**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


WASHINGTON,
      D.C. 20549











**FORM
      10-QSB**








[X]  Quarterly
                Report under Section 13 or 15(d) of the Securities Exchange Act of
                1934.





For
      the quarterly period ended:
**September 30, 2007**





[  ]  Transition
                Report under Section 13 or 15(d) of the Securities Exchange Act of
                1934.





For
      the transition period
      from:  _______  to _______




Commission
      file number:  **2-76219-NY**





**VICTORY
      ENERGY CORPORATION**


(Exact
      name of small business issuer as specified in its charter)





**NEVADA**
            **87-0564472**(State
                or other jurisdiction of incorporation or organization)
            (I.R.S.
                Employer I.D. Number)





**112
      N Curry Street, Carson City, Nevada 89703-4934**


(Address
      of principal executive offices)





**(866)
      279-9257**


(Issuer’s
      telephone number)





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 []





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





State
      the
      number of shares outstanding of each of the issuer’s classes of common equity,
      as of the latest practicable date: As of November 11, 2007, there were
      31,285,366 shares of our common stock outstanding.





Transitional
      Small Business Disclosure Format. YES [ ] NO [X]





-1-


**INDEX**


Page
                No.**PART
                1. FINANCIAL INFORMATION**Item
                1.                      Financial
                Statements
            3Consolidated
                Balance Sheet, September 30, 2007 (unaudited) andDecember
                31, 2006
                (audited)
            3Consolidated
                Statement of Operations, for the three months ended September 30,
                2007and
                2006, and cumulative from
                inception to June 30, 2007 (unaudited)
            4Consolidated
                Statement of Stockholders’ Equity(Deficit) for the period
                fromJanuary
                7, 1982 (inception)
                through September 30, 2007 (unaudited)
            5Consolidated
                Statements of Cash Flows, for the three months endedSeptember
                30, 2007 and 2006, and
                cumulative from inception (Jan. 7, 1982)to
                September 30, 2007
                (unaudited)
            6Notes
                to
                Condensed Financial Statements (unaudited)
            7Item
                2.                      Management’s
                Discussion and Analysis or Plan of Operation
            13Item
                3.                      Controls
                and Procedures
            16**PART
                II. OTHER INFORMATION**Item
                1.                      Legal
                Proceedings
            17Item
                2.                      Unregistered
                Sales of Equity Securities and Use of Proceeds
            17Item
                3.                      Defaults
                Upon Senior Securities
            17Item
                4.                      Submission
                of Matters to a Vote of Security Holders
            17Item
                5.                      Other
                Information
            17Item
                6.                      Exhibits
                and Reports on Form 8-K
            18





-2-




VICTORY
                  ENERGY CORPORATION AND SUBSIDIARIES(A
                  Development Stage Company)Consolidated
                  Balance Sheets
  September
                    30,
                
                
                December
                    31,**ASSETS**
                
                2007
                
                
                2006UnauditedCURRENT
                    ASSETSCash
                    and Cash Equivalents
                
                $
                129
                
                
                $
                -Subscriptions
                    Receivable
                
                
                735,000
                
                
                
                -Total
                    Curent Assets
                
                
                735,129
                
                
                
                -FIXED
                    ASSETS, NET
                
                
                -
                
                
                
                -OTHER
                    ASSETSInvestment
                    in Joint Venture
                
                
                50,000
                
                
                
                50,000TOTAL
                    ASSETS
                
                $
                785,129
                
                
                $
                50,000**LIABILITIES
                    & STOCKHOLDERS' DEFICIT**CURRENT
                    LIABILITESBank
                    Overdraft
                
                $
                -
                
                
                $
                79Accounts
                    Payable
                
                
                34,600
                
                
                
                19,142Credit
                    Line - WFB Business Line
                
                
                80,840
                
                
                
                56,961Prepaid
                    Subscriptions
                
                
                203,500
                
                
                
                203,500Total
                    Current Liabilities
                
                
                318,940
                
                
                
                279,682OTHER
                    LIABILITIESLoan
                    from Officer
                
                
                1,148,235
                
                
                
                690,085Total
                    Other Liabilities
                
                
                1,148,235
                
                
                
                690,085Total
                    Liabilities
                
                
                1,467,175
                
                
                
                969,767Commitments
                    and contingencies (Note 6)STOCKHOLDERS'
                    DEFICITPreferred
                    Stock, $0.001 par value, 10,000,000 sharesauthorized,
                    630,517 issued and outstanding
                
                
                631
                
                
                
                716Common
                    Stock, $0.001 par value, 200,000,000 sharesauthorized,  31,285,366 issued
                    and outstanding
                
                
                31,286
                
                
                
                4,518Additional
                    paid-in capital
                
                
                7,999,041
                
                
                
                4,566,320Deficit
                    accumulated in the development stage
                
                
                (8,713,004
                )
                
                
                (5,491,321
                )Total
                    Stockholders' Deficit
                
                
                (682,046
                )
                
                
                (919,767
                )TOTAL
                    LIABILITIES AND STOCKHOLDERS' DEFICIT
                
                $
                785,129
                
                
                $
                50,000


-3-




VICTORY
                  ENERGY CORPORATION AND
                  SUBSIDIARIES
 (A
                    Development Stage Company)Consolidated
                    Statement of OperationsUnaudited
 
 For
                    the periodof
                    Inception,For
                    the
                
                
                For
                    the
                
                
                from
                    January 2,Three
                    Months Ended
                
                
                Nine
                    Months Ended
                
                
                1982
                    throughSeptember
                    30,
                
                
                September
                    30,
                
                
                September
                    30,2007
                
                
                2006
                
                
                2007
                
                
                2006
                
                
                2007Revenues
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                20,207Costs
                    and ExpensesConsulting
                    Expense
                
                
                95,000
                
                
                
                254,350
                
                
                
                3,007,501
                
                
                
                997,165
                
                
                
                6,901,855Land
                    Leases
                
                
                -
                
                
                
                -
                
                
                
                1,680
                
                
                
                24,040
                
                
                
                25,720Wages
                    and Salaries
                
                
                -
                
                
                
                80,000
                
                
                
                
                
                
                
                102,500
                
                
                
                270,500General
                    & Administrative
                
                
                47,159
                
                
                
                11,074
                
                
                
                212,502
                
                
                
                378,571
                
                
                
                1,407,969Total
                    Expenses
                
                
                142,159
                
                
                
                345,424
                
                
                
                3,221,683
                
                
                
                1,502,276
                
                
                
                8,606,044Operating
                    Loss
                
                
                (142,159
                )
                
                
                (345,424
                )
                
                
                (3,221,683
                )
                
                
                (1,502,276
                )
                
                
                (8,585,837
                )Other
                    Income and (expenses)Loss
                    on abandonment of subsidiary
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                (50,900
                )Loss
                    from reduction in debt
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                (48,363
                )Interest
                    Expense
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                0Other
                    Income
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                2,096Total
                    Other Income and (expenses)
                
                
                0
                
                
                
                0
                
                
                
                0
                
                
                
                0
                
                
                
                (97,167
                )Net
                    Loss
                
                $
                (142,159
                )
                
                $
                (345,424
                )
                
                $
                (3,221,683
                )
                
                $
                (1,502,276
                )
                
                $
                (8,683,004
                )Basic
                    and Dilutive net loss per share
                
                $
                (0.00
                )
                
                $
                (0.11
                )
                
                $
                (0.15
                )
                
                $
                (0.56
                )Weighted
                    average number of sharesoutstanding,
                    basic and diluted
                
                
                31,285,366
                
                
                
                3,179,439
                
                
                
                21,461,340
                
                
                
                2,691,443(Restated)
                
                
                
                
                
                
                (Restated)Note
                    2
                
                
                
                
                
                
                Note
                    2Dilutive
                    effect of preferred stock,
                
                
                0
                
                
                
                
                
                
                
                0(Note
                    2)




-4-




VICTORY
                  ENERGY CORPORATIONAND SUBSIDIARIES(A
                  Development Stage Company)Consolidated
                  Statement of Stockholders' Equity (Deficit)Unaudited
 AccumulatedAdditional
                
                
                Deficit
                    DuringCommon
                    Stock
                
                
                Preferred
                    Stock
                
                
                Paid-in
                
                
                DevelopmentShares
                
                
                Amount
                
                
                Shares
                
                
                Amount
                
                
                Capital
                
                
                Stage
                
                
                TotalBalances
                    at January 7, 1982
                
                
                0
                
                
                $
                -
                
                
                
                0
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -Common
                    stock for cash at $7.50/sh
                
                
                6,000
                
                
                
                6
                
                
                
                
                
                
                
                
                
                
                
                45,000
                
                
                
                0
                
                
                
                45,006Common
                    stock for cash at $0.39/sh.
                
