UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                              Washington, DC 20549

                                   FORM 10-QSB

                                   (Mark One)

 |X| QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
                                    OF 1934

                For the quarterly period ended September 30, 2007

                                       OR

 |_| TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT

                                     OF 1934

             For the transition period from              to
                                            ------------    ------------

                         Commission File Number 0-23901

                                    GSV, INC.

        (Exact name of small business issuer as specified in its charter)
<TABLE>
<S>                                                                      <C>
                   Delaware                                                         13-3979226
(State or other jurisdiction of incorporation                           (I.R.S. Employer Identification No.)
               or organization)
</TABLE>

                     191 Post Road West, Westport, CT 06880
                    (Address of principal executive offices)

                                 (203) 221-2690
                           (Issuer's telephone number)

Check whether the issuer:  (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 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 12, 2007, there were
7,502,703 shares of common stock  outstanding,  excluding 168,592 shares held in
Treasury.

Transitional Small Business Disclosure Format (check one): Yes |_| No |X|.
<PAGE>
                           GSV, INC. AND SUBSIDIARIES

                              INDEX TO FORM 10-QSB

<TABLE>
<S>                                                                             <C>
                                                                                 Page
                                                                                Number

PART I. FINANCIAL INFORMATION

Item 1.  Financial Statements (unaudited):

         Consolidated Balance Sheet at September 30, 2007                         3-4

         Consolidated Statements of Operations for the
         Nine Months and Three Months ended September 30, 2007 and 2006            5

         Consolidated Statements of Cash Flows for the
         Nine Months ended September 30, 2007 and 2006                             6

         Notes to Unaudited Consolidated Financial Statements                     7-11

Item 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations                                     12-15

         Liquidity, Capital Resources and Critical Accounting
         Policies and Use of Estimates                                           15-17

Item 3.  Controls and Procedures                                                  18

PART II.  OTHER INFORMATION                                                       19

Item 6.  Exhibits                                                                 19

SIGNATURES                                                                        20
</TABLE>
<PAGE>
PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

                           GSV, Inc. and Subsidiaries
                           CONSOLIDATED BALANCE SHEET
                               September 30, 2007
                                   (Unaudited)
<TABLE>
<S>                                                                             <C>

        ASSETS
CURRENT ASSETS
        Cash and cash equivalents                                               $       257,682
        Accounts receivable and other current assets                                    150,485
                                                                                ----------------
                Total current assets                                                    408,168
   Investments:
        Internet related                                                                 50,000
        Geologic studies                                                              2,316,721
        Oil and gas wells, net of accumulated depletion                                  70,475

        Property and equipment, net of accumulated depreciation                             174
                                                                                ----------------

                Total assets                                                    $     2,845,537
                                                                                ================

        LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
        Accounts payable                                                        $        66,595
        Notes payable                                                                   736,249
        Other current liabilities                                                        89,184
        Accrued interest                                                                108,064
                                                                                ----------------

                Total current liabilities                                             1,000,093
                                                                                ----------------

                Total liabilities                                                     1,000,093

STOCKHOLDERS' EQUITY
        Series B Preferred stock, $0.001 par value;
        1,500,000 shares authorized; 1,500,000 shares issued and outstanding              1,500

        Series C Preferred stock, $ 0.001 par value;
        200,000 shares authorized; 200,000 shares issued and outstanding                    200

        Common Stock, $0.001 par value; 75,000,000 shares authorized;
        7,671,303 shares issued; 7,502,703 shares outstanding                             7,671

        Additional paid-in capital                                                   41,048,955
        Treasury stock (168,600 shares)                                                (558,998)
        Accumulated deficit                                                         (38,653,883)
                                                                                ----------------

                Total stockholders' equity                                            1,845,444
                                                                                ----------------

                Total liabilities and stockholders' equity                      $     2,845,537
                                                                                ================
</TABLE>
    The accompanying notes are an integral part of the financial statements.


                                      -3-
<PAGE>
                           GSV, Inc. and Subsidiaries
                      CONSOLIDATED STATEMENTS OF OPERATIONS

              For the Nine Months Ended September 30, 2007 and 2006
                                   (Unaudited)
<TABLE>
<S>                                                                             <C>                     <C>
                                                                                    2007                    2006
                                                                                -----------             -----------
Revenues from oil and gas investments                                           $  578,227              $  157,056
General and administrative expenses                                                452,153                 303,435
                                                                                -----------             -----------

        Income (loss) from operations                                              126,074                (146,379)

   Interest expense                                                                (42,703)                (42,703)
                                                                                -----------             -----------

        NET INCOME (LOSS)                                                       $   83,371              $ (189,082)
                                                                                ===========             ===========

Net income (loss) per common share:
Income (loss) per common share from operations - basic                          $     0.01              $    (0.03)
                                                                                ===========             ===========

Income (loss) per common share from operations - fully diluted                  $     0.01              $       --
                                                                                ===========             ===========

Weighted average common shares outstanding, basic                                7,502,703               7,472,703
                                                                                ===========             ===========
</TABLE>
    The accompanying notes are an integral part of the financial statements.

                                      -4-
<PAGE>
                           GSV, Inc. and Subsidiaries
                      CONSOLIDATED STATEMENTS OF OPERATIONS

             For the Three Months Ended September 30, 2007 and 2006
                                   (Unaudited)

<TABLE>
<S>                                                                             <C>                     <C>
                                                                                    2007                    2006
                                                                                -----------             -----------
Revenues from oil and gas investments                                           $  223,115              $   94,869
General and administrative expenses                                                210,597                 110,406
                                                                                -----------             -----------

Income (loss) from operations                                                       12,518                 (15,538)

Interest expense                                                                   (14,234)                (14,234)
                                                                                -----------             -----------

        NET LOSS                                                                $   (1,716)             $  (29,772)
                                                                                ===========             ===========
Net loss per common share:

Loss per common share from operations - basic                                   $     0.00              $    (0.00)
                                                                                ===========             ===========

Weighted average common shares outstanding, basic                                7,502,703                7,472,703
                                                                                ===========             ===========
</TABLE>
    The accompanying notes are an integral part of the financial statements.


