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 March 31, 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 or                (I.R.S. Employer Identification No.)
 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 May 8,  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

                                                                        Page
                                                                       Number

PART I. FINANCIAL INFORMATION

Item 1.  Financial Statements (unaudited):

         Consolidated Balance Sheet at March 31, 2007                     2

         Consolidated Statements of Operations for the
         Three Months ended March 31, 2007 and 2006                       3

         Consolidated Statements of Cash Flows for the
         Three Months ended March 31, 2007 and 2006                       4

         Notes to Unaudited Consolidated Financial Statements             5

Item 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations                              9

Item 3.  Controls and Procedures                                          16

PART II. OTHER INFORMATION                                                16

Item 6.  Exhibits                                                         17

SIGNATURES                                                                18

                                      -1-
<PAGE>
PART I. FINANCIAL INFORMATION

Item 1.  Financial Statements

                           GSV, Inc. And Subsidiaries
                           CONSOLIDATED BALANCE SHEET
                                 March 31, 2007
                                  (Unaudited)
<TABLE>
<S>                                                                  <C>

                ASSETS
CURRENT ASSETS
        Cash and cash equivalents                                    $    122,334
        Accounts Receivable and other current assets                      129,958
                                                                     -------------
                Total current assets                                      252,292

        Investments:
        Internet related companies                                         50,000
        Geologic studies                                                2,316,721
        Oil and gas wells, net of accumulated depletion                   164,731
        Property and equipment, net of accumulated depreciation             1,674
                                                                     -------------
                                                                        2,533,126

                Total assets                                         $  2,785,418
                                                                     =============

                LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
        Accounts  Payable                                            $    126,305
        Notes Payable - Current                                           556,249
        Accrued Interest                                                   99,596
        Other Current Liabilities                                          17,440
                                                                     -------------
                Total current liabilities                                 799,590

        Long term Note Payable                                            200,000
                                                                     -------------
                Total liabilities                                         999,590


STOCKHOLDERS' EQUITY
        Series B Preferred stock, $0.001 par value; 1,500,000               1,500
          shares authorized, issued and outstanding
        Series C Preferred stock, $ 0.001 par value;                          200
          200,000 shares authorized, issued and outstanding
        Common Stock, $0.001 par value; 75,000,000 shares                   7,671
          authorized; 7,647,303 issued;  7,502,703 outstanding
        Additional paid-in capital                                     41,048,955
        Treasury stock                                                   (558,998)
        Accumulated deficit                                           (38,713,500)
                                                                     -------------
                Total stockholders' equity                              1,785,828
                                                                     -------------
                Total liabilities and stockholders' equity              2,785,418
                                                                     =============
</TABLE>
    The accompanying notes are an integral part of the financial statements.


                                      -2-
<PAGE>
                           GSV, Inc. and Subsidiaries
                      CONSOLIDATED STATEMENTS OF OPERATIONS
               For the Three Months Ended March 31, 2007 and 2006
                                  (Unaudited)

<TABLE>
<S>                                                <C>                          <C>
                                                        2007                         2006
                                                   --------------               --------------
Revenues from Oil and gas investments              $     150,142                $      (5,988)
General and administrative expenses                      112,154                       85,732
                                                    -------------                -------------

        Income (Loss) from operations before other        37,988                      (91,720)
          income and expenses

        Interest expense                                 (14,234)                     (14,234)
                                                    -------------                -------------
        NET INCOME (LOSS)                          $      23,754                $    (105,954)
                                                    =============                =============
Net Income (loss) per common share:
Loss per common share from
  operations - basic                               $        0.00                $       (0.01)
                                                    =============                =============

Weighted average common shares
  outstanding, basic                                   7,502,703                    7,472,695
                                                    =============                =============
</TABLE>

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

                                      -3-
<PAGE>
                           GSV, Inc. and Subsidiaries
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
               For the Three Months Ended March 31, 2007 and 2006
                                  (Unaudited)