                
                168,503
                
                
                
                169
                
                
                
                
                
                
                
                
                
                
                
                65,819
                
                
                
                0
                
                
                
                65,988Net
                    loss from inception to Dec. 31,'82
                
                
                0
                
                
                
                0
                
                
                
                
                
                
                
                
                
                
                
                0
                
                
                
                (39,597
                )
                
                
                (39,597
                )Balances
                    at Dec. 31, 1982
                
                
                174,503
                
                
                
                175
                
                
                
                
                
                
                
                
                
                
                
                110,819
                
                
                
                (39,597
                )
                
                
                71,397Net
                    loss, year ended Dec. 31, 1983
                
                
                0
                
                
                
                0
                
                
                
                
                
                
                
                
                
                
                
                0
                
                
                
                (71,397
                )
                
                
                (71,397
                )Balances
                    at Dec. 31, 1983
                
                
                174,503
                
                
                
                175
                
                
                
                
                
                
                
                
                
                
                
                110,819
                
                
                
                (110,994
                )
                
                
                (0
                )Common
                    stock for cash at $25.00/sh.
                
                
                57
                
                
                
                0
                
                
                
                
                
                
                
                
                
                
                
                1,425
                
                
                
                0
                
                
                
                1,425Common
                    stock for cash at $25.00/sh. per share
                
                
                3
                
                
                
                0
                
                
                
                
                
                
                
                
                
                
                
                75
                
                
                
                0
                
                
                
                75Common
                    stock for cash at $0.025/sh. per share
                
                
                1,580,000
                
                
                
                1,580
                
                
                
                
                
                
                
                
                
                
                
                38,373
                
                
                
                0
                
                
                
                39,953Net
                    loss - year ended Dec. 31, 1984
                
                
                0
                
                
                
                0
                
                
                
                
                
                
                
                
                
                
                
                0
                
                
                
                0
                
                
                
                0Balances
                    at Dec. 31, 1984
                
                
                1,754,563
                
                
                
                1,755
                
                
                
                
                
                
                
                
                
                
                
                150,692
                
                
                
                (110,994
                )
                
                
                41,453Cancellation
                    of common stock
                
                
                (1,296,132
                )
                
                
                (1,297
                )
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                (1,297
                )Net
                    loss - year ended Dec. 31, 1985
                
                
                0
                
                
                
                0
                
                
                
                
                
                
                
                
                
                
                
                0
                
                
                
                0
                
                
                
                0Balances
                    at Dec. 31, 1985
                
                
                458,431
                
                
                
                458
                
                
                
                
                
                
                
                
                
                
                
                150,692
                
                
                
                (110,994
                )
                
                
                40,156Net
                    loss - year ended Dec. 31, 1986
                
                
                0
                
                
                
                0
                
                
                
                
                
                
                
                
                
                
                
                0
                
                
                
                0
                
                
                
                0Balances
                    at Dec. 31, 1986
                
                
                458,431
                
                
                
                458
                
                
                
                
                
                
                
                
                
                
                
                150,692
                
                
                
                (110,994
                )
                
                
                40,156Net
                    loss - year ended Dec. 31, 1987
                
                
                0
                
                
                
                0
                
                
                
                
                
                
                
                
                
                
                
                0
                
                
                
                0
                
                
                
                0Balances
                    at Dec. 31, 1987
                
                
                458,431
                
                
                
                458
                
                
                
                
                
                
                
                
                
                
                
                150,692
                
                
                
                (110,994
                )
                
                
                40,156Net
                    loss - year ended Dec. 31, 1988
                
                
                0
                
                
                
                0
                
                
                
                
                
                
                
                
                
                
                
                0
                
                
                
                0
                
                
                
                0Balances
                    at Dec. 31, 1988
                
                
                458,431
                
                
                
                458
                
                
                
                
                
                
                
                
                
                
                
                150,692
                
                
                
                (110,994
                )
                
                
                40,156Net
                    loss - year ended Dec. 31, 1989
                
                
                0
                
                
                
                0
                
                
                
                
                
                
                
                
                
                
                
                0
                
                
                
                0
                
                
                
                0Balances
                    at Dec. 31, 1989
                
                
                458,431
                
                
                
                458
                
                
                
                
                
                
                
                
                
                
                
                150,692
                
                
                
                (110,994
                )
                
                
                40,156Net
                    loss - year ended Dec. 31, 1990
                
                
                0
                
                
                
                0
                
                
                
                
                
                
                
                
                
                
                
                0
                
                
                
                0
                
                
                
                0Balances
                    at Dec. 31, 1990
                
                
                458,431
                
                
                
                458
                
                
                
                
                
                
                
                
                
                
                
                150,692
                
                
                
                (110,994
                )
                
                
                40,156Net
                    loss - year ended Dec. 31, 1991
                
                
                0
                
                
                
                0
                
                
                
                
                
                
                
                
                
                
                
                0
                
                
                
                0
                
                
                
                0Balances
                    at Dec. 31, 1991
                
                
                458,431
                
                
                
                458
                
                
                
                
                
                
                
                
                
                
                
                150,692
                
                
                
                (110,994
                )
                
                
                40,156Net
                    loss - year ended Dec. 31, 1992
                
                
                0
                
                
                
                0
                
                
                
                
                
                
                
                
                
                
                
                0
                
                
                
                0
                
                
                
                0Balances
                    at Dec. 31, 1992
                
                
                458,431
                
                
                
                458
                
                
                
                
                
                
                
                
                
                
                
                150,692
                
                
                
                (110,994
                )
                
                
                40,156Net
                    loss - year ended Dec. 31, 1993
                
                
                0
                
                
                
                0
                
                
                
                
                
                
                
                
                
                
                
                0
                
                
                
                0
                
                
                
                0Balances
                    at Dec. 31, 1993
                
                
                458,431
                
                
                
                458
                
                
                
                
                
                
                
                
                
                
                
                150,692
                
                
                
                (110,994
                )
                
                
                40,156Cancellation
                    of common stock
                
                
                (316,000
                )
                
                
                (316
                )
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                (316
                )Net
                    loss - year ended Dec. 31, 1994
                
                
                0
                
                
                
                0
                
                
                
                
                
                
                
                
                
                
                
                0
                
                
                
                (6,656
                )
                
                
                (6,656
                )Balances
                    at Dec. 31, 1994
                
                
                142,431
                
                
                
                142
                
                
                
                
                
                
                
                
                
                
                
                150,692
                
                
                
                (117,650
                )
                
                
                33,184Common
                    stock for cash at $0.001/sh.
                
                
                2,357,895
                
                
                
                2,359
                
                
                
                
                
                
                
                
                
                
                
                0
                
                
                
                0
                
                
                
                2,359Net
                    loss - year ended Dec. 31, 1995
                
                
                0
                
                
                
                0
                
                
                
                
                
                
                
                
                
                
                
                0
                
                
                
                (49,097
                )
                
                
                (49,097
                )Balances
                    at Dec. 31, 1995
                
                
                2,500,326
                
                
                
                2,500
                
                
                
                
                
                
                
                
                
                
                
                150,692
                
                
                
                (166,747
                )
                
                
                (13,555
                )Common
                    stock for cash at $0.001/sh.
                
                
                120,000
                
                
                
                120
                
                
                
                
                
                
                
                
                
                
                
                0
                
                
                
                0
                
                
                
                120Net
                    loss - year ended Dec. 31, 1996
                
                
                0
                
                
                
                0
                
                
                
                
                
                
                
                
                
                
                
                0
                
                
                
                (1,681
                )
                
                
                (1,681
                )Balances
                    at Dec. 31, 1996
                
                
                2,620,326
                
                
                
                2,620
                
                
                
                
                
                
                
                
                
                
                
                150,692
                
                
                
                (168,428
                )
                
                
                (15,116
                )Net
                    loss - year ended Dec. 31, 1997
                
                
                0
                
                
                
                0
                
                
                
                
                
                
                
                
                
                
                
                0
                
                
                
                (3,517
                )
                
                
                (3,517
                )Balances
                    at Dec. 31, 1997
                
                
                2,620,326
                
                
                
                2,620
                
                
                
                
                
                
                
                
                
                
                
                150,692
                
                
                
                (171,945
                )
                
                
                (18,633
                )Net
                    loss - year ended Dec. 31, 1998
                
                
                0
                
                
                
                0
                
                
                
                
                
                
                
                
                
                
                
                0
                
                
                
                (2,479
                )
                
                
                (2,479
                )Balances
                    at Dec. 31, 1998
                
                
                2,620,326
                
                
                
                2,620
                
                
                
                
                
                
                
                
                
                
                
                150,692
                
                
                
                (174,424
                )
                
                
                (21,112
                )Net
                    loss - year ended Dec. 31, 1999
                
                
                0
                
                
                
                0
                
                
                
                
                
                
                
                
                
                
                
                0
                
                
                
                (6,307
                )
                
                
                (6,307
                )Balances
                    at Dec. 31, 1999
                
                
                2,620,326
                
                
                
                2,620
                
                
                
                
                
                
                
                
                
                
                
                150,692
                
                
                
                (180,731
                )
                
                
                (27,419
                )Net
                    loss - year ended Dec. 31, 2000
                
                
                0
                
                
                
                0
                
                
                
                
                
                
                
                
                
                
                
                0
                
                
                
                (9,011
                )
                
                
                (9,011
                )Balances
                    at Dec. 31, 2000
                
                
                2,620,326
                
                
                