                                      -5-
<PAGE>
                           GSV, Inc. and Subsidiaries
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
              For the Nine Months Ended September 30, 2007 and 2006
                                   (Unaudited)

<TABLE>
<S>                                                                             <C>                     <C>
                                                                                    2007                    2006
                                                                                -----------             -----------
OPERATING ACTIVITIES
Net Income (loss)                                                               $   83,371              $ (189,082)
Adjustments to reconcile net income (loss) to net cash provided by
      operating activities:
   Preferred Stock issued for settlement                                                --                  30,000
   Depreciation                                                                      2,250                   2,250
   Depletion                                                                       208,339                  60,232
   Changes in operating assets and liabilities
      Account receivable and other current assets                                  (46,510)                164,203
      Accounts payable and other current liabilities                                76,552                  50,809
                                                                                -----------             -----------

         Net cash provided by operating activities                                 324,001                 118,412

INVESTING ACTIVITIES:
Investment in oil and gas wells                                                    (84,578)               (170,389)
                                                                                -----------             -----------

         Net cash used in investing activities                                     (84,578)               (170,389)

FINANCING ACTIVITIES
Repayment of notes payable                                                         (20,000)                     --
                                                                                -----------             -----------

         Net cash used in financing activities                                     (20,000)                     --
                                                                                -----------             -----------

         Net change in cash                                                        219,423                 (51,977)

CASH AND CASH EQUIVALENTS, BEGINNING                                                38,260                 171,738
                                                                                -----------             -----------

CASH AND CASH EQUIVALENTS, ENDING                                               $  257,682              $  119,761
                                                                                ===========             ===========
</TABLE>
    The accompanying notes are an integral part of the financial statements.


                                      -6-
<PAGE>
GSV, INC. AND SUBSIDIARIES

              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1.   Description of the Business

GSV, Inc. (the "Company") manages investments in oil and gas assets. The Company
has been pursuing opportunities in the alternative energies arena,  specifically
in the biodiesel sector. The Company also has limited Internet  investments with
a carrying value of $50,000 as of September 30, 2007.

Effective June 1, 2002, the Company  acquired  working  interests in two oil and
gas wells in the state of Louisiana pursuant to an asset purchase agreement with
Polystick U.S. Corporation ("Polystick"), a privately held New York corporation.
Additionally,  the  Company  acquired  an  option,  including  a right  of first
refusal,  to  purchase  other  oil and gas  properties  held by  Polystick.  The
consideration  consisted of $550,000 in cash and 850,000 shares of the Company's
common stock valued at $0.25 per share.

On July 21, 2003, the Company  entered into an Agreement and Plan of Merger (the
"Merger  Agreement")  with Polystick,  Cybershop,  L.L.C.,  a New Jersey limited
liability company and wholly-owned subsidiary of the Company ("Merger Sub"), and
Polystick Oil & Gas, Inc., a Delaware corporation and a wholly-owned  subsidiary
of Polystick ("POGI"),  pursuant to which, on the same day, POGI was merged into
Merger Sub (the  "Merger") and in  consideration  thereof the Company  issued to
Polystick  4,500,000  shares of common  stock and  1,500,000  shares of Series B
convertible preferred stock.

As a result of the Merger,  the Company,  through Merger Sub, acquired interests
in certain oil and gas properties in Texas and an undivided  one-third  interest
in Century Royalty LLC ("Century  Royalty"),  a Texas limited  liability company
that manages the oil and gas properties in Texas, plus an additional interest in
the Louisiana properties in which the Company already held an interest.  Century
Royalty also holds the rights to certain geologic studies.

On May 20, 2004, the Company elected to participate in  re-completion  of one of
the wells in Louisiana.  The work was  successfully  completed on June 10, 2004.
The total cost to the Company was $74,063.  The Company has realized an increase
in revenues as a result of the re-completion of this well.

On November 1, 2004, the working  interest  partnership of which Century Royalty
is a member started work on a re-entry  prospect in Texas.  After reaching 6,000
feet and logging,  the  partnership  determined  that it was not  economical  to
complete the well and on November 8, 2004, decided to plug and abandon the well.

On  February  9, 2006,  production  from the wells in  Louisiana  was  suspended
temporarily  because the water level had risen in one of the wells.  On or about
May 8, 2006, work to recomplete the wells in a different sand zone was completed
and production was restarted.  The Company's share of the costs of recompletion,
which was about  $70,300,  was  deducted  from the royalty  payments the Company
received from the operator.  Also,  because of the delay between sales of gas by
the operator and the  Company's  receipt of royalty  payments from the operator,
the temporary  suspension of production  reduced the Company's  royalty revenues
for the second and the third quarters of 2006.

On November 1, 2006, Southwestern Energy Production Company, the operator of the
wells in Louisiana,  designated  White Oak Operating  Company LLC to operate the
wells  on their  behalf.  The  Company  did not  experience  any  change  in the
production as a result.

On June 28, 2006, the working interest partnership of which Century Royalty is a
member commenced  drilling on one of the prospects and planned to drill a second
prospect once the first was  completed.  The costs of drilling  these  prospects
were  expected  to exceed  Century  Royalty's  carried  interest  in the working
interest  partnership.  On June 20,  2006,  the Company  agreed to  contribute a
maximum of $100,000 towards the drilling of these two prospects and decrease the
Company's  working  interest in these two  prospects  to 11.918%.


                                      -7-
<PAGE>

On October 5, 2006, the Company announced the successful  completion of drilling
in the first prospect,  located in Liberty County, Texas. The pipeline tie-in of
the "Friendswood No. 2 RE" gas well was completed  successfully in June 2007. On
or about September 14, 2007, efforts to increase the pressure of the flow of gas
from  the  well  were  successful  and the  sale  of gas  through  the  pipeline
commenced. The Company is expecting to receive an independent engineering report
to establish the estimated  size and projected  cash flow to be generated by the
well. For the  engineering  report to be generated the flow of gas from the well
must be  sufficiently  steady and  established.  Based on initial  reports,  the
company  expects  that up to four  additional  wells may be  required  to obtain
maximum flow from the anticipated reserves. Century Royalty and its partners are
preparing to commence  drilling a second well near "Friendswood No. 2 RE" in the
near future.

In October  2006,  the Company  granted one of the members of the Texas  working
interest  partnership the right to drill a well based on the geological  seismic
data. In return the Company  received a 2% carried interest in the proposed well
until  completion and a 2% working interest  thereafter.  The "Shirley Gay" well
was  completed  in March  2007  and is  waiting  for  pipeline  tie-in.  Through
September 30, 2007,  the  Company's  expenses  related to the  completion of the
"Shirley Gay" well total  $22,863.  Production  is expected to commence  shortly
after  pipeline  tie-in  connections  are  completed.  The Company is  currently
awaiting the  completion of an independent  engineering  report to establish the
estimated size and projected cash flow to be generated by the well.

