $     --       $    5,475




         The accompanying notes are an integral part of these financial statements.
</TABLE>



                                      -34-
<PAGE>





                              ROYAL OIL & GAS CORP.
                          (A Development Stage Company)
                          Notes to Financial Statements
                           December 31, 2007 and 2006

NOTE 1 -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

          a. Organization

          ROYAL OIL & GAS CORP.  (the  "Company") was organized  August 23, 1978
          under the laws of the State of Utah as Price Card & Gift,  Inc. On May
          19, 1988, the Company changed its name to Kellard Marble, Inc., and on
          March 13, 1989,  changed its name to Who's the  Greatest,  Inc. On May
          15, 1994, the Company amended its articles of  incorporation  changing
          the name to SWISSAMERA  ENTERPRISES,  INC.,  and on July 09, 2001, the
          Company  changed  its name to ROYAL OIL & GAS CORP.,  the  Company had
          forward  and  reverse  splits  of its  common  stock in 1989 and 1993,
          respectively.  All accompanying  stockholders'  equity  information is
          presented  as if the stock  splits  had  occurred  at  inception.  The
          Company  has had no  significant  operations  since  inception  and is
          considered a development stage company in accordance with Statement of
          Financial Accounting Standards No. 7.

          b. Deferred Taxes

          Deferred taxes are provided on a liability method whereby deferred tax
          assets  are  recognized  for  deductible  temporary   differences  and
          operating loss and tax credit  carryforwards and deferred  liabilities
          are   recognized   for  taxable   temporary   differences.   Temporary
          differences are the differences between the reported amounts of assets
          and liabilities  and their tax bases.  Deferred tax assets are reduced
          by the valuation allowances when, in the opinion of management,  it is
          more  likely  than not that some  portion of all of the  deferred  tax
          assets will not be realized.  Deferred tax assets and  liabilities are
          adjusted  for the effects of changes in tax laws and rates on the date
          of enactment.

          When tax returns are filed,  it is highly  certain that some positions
          taken would be sustained upon  examination by the taxing  authorities,
          while  others  are  subject  to  uncertainty  about the  merits of the
          position  taken or the amount of the position that would be ultimately
          sustained.  The  benefit  of a  tax  position  is  recognized  in  the
          financial  statements  in  the  period  during  which,  based  on  all
          available  evidence,  management  believes  it is more likely than not
          that the position will be sustained  upon  examination,  including the
          resolution of appeals or litigation  processes,  if any. Tax positions
          taken are not offset or aggregated with other positions. Tax positions
          that meet the more-likely-than-not  recognition threshold are measured
          as the  largest  amount of tax  benefit  that is more than 50  percent
          likely of being realized upon  settlement  with the applicable  taxing
          authority.  The portion of the benefits  associated with tax positions
          taken that exceeds the amount measured as described above is reflected
          as a liability  for  unrecognized  tax  benefits  in the  accompanying
          balance sheet along with any  associated  interest and penalties  that
          would be payable to the taxing authorities upon examination.

          Interest and penalties  associated with  unrecognized tax benefits are
          classified as additional income taxes in the statement of income.


         Net  deferred  tax assets  consist of the  following  components  as of
December 31, 2007 and 2006:

                                                For the Years Ended
                                                    December 31,
                                                 2007          2006
                                            -----------    -----------

        Deferred tax asset: NOL Carryover   $   211,273    $   192,580
        Deferred tax liabilities:                  --             --
        Valuation allowance                    (211,273)      (192,580)
                                            -----------    -----------

                                            $      --      $      --
                                            ===========    ===========



                                      -35-
<PAGE>


                              ROYAL OIL & GAS CORP.
                          (A Development Stage Company)
                          Notes to Financial Statements
                           December 31, 2007 and 2006


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

         The  income  tax  provision  differs  from the  amount  of  income  tax
         determined  by applying the U.S.  federal and state income tax rates of
         39% to pretax  income from  continuing  operations  for the years ended
         December 31, 2006 and 2005 due to the following:

                                            For the Years Ended
                                                December 31,
                                             2007          2006
                                        -----------    -----------

                  Book loss             $   (19,785)   $   (17,830)
                  Interest                    1,092          1,040
                  Valuation allowance        18,693         17,790
                                        -----------    -----------

                                        $      --      $      --
                                        ===========    ===========


         At December 31, 2007, the Company had net operating loss  carryforwards
         of  approximately  $ 540,000 that may be offset  against future taxable
         income  from  the year  2006  through  2026.  No tax  benefit  has been
         reported  in the  December  31,  2007  financial  statements  since the
         potential  tax benefit is offset by a valuation  allowance  of the same
         amount.

         Due to the  change in  ownership  provisions  of the Tax  Reform Act of
         1986, net operating loss carryforwards for Federal income tax reporting
         purposes  are  subject  to  annual  limitations.  Should  a  change  in
         ownership occur, net operating loss  carryforwards may be limited as to
         use in future years.