                2,620
                
                
                
                
                
                
                
                
                
                
                
                150,692
                
                
                
                (189,742
                )
                
                
                (36,430
                )Net
                    loss - year ended Dec. 31, 2001
                
                
                0
                
                
                
                0
                
                
                
                
                
                
                
                
                
                
                
                0
                
                
                
                (19,461
                )
                
                
                (19,461
                )Balances
                    at Dec. 31, 2001
                
                
                2,620,326
                
                
                
                2,620
                
                
                
                
                
                
                
                
                
                
                
                150,692
                
                
                
                (209,203
                )
                
                
                (55,891
                )Contributed
                    capital for rent andother
                    compensation
                
                
                0
                
                
                
                0
                
                
                
                
                
                
                
                
                
                
                
                1,950
                
                
                
                0
                
                
                
                1,950Net
                    loss - year ended Dec. 31, 2002
                
                
                0
                
                
                
                0
                
                
                
                
                
                
                
                
                
                
                
                0
                
                
                
                (13,960
                )
                
                
                (13,960
                )Balances
                    at Dec. 31, 2002
                
                
                2,620,326
                
                
                
                2,620
                
                
                
                
                
                
                
                
                
                
                
                152,642
                
                
                
                (223,163
                )
                
                
                (67,901
                )Contributed
                    capital for rent andofficer
                    compensation
                
                
                0
                
                
                
                0
                
                
                
                
                
                
                
                
                
                
                
                488
                
                
                
                0
                
                
                
                488Capital
                    contributed by shareholdersvia
                    accounts payable and interest
                
                
                
                0
                
                
                
                
                
                
                
                
                
                
                
                77,415
                
                
                
                0
                
                
                
                77,415Stock
                    issued for services $0.025/sh.
                
                
                13,389,932
                
                
                
                13,390
                
                
                
                
                
                
                
                
                
                
                
                321,358
                
                
                
                0
                
                
                
                334,748Stock
                    issued for services at $0.61/sh.
                
                
                100,000
                
                
                
                100
                
                
                
                
                
                
                
                
                
                
                
                60,900
                
                
                
                0
                
                
                
                61,000Stock
                    for consulting at $0.47/share
                
                
                10,000
                
                
                
                10
                
                
                
                
                
                
                
                
                
                
                
                4,690
                
                
                
                0
                
                
                
                4,700Net
                    loss - year ended Dec. 31, 2003
                
                
                0
                
                
                
                0
                
                
                
                
                
                
                
                
                
                
                
                0
                
                
                
                (592,962
                )
                
                
                (592,962
                )Balances
                    at Dec. 31, 2003
                
                
                16,120,258
                
                
                
                16,120
                
                
                
                
                
                
                
                
                
                
                
                617,493
                
                
                
                (816,125
                )
                
                
                (182,512
                )Stock
                    issued for services at $0.16/sh
                
                
                1,000,000
                
                
                
                1,000
                
                
                
                
                
                
                
                
                
                
                
                159,000
                
                
                
                0
                
                
                
                160,000Stock
                    issued for services at $0.17/sh.
                
                
                1,800,000
                
                
                
                1,800
                
                
                
                
                
                
                
                
                
                
                
                304,200
                
                
                
                0
                
                
                
                306,000Stock
                    issued for services at $0.165/sh
                
                
                800,000
                
                
                
                800
                
                
                
                
                
                
                
                
                
                
                
                131,200
                
                
                
                0
                
                
                
                132,000Stock
                    issued for services at $0.215/sh.
                
                
                30,000
                
                
                
                30
                
                
                
                
                
                
                
                
                
                
                
                6,420
                
                
                
                0
                
                
                
                6,450Stock
                    issued for debt at $0.45 per sh.
                
                
                150,000
                
                
                
                150
                
                
                
                
                
                
                
                
                
                
                
                67,350
                
                
                
                0
                
                
                
                67,500Stock
                    issued for services at $0.40/sh
                
                
                300,000
                
                
                
                300
                
                
                
                
                
                
                
                
                
                
                
                119,700
                
                
                
                0
                
                
                
                120,000Stock
                    issued for services at $0.34/sh.
                
                
                700,000
                
                
                
                700
                
                
                
                
                
                
                
                
                
                
                
                237,300
                
                
                
                0
                
                
                
                238,000Stock
                    issued for services at $0.41/sh.
                
                
                300,000
                
                
                
                300
                
                
                
                
                
                
                
                
                
                
                
                122,700
                
                
                
                0
                
                
                
                123,000Stock
                    issued for services at $0.27/sh.
                
                
                300,000
                
                
                
                300
                
                
                
                
                
                
                
                
                
                
                
                80,700
                
                
                
                0
                
                
                
                81,000Stock
                    issued for services at $0.22/sh.
                
                
                600,000
                
                
                
                600
                
                
                
                
                
                
                
                
                
                
                
                131,400
                
                
                
                0
                
                
                
                132,000Net
                    loss - year ended Dec. 31, 2004
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                (1,606,057
                )
                
                
                (1,606,057
                )Balances
                    at Dec. 31, 2004
                
                
                22,100,258
                
                
                
                22,100
                
                
                
                
                
                
                
                
                
                
                
                1,977,463
                
                
                
                (2,422,182
                )
                
                
                (422,619
                )Contributed
                    capital for general and administrative expenses
                
                
                
                
                
                
                
                
                
                
                
                138,701
                
                
                
                
                
                
                
                138,701Stock
                    issued for services at $0.03/sh.
                
                
                19,860,000
                
                
                
                19,860
                
                
                
                
                
                
                
                
                
                
                
                575,940
                
                
                
                
                
                
                
                595,800Net
                    loss - year ended Dec. 31, 2005
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                (1,323,775
                )
                
                
                (1,323,775
                )Balances
                    at December 31, 2005
                
                
                41,960,258
                
                
                
                41,960
                
                
                
                0
                
                
                
                0
                
                
                
                2,692,104
                
                
                
                (3,745,957
                )
                
                
                (1,011,893
                )Stock
                    issued for services at $0.027/sh.
                
                
                17,583,334
                
                
                
                17,583
                
                
                
                
                
                
                
                
                
                
                
                459,917
                
                
                
                
                
                
                
                477,500Common
                    stock issued in debtrestructuring
                    at $0.06 and $0.03
                
                
                10,666,667
                
                
                
                10,667
                
                
                
                
                
                
                
                
                
                
                
                429,333
                
                
                
                
                
                
                
                440,000Stock
                    issued for debt at $0.06/ sh.
                
                
                5,000,000
                
                
                
                5,000
                
                
                
                
                
                
                
                
                
                
                
                295,000
                
                
                
                
                
                
                
                300,000Stock
                    issued for services at $0.03/sh.
                
                
                2,500,000
                
                
                
                2,500
                
                
                
                
                
                
                
                
                
                
                
                72,500
                
                
                
                
                
                
                
                75,000Stock
                    issued for services at $0.05/sh.
                
                
                500,000
                
                
                
                500
                
                
                
                
                
                
                
                
                
                
                
                24,500
                
                
                
                
                
                
                
                25,000Stock
                    issued for services at $0.008/sh.
                
                
                10,000,000
                
                
                
                10,000
                
                
                
                
                
                
                
                
                
                
                
                70,000
                
                
                
                
                
                
                
                80,000Stock
                    for consulting at $0.008/sh.
                
                
                4,500,000
                
                
                
                4,500
                
                
                
                
                
                
                
                
                
                
                
                31,500
                
                
                
                
                
                
                
                36,000Stock
                    for consulting at $0.008/sh.
                
                
                500,000
                
                
                
                500
                
                
                
                
                
                
                
                
                
                
                
                3,500
                
                
                
                
                
                
                
                4,000Stock
                    for consulting at $0.008/sh.
                
                
                4,000,000
                
                
                
                4,000
                
                
                
                
                
                
                
                
                
                
                
                28,000
                
                
                
                
                
                
                
                32,000Stock
                    for consulting at $0.008/sh.
                
                
                700,000
                
                
                
                700
                
                
                
                
                
                
                
                
                
                
                
                4,900
                
                
                
                
                
                
                
                5,600Stock
                    for consulting at $0.008/sh.
                
                
                300,000
                
                
                
                300
                
                
                
                
                
                
                
                
                
                
                
                2,100
                
                
                
                
                
                
                
                2,400Stock
                    for consulting at $0.008/sh.
                
                
                3,600,000
                
                
                
                3,600
                
                
                
                
                
                
                
                
                
                
                
                25,200
                
                
                
                
                
                
                
                28,800Stock
                    for consulting at $0.008/sh.
                
                
                3,000,000
                
                
                
                3,000
                
                
                
                
                
                
                
                
                
                
                
                21,000
                
                
                
                
                
                
                
                24,000Stock
                    for consulting at $0.008/sh.
                