The  Company's  management  has little  practical  experience in the oil and gas
industry.  The Company's management relies to a great extent on the employees of
Century  Royalty LLC to monitor and  implement  strategy with respect to its oil
and gas assets.  The inexperience of the Company's  management may detrimentally
affect the  Company's  operations  and results  because,  for example,  it could
prevent  the Company  from taking  advantage  of  opportunities  that arise on a
timely  basis or cause  the  Company  to take  actions  that a more  experienced
management  team might  determine are not in the Company's best  interests.  The
Company is  currently  seeking to engage  additional  professional  managers  to
assist in extracting value from the properties.

2.   Basis of Presentation

The accompanying  financial  statements have been prepared pursuant to the rules
and regulations of the Securities and Exchange  Commission for interim financial
reporting.  Accordingly,  certain  information  and notes required by accounting
principles  generally  accepted  in the United  States of America  for  complete
financial statements are not included. These financial statements should be read
in conjunction with the financial statements and accompanying notes for the year
ended December 31, 2006,  included in the Company's Annual Report on Form 10-KSB
as filed  with  the  Securities  and  Exchange  Commission.  In the  opinion  of
management,  the  accompanying  financial  statements  include  all  adjustments
(consisting  primarily of normal recurring  accruals) that the Company considers
necessary  for a  fair  presentation  of  its  financial  position,  results  of
operations  and cash  flows.  Results for  interim  periods are not  necessarily
indicative of the results that may be achieved for the full year.

The  Company  has  incurred  substantial  operating  losses,   resulting  in  an
accumulated  deficit of  $38,653,883  as of  September  30,  2007.  Its  current
investments are limited to certain oil and gas producing properties in Louisiana
and an interest in Century Royalty.  Century Royalty's primary asset consists of
geologic studies to exploit oil and gas properties.  One prospect,  "Friendswood
No. 2 RE," has been  successfully  completed  and in June 2007 was  successfully
tied into a pipeline. The operators are currently examining ways to increase the
pressure  of the flow of gas from  the  well in  order to sell gas  through  the
pipeline. The Company expects that once a steady flow has been established,  the
Company  will  receive  an  independent  engineering  report  to  establish  the
estimated  size and  projected  cash flow to be generated by the well.  Based on
initial  reports,  the Company expects that up to four  additional  wells may be
required to obtain maximum flow from the anticipated  reserves.  Century Royalty
and its  partners  are  preparing  to  commence  drilling  a  second  well  near
"Friendswood No. 2 RE" in the near future.  Timing of work on the second well is
dependent on  stabilization  of  "Friendswood  No. 2 RE."

In recent  periods cash flows from the  Company's oil and gas  investments  have
been  sufficient  to enable the  Company to fund its  operating,  investing  and
financing  needs.  However,  the Company  will be required to obtain  additional
financing to fund drilling and development to recover its investment in geologic
studies and to pay certain indebtedness as it becomes due. There is no assurance
that the Company will obtain additional adequate financing


                                      -8-
<PAGE>
nor is there any  assurance  that  proved  reserves  will be  discovered.  These
conditions raise  substantial doubt about the Company's ability to continue as a
going  concern.  The  accompanying  financial  statements  do  not  include  any
adjustments  that may result from the outcome of this  uncertainty.  The Company
plans to re-negotiate the terms and conditions of an outstanding note payable to
116 Newark Avenue Corporation that will mature on November 29, 2007. The Company
cannot predict the outcome of these negotiations.

3.   Recent Accounting Pronouncements

The  Company  adopted  FIN 48,  Accounting  for  Uncertainty  in  Income  Taxes,
effective  January 1, 2007. FIN 48 clarifies and sets forth consistent rules for
accounting  for  uncertain  income tax  positions  in  accordance  with FAS 109,
Accounting  for Income  Taxes.  There was no  cumulative  effect of applying the
provisions of this interpretation.

4. Investments

The Company has made  investments in four  internet-related  companies that have
been  accounted  for  using  the cost  method.  Such  investments  are  reviewed
periodically  for impairment.  Impaired  investments have been written down to a
nominal amount.

The Company acquired  working  interests in two oil and gas wells effective June
1,  2002,  for  $550,000  in cash and  common  stock of the  Company  valued  at
$212,500,  for a total  investment  of  $762,500.  The  asset is  depleted  on a
periodic  basis using the units of production  method.  In the fourth quarter of
2002,  the properties  exhibited a marked  decrease in the volume of oil and gas
produced.  On May 20, 2004, the Company elected to participate in  re-completion
of one of the wells in Louisiana.  The work was  successfully  completed on June
10,  2004.  The total cost to the Company was  $74,063.  The Company has seen an
increase in revenues as a result of the  re-completion of this well.  Production
from the wells in Louisiana was suspended  temporarily  on or about  February 9,
2006,  because the water level had risen in one of the wells. On or about May 8,
2006,  work to recomplete  the wells in a different  sand zone was completed and
production was restarted. The wells returned to full production at the beginning
of July 2006. The Company's share of the costs of recompletion,  which was about
$70,300,  was deducted from the royalty  payments the Company  received from the
operator.  Also,  because of the delay  between sales of gas by the operator and
the  Company's  receipt of royalty  payments  from the  operator,  the Company's
royalty  revenues  were reduced in the quarter  ended  September  30,  2006.  On
November 1, 2006,  Southwestern Energy Production  Company,  the operator of the
wells,  designated  White Oak  Operating  Company LLC to be the  operator of the
wells. An independent  reserve study  performed  January 2007 estimated that the
remaining  reserve in the wells  including  PDP and PDNP,  net of  expenses  and
discounted at 10%, was $594,114.

On July 21, 2003,  the Company  entered into the Merger  Agreement,  pursuant to
which,  on the same day,  POGI was merged into  Merger Sub and in  consideration
thereof the Company  issued to  Polystick  4,500,000  shares of common stock and
1,500,000 shares of Series B convertible preferred stock. Each share of Series B
convertible  preferred  stock is convertible at any time at the holder's  option
into a number of shares of common stock equal to $1.00 divided by the conversion
price then in effect.  The conversion price is initially $1.00. No dividends are
payable on the Series B convertible  preferred  stock,  except that in the event
dividends are declared  with respect to common  stock,  each holder of shares of
Series B  convertible  preferred  stock  shall be  entitled to receive an amount
equal to the  amount of  dividends  that  would  have been paid on the shares of
common stock  issuable  upon  conversion  of such shares of Series B convertible
preferred  stock had such shares been  converted  into common stock  immediately
before such dividend was declared.  Upon any Liquidation  Event,  the holders of
the outstanding Series B convertible preferred stock will be entitled to be paid
an amount  equal to $1.00 per share plus the amount of any  declared  and unpaid
dividends thereon.  If upon any Liquidation Event, the net assets of the Company
are  insufficient to permit payment in full of such  preferential  amount to the
holders of Series B convertible  preferred stock,  then the entire net assets of
the  Company  will be  distributed  ratably  among the  holders  of the Series B
convertible preferred stock.