         The Company  adopted the  provisions  of SFAS  Interpretation  48 ("FIN
         48"), "Accounting for Uncertainty in Income Taxes," on January 1, 2007.
         Previously,   the  Company  had  accounted  for  tax  contingencies  in
         accordance with SFAS 5, "Accounting for  Contingencies." As required by
         FIN 48, which  clarifies SFAS 109,  "Accounting  for Income Taxes," the
         Company  recognizes the financial  statement  benefit of a tax position
         only after  determining  that the  relevant  tax  authority  would more
         likely  than not  sustain  the  position  following  an  audit.  At the
         adoption  date,  the Company  applied FIN 48 to all tax  positions  for
         which the statute of limitations remained open.

         The Company files income tax returns in the U.S. federal  jurisdiction,
         and various states and foreign jurisdictions. The Company has not filed
         tax  returns.  The  statute  of  limitations  will not begin  until tax
         returns are filed.  Once  returns are filed,  the three year period for
         the statute will begin to run.

         The  Company's  policy is to  recognize  interest  accrued  related  to
         unrecognized   tax  benefits  in  interest  expense  and  penalties  in
         operating expenses.

         c. Accounting Method

         The  financial  statements  are  prepared  using the accrual  method of
         accounting. The Company has elected a calendar year end.

         d. Estimates

         The  preparation of financial  statements in conformity  with generally
         accepted  accounting  principles  requires management to make estimates
         and  assumptions  that  affect  the  reported  amounts  of  assets  and
         liabilities and disclosure of contingent  assets and liabilities at the
         date of the financial  statements and the reported  amounts of revenues
         and expenses during the reporting  period.  Actual results could differ
         from those estimates.

         e. Cash and Cash Equivalents

         The Company considers all highly liquid  investments with a maturity of
         three months or less when purchased to be cash equivalents.



                                      -36-
<PAGE>

                              ROYAL OIL & GAS CORP.
                          (A Development Stage Company)
                          Notes to Financial Statements
                           December 31, 2007 and 2006

NOTE 1 -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

         f. Basic Loss Per Share

         The computation of basic loss per share of common stock is based on the
         weighted  average  number of shares issued and  outstanding  during the
         period of the financial statements as follows:

                                                      December 31,
                                                  2007           2006
                                              -----------    -----------

             Numerator - loss                     (50,730)   $   (45,730)
             Denominator - weighted average
             number of shares outstanding      11,355,754      8,430,045
                                              -----------    -----------

             Loss per share                   $     (0.00)   $     (0.01)
                                              ===========    ===========


g.       Recently Adopted Accounting Standards

         In June 2006, the Financial  Accounting Standards Board ("FASB") issued
         FASB  Interpretation  No. 48 ("FINA 48")  Accounting for Uncertainty in
         Income  Taxes - an  interpretation  of FASB  Statement  No. 109,  which
         prescribes   comprehensive   guidelines  for  recognizing,   measuring,
         presenting  and  disclosing  in the  financial  statement tax positions
         taken or expected to be taken on tax  returns.  FIN 48,  effective  for
         fiscal  years  beginning  after  December 15 2006,  seeks to reduce the
         diversity  in  practice   associated   with  certain   aspects  of  the
         recognition and measurement related to accounting for income taxes. The
         Company is currently assessing the impact of FIN 48 on its consolidated
         financial position and results of operations.

         In  September   2006,  the  FASB  issued  SFAS  No.  157,  "Fair  Value
         Measurements", ("SFAS 157"). SFAS 157 defines fair value, establishes a
         framework for  measuring  fair value in generally  accepted  accounting
         principles, and expands disclosures about fair value measurements.  The
         provisions of this standard  apply to other  accounting  pronouncements
         that require or permit fair value measurements.  The company will adopt
         SFAS 157 for financial  assets and  liabilities on January 1, 2008. The
         Company  anticipates  that  the  adoption  of SFAS  157 will not have a
         material impact on the Company's financial statements.

         In September 2006, the FASB issued SFAS No. 158, Employers'  Accounting
         for  Defined  Benefit  Pension  and Other  Postretirement  Plans.  This
         Statement  requires an employer to  recognize  the over funded or under
         funded status of a defined  benefit post  retirement plan (other than a
         multiemployer  plan) as an  asset  or  liability  in its  statement  of
         financial  position,  and to recognize changes in that funded status in
         the year in which the changes occur through  comprehensive income. SFAS
         No. 158 is effective  for fiscal  years ending after  December 15, 2006
         which for the Company  would be February 1, 2007.  The Company does not
         expect that the  implementation  of SFAS No. 158 will have any material
         impact on its financial position and results of operations.