                
                4,000,000
                
                
                
                4,000
                
                
                
                
                
                
                
                
                
                
                
                28,000
                
                
                
                
                
                
                
                32,000Balances
                    before reverse split
                
                
                108,810,259
                
                
                
                108,810
                
                
                
                0
                
                
                
                0
                
                
                
                4,187,554
                
                
                
                (3,745,957
                )
                
                
                550,407Reverse
                    split  25 to 1
                
                
                (104,457,849
                )
                
                
                (104,458
                )
                
                
                0
                
                
                
                0
                
                
                
                104,458
                
                
                
                
                
                
                
                0New
                    Stock issued for rounding
                
                
                890
                
                
                
                1
                
                
                
                
                
                
                
                
                
                
                
                (1
                )
                
                
                
                
                
                
                0Balances
                    after reverse split
                
                
                4,353,300
                
                
                
                4,353
                
                
                
                0
                
                
                
                0
                
                
                
                4,292,011
                
                
                
                (3,745,957
                )
                
                
                550,407Preferred
                    stock for cash at $0.467/sh.
                
                
                
                
                
                
                
                715,517
                
                
                
                716
                
                
                
                246,234
                
                
                
                
                
                
                
                246,950Common
                    stock for rounding$0.50/sh.
                
                
                1
                
                
                
                0
                
                
                
                
                
                
                
                
                
                
                
                0
                
                
                
                
                
                
                
                0Common
                    stock for services $0.20/sh
                
                
                5,200
                
                
                
                5
                
                
                
                
                
                
                
                
                
                
                
                1,035
                
                
                
                
                
                
                
                1,040Common
                    stock for rounding$0.20/sh.
                
                
                14
                
                
                
                0
                
                
                
                
                
                
                
                
                
                
                
                0
                
                
                
                
                
                
                
                0Common
                    stock for services $0.17/sh.
                
                
                160,000
                
                
                
                160
                
                
                
                
                
                
                
                
                
                
                
                27,040
                
                
                
                
                
                
                
                27,200Net
                    loss - year ended Dec. 31, 2006
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                (1,745,364
                )
                
                
                (1,745,364
                )Balances
                    at December 31, 2006
                
                
                4,518,515
                
                
                
                4,518
                
                
                
                715,517
                
                
                
                716
                
                
                
                4,566,320
                
                
                
                (5,491,321
                )
                
                
                (919,767
                )Common
                    stock for services $0.15/sh
                
                
                6,277,251
                
                
                
                6,278
                
                
                
                
                
                
                
                
                
                
                
                935,310
                
                
                
                
                
                
                
                941,588Common
                    stock sold @ $0.21/sh
                
                
                5,662,000
                
                
                
                5,662
                
                
                
                
                
                
                
                
                
                
                
                1,183,358
                
                
                
                
                
                
                
                1,189,020Common
                    stock for services $0.21/sh
                
                
                40,000
                
                
                
                40
                
                
                
                
                
                
                
                
                
                
                
                8,360
                
                
                
                
                
                
                
                8,400Common
                    stock for services $0.21/sh
                
                
                2,787,600
                
                
                
                2,788
                
                
                
                
                
                
                
                
                
                
                
                582,608
                
                
                
                
                
                
                
                585,396Common
                    stock subscribed, issued $0.21
                
                
                3,500,000
                
                
                
                3,500
                
                
                
                
                
                
                
                
                
                
                
                731,500
                
                
                
                
                
                
                
                735,000Preferred
                    Stock converted to common
                
                
                8,500,000
                
                
                
                8,500
                
                
                
                (85,000
                )
                
                
                (85
                )
                
                
                (8,415
                )
                
                
                
                
                
                
                0Net
                    loss - 9 mo ended Sep. 30, 2007
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                (3,221,683
                )
                
                
                (3,221,683
                )Balances
                    at September 30, 2007
                
                
                31,285,366
                
                
                $
                31,286
                
                
                
                630,517
                
                
                $
                631
                
                
                $
                7,999,041
                
                
                $
                (8,713,004
                )
                
                $
                (682,046
                )




-5-


VICTORY
                  ENERGY CORPORATION AND SUBSIDIARIES(A
                  Development Stage Company)Consolidated
                  Statements of Cash FlowsUnaudited
 For
                    the
                
                
                For
                    the
                
                
                Inception
                    fromThree
                    Months Ended
                
                
                Nine Months
                    Ended
                
                
                Jan.
                    7, 1982September
                    30,
                
                
                September
                    30,
                
                
                through2007
                
                
                2006
                
                
                2007
                
                
                2006
                
                
                Sep.
                    30, 2007CASH
                    FLOWS FROM OPERATING ACTIVITIES:Net
                    Loss
                
                $
                (142,159
                )
                
                $
                (345,424
                )
                
                $
                (3,221,683
                )
                
                $
                (1,502,276
                )
                
                $
                (8,584,504
                )Adjustments
                    to reconcile net loss to net cashused
                    by operating activities:Depreciation
                
                
                
                
                
                
                299
                
                
                
                
                
                
                
                898
                
                
                
                2,294Loss
                    on extinguishment of debt
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                48,363Loss
                    on abandonment of subsidiary
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                50,900Issuance
                    of common stock for services rendered
                
                
                
                244,800
                
                
                
                1,535,384
                
                
                
                1,122,300
                
                
                
                6,178,540Increase
                    in Short Term ReceivablesDecrease
                    (Increase) in Prepaid Expenses
                
                
                
                43,450
                
                
                
                
                
                
                
                246,950Increase
                    (Decrease) in DepositsIncrrease
                    (Decrease) in Prepaid Subscriptions
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                203,500(Incrrease)
                    Decrease in Subscriptions Receivable
                
                
                
                
                
                
                
                (735,000
                )
                
                
                
                
                
                
                (735,000
                )Increase
                    (Decrease) in accounts payable
                
                
                (5,840
                )
                
                
                9,176
                
                
                
                15,458
                
                
                
                (321,794
                )
                
                
                34,600Increase
                    (Decrease) in accrued liabilities
                
                
                
                16,006
                
                
                
                
                
                
                
                4,590Increase
                    (Decrease ) in Accrued Payroll,P'roll Taxes
                
                
                43,994
                
                
                
                
                
                
                
                510,970Increase
                    (Decrease) in Short Term ReceivablesRepayment
                    of long term debtIncrease
                    (decrease) in Accrued Liabilities-Related
                
                
                
                4,500
                
                
                
                
                
                
                
                4,500Non-cash
                    contributed capital
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                (524
                )Net
                    Cash provided by (used by)Operating
                    Activities
                
                
                (147,999
                )
                
                
                16,801
                
                
                
                (2,405,841
                )
                
                
                66,138
                
                
                
                (2,801,831
                )CASH
                    FLOWS FROM INVESTING ACTIVITIESPurchase
                    of Fixed Assets
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                (2,294
                )Purchase
                    / Sale of Marketable Securities
                
                
                
                
                
                
                
                
                
                
                
                88,300Investment
                    in Joint Venture
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                (50,000
                )
                
                
                (50,000
                )Net
                    Cash (used by) Investing Activities
                
                
                0
                
                
                
                0
                
                
                
                0
                
                
                
                38,300
                
                
                
                (52,294
                )CASH
                    FLOWS FROM FINANCING ACTIVITIESProceeds
                    of Note Payable
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                3,027Proceeds
                    (Repayment) of Loans
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                (210,984
                )Increase
                    (decrease) in Credit Line
                
                
                218
                
                
                
                61,128
                
                
                
                23,879
                
                
                
                61,128
                
                
                
                80,840Proceeds
                    (Repayment) of Loan from Officer
                
                
                159,670
                
                
                
                (75,000
                )
                
                
                458,150
                
                
                
                41,664
                
                
                
                1,019,735Proceeds
                    (Repayment) of Note Payable-Related Party
                
                
                
                
                
                
                
                (2,500
                )Increase
                    (Decrease) in Other Loans Payable
                
                
                
                19,000
                
                
                
                
                
                
                
                19,000Contributed
                    capital for rent and officers' compensation
                
                
                
                
                
                
                
                
                
                
                
                2,438Proceeds
                    from the sale of Preferred StockProceeds
                    from the sale/conversion of Common Stock
                
                
                
                1,189,020
                
                
                
                
                
                
                
                1,504,291Commons
                    stock subscribed, issued
                
                
                
                
                
                
                
                
                
                
                735,000Proceeds
                    from the sale/conversion of Preferred Stock
                
                
                
                
                
                
                
                
                
                
                
                246,950Contributed
                    Capital by shareholdersNet
                    Cash provided by Financing Activities
                
                
                159,888
                
                
                
                5,128
                
                
                
                2,406,049
                
                
                
                (88,665
                )
                
                
                2,854,254NET
                    INCREASE IN CASH
                
                
                11,889
                
                
                
                21,929
                
                
                
                208
                
                
                
                15,773
                
                
                
                129CASH
                    AT BEGINNING OF PERIOD
                
                
                (11,760
                )
                
                
                (2,082
                )
                
                
                (79
                )
                
                
                4,074
                
                
                
                -CASH
                    AT END OF PERIOD
                
                $
                129
                
                
                $
                19,847
                
                
                $
                129
                
                
                $
                19,847
                
                
                $
                129CASH
                    PAID FOR:Interest
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -Income
                    Taxes
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -




-6-


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**





NOTE
      1 -
      BUSINESS AND CONTINUED OPERATIONS




Victory
      Energy Corporation (OTC symbol VTYE), formerly known as Victory Capital Holdings
      Corporation (our “Company”) was organized under the laws of the State of Nevada
      on January 7, 1982, under the name All Things, Inc. On March 21, 1985 the
      Company’s name was changed to New Environmental Technologies Corporation and on
      April 28, 2003 to Victory Capital Holdings Corporation.  The name was
      changed finally to Victory Energy Corporation on May 3, 2006.