In connection with and as a condition to the Merger, the Company redeemed all of
its existing outstanding Series A convertible  preferred stock, par value $0.001
per share, for $400,001 plus dividends payable. The Company paid $263,801 of the
redemption price in cash and $200,000 by a full recourse promissory note bearing
interest at a rate


                                      -9-
<PAGE>
of 8% per annum  and due  September  4,  2004,  secured  by a lien on all of the
Company's  assets.  The Company has paid $20,000 of the principal  amount of the
note, and the maturity date of the note has been extended to March 1, 2008.

As a result of the  merger,  the  Company  acquired  through  Cybershop  L.L.C.,
interests in certain oil and gas properties in Texas and an undivided  one-third
interest in Century Royalty,  which manages the oil and gas properties in Texas,
plus an  additional  interest in the  Louisiana  properties in which the Company
already  held an  interest.  Century  Royalty  also  holds the rights to certain
geologic studies that are included in other long term assets on the accompanying
balance  sheet.  These  geologic  studies are currently  being  carried  without
amortization,  since the data relates to  properties  that are  currently  under
evaluation,  but for which there are yet no  established  reserves.  On June 28,
2006,  the working  interest  partnership  of which Century  Royalty is a member
commenced drilling on one of the prospects and planned to commence drilling on a
second  prospect  once the first was  completed.  The  costs of  drilling  these
prospects  were expected to exceed  Century  Royalty's  carried  interest in the
working interest partnership. On June 20, 2006, the Company agreed to contribute
a maximum of $100,000  towards the  drilling of the first  prospect and decrease
its working interest in these two prospects to 11.918%.

On October 5, 2006, the Company announced the successful  completion of drilling
in the first prospect,  located in Liberty County, Texas. The pipeline tie-in of
the "Friendswood No. 2 RE" gas well was completed  successfully in June 2007. On
or about September 14, 2007, efforts to increase the pressure of the flow of gas
from  the  well  were  successful  and the  sale  of gas  through  the  pipeline
commenced. The Company is expecting to receive an independent engineering report
to establish the estimated  size and projected  cash flow to be generated by the
well. For the  engineering  report to be generated the flow of gas from the well
must be  sufficiently  steady and  established.  Based on initial  reports,  the
Company  expects  that up to four  additional  wells may be  required  to obtain
maximum flow from the anticipated reserves. Century Royalty and its partners are
preparing to commence  drilling a second well near "Friendswood No. 2 RE" in the
near future.

In October  2006,  the  Company  granted  one of the  members in the Texas joint
interest  partnership the right to drill a well based on the geological  seismic
data that Century  Royalty  holds.  In return the Company  received a 2% carried
interest  in the  proposed  well  until  completion  and a 2%  working  interest
thereafter.  The "Shirley Gay" well was completed in the beginning of March 2007
and is waiting for pipeline  tie-in.  Through  September 30, 2007, the Company's
expenses in the completion of the well totaled  $22,863.  Production is expected
to commence shortly after pipeline tie-in connections are completed. The Company
is currently  awaiting the  completion of an independent  engineering  report to
establish  the  estimated  size and  projected  cash flow to be generated by the
well.

The  working  interest  partnership  began a drilling  program  for the  subject
properties in 2006. If the drilling program is not successful,  the Company will
likely  record an  impairment  loss of some or all of the carrying  value of its
geologic studies.

5.   Stockholders' Equity

There were no changes to stockholders' equity during the quarter ended September
30, 2007.

6.   Net Loss Per Common Share

Basic and diluted net loss per common  share is  calculated  by dividing the net
loss by the  weighted-average  common  shares  outstanding.  Potential  dilution
related to the warrant was excluded because it was anti-dilutive.

7.   Lease Termination and Issuance of Series C Preferred Stock

On January 3, 2006,  the Company  entered  into a  Termination,  Settlement  and
Release Agreement with 116 Newark Avenue  Corporation,  dated as of November 30,
2005, pursuant to which the Company agreed to terminate the lease for its former
offices  in Jersey  City,  New  Jersey.  Under the terms of the  agreement,  the
Company paid 116 Newark  $70,000 in cash,  and issued a  promissory  note in the
principal  amount of $356,249 and 200,000 shares of Series C Preferred  Stock to
116  Newark  and  reimbursed  116 Newark  for  $10,000  of its legal  fees.  The
promissory  note


                                      -10-
<PAGE>
matures  on  November  29,  2007 and bears  interest  at a rate of 7% per annum.
Payment  and  performance  under  the  promissory  note has been  guaranteed  by
Polystick  and secured by a pledge  agreement  between  Polystick and 116 Newark
pursuant to which Polystick has pledged 356,249 shares of the Company's Series B
preferred  stock that it holds to 116 Newark.  The  estimated  fair value of the
200,000 shares of Series C Preferred  Stock was $30,000.  The Company expects to
revise the terms of the note payable to 116 Newark.


                                      -11-
<PAGE>
Item 2. Management's  Discussion and Analysis of Financial Condition and Results
of Operations

Overview

Since July 2003,  our  business  operations  have been  focused on managing  our
existing  investments in oil and gas assets and entering into new investments in
this industry. Currently, we have been pursuing opportunities in the alternative
energies  arena,  specifically in the biodiesel  sector.  From June 2001 to July
2003, our business  operations  included  managing our existing  investments and
entering into new business operations through acquisitions or mergers.

Prior to June 2001, we had sought to identify and develop attractive early stage
Internet  companies in exchange for equity positions in such companies.  We have
since made  substantial  write  downs of these  investments  to more  accurately
reflect  current  market  valuations,  and these  investments do not represent a
significant  asset. As of September 30, 2007,  these  investments were valued at
approximately  1.8% of the  total  value of our  assets.  We are  continuing  to
investigate  whether  or not  there are any  business  prospects  through  which
material value can be realized from the remaining Internet investments.

Effective June 1, 2002, we acquired  working  interests in two oil and gas wells
in the state of Louisiana pursuant to an asset purchase agreement with Polystick
U.S.  Corporation  ("Polystick"),  a privately  held New York  corporation.  The
consideration  consisted  of $550,000  in cash and 850,000  shares of our common
stock  valued at $0.25 per share.  Additionally,  we acquired a one-year  option
valued at $80,210, including a right of first refusal, to purchase other oil and
gas properties held by Polystick.