<TABLE>
<S>                                                     <C>                          <C>
                                                             2007                         2006
                                                        --------------               --------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (loss)                                              23,754                     (105,954)
Adjustments to reconcile net income (loss) to net
  cash provided by operating activities:
Preferred Stock issued for settlement                              --                       30,000
Depreciation                                                      750                          750
Depletion                                                      35,642                           --
Increase (decrease) in cash from changes in:
Account receivable and other current assets                   (33,435)                     214,680
Accounts payable and other current liabilities                 63,503                       13,695
                                                        --------------               --------------
        Net cash provided by operating activities              90,213                      153,171

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of investment - oil & gas wells                       (6,139)                     (41,071)
                                                        --------------               --------------
        Net cash used by investing activities                  (6,139)                     (41,071)
                                                        --------------               --------------
        Net increase in cash                                   84,075                      112,100

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR                   38,260                      171,738
                                                        --------------               --------------
CASH AND CASH EQUIVALENTS, END OF YEAR                        122,334                      283,838
                                                        ==============               ==============
</TABLE>
     The accompanying notes are an integral part of the financial statements


                                      -4-
<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 March 31, 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 U.S. Corp.
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 seen 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,  it was determined  that it was not economical to complete the
well and it was decided on November 8, 2004, 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 had the effect of reducing 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%.  On October 5,
2006, the Company  announced the successful  completion of drilling in the first
prospect,  located in Liberty  County,  Texas.  The


                                      -5-
<PAGE>
operators have since decided that it is unnecessary to drill the second prospect
as the first well will be sufficient to tap the reserves identified.  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.

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 the beginning of March 2007 and is waiting for pipeline tie-in.
Through March 31, 2007, the Company's  expenses related to the completion of the
"Shirley  Gay" well total  $8,193.  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 our 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.

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 $38,713,500 as of March 31, 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  has been
completed and is in the process of being tied into the  pipeline.  Production is
not expected  until the second  quarter.  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  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.

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.

As of  December  31,  2006,  the Company had $7.4  million of  unrecognized  tax
benefits.  There have been no significant  changes to the amount of unrecognized
tax benefits  from the date of adoption  through  March 31,  2007,  nor does the
Company  reasonably  expect any  significant  changes  to occur  within the next
twelve months.


                                      -6-
<PAGE>
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, effective 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 of 8% per annum and due September 4, 2004, secured by
a lien on all of the  Company's  assets.  The maturity date of the note has been
extended to September 1, 2007.

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%.


                                      -7-
<PAGE>
On October 5, 2006, the Company announced the successful  completion of drilling
in the first  prospect,  located in Liberty  County,  Texas.  The operators have
since decided that it is unnecessary  to drill the second  prospect as the first
well will be sufficient to tap the reserves  identified.  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.

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  March 31,  2007,  the  Company's
expenses in the completion of the well totaled $8,193. 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

None.

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 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
shares of Series C Preferred Stock was $30,000.


                                      -8-
<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 March 31,  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  and 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.
For  later  prospects,  Century  Royalty  is  entitled  to an 80%  participation
interest. Century's net carried interest falls to 14% after royalty payments for
the leases.  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 $942,012
of this  amount as of March 31,  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,  we announced the  successful  completion of drilling in the
first  prospect,  located in Liberty  County,  Texas.  The operators  have since
decided that it is  unnecessary  to drill the second  prospect as the first well
will be  sufficient  to tap the reserves  identified.  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.

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


                                      -9-
<PAGE>
beginning of March 2007 and is waiting for pipeline  tie-in.  Through  March 31,
2007, our expenses related to completion of the "Shirley Gay" well total $8,193.
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  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 the Company with the Secretary of State of
the State of Delaware on July 18, 2003 ("Series B Certificate of Designations").
As of May 8, 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  provides 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  provides  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.

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


                                      -10-
<PAGE>
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.

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 the
Company with the  Secretary of State of the State of Delaware on January 3, 2006
("Series C Certificate  of  Designations").  As of March 31, 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  Affiliates  (as
defined in the Series C Certificate of Designations)  of the Company,  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 Affiliates of the Company, 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.

Results of Operations

Three Months Ended March 31, 2007 compared to Three Months Ended March 31, 2006

Revenues:  Revenues for the quarter  increased by $156,130,  to $150,142 in 2007
from negative $5,988 in 2006. This increase was due to the successful  repair of
the Louisiana wells.