The
      Company was formed for the purpose of engaging in all lawful businesses. The
      Company’s initial authorized capital consisted of 100,000,000 shares of $0.001
      par value common voting stock and as of the date of this filing the authorized
      capital is 200,000,000 shares of $.001 par value common stock.





The
      consolidated financial statements presented are those of Victory Energy
      Corporation and subsidiaries.   While the information presented
      in the accompanying interim nine months financial statements is unaudited,
      it
      includes all adjustments which are, in the opinion of management, necessary
      to
      present fairly the financial position, results of operations and cash flows
      for
      the interim periods presented in accordance with the accounting principles
      generally accepted in the United States of America. These interim financial
      statements follow the same accounting policies and methods of their application
      as the Company’s December 31, 2006 annual financial statements. All adjustments
      are of a normal recurring nature. It is suggested that these abridged interim
      financial statements be read in conjunction with the Company’s December 31, 2006
      annual financial statements.





Operating
      results for the nine months ended September 30, 2007 are not necessarily
      indicative of the results that can be expected for the year ended December
      31,
      2007.





On
      October 3, 2001, the Company formed a wholly owned subsidiary named Papadog,
      Inc. Papadog has since changed its name to Global Card Services, Inc and then
      to
      Global Card Incorporated, (“Global”).  As of the date of this report,
      there has been no activity for this subsidiary.





On
      November 12, 2003, the Company formed a wholly owned subsidiary named On Demand
      Communications, Inc., (“On Demand”).  As of the date of this report,
      there has been no activity for this subsidiary.





On
      November 27, 2006 the company incorporated a
      Nevada  subsidiary,  Victory Energy Resources,
      Inc.   The name of the subsidiary was changed to Victory Carbon
      Solutions, Inc.  There has been no activity in this
      company.





**Current
      Business of the Company**


Management
        has determined that the Company will focus on projects in the oil and gas
        industry. This is based upon a belief that this industry is becoming an
        economically viable sector in which to conduct business operations. We have
        targeted specific prospects and intend to engage in the drilling for oil
        and
        gas. Jon Fullenkamp, our President, has a great deal of experience in the
        oil
        and gas industry and has already recruited additional experience with the
        addition of new directors and advisory board member.
  Victory
        Carbon Solutions Inc. was formed as a wholly owned subsidiary of the Corporation
        to participate in the Green House Gas opportunities currently available in
        today’s energy markets and for the Corporation to join in the Carbon Credits
        exchange currently offered as part of the Chicago Climate
        Exchange.  In addition the Corporation will utilize this platform to
        establish a fund having a focus of investing in Carbon Credits as well as
        financing eco-friendly projects like, windmill farms, geothermal production,
        solar farms, and other energy saving projects.
 
 The
        Corporation has secured the options on five (5) shallow gas wells located
        in the
        Adams-Baggett Ranch located in Crockett County Texas.  The
        Adams-Baggett Canyon Sandstone gas field is located in the Permian Basin
        part of
        the 6th largest
        known oil and gas reserves in the world.  The Canyon Sandstone
        formation is found at a depth of 4,300 feet to 4,900 feet.  Each well
        drilled in the field has an estimated proven undeveloped reserve of 500 Million
        cubic feet of gas per well, giving a total of approximately 2.5 Billion cubic
        feet of natural gas of proven undeveloped reserves for the
        Corporation.  The Corporation has an addition first right of refusal
        on five (5) more options as it evaluates the initial five (5) wells to be
        drilled.
 
 Management
        has recently negotiated the mineral rights on a prospect for Victory in the
        Palo
        Duro Basin located in Briscoe County Texas. Victory has established a letter
        of
        intent which sets out the substantive terms of a Formal Agreement (“Agreement”)
        that Victory intends to complete and execute. Under the Agreement, we will
        be
        required to commit up to one hundred thousand dollars ($100,000.00) for seismic
        evaluation to determine the first three drilling targets. In exchange, we
        will
        receive 50% of the mineral rights of all hydrocarbon deposits on the first
        eight
        sections, approximately 10 sections of land. During the evaluation of the
        drilling targets, and including the time to drill the first three wells,
        we will
        have the ability to exercise its irrevocable option to lease up to a total
        of
        100,000 acres of mineral rights within the Palo Duro Basin.
  The
          Corporation also holds interest as a joint venture partner in the Mesa
          Gas
          Prospect located in Roosevelt County New Mexico.****This
          Prospect is a 12,000-acre field targeted primarily for
          gas.  Additionally, the Corporation owns the mineral rights in a
          prospective oilfield identified as N.E. Glasgow Prospect located in Valley
          County Montana.  This particular acreage has a Wrench Fault identified
          geologically.  The acreage also has indications of Lodgepole Reef
          deposits.   We had taken on the evaluation of a prospect in
          Oklahoma identified as the Skedee Prospect. As we progressed into the due
          diligence of these prospects and the potential production, management determined
          that the development of the prospect was not worth the required investment
          capital. Even with the potential reduction in investment dollars, the prospects
          had an unacceptable pay back time for the initial investment. Management
          felt
          the shareholders would be better served by seeking other
          prospects.




NOTE
      2 -
      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





Fair
      Value of Financial Instruments





The
      Financial Accounting Standards Board issued Statement of Financial Accounting
      Standards (“SFAS”) No. 107, “Disclosures About Fair Value of Financial
      Instruments.”  SFAS No. 107 requires disclosure of fair value information
      about financial instruments when it is practicable to estimate that value. 
The carrying amounts of the Company’s financial instruments as of September 30,
      2007 and December 31, 2006 approximate their respective fair values because
      of
      the short-term nature of these instruments.  Such instruments consist of
      cash, accounts payable and accrued expenses.  The fair value of related
      party payables is not determinable.





-7-


Income
      Taxes





The
      Company utilizes SFAS No. 109, “Accounting for Income Taxes,” which requires the
      recognition of deferred tax assets and liabilities for the expected future
      tax
      consequences of events that have been included in the financial statements
      or
      tax returns.  Under this method, deferred tax assets and liabilities
      are determined based on the difference between the tax basis of assets and
      liabilities and their financial reporting amounts based on enacted tax laws
      and
      statutory tax rates applicable to the periods in which the differences are
      expected to affect taxable income.  Valuation allowances are
      established, when necessary, to reduce deferred tax assets to the amount
      expected to be realized. The Company generated deferred tax credits through
      net
      operating loss carryforwards.  However, a valuation allowance of 100%
      has been established, as the realization of the deferred tax credits is not
      reasonably certain, based on going concern considerations outlined
      below.





Going
      Concern





The
      Company’s financial statements are prepared using accounting principles
      generally accepted in the United States of America applicable to a going
      concern, which contemplates the realization of assets and liquidation of
      liabilities in the normal course of business.  The Company has
      suffered recurring losses.  The Company incurred a net loss of
      $3,221,683 and a negative cash flow from operations of $2,405,841 during the
      nine months ended September 30, 2007, and a shareholders’ deficiency of $682,046
      at September 30, 2007.  The Company has not yet established an ongoing
      source of revenues sufficient to cover its operating costs and to allow it
      to
      continue as a going concern.  The ability of the Company to continue
      as a going concern is dependent on the Company obtaining adequate capital to
      fund operating losses until it becomes profitable.  If the Company is
      unable to obtain adequate capital, it could be forced to cease development
      of
      operations.





In
      order
      to continue as a going concern, develop a reliable source of revenues, and
      achieve a profitable level of operations the Company will need, among other
      things, additional capital resources.  Management’s plans to continue
      as a going concern include raising additional capital through sales of common
      stock.  In the interim, shareholders of the Company are committed to
      meeting its minimal operating expenses.  However, management cannot
      provide any assurances that the Company will be successful in accomplishing
      any
      of its plans.





The
      ability of the Company to continue as a going concern is dependent upon its
      ability to successfully accomplish the plans described in the preceding
      paragraph and eventually secure other sources of financing and attain profitable
      operations.  The accompanying financial statements do not include any
      adjustments that might be necessary if the Company is unable to continue as
      a
      going concern.





Development-Stage
      Company





The
      Company is considered a development-stage company, with no operating revenues
      during the periods presented, as defined by Statement of Financial Accounting
      Standards (“SFAS”) No. 7.  SFAS No. 7 requires companies to report
      their operations, shareholders deficit and cash flows since inception through
      the date that revenues are generated from management’s intended operations,
      among other things.  Management has defined inception as January 7,
      1982.  Since inception, the Company has incurred operating losses
      totaling $8,713,004, much of which relates to stock-based compensation to
      officers, directors and consultants as a means to preserve working
      capital.  The Company’s working capital has been generated through the
      sales of common stock, loans made by officers of the Company and a bank line
      of
      credit. Management has provided financial data since January 7, 1982 “Inception”
in the financial statements, as a means to provide readers of the Company’s
      financial information to make informed investment decisions.