On July  21,  2003,  we  entered  into an  Agreement  and  Plan of  Merger  with
Polystick,  Cybershop,  a New Jersey limited  liability company and wholly-owned
subsidiary of GSV, Inc.  ("Cybershop") and Polystick Oil & Gas, Inc., a Delaware
corporation  and  wholly-owned  subsidiary  of Polystick  ("POGI"),  pursuant to
which, on the same day, POGI was merged into Cybershop. In consideration thereof
we issued to Polystick 4,500,000 shares of our common stock and 1,500,000 shares
of our Series B convertible preferred stock.

As a result of the merger we acquired,  through Cybershop,  interests in certain
oil and gas properties in Texas and an interest in Century Royalty LLC ("Century
Royalty"),  a Texas  limited  liability  company  that  manages  the oil and gas
properties in Texas, plus an additional interest in the Louisiana  properties in
which we already  held an  interest.  Century  Royalty  also holds the rights to
certain  geologic  studies.  Century  Royalty has a carried  interest  with this
partnership  of 20% for the first well drilled in the first 5 prospects or $1.25
million  of  investment,  whichever  comes  first.  Century  Royalty  has  a 20%
participation interest in all subsequent wells drilled in the first 5 prospects.
As these agreements have expired, they relate only to prospects for which leases
have  already  been taken and have not  expired.  We are  entitled  to the first
$4,168,659 of net income in Century Royalty and to 75% of net income thereafter.
We have already received $1,337,081 of this amount as of September 30, 2007. Due
to the existence of these revenue  overrides,  the operations of Century Royalty
are included in the accompanying statements of operations.

On June 28, 2006, the working interest partnership of which Century Royalty is a
member  commenced  drilling  on one of the  prospects  and planned to drill on a
second  prospect  once the first was  completed.  The  costs of  drilling  these
prospects  were expected to exceed  Century  Royalty's  carried  interest in the
working  interest  partnership.  On June 20,  2006,  we agreed to  contribute  a
maximum of $100,000 towards the drilling of these two prospects and decrease our
working interest in these two prospects to 11.918%.

On October 5, 2006, the Company announced the successful  completion of drilling
in the first prospect,  located in Liberty County, Texas. The pipeline tie-in of
the "Friendswood No. 2 RE" gas well was completed  successfully in June 2007. On
or about September 14, 2007, efforts to increase the pressure of the flow of gas
from  the  well  were  successful  and the  sale  of gas  through  the  pipeline
commenced. The Company is expecting to receive an independent engineering report
to establish the estimated  size and projected  cash flow to be generated by the
well. For the  engineering  report to be generated the flow of gas from the well
must be  sufficiently  steady and  established.  Based on initial  reports,  the
company  expects  that up to four  additional  wells may be  required  to obtain
maximum


                                      -12-
<PAGE>
flow  from the  anticipated  reserves.  Century  Royalty  and its  partners  are
preparing to commence  drilling a second well near "Friendswood No. 2 RE" in the
near future.

In October  2006,  we granted one of the members of the Texas  working  interest
partnership the right to drill a well based on the geological  seismic data that
Century  Royalty  holds.  In return,  we  received a 2% carried  interest in the
proposed  well until  completion,  and a 2%  working  interest  thereafter.  The
"Shirley  Gay" well was  completed in the beginning of March 2007 and is waiting
for  pipeline  tie-in.  Through  September  30, 2007,  our  expenses  related to
completion  of the "Shirley Gay" well total  $22,863.  Production is expected to
commence  shortly  after  pipeline  tie-in  connections  are  completed.  We are
currently  awaiting  the  completion  of an  independent  engineering  report to
establish  the  estimated  size and  projected  cash flow to be generated by the
well.

Our management has little practical experience in the oil and gas industry.  Our
management  relies to a great extent on the employees of Century  Royalty LLC to
monitor and  implement  strategy  with  respect to our oil and gas  assets.  Our
management's  inexperience may  detrimentally  affect our operations and results
because, for example, it could prevent us from taking advantage of opportunities
that arise on a timely basis or cause us to take actions that a more experienced
management team might  determine are not in our best  interests.  The Company is
currently  seeking  to  engage  additional  professional  managers  to assist in
extracting value from the properties.

The  sole  shareholder  of  Polystick  is  RT  Sagi  Holding  Ltd.,  an  Israeli
corporation.  The sole stockholder of RT Sagi and indirect owner of Polystick is
Mr. Sagi Matza.  Effective as of the  consummation of the Merger,  Mr. Matza was
appointed to our board of directors as the designee of Polystick.  Polystick has
the right to elect two additional  persons to our board of directors but has not
yet done so.

Each share of Series B convertible  preferred  stock is convertible at any time,
at the holder's  option,  into a number of shares of common stock equal to $1.00
divided by the conversion price then in effect.  The terms upon which the Series
B convertible  preferred  stock may be converted into common stock are set forth
in  the  Certificate  of  Designations,  Preferences  and  Rights  of  Series  B
Convertible Preferred Stock filed by us with the Secretary of State of the State
of Delaware on July 18, 2003 ("Series B  Certificate  of  Designations").  As of
June 30, 2007, the Series B convertible  preferred  stock owned by Polystick was
convertible into 1,500,000 shares of common stock.

No dividends are payable on the Series B  convertible  preferred  stock,  except
that in the event  dividends  are declared with respect to the common stock each
holder of shares of Series B  convertible  preferred  stock will be  entitled to
receive an amount equal to the amount of dividends  that would have been paid on
the shares of common stock  issuable upon  conversion of such shares of Series B
convertible  preferred  stock had such shares of Series B convertible  preferred
stock been  converted  into common  stock  immediately  before the  dividend was
declared.

Upon  any  Liquidation  Event,  as  defined  in  the  Series  B  Certificate  of
Designations,  the holders of the  outstanding  Series B  convertible  preferred
stock will be entitled, before any distribution or payment is made to any holder
of  common  stock  or any  other  Junior  Stock  (as  defined  in the  Series  B
Certificate of Designations), to be paid an amount equal to $1.00 per share plus
the amount of any declared and unpaid dividends thereon. If upon any Liquidation
Event our net assets distributable among the holders of the Series B convertible
preferred  stock  are  insufficient  to  permit  the  payment  in  full  of such
preferential amount to the holders of the Series B convertible  preferred stock,
then our net assets will be distributed  ratably among the holders of the Series
B convertible  preferred stock in proportion to the amounts they otherwise would
have been entitled to receive.