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


                                      -11-
<PAGE>
and general corporate expenses. General and administrative expenses increased by
$26,422, or 31%, to $112,154 in the quarter ended March 31, 2007 from $85,732 in
the  quarter  ended March 31,  2006,  primarily  as a result of the  increase in
depletion of the wells in Louisiana.

Interest expense: Interest expense for both the quarter ended March 31, 2007 and
March 31, 2006 was $14,234.

Net  Losses:  Loss from  operations  increased  by  $129,708  from a net loss of
$105,954 in the first  quarter of 2006,  or $0.01 per basic and  diluted  common
share, to net income of $23,754 in the first quarter of 2007, or $0.00 per basic
and diluted common share.

Liquidity and Capital Resources

Net cash  provided by  operations  decreased by $62,958,  from  $153,171 for the
three months  ended March 31, 2006,  to $90,213 for the three months ended March
31, 2007.  The decrease in cash provided by operations  was primarily due to the
decrease in payments received from the operator against accounts receivable.

Net cash used by  investing  activities  during the three months ended March 31,
2007,  was $6,139,  as compared  to $41,071 in the  corresponding  period of the
prior year. The change is due to the investments the Company made in the quarter
ended March 31, 2006 related to the recompletion of the wells in Louisiana.

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 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


                                      -12-
<PAGE>
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 the
Company's  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 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 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 at least 2 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.


                                      -13-
<PAGE>
Critical Accounting Policies and Use of Estimates

The discussion and analysis of our financial condition and results of operations
are based upon our consolidated  financial statements,  which have been prepared
in accordance with accounting principles generally accepted in the United States
of America. The preparation of our consolidated financial statements requires us
to make estimates and assumptions that affect our reported results of operations
and the amount of reported  assets,  liabilities  and proved oil and natural gas
reserves.  Some accounting  policies involve judgments and uncertainties to such
an extent that there is reasonable  likelihood that materially different amounts
could have been reported under different conditions, or if different assumptions
had been used. Actual results may differ from the estimates and assumptions used
in the preparation of our consolidated financial statements. Described below are
the most significant  policies we apply in preparing our consolidated  financial
statements.  We also describe the most significant  estimates and assumptions we
make in applying these policies.

Oil and Natural Gas Activities

Accounting  for oil and natural  gas  activities  is subject to special,  unique
rules.  Two generally  accepted  methods of  accounting  for oil and natural gas
activities  are  available  -  successful   efforts  and  full  cost.  The  most
significant   differences  between  these  two  methods  are  the  treatment  of
unsuccessful exploration costs and the manner in which the carrying value of oil
and natural gas  properties  are amortized and  evaluated  for  impairment.  The
successful efforts method requires unsuccessful exploration costs to be expensed
as they are incurred upon a determination  that the well is  uneconomical  while
the full cost  method  provides  for the  capitalization  of these  costs.  Both
methods  generally  provide for the periodic  amortization of capitalized  costs
based on proved reserve quantities. Impairment of oil and natural gas properties
under the  successful  efforts  method is based on an evaluation of the carrying
value of individual oil and natural gas properties  against their estimated fair
value, while impairment under the full cost method requires an evaluation of the
carrying  value of oil and  natural  gas  properties  included  in a cost center
against  the net  present  value of future  cash flows from the  related  proved
reserves, using period-end prices and costs and a 10% discount rate.

Full Cost Method

We use  the  full  cost  method  of  accounting  for our  oil  and  natural  gas
activities.   Under  this  method,   all  costs  incurred  in  the  acquisition,
exploration  and  development of oil and natural gas properties are  capitalized
into a cost center (the  amortization  base).  Such amounts  include the cost of
drilling and equipping productive wells, dry hole costs, lease acquisition costs
and delay rentals.  All general and  administrative  costs unrelated to drilling
activities  are  expensed  as  incurred.  The  capitalized  costs of our oil and
natural  gas  properties,  plus  an  estimate  of  our  future  development  and
abandonment  costs,  are amortized on a  unit-of-production  method based on our
estimate  of total  proved  reserves.  Our  financial  position  and  results of
operations  could have been  significantly  different had we used the successful
efforts method of accounting for our oil and natural gas activities.