Use
      of
      Estimates





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





-8-


Principles
      of Consolidation





The
      consolidated financial statements include those of Victory Energy Corporation
      and its wholly owned subsidiaries, Global Card Incorporated, On Demand
      Communications, Inc. and Victory Energy Resources, Inc. All material
      inter-company items and transactions have been eliminated.  There was
      no activity in the subsidiaries in the first nine months of 2007 and during
      2006.





Loss
      Per Share





Statement
      of Financial Accounting Standards No. 128 “Earnings Per Share” requires
      presentation of basic earnings per share and diluted earnings per
      share.  Basic income (loss) per share (“Basic EPS”) is computed by
      dividing net loss available to common stockholders by the weighted average
      number of common shares outstanding during the period.  Diluted
      earnings per share (“Diluted EPS”) is similarly calculated using the treasury
      stock method except that the denominator is increased to reflect the potential
      dilution that would occur if preferred stock at the end of the applicable period
      were exercised. These potential dilutive securities were not included in the
      calculation of loss per share for the nine months ended September 30, 2007
      because the Company incurred a loss in the period, and thus their effect would
      have been anti-dilutive.  At September 30, 2007, potentially dilutive
      securities consisted of 630,517 shares of preferred stock, convertible at the
      rate of 1 preferred share to 100 common shares.





The
      following is a reconciliation of the numerators and denominators of the basic
      and diluted earnings per share computations for the nine months ended September
      30, 2007 and 2006.





In
      2006 a
      reverse stock split of Common Stock occurred on a 25 to 1 basis.


The
      September, 2006 loss per share for the first three months and nine months of
      2006 has been restated accordingly, giving retroactive effect to the reverse
      stock split.








**September
                30, 2007**
            ****
            ****
            **September
                30,**
              **2006**Numerator:Basic
                and diluted net loss per share:Net
                Loss
            
            $
            (3,221,683
            )
            
            $
            (1,502,276
            )DenominatorBasic
                and diluted weighted averagenumber
                of shares outstanding
            
            
            21,461,340
            
            
            
            2,691,443Basic
                and Diluted Net Loss Per Share
            
            $
            (0.15
            )
            
            $
            (0.56
            )(Restated)Dilutive
                effect of Preferred Stock
            
            Nil
            
            
            N/A





-9-


Equipment
      and Fixtures





Equipment
      and fixtures are recorded at cost.  Depreciation is provided using
      accelerated and straight-line methods over the estimated useful lives of the
      related assets as follows.





Description
            YearsFurniture
                and fixtures
            7Computer
                hardware and software
            3-5





Equipment
      and fixtures have been fully depreciated.




NOTE
      3 –
RELATED PARTY TRANSACTIONS





Five
      ledger accounts in the books of the Company relating to loans, salaries and
      out-of-pocket expenses payable to the President/C.E.O., Jon Fullenkamp, were
      combined into one account “Loan from Officer”, which totaled $1,148,235 at
      September 30, 2007.  The loan is non-interest bearing and payable on
      demand.  Under the terms of the employment agreement, the employee may
      at his election convert any and all funds due to him into shares of the
      Company’s common stock at a conversion price of $0.01 per share. In practice, in
      prior years, funds due to him were converted at a discounted market
      value.





In
      the
      nine months ended September 30, 2007 and 2006 the President/CEO incurred
      $458,150 and $62,664 respectively in reimbursable expenses on behalf of the
      Company.





In
      March
      2006 the company issued a promissory note to a group of stockholders for
      consideration of $141,458 in cash. The terms were to be repayable in one year
      at
      an interest rate of 10%, payable quarterly.  Interest was deferred. In
      December, 2006 the note was reclassified to prepaid subscriptions, reflecting
      an
      accommodation with the stockholders.





NOTE
      4 –
INVESTMENT IN JOINT VENTURE





In
      May,
      2006 the Company paid $50,000 to Geosurveys, Inc, a geophysical survey company
      of oil and gas prospects.  This was part of an agreement with Eldorado
      Exploration, Inc. whereby the Company obtained a 2 1⁄2 percent working interest in
      a prospective oil well called the Mesa #1 well on leased land in New
      Mexico.   The agreement provides for cost sharing of drilling
      costs.





NOTE
      5 -
      COMMITMENTS AND CONTINGENCIES





There
      were no additional commitments and contingencies in the six months ended
      September 30, 2007.





-10-


NOTE
      6 –
CAPITAL STOCK TRANSACTIONS





Reverse
      Common Stock Split





The
      Common Stock issued and outstanding at October 26, 2006 was
      108,810,259.   On this date the Board of Directors declared a
      reverse stock split of the Company’s Common Stock, converting the common stock
      on a 25 to 1 basis.    Common shares outstanding were
      reduced by 104,457,849.  New stock outstanding after the split and
      after issuing 890 shares for rounding was 4,353,300.   The effect
      on the balance sheet was to increase Paid-in Capital by $104,458 and to reduce
      Common Stock by $104,458, a neutral effect on stockholders’ equity.





On
      October 20, 2005 one share was issued at $0.50, valued de minimus, for rounding
      following the reverse split.





On
      November 11, 2006 5,200 shares were issued for services valued at $1,040 at
      market value of $0.20 per share.





On
      December 5, 2006, 14 shares valued de minimus were issued for
      rounding.





On
      December 27, 2006, 160,000 shares were issued for services, valued at $27,200,
      at market value of $0.17.





2007





On
      January 22, 2007, 6,277,251 shares of common stock were issued for services
      at
      $0.15 per share, reflecting market value.  $941,588 was recorded as
      consulting fees.





On
      February 1, 2007, 5,662,000 shares of common stock were issued at $0.21
      reflecting market value for subscriptions receivable
      of  $1,189,020.





On
      March
      1, 2007, 40,000 shares of common stock were issued to a Director for services
      rendered at $0.21 per share reflecting market
      value.    $8,400 was recorded as consulting
      fees.





On
      May 7,
      2007, 1,710,000 shares of common stock were issued for services at $0.21 per
      share,    reflecting market value.  $359,100 was
      recorded as consulting fees.





On
      June
      5, 2007,  1,077,600 shares of common stock were issued for services at
      $0.21 per share reflecting market value. $226,296 was recorded as consulting
      fees.





On
      June
      13, 2007, 850,000 shares of common stock were issued to preferred stockholders
      in a conversion of 85,000 shares of preferred stock to common, converted at
      the
      rate of one share of preferred stock to 100 shares of common stock.





On
      June
      15, 3,500,000 shares of common stock were issued at $0.21 per share reflecting
      market value, for subscriptions receivable of $735,000.





The
      total
      of issued and outstanding common shares at September 30, 2007 and
      2006  was 31,285,366  and 3,925,743 respectively, (September
      30, 2006 was restated for a reverse 25 to 1 stock split October 26,
      2006).





-11-


Preferred
      Stock





On
      August
      22, 2006 the Board of Directors resolved to amend the Articles of Incorporation,
      to authorize 10,000,000 shares of preferred stock, having a par value of
      $0.001.  The stock is convertible to common stock at will in a ratio
      of 1 preferred to 100 common.  Preferred stockholders may vote as
      common stockholders on any matter on which common stockholders can vote, and
      in
      accordance with the underlying common stock held.  Preferred stock
      dividends may be declared by the Board of Directors.





On
      October 20, 2006, 715,512.23 preferred shares were issued for cash at $0.467
      each pursuant to Regulation “S”, realizing $246,950.





On
      June
      13, 2007 85,000 shares of preferred stock were converted, at the rate of one
      share of preferred stock to 100 shares of common stock, to 850,000 shares common
      stock.





The
      total
      of issued and outstanding preferred shares at September 30, 2007 and 2006 was
      630,517 and zero, respectively.





NOTE
      7 –
LITIGATION




During
      the second quarter of 2007, a former consultant solicited the courts for the
      shortfall between the original settlement amount and the amount realized in
      a
      court action.  On June 6, 2007, the Corporation delivered final
      settlement, but appealed the court’s decision.  The appeal process
      will take approximately 12 months to be reviewed by the appellate court. 
Effectively
      the trial court proceedings have been stayed.




Neither
      the Company nor any of its officers or directors is involved in any other
      litigation either as plaintiffs or defendants, and have no knowledge of any
      threatened or pending litigation against them or any of the officers or
      directors.