         In February  2007,  the FASB issued SFAS No. 159, The Fair Value Option
         for  Financial  Assets and  Financial  Liabilities.  SFAS 159  provides
         companies  with an option  to  report  selected  financial  assets  and
         liabilities at fair value.  SFAS 159 also establishes  presentation and
         disclosure  requirements  designed to  facilitate  comparisons  between
         companies  that choose  different  measurement  attributes  for similar
         types of assets and liabilities and to provide  additional  information
         that will help investors and other  financial  statement  users to more
         easily  understand the effect of the Company's choice to use fair value
         on its  earnings.  Finally,  SFAS 159 requires  entities to display the
         fair value of those  assets and  liabilities  for which the Company has
         chosen to use fair value on the face of the balance sheet.  SFAS 159 is
         effective  as  of  the  beginning  of an  entity's  first  fiscal  year
         beginning  after  November 15, 2007.  The Company does not believe that
         SFAS No. 159 will have a  material  impact on its  financial  position,
         results of operations or cash flows.


                                      -37-
<PAGE>

                              ROYAL OIL & GAS CORP.
                          (A Development Stage Company)
                          Notes to Financial Statements
                           December 31, 2007 and 2006

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

         In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interest
         In Consolidated Financial Statements. SFAS 160 requires all entities to
         report noncontrolling  (minority) interests in subsidiaries in the same
         way as equity in the consolidated financial statement.  Moreover,  SFAS
         160 eliminates  the diversity  that currently  exists in accounting for
         transactions   between  an  entity  and  noncontrolling   interests  by
         requiring  they be treated as equity  transactions.  This  statement is
         effective  for fiscal years  beginning  after  December  15, 2008.  The
         Company does not believe that SFAS No. 160 will have a material  impact
         on its financial position, results of operations, or cash flows.

NOTE 2 - RELATED PARTY TRANSACTIONS

         The  Company  makes  use  of  office  space  and  management   services
         controlled by a related party. These services are  non-contractual  and
         are on an as-used basis.  The Company also, from time to time, has some
         of its expenses  paid by related  parties with the intent to repay.  In
         2007, the Company incurred $29,945 debt for such expenses.  These types
         of transactions, from time to time, result in related party balances on
         the  Company's  books as a  necessary  part of  funding  the  Company's
         operations.  At December  31, 2007,  the Company  owed related  parties
         $41,984 for expenses  which were paid on behalf of the Company.  During
         the year ended December 31, 2007, the Company issued no shares.

NOTE 3 - GOING CONCERN

         The  Company's  financial   statements  are  prepared  using  generally
         accepted  accounting  principles  applicable to a going concern,  which
         contemplates  the  realization of assets and liquidation of liabilities
         in the normal  course of  business.  The  Company  has not  established
         revenues  sufficient  to cover  its  operating  costs  and  allow it to
         continue as a going concern.  Management  intends to seek a merger with
         an existing,  operating  company.  In the interim,  it has committed to
         meeting the Company's minimal operating expenses.

NOTE 4 - CONTRIBUTED CAPITAL FOR EXPENSES

         During the 12 months ended  December  31, 2007 and 2006,  interest on a
         note  payable to a related  party was accrued at the  interest  rate of
         10%. As there is no  expectation  for this  interest to ever have to be
         paid, the amount is being recorded as contributed  capital for expenses
         and  recorded  as  Additional  Paid-in  Capital.  During the year ended
         December  31,  2007,  the  company   recorded  $2,800  of  interest  as
         contributed capital.

NOTE 5 - REVERSE STOCK SPLIT

         Effective  December 31, 2005, the Company  effected a 1-for-10  reverse
         stock  split of its  issued  and  outstanding  shares of common  stock,
         following  the approval of such stock split by holders of a majority of
         the outstanding common stock. All figures in these financial statements
         give retroactive effect to the reverse split

NOTE 6 - CAPITAL STOCK

         On March 28, 2006, the Company issued  8,038,700 shares of common stock
         at $0.01 per share to a related  party as payment of the related  party
         loan balance of $80,387 at December 31,  2005.  On March 31, 2006,  the
         Company issued 1,460,078 shares of common stock at $0.01 per share to a
         related  party as payment  of  shareholder  loans of  $14,601  incurred
         during the three months ended March 31, 2006.

         On June 30, 2006, the Company issued  1,310,000  shares of common stock
         at $0.01 per share to a related party as payment of  shareholder  loans
         of $13,100 incurred during the three months ended June 30, 2006.



                                      -38-
<PAGE>

                                   SIGNATURES

In  accordance  with the Exchange Act, the  registrant  caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.



                             Royal Oil & Gas Corp.
                                  (Registrant)

                             /s/ Delbert G. Blewett
                             -----------------------------------------------
                             Delbert G. Blewett, President and Director
                             Dated: April 15, 2008

                             /s/ Fred Hefti
                             -----------------------------------------------
                             Fred Hefti, Secretary and Director
                             Dated: April 15, 2008




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