Proved Oil and Natural Gas Reserves

Estimates  of our  proved  reserves  included  in this  report are  prepared  in
accordance with accounting principles generally accepted in the United States of
America and SEC guidelines.  Our engineering estimates of proved oil and natural
gas  reserves  directly  impact  financial   accounting   estimates,   including
depreciation,  depletion  and  amortization  expense  and the full cost  ceiling
limitation.  Proved oil and natural gas reserves are the estimated quantities of
oil and natural gas reserves that  geological and engineering  data  demonstrate
with  reasonable  certainty  to  be  recoverable  in  future  years  from  known
reservoirs under period-end  economic and operating  conditions.  The process of
estimating quantities of proved reserves is very complex,  requiring significant
subjective  decisions  in the  evaluation  of all  geological,  engineering  and
economic  data for each  reservoir.  The  accuracy  of a reserve  estimate  is a
function  of:  (i)  the  quality  and  quantity  of  available  data;  (ii)  the
interpretation  of that data;  (iii) the accuracy of various  mandated  economic
assumptions  and (iv) the judgment of the persons  preparing the  estimate.  The
data for a given  reservoir  may change  substantially  over time as a result of
numerous factors, including additional development activity, evolving production
history and continual  reassessment of the viability of production under varying
economic conditions.  Changes in oil and natural gas prices, operating costs and
expected performance from a given reservoir also will result in revisions to the
amount of our estimated proved  reserves.  Our estimated proved reserves for the
years  ended  December  31, 2006 and 2005 were  prepared  by Pressler  Petroleum
Consultants  Inc.,  an  independent  oil and natural gas  reservoir  engineering
consulting firm.


                                      -14-
<PAGE>
Depreciation, Depletion and Amortization

Our rate of recording depreciation, depletion and amortization expense (DD&A) is
dependent  upon our  estimate  of  proved  reserves,  which is  utilized  in our
unit-of-production method calculation.  If the estimates of proved reserves were
to be reduced, the rate at which we record DD&A expense would increase, reducing
net income.  Such a reduction in reserves  may result from lower market  prices,
which may make it non-economic to drill for and produce higher cost reserves.  A
five percent positive or negative  revision to proved reserves would decrease or
increase the DD&A rate by approximately $0.15 to $0.17 per Mcfe, respectively.

Future Development and Abandonment Costs

Future  development  costs  include  costs  incurred to obtain  access to proved
reserves such as drilling costs and the  installation  of production  equipment.
Future  abandonment  costs include costs to dismantle and relocate or dispose of
our  production  facilities,   gathering  systems  and  related  structures  and
restoration  costs.  We  develop  estimates  of  these  costs  for  each  of our
properties based upon their geographic location,  type of production  structure,
well  depth,  currently  available  procedures  and ongoing  consultations  with
construction and engineering  consultants.  Because these costs typically extend
many years into the future,  estimating  these  future  costs is  difficult  and
requires management to make judgments that are subject to future revisions based
upon  numerous  factors,  including  changing  technology  and the political and
regulatory  environment.  We review  our  assumptions  and  estimates  of future
development  and future  abandonment  costs on an annual  basis.  A five percent
positive or negative change in future  development  and abandonment  costs would
decrease or increase the DD&A rate by approximately $0.05 per Mcfe.

Asset Retirement Obligations

We have significant  obligations to remove tangible equipment and facilities and
to restore land at the end of oil and gas production operations. Our removal and
restoration  obligations  are  associated  with plugging and  abandoning  wells.
Estimating the future restoration and removal costs is difficult and requires us
to make estimates and judgments because most of the removal obligations are many
years in the future and contracts and regulations often have vague  descriptions
of what constitutes removal. Asset removal technologies and costs are constantly
changing,  as  are  regulatory,  political,  environmental,  safety  and  public
relations  considerations.  Inherent  in  the  present  value  calculations  are
numerous  assumptions and judgments  including the ultimate  settlement amounts,
inflation  factors,  credit adjusted  discount rates,  timing of settlements and
changes in the legal, regulatory, environmental and political environments.