-12-


**Item
      2.                    
Management's Discussion and Analysis or Plan of
      Operation**





The
      following discussion includes certain forward-looking statements within the
      meaning of the safe harbor protections of Section 27A of the Securities Act
      of
      1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as
      amended. Statements that include words such as “believe,” “expect,” “should,”
“intend,” “may,” “anticipate,” “likely,” “contingent,” “could,” “may,” or other
      future-oriented statements, are forward-looking statements. Such forward-looking
      statements include, but are not limited to, statements regarding our business
      plans, strategies and objectives, and, in particular, statements referring
      to
      our expectations regarding our ability to continue as a going concern, generate
      increased market awareness of, and demand for, our current products, realize
      profitability and positive cash flow, and timely obtain required financing.
      These forward-looking statements involve risks and uncertainties that could
      cause actual results to differ from anticipated results. The forward-looking
      statements are based on our current expectations and what we believe are
      reasonable assumptions given our knowledge of the markets; however, our actual
      performance, results and achievements could differ materially from those
      expressed in, or implied by, these forward-looking statements. Factors within
      and beyond our control that could cause or contribute to such differences
      include, among others, the following: those associated with drilling and
      subsequent sale of oil and gas, our critical capital raising efforts in an
      uncertain and volatile economical environment, our ability to maintain
      relationship with strategic companies, our cash preservation and cost
      containment efforts, our ability to retain key management personnel, our
      relative inexperience with advertising, our competition and the potential impact
      of technological advancements thereon, the impact of changing economic,
      political, and geo-political environments on our business, as well as those
      factors discussed elsewhere in this Form 10-QSB and in “Item 1 - Our Business,”
“Item 6 - Management’s Discussion and Analysis,” and elsewhere in our most
      recent Form 10-KSB, filed with the United States Securities and Exchange
      Commission.





Readers
      are urged to carefully review and consider the various disclosures made by
      us in
      this report and those detailed from time to time in our reports and filings
      with
      the United States Securities and Exchange Commission that attempt to advise
      interested parties of the risks and factors that are likely to affect our
      business.





Our
      fiscal year ends on December 31. References to a fiscal year refer to the
      calendar year in which such fiscal year ends.




**Our
      Business**





Victory
      Energy Corporation (OTC symbol VYEY), formerly known as Victory Capital Holdings
      Corporation (our “Company”) was organized under the laws of the State of Nevada
      on January 7, 1982, under the name All Things, Inc. On March 21, 1985, our
      Company’s name was changed to New Environmental Technologies Corporation; on
      April 28, 2003, our name was changed to Victory Capital Holdings Corporation
      and
      on May 3, 2006, it was changed to Victory Energy Corporation. Our Company was
      formed for the purpose of engaging in all lawful businesses. Our Company’s
      initial authorized capital consisted of 100,000,000 shares of $0.001 par value
      common voting stock and as of the date of this filing our authorized capital
      is
      200,000,000 shares of $.001 par value common stock.





Our
      Company has had no material business operations since 1989. In 2004, we began
      the search for the acquisition of assets, property or businesses that may
      benefit our Company and our shareholders. Our goal has been to bring value
      to
      the Company and to our shareholders through such acquisitions. Each merger
      and
      acquisition we approach is done with the intention to position us in markets
      and
      sectors where excellent growth is anticipated. We plan to retain a percentage
      of
      stock ownership in each subsidiary while spinning them out as their own new
      public company if such transaction is economically feasible. The balance of
      the
      stock will be distributed to the Company’s shareholders at the time of spin out
      of the new public company. This is a non-dilutive method to increase shareholder
      value as we grow and maintain a position in the market segments
      selected.





**Current
      Business of the Company**





Management
      has determined that the Company will focus on projects in the oil and gas
      industry. This is based upon a belief that this industry is becoming an
      economically viable sector in which to conduct business operations. We have
      targeted specific prospects and intend to engage in the drilling for oil and
      gas. Jon Fullenkamp, our President, has a great deal of experience in the oil
      and gas industry and has already recruited additional experience with the
      addition of new directors and advisory board member.





-13-


Victory
      Carbon Solutions Inc. was formed as a wholly owned subsidiary of the Corporation
      to participate in the Green House Gas opportunities currently available in
      today’s energy markets and for the Corporation to join in the Carbon Credits
      exchange currently offered as part of the Chicago Climate
      Exchange.  In addition the Corporation will utilize this platform to
      establish a fund having a focus of investing in Carbon Credits as well as
      financing eco-friendly projects like, windmill farms, geothermal production,
      solar farms, and other energy saving projects.





The
      Corporation has secured the options on five (5) shallow gas wells located in
      the
      Adams-Baggett Ranch located in Crockett County Texas.  The
      Adams-Baggett Canyon Sandstone gas field is located in the Permian Basin part
      of
      the 6th largest
      known oil and gas reserves in the world.  The Canyon Sandstone
      formation is found at a depth of 4,300 feet to 4,900 feet.  Each well
      drilled in the field has an estimated proven undeveloped reserve of 500 Million
      cubic feet of gas per well, giving a total of approximately 2.5 Billion cubic
      feet of natural gas of proven undeveloped reserves for the
      Corporation.  The Corporation has an addition first right of refusal
      on five (5) more options as it evaluates the initial five (5) wells to be
      drilled.





Management
      has recently negotiated the mineral rights on a prospect for Victory in the
      Palo
      Duro Basin located in Briscoe County Texas. Victory has established a letter
      of
      intent which sets out the substantive terms of a Formal Agreement (“Agreement”)
      that Victory intends to complete and execute. Under the Agreement, we will
      be
      required to commit up to one hundred thousand dollars ($100,000.00) for seismic
      evaluation to determine the first three drilling targets. In exchange, we will
      receive 50% of the mineral rights of all hydrocarbon deposits on the first
      eight
      sections, approximately 10 sections of land. During the evaluation of the
      drilling targets, and including the time to drill the first three wells, we
      will
      have the ability to exercise its irrevocable option to lease up to a total
      of
      100,000 acres of mineral rights within the Palo Duro Basin.




The
      Corporation also holds interest as a joint venture partner in the Mesa Gas
      Prospect located in Roosevelt County New Mexico.****This
      Prospect is a 12,000-acre field targeted primarily for
      gas.  Additionally, the Corporation owns the mineral rights in a
      prospective oilfield identified as N.E. Glasgow Prospect located in Valley
      County Montana.  This particular acreage has a Wrench Fault identified
      geologically.  The acreage also has indications of Lodgepole Reef
      deposits.   We had taken on the evaluation of a prospect in
      Oklahoma identified as the Skedee Prospect. As we progressed into the due
      diligence of these prospects and the potential production, management determined
      that the development of the prospect was not worth the required investment
      capital. Even with the potential reduction in investment dollars, the prospects
      had an unacceptable pay back time for the initial investment. Management felt
      the shareholders would be better served by seeking other prospects.





We
      have
      no other employees at this time and will seek to retain independent contractors
      to assist in operating and managing the prospects as well as to carry out the
      principal and necessary functions incidental to the oil and gas business. With
      the intended acquisition of oil and natural gas, we intend to establish
      ourselves as an industry partner within the industry. Once we can establish
      a
      revenue base with cash flow, we will seek opportunities more aggressive in
      nature.





**Plan
        of Operation**





Our
      plan
      of operation for the next 12 months will be the continued acquisition of
      economically viable oil and gas prospects. Once acquired, we intend to develop
      and produce the prospects assuming they are commercially economical to produce
      based on a complete due diligence process. In that case, we can expect to derive
      revenues from operations. We intend to diversify our holdings in both oil and
      gas producing wells to take advantage of what we believe is a potentially strong
      window of opportunity that currently exists in the oil and gas industry for
      the
      next several years.




We
      completed due diligence on other projects which ultimately proved to be too
      expensive to pursue. We have continued to seek out other viable
      opportunities.




-14-


**Results
      of Operations for Period Ended September 30, 2007**




As
      of
      September 30, 2007, the Company has not earned any revenues and has incurred
      a
      net loss to date of $3,221,683. Operations have been primarily seeking potential
      opportunities in the oil and gas industry through the location of commercially
      economical prospects, and raising capital and developing revenue generating
      opportunities and strategic relationships.


During
        the three month period ended September 30, 2007, we incurred operating expenses
        in the amount of $3,221,683. These operating expenses included due diligence
        expenses, consulting fees, professional fees, land leases, oil and gas leases,
        and office and general expenses.


**Liquidity
      and Capital Resources**




To
      date,
      we have financed our operations from funds put into the Company by our CEO.
      We
      intend to raise future capital from the sale of a percentage of our prospects
      to
      fund development and production or through the sale of our common stock to
      finance the prospects in their entirety.




**Recent
      Accounting Pronouncements**




In
      February 2007, the Financial Accounting Standards Board (FASB) issued SFAS
      No.
      159, “The Fair Value Option for Financial Assets and Financial Liabilities –
Including an Amendment of FASB Statement No. 115”.  This statement
      permits entities to choose to measure many financial instruments and certain
      other items at fair value. Most of the provisions of SFAS No. 159 apply only
      to
      entities that elect the fair value option. However, the amendment to SFAS No.
      115 “Accounting for Certain Investments in Debt and Equity Securities” applies
      to all entities with available-for-sale and trading securities. SFAS No. 159
      is
      effective as of the beginning of an entity’s first fiscal year that begins after
      November 15, 2007. Early adoption is permitted as of the beginning of a fiscal
      year that begins on or before November 15, 2007, provided the entity also elects
      to apply the provision of SFAS No. 157, “Fair Value Measurements”. In February
      2007, the Financial Accounting Standards Board (FASB) issued SFAS No. 159,
“The
      Fair Value Option for Financial Assets and Financial Liabilities – Including an
      Amendment of FASB Statement No. 115”.  This statement permits entities
      to choose to measure many financial instruments and certain other items at
      fair
      value. Most of the provisions of SFAS No. 159 apply only to entities that elect
      the fair value option. However, the amendment to SFAS No. 115 “Accounting for
      Certain Investments in Debt and Equity Securities” applies to all entities with
      available-for-sale and trading securities. SFAS No. 159 is effective as of
      the
      beginning of an entity’s first fiscal year that begins after November 15, 2007.
      Early adoption is permitted as of the beginning of a fiscal year that begins
      on
      or before November 15, 2007, provided the entity also elects to apply the
      provision of SFAS No. 157, “Fair Value Measurements”. The adoption of this
      statement is not expected to have a material effect on our financial
      statements.