The Series B Certificate of  Designations  provide that so long as any shares of
Series B convertible  preferred stock are outstanding,  we will not, without the
written  approval of the holders of at least a majority of the  then-outstanding
Series B convertible  preferred stock,  increase the maximum number of directors
constituting our board of directors to more than seven. The Series B Certificate
of Designations also provide that, so long as any shares of Series B convertible
preferred  stock  are  outstanding,  the  holders  of the  Series B  convertible
preferred stock, voting separately as a class, will be entitled to designate and
elect three of the  members of our board of  directors.  Also,  a vacancy in any
directorship elected by the holders of the Series B convertible  preferred stock
may be filled  only by vote or  written  consent  of the  holders  of at least a
majority of the then outstanding shares of Series B convertible preferred stock.
The Series B  convertible  preferred  stock has no other voting rights except as
provided by applicable law.


                                      -13-
<PAGE>
In  connection  with and as a condition  to  consummation  of the merger in July
2003, we redeemed all of our outstanding  Series A convertible  preferred stock,
par value  $0.001  per share,  for  $400,001  plus  dividends  payable.  We paid
$263,801  of the  redemption  price in cash and  $200,000 by a  promissory  note
secured by a lien on all of our assets.

In June 2001, we sublet to  Nekema.com  our former  offices in Jersey City,  New
Jersey  through  December 31, 2008.  The rent on the sublease was  guaranteed by
Lumbermens Mutual Casualty Company,  d/b/a Kemper Insurance  Company,  until May
2003. In September 2002 Nekema ceased  business  operations and defaulted on the
sublease.  Kemper  Insurance  Company  made all  payments  of rent due under the
sublease  through May 2003. We ceased paying rent under the lease for this space
in July 2003. On May 5, 2004, we filed a proof of claim against  Nekema's estate
in the United States Bankruptcy Court for the Southern District of New York. The
proof of claim was for the total sum of  $421,455  as  permitted  by law and the
court  approved a settlement of $363,049.  On November 15, 2005,  the trustee in
the bankruptcy filed a notice of filing of final accounts. On February 15, 2006,
we received $22,301 in settlement of our claim.

On January 3,  2006,  we entered  into a  Termination,  Settlement  and  Release
Agreement  with  116  Newark  Avenue  Corporation  ("116  Newark"),  dated as of
November  30, 2005,  pursuant to which we agreed to terminate  the lease for our
former offices in Jersey City, New Jersey. Under the terms of the agreement,  we
paid 116  Newark  $70,000 in cash,  issued a  promissory  note in the  principal
amount of $356,249 and 200,000 shares of Series C preferred  stock to 116 Newark
and reimbursed  116 Newark for $10,000 of its legal fees.  The  promissory  note
matures  on  November  29,  2007 and bears  interest  at a rate of 7% per annum.
Payment  and  performance  under  the  promissory  note has been  guaranteed  by
Polystick U.S.  Corporation and secured by a pledge agreement  between Polystick
and 116 Newark  pursuant to which  Polystick has pledged  356,249  shares of our
Series B  Preferred  Stock  that it holds to 116  Newark.  We are  currently  in
discussions with 116 Newark to revise the terms of the promissory note.

Each share of Series C preferred  stock is convertible at any time into a number
of shares of common stock equal to $1.00 divided by the conversion  rate then in
effect.  The terms upon which the Series C  convertible  preferred  stock may be
converted into common stock are set forth in the  Certificate  of  Designations,
Preferences and Rights of Series C Convertible  Preferred Stock filed by us with
the  Secretary  of State of the State of Delaware on January 3, 2006  ("Series C
Certificate  of  Designations").   As  of  September  30,  2007,  the  Series  C
convertible  preferred  stock owned by 116 Newark was  convertible  into 200,000
shares of common stock.

No dividends are payable on the Series C convertible preferred stock.

Upon  any  Liquidation  Event,  as  defined  in  the  Series  C  Certificate  of
Designations,  the holders of the  outstanding  Series C  convertible  preferred
stock will be entitled, before any distribution or payment is made to any holder
of  common  stock  or any  other  Junior  Stock  (as  defined  in the  Series  C
Certificate of Designations),  to be paid an amount equal to $1.00 per share. If
upon any Liquidation Event our net assets distributable among the holders of the
Series C convertible  preferred stock are  insufficient to permit the payment in
full of such  preferential  amount to the  holders of the  Series C  convertible
preferred  stock,  then our net assets  will be  distributed  ratably  among the
holders of the Series C convertible preferred stock in proportion to the amounts
they otherwise would have been entitled to receive.

The Series C Certificate of Designations  provides that so long as any shares of
Series C convertible  preferred stock are outstanding,  we will not, without the
written  approval of the holders of at least a majority of the  then-outstanding
Series C convertible  preferred stock, (i) issue any additional shares of Series
C convertible  preferred  stock,  or (ii) issue any Senior Stock or Parity Stock
(as such terms are defined in the Series C Certificate of Designations),  unless
such Senior  Stock or Parity  Stock is to be issued in exchange  for (A) cash or
services  rendered or to be rendered by parties who are not our  Affiliates  (as
defined in the Series C Certificate  of  Designations),  in either case having a
value greater than the aggregate liquidation  preference of such Senior Stock or
Parity Stock, or (B) equity  securities or assets of one or more businesses that
are not our  Affiliates,  in  either  case  having  a value  that is equal to or
greater than the aggregate liquidation preference of such Senior Stock or Parity
Stock.  The Series C  convertible  preferred  stock has no other  voting  rights
except as provided by applicable law.


                                      -14-
<PAGE>
Results of Operations

Three months ended  September 30, 2007 compared to three months ended  September
30, 2006

Revenues: Revenues for the quarter increased by $128,246, or 135.2%, to $223,115
in  2007  from  $94,869  in  2006.  This  increase  was due to the  increase  in
production in the Louisiana well.

General  and  administrative:   General  and  administrative   expenses  consist
primarily  of  payroll  and  payroll   related   expenses  for   administrative,
information  technology,  accounting,  and  management  personnel,  legal  fees,
depletion and general corporate  expenses.  General and administrative  expenses
increased by $100,191,  or 90.1%, to $210,597 in the quarter ended September 30,
2007 from  $110,406 in the quarter  ended  September  30,  2006,  primarily as a
result of the increase in depletion.

Interest expense:  Interest expense for the quarter ended September 30, 2007 was
unchanged from the  corresponding  period of the preceding year, and amounted to
$14,234.

Net loss: Income from operations  increased by $28,055 from a loss of $29,772 in
the third quarter of 2006, or ($0.00) per basic and diluted  common share,  to a
loss of $1,716  in the third  quarter  of 2007,  or $0.00 per basic and  diluted
common share.