Stock-based Compensation

Determining the amount of stock-based  compensation  for awards granted includes
selecting  an  appropriate  model to  calculate  fair  value.  We have  used the
Black-Scholes  option  valuation  model to value  employee  stock option awards.
Certain  inputs to this valuation  model require  considerable  judgment.  These
inputs include  estimating the volatility of our stock, the expected life of the
option  awarded and the  forfeiture  rate.  We have  estimated  volatility,  the
expected life and the forfeiture  rate based on historical  data.  Volatility is
estimated over a term that approximates the expected life of the option awarded.

Valuation of Investments in Non-Publicly Traded Companies

In the past, we have been making  strategic  equity  investments in non-publicly
traded  internet-related  companies.  Depending  on our level of  ownership  and
whether or not we have the ability to exercise significant influence, we account
for these  investments  on either the cost or equity  method,  and  review  such
investments periodically for impairment.  The appropriate reductions in carrying
values are recorded when, and if, necessary.  The process of assessing whether a
particular  investment's  net  realizable  value is less than its carrying  cost
requires a significant amount of judgment. In making this judgment, we carefully
consider the  investee's  cash  position,  projected  cash flows (both short and
long-term),  financing needs,  most recent valuation data, the current investing
environment,  management / ownership changes,  and competition.  This evaluation
process is based on  information  that we  request  from  these  privately  held
companies.  This  information  is not subject to the same  disclosure  and audit
requirements as the reports required of U.S. public companies,  and as such, the
reliability and accuracy of the data may vary.


                                      -15-
<PAGE>
Based on our evaluations,  we did not record  impairment  charges related to our
investments in non-publicly  traded companies during the quarter ended March 31,
2007. The total  investment in non-public  companies was $50,000 as of March 31,
2007.

Off-Balance Sheet Transactions

There are no off-balance  sheet  arrangements that have or are reasonably likely
to have a current  or future  effect on the small  business  issuer's  financial
condition,  changes in financial  condition,  revenues or  expenses,  results of
operations,  liquidity,  capital  expenditures  or  capital  resources  that  is
material to investors.

Forward-Looking Statements

Some of the  statements  in this  report  are  forward-looking  statements  that
involve  risks  and  uncertainties.  These  forward-looking  statements  include
statements about our plans, objectives, expectations, intentions and assumptions
that are not statements of historical fact. You can identify these statements by
the following words:

- "may"
- "will"
- "should"
- "estimates"
- "plans"
- "expects"
- "believes"
- "intends"

and similar expressions. We cannot guarantee our future results,  performance or
achievements.  Our actual results and the timing of corporate  events may differ
significantly from the expectations discussed in the forward-looking statements.
You  are  cautioned  not  to  place  undue  reliance  on  any  forward-  looking
statements.  Potential  risks and  uncertainties  that  could  affect our future
operating  results  include,  but are not  limited  to,  our  limited  operating
history,  history of losses,  need to raise  additional  capital,  the high risk
nature of our business,  and other risks  described in our Annual Report on Form
10-KSB for the year ended December 31, 2006.

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 March  31,  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 March 31, 2007,  that has
materially affected,  or is reasonably likely to materially affect, our internal
control over financial reporting.


                                      -16-
<PAGE>
                           PART II. OTHER INFORMATION

Item 6. Exhibits

10.1 Agreement by and between GSV, Inc. and D. Emerald Investments Ltd. dated as
     of May 7, 2007.

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.


                                      -17-
<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:  May 15, 2007                  By: /s/ Gilad Gat
                                         -------------
                                    Gilad Gat
                                    Chief Executive Officer
                                    (principal executive officer)
                                    Chief Financial Officer
                                    (principal financial and accounting officer)


                                      -18-
<PAGE>
EXHIBIT INDEX

Exhibit No.     Description

10.1            Agreement by and between GSV, Inc. and D. Emerald Investments
                Ltd. dated as of May 7, 2007.

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-