In
      September 2006, the SEC issued Staff Accounting Bulletin (“SAB”) No. 108,
“Considering the Effects of Prior Year Misstatements when Quantifying
      Misstatements in Current Year Financial Statements.” SAB No. 108 addresses how
      the effects of prior year uncorrected misstatements should be considered when
      quantifying misstatements in current year financial statements. SAB No. 108
      requires companies to quantify misstatements using a balance sheet and income
      statement approach and to evaluate whether either approach results in
      quantifying an error that is material in light of relevant quantitative and
      qualitative factors. SAB No. 108 is effective for period ending after November
      15, 2006. We are currently evaluating the impact of adopting SAB No. 108 but
      does not expect that it will have a material effect on its financial
      statements




In
      September 2006, the FASB issued SFAS No. 158, “Employers’ Accounting for Defined
      Benefit Pension and Other Postretirement Plans – an amendment of FASB Statements
      No. 87, 88, 106, and 132®”. This statement requires employers to recognize the
      overfunded or underfunded status of a defined benefit postretirement 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 of a business entity or
      changes in unrestricted net assets of a not-for-profit
      organization.  This statement also requires an employer to measure the
      funded status of a plan as of the date of its year-end statement of financial
      position, with limited exceptions. The provisions of SFAS No. 158 are effective
      for employers with publicly traded equity securities as of the end of the fiscal
      year ending after December 15, 2006. The adoption of this statement did not
      have
      a material effect on our reported financial position or results of
      operations.


-15-




In
      September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements”. The
      objective of SFAS No. 157 is to increase consistency and comparability in fair
      value measurements and to expand disclosures about fair value
      measurements.  SFAS No. 157 defines fair value, establishes a
      framework for measuring fair value in generally accepted accounting principles,
      and expands disclosures about fair value measurements. SFAS No. 157 applies
      under other accounting pronouncements that require or permit fair value
      measurements and does not require any new fair value measurements. The
      provisions of SFAS No. 157 are effective for fair value measurements made in
      fiscal years beginning after November 15, 2007. The adoption of this statement
      is not expected to have a material effect on our future reported financial
      position or results of operations.




In
      June
      2006, the FASB issued FASB Interpretation No. 48, “Accounting for Uncertainty in
      Income Taxes, an interpretation of FASB Statements No. 109”. FIN 48 clarifies
      the accounting for uncertainty in income taxes by prescribing a two-step method
      of first evaluating whether a tax position has met a more likely than not
      recognition threshold and second, measuring that tax position to determine
      the
      amount of benefit to be recognized in the financial statements. FIN 48 provides
      guidance on the presentation of such positions within a classified statement
      of
      financial position as well as on derecognition, interest and penalties,
      accounting in interim periods, disclosure, and transition. FIN 48 is effective
      for fiscal years beginning after December 15, 2006. The adoption of this
      statement is not expected to have a material effect on our future reported
      financial position or results of operations.




In
      September 2006, the SEC issued Staff Accounting Bulletin (“SAB”) No. 108,
“Considering the Effects of Prior Year Misstatements when Quantifying
      Misstatements in Current Year Financial Statements.” SAB No. 108 addresses how
      the effects of prior year uncorrected misstatements should be considered when
      quantifying misstatements in current year financial statements. SAB No. 108
      requires companies to quantify misstatements using a balance sheet and income
      statement approach and to evaluate whether either approach results in
      quantifying an error that is material in light of relevant quantitative and
      qualitative factors. SAB No. 108 is effective for period ending after November
      15, 2006. We are currently evaluating the impact of adopting SAB No. 108 but
      do
      not expect that it will have a material effect on our financial
      statements




In
      September 2006, the FASB issued SFAS No. 158, “Employers’ Accounting for Defined
      Benefit Pension and Other Postretirement Plans – an amendment of FASB Statements
      No. 87, 88, 106, and 132®”. This statement requires employers to recognize the
      overfunded or underfunded status of a defined benefit postretirement 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 of a business entity or
      changes in unrestricted net assets of a not-for-profit
      organization.  This statement also requires an employer to measure the
      funded status of a plan as of the date of its year-end statement of financial
      position, with limited exceptions. The provisions of SFAS No. 158 are effective
      for employers with publicly traded equity securities as of the end of the fiscal
      year ending after December 15, 2006. The adoption of this statement did not
      have
      a material effect on our reported financial position or results of
      operations.





In
      September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements”. The
      objective of SFAS No. 157 is to increase consistency and comparability in fair
      value measurements and to expand disclosures about fair value
      measurements.  SFAS No. 157 defines fair value, establishes a
      framework for measuring fair value in generally accepted accounting principles,
      and expands disclosures about fair value measurements. SFAS No. 157 applies
      under other accounting pronouncements that require or permit fair value
      measurements and does not require any new fair value measurements. The
      provisions of SFAS No. 157 are effective for fair value measurements made in
      fiscal years beginning after November 15, 2007. The adoption of this statement
      is not expected to have a material effect on our future reported





**Item
      3.  Controls and Procedures**




Our
      management is responsible for establishing and maintaining adequate internal
      control over financial reporting for the Company. Under the supervision and
      with
      the participation of our management, including the Principal Executive Officer
      and Principal Financial Officer, we have evaluated the effectiveness of the
      design and operation of our disclosure controls and procedures pursuant to
      Exchange Act Rules 13a-15 and 15d-15 as of the end of the period covered by
      this
      report. Based on that evaluation, the Principal Executive Officer and Principal
      Financial Officer have concluded that these disclosure controls and procedures
      were effective such that the material information required to be filed in our
      SEC reports is recorded, processed, summarized and reported within the required
      time periods specified in the SEC rules and forms. There were no changes in
      our
      internal control over financial reporting during the quarter ended June 30,
      2007
      that have materially affected, or are reasonably likely to materially affect,
      our internal controls over financial reporting. Potential investors should
      be
      aware that the design of any system of controls and procedures is based in
      part
      upon certain assumptions about the likelihood of future events.  There can
      be no assurance that any system of controls and procedures will succeed in
      achieving its stated goals under all potential future conditions, regardless
      of
      how remote.




-16-


**PART
      II - OTHER INFORMATION**




**Item
      1.  Legal Proceedings**




During
      the second quarter of 2007, the former consultant solicited the courts for
      the
      shortfall between the original settlement amount and the amount
      realized.  On June 6, 2007, the Corporation delivered final
      settlement, but appealed the court’s decision.  The appeal process
      will take approximately 12 months to be reviewed by the appellate
      court.  Effectively the trial court proceedings have been
      stayed.




On
      July
      24, 2006, all litigation was settled between the Company and a former
      consultant. The Company settled the case for an estimated value of $280,000
      to
      be realized over a 10-month period ending in May of 2007.




In
      May
      2006, we settled a past debt with Treetop Investments for 5,000,000 shares
      of
      our restricted common stock in a transaction combining settlement of debt and
      purchase of stock.




Neither
      the Company nor any of our officers or directors is involved in any other
      litigation either as plaintiffs or defendants and we have no knowledge of any
      threatened or pending litigation against us or any of our officers or
      directors.




**Item
      2.  Unregistered Salesof EquitySecurities and
      Use of Proceeds**




During
      the three months ended September 30, 2007 no common shares of stock were
      issued.




**Item
      3.  Defaults Upon Senior Securities**




During
      the three months ended September 30, 2007, we were not in default on any of
      our
      indebtedness.




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




There
      were no matters submitted to a vote of our shareholders.




**Item
      5.  Other Information.**




None




-17-


**Item
      6.  Exhibits**




**Exhibit
                No.**
            **Description
                of Exhibit**31
            Certification
                of Chief Executive/Financial Officer
                pursuant to Section 302 of the Sarbanes-Oxley Act of
                200232
            Certification
                of Chief Executive/Financial Officer
                pursuant to Section 906







**SIGNATURE**





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





**Victory
      Energy
      Corporation**





Date:
      November  __, 2007


---------------------------------------


Jon
      Fullenkamp


Principal
      Executive
      Officer


Principal
      Financial
      Officer


Principal
      Accounting
      Officer


and
      Director





Date:  November
      __,
      2007


----------------------------------------


Rick May, Director








Date:  November
      __,
      2007


-----------------------------------------


Perry Mansell, Director








-18-