Nine months ended September 30, 2007 compared to nine months ended September 30,
2006

Revenues:  Revenues for the period increased by $421,171, or 268.2%, to $578,227
in  2007  from  $157,056  in  2006.  This  increase  was due to an  increase  in
production from the Louisiana well.

General  and  administrative:   General  and  administrative   expenses  consist
primarily  of  payroll  and  payroll   related   expenses  for   administrative,
information  technology,  accounting,  and  management  personnel,  legal  fees,
depletion and general corporate  expenses.  General and administrative  expenses
increased by $148,718,  or 49.0%, to $452,153 in the nine months ended September
30, 2007 from $303,435 in the nine months ended September 30, 2006, primarily as
a result of the increase in depletion.

Interest expense:  Interest expense for the nine months ended September 30, 2007
was unchanged from the  corresponding  period of the prior year, and amounted to
$42,703.

Net Income (loss):  Income from operations  increased by $272,453 from a loss of
$189,082  in the first nine  months of 2006,  or ($0.03)  per basic and  diluted
common  share,  to income of $83,371 in the first nine months of 2007,  or $0.01
per basic and diluted common share.

Liquidity and Capital Resources

Net cash  provided by  operations  increased by $205,589,  from $118,411 for the
nine months  ended  September  30,  2006,  to $324,001 for the nine months ended
September  30,  2007.  The  increase  in net cash  provided  by  operations  was
primarily due to an increase in revenue from the Louisiana wells.

Net cash used in investing activities during the nine months ended September 30,
2007, was $84,578,  as compared to $170,389 in the  corresponding  period of the
prior year.  In the nine months ended  September  30, 2006,  the majority of the
investing  activity  was in the wells in  Louisiana,  and in the same  period in
2007, the majority of the investing  activity was in the completion and pipeline
connection of the well in Texas.

Net cash used in financing activities during the nine months ended September 30,
2007  was  $20,000  compared  to $0 for the same  period  in the  year.  This is
attributable  to a  payment  made on a note  payable  on  September  6,  2007 of
$20,000.


                                      -15-
<PAGE>
In 2003, we issued to Polystick  4,500,000  shares of common stock and 1,500,000
shares of Series B convertible  preferred  stock valued at $2,625,000 to acquire
assets in a non-cash transaction.

On February 11, 2004, we borrowed $25,000 from Brooks Station Holdings,  Inc., a
private investment corporation ("Brooks Station").  In partial consideration for
the loan, we issued 100,000 shares of common stock to Brooks  Station.  On March
18,  2004,  we  borrowed  another  $25,000  from  Brooks  Station and in partial
consideration  for the loan issued  another  100,000  shares of common  stock to
Brooks Station. Each loan was evidenced by a promissory note bearing interest at
8% per annum  secured by a lien on all of our assets.  On September 20, 2004, we
negotiated  an  extension  of the  maturity  of the notes  from  their  original
maturity  date of  September  1, 2004 to March 1, 2005.  On March 10,  2005,  we
repaid the note issued on February 11, 2004 and  negotiated  an extension of the
maturity of the note dated March 18, 2004 to September 1, 2005. We also extended
to the same date the  maturity  of an 8%  secured  promissory  note we issued to
Brooks Station on July 21, 2003 in the principal  amount of $200,000.  On August
31, 2005,  we repaid the March 18, 2004 note and  negotiated an extension of the
maturity  date of the July 21, 2003 note to March 1, 2006. On March 20, 2006, we
repaid $20,000 of the accrued and unpaid  interest on the July 21, 2003 note and
negotiated  an extension of the maturity  date of the note to September 1, 2006.
On September  20, 2006,  we  negotiated an extension of the maturity date of the
note to March 1, 2007.  On March 1, 2007,  we  negotiated  an  extension  of the
maturity  date of the note to September 1, 2007. On September 6, 2007, we repaid
$20,000  of the  accrued  and  unpaid  interest  on the note and  $20,000 of the
principal  balance of the note, and negotiated an extension of the maturity date
of the note to March 1, 2008.

On May 11, 2004, we sold a convertible  promissory note in the principal  amount
of $200,000 and a warrant to purchase up to 1,142,857 shares of our common stock
at a  price  of $.70  per  share  to D.  Emerald  Investments  Ltd.,  a  private
investment  corporation  ("Emerald").  The note bears interest at the rate of 8%
per annum and is convertible  into shares of our common stock at a price of $.70
per share.  The aggregate  purchase price of these  securities was $200,000.  In
connection with the sale of these securities we agreed that if Emerald exercises
the  warrant  in full  and  converts  the  convertible  note in full,  then,  at
Emerald's  request,  we will appoint a person designated by Emerald to our Board
of Directors and, in addition, for so long as Emerald holds at least eighty-five
percent (85%) of the common stock issued upon such exercise and  conversion,  we
will  nominate such person (or a different  person  designated by Emerald) to be
reelected  to the Board of  Directors  in  connection  with any  meeting  of our
stockholders  at which  directors are to be elected.  We also agreed that within
120 days of the  exercise of the warrant  and/or  conversion  of the note for an
aggregate of at least 428,572  shares of common stock (subject to adjustment for
dilutive  events as set forth in the warrant and the note) we will  register all
of the shares  issuable upon  conversion of the note and exercise of the warrant
under the Securities  Act of 1933.  Additionally,  we granted  Emerald rights to
have the shares  included in other  registration  statements we may file for the
public  offering of our securities  for cash  proceeds.  In 2004, we recorded an
expense of $129,000 for the value of the warrants and the conversion  feature of
the note calculated using the Black-Scholes method.

Our  principal  stockholder,  Polystick,  entered  into a guaranty  and a pledge
agreement  with Emerald  under which  Polystick  pledged  200,000  shares of our
Series B  convertible  preferred  stock as  collateral  security  for the  note.
Polystick  also  entered  into a  voting  agreement  with  Emerald  under  which
Polystick  agreed that if we fail to fully and timely fulfill our obligations to
appoint or nominate a  representative  for  election to our board of  directors,
then,  at  Emerald's  request,  Polystick  will  vote  its  shares  of  Series B
convertible  preferred stock in favor of a nominee  designated by Emerald in any
election  of  directors  occurring  during  such time and for so long as Emerald
holds at least 85% of the common stock  issued upon  exercise of the warrant and
conversion of the note.  Polystick  also agreed that,  provided  that  Polystick
continues to have the right to designate and elect three  directors to our board
of directors under the terms of the Series B convertible  preferred  stock,  any
such nominee will count as one of such directors. Additionally, Polystick agreed
to use all its power and  authority  as provided by our by-laws and the Series B
convertible  preferred  stock to  convene,  at  Emerald's  request,  meetings of
stockholders  as may be  necessary  to elect  Emerald's  nominee to the board of
directors.

On July 3, 2005,  we entered into an agreement  with Emerald dated as of May 10,
2005,  pursuant to which we agreed to extend and renew the note and the warrant.
Under the terms of the  agreement,  the  maturity  date of the note was extended
from May 10, 2006 to May 10, 2007,  and Emerald's  right to convert the note and
all accrued  interest on


                                      -16-
<PAGE>
the note into common stock at a price of $.70 per share was  extended  until any
time prior to May 10, 2006.  The term of the warrant was also  extended from May
10, 2005 to May 10, 2006.

On July 11, 2006, we entered into an agreement  with Emerald dated as of May 10,
2006,  pursuant to which we agreed to further  extend and renew the note and the
warrant.  Under the terms of the  agreement,  the maturity  date of the note was
extended from May 10, 2007 to January 10, 2008,  and Emerald's  right to convert
the note and all accrued  interest  on the note into common  stock at a price of
$.70 per share was extended  until any time prior to May 10,  2007.  The term of
the warrant was also extended from May 10, 2006 to May 10, 2007.

On May 7, 2007,  we entered  into an agreement  with Emerald  dated as of May 7,
2007,  pursuant to which we agreed to further  extend and renew the note and the
warrant.  Under the terms of the  agreement,  the maturity  date of the note was
extended from January 10, 2008 to July 10, 2008, and Emerald's  right to convert
the note and all accrued  interest  on the note into common  stock at a price of
$.70 per share was extended  until any time prior to July 10, 2008.  The term of
the warrant was also extended from May 10, 2007 to May 10, 2008.

On January 3,  2006,  we entered  into a  Termination,  Settlement  and  Release
Agreement  with 116 Newark  Avenue  Corporation,  dated as of November 30, 2005,
pursuant  to which we agreed to  terminate  the lease for our former  offices in
Jersey City, New Jersey.  Under the terms of the  agreement,  we paid 116 Newark
$70,000 in cash,  issued a promissory  note in the principal  amount of $356,249
and 200,000 shares of Series C preferred  stock to 116 Newark and reimbursed 116
Newark for $10,000 of its legal fees.  The  promissory  note matures on November
29, 2007 and bears interest at a rate of 7% per annum.  Payment and  performance
under the  promissory  note has been  guaranteed  by Polystick  and secured by a
pledge  agreement  between  Polystick and 116 Newark pursuant to which Polystick
has pledged  356,249 shares of our Series B Preferred Stock that it holds to 116
Newark.  116 Newark has the right to include any shares of common stock received
upon  conversion  of the Series C  preferred  stock and upon  conversion  of the
pledged  shares  as  part of any  registration  statement  that  we may  file in
connection  with any public offering of our securities  (excluding  registration
statements on Forms S-4 and S-8). We are currently in discussions  with the note
holder to  renegotiate  the terms and  conditions of the note. We cannot predict
the outcome of these discussions.

We believe that our existing  capital  resources  will enable us to maintain our
operations at existing levels for at least the next 12 months,  assuming that we
can extend the maturities of the notes we issued to Brooks Station,  Emerald and
116 Newark  beyond the next 12 months.  However,  it is difficult to project our
capital  needs.  We cannot  assure you that any  additional  financing  or other
sources of capital will be available to us upon acceptable terms, if at all. The
inability to obtain  additional  financing,  when needed,  would have a material
adverse effect on our business, financial condition and operating results.

Critical Accounting Policies and Use of Estimates

The  Company's  discussion  and analysis of financial  condition  and results of
operations are based on the condensed financial  statements.  The preparation of
these financial  statements requires the Company to make estimates and judgments
that affect the amounts  reported in them.  The  Company's  critical  accounting
policies and estimates  include those related to oil and natural gas activities,
full cost  method,  proved oil and natural  gas  reserves,  depletion  reserves,
future  development and abandonment  costs,  asset retirement  obligations,  and
valuation of investment in non-publicly traded companies.  The Company bases its
estimates  on  historical  experience  and on  various  other  assumptions  that
management believes to be reasonable under the circumstances. Actual results may
differ from these  estimates  under  different  assumptions or  conditions.  For
additional  information  about the Company's  critical  accounting  policies and
estimates, see Note 2 to the financial statements included in the Company's Form
10-KSB for the year ended December 31, 2006.  There were no significant  changes
in critical  accounting  policies  and  estimates  during the three months ended
September 30, 2007.

New accounting  pronouncements  and the Company's  assessment of their impact on
the financial  statements  are disclosed in Note 3 to the notes to  consolidated
financial statements contained herein.


                                      -17-
<PAGE>
Item 3. Controls and Procedures

We performed an evaluation  under the supervision and with the  participation of
our management,  including our chief executive and chief financial  officer,  of
the effectiveness of our disclosure controls and procedures (as defined in Rules
13a-15(e) and 15d-15(e)  under the Securities  Exchange Act of 1934, as amended)
as of  September  30, 2007. A control  system,  no matter how well  designed and
operated,  can provide only  reasonable,  not absolute,  assurance  that it will
detect or uncover failures within our company to disclose  material  information
otherwise  required  to be set  forth in our  periodic  reports.  Following  the
evaluation  described above,  our management,  including our chief executive and
chief financial  officer,  concluded that based on the evaluation our disclosure
controls and procedures were effective at that time.

There has been no change in our internal  control over  financial  reporting (as
defined in Rules  13a-15(f) and 15d-15(f)  under the Securities  Exchange Act of
1934, as amended) that  occurred in the quarter ended  September 30, 2007,  that
has  materially  affected,  or is reasonably  likely to materially  affect,  our
internal control over financial reporting.


                                      -18-
<PAGE>
                           PART II. OTHER INFORMATION

Item 6. Exhibits

Exhibit No.          Description
-------------------  -----------------------------------------------------------

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

32.1                 Certification of Chief Executive and Financial Officer
                     pursuant to Section 906 of the Sarbanes-Oxley Act of 2002


                                      -19-
<PAGE>
                                   SIGNATURES

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


Date: November 14, 2007                 By:     /s/ Gilad Gat
                                                -------------
                                                Gilad Gat
                                                Chief Executive Officer
                                                (principal executive officer)
                                                Chief Financial Officer
                                                (principal financial and
                                                 accounting officer)


                                      -20-
<PAGE>
EXHIBIT INDEX

Exhibit No.          Description
-------------------  -----------------------------------------------------------

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

32.1                 Certification of Chief Executive and Financial Officer
                     pursuant to Section 906 of the Sarbanes-Oxley Act of 2002