----

----

| Nevada                                         | 88-0456274                           |
|------------------------------------------------|--------------------------------------|
| (State or other jurisdiction of incorporation) | (I.R.S. Employer Identification No.) |
|                                           |                                 |
| 2121 Sage Road, Suite 200, Houston, Texas      | 77056                                |
| (Address of principal executive offices)       | (Zip code)                           |

| Large accelerated filer o | Accelerated filer o                         |
|---------------------------|---------------------------------------------|
| Non-accelerated filer o   | Smaller reporting Company  þ |

----

| PART   I.  FINANCIAL INFORMATION                                                                                                                                                           |   Page |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------|
|                                                                                                                                                                                                      |   No.  |
| Item 1. Financial Statements                                                                                                                                                                              |        |
|                                                                                                                                                                                                      |        |
| Balance Sheets as of October 31, 2009 (restated)  and July 31, 2009  (Unaudited).                                                                                                               | 3           |
|                                                                                                                                                                                                      |        |
| Statements of Operations for the three months ended October 31, 2009 (restated) and 2008 and for the period from October 21, 2002 (Inception) to October 31, 2009  (Unaudited).                      | 4           |
|                                                                                                                                                                                                      |        |
| Statements of Cash Flows for the three months ended October 31, 2009 (restated) and 2008  and for the period from October 21, 2002 (Inception) to October 31, 2009 (restated) (Unaudited). | 5           |
|                                                                                                                                                                                                      |        |
| Notes to the Financial Statements (Unaudited)                                                                                                                                                             | 6           |
|                                                                                                                                                                                                      |        |
| Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations                                                                                                             | 15          |
|                                                                                                                                                                                                      |        |
| Item 3. Quantitative and Qualitative Disclosures about Market Risk                                                                                                                                        | 17          |
|                                                                                                                                                                                                      |        |
| Item 4. Controls and Procedures                                                                                                                                                                           | 17          |
|                                                                                                                                                                                                      |        |
| PART II. OTHER INFORMATION                                                                                                                                                                                |        |
|                                                                                                                                                                                                      |        |
| Item 1. Legal Proceedings                                                                                                                                                                                 | 17          |
|                                                                                                                                                                                                      |        |
| Item 2. Recent Sales of Unregistered Securities                                                                                                                                                           | 18          |
|                                                                                                                                                                                                      |        |
| Item 3. Defaults Upon Senior Securities                                                                                                                                                                   | 18          |
|                                                                                                                                                                                                      |        |
| Item 4. Submission of Matters to a Vote of Security Holders                                                                                                                                               | 18          |
|                                                                                                                                                                                                      |        |
| Item 5. Other Information                                                                                                                                                                                 | 18          |
|                                                                                                                                                                                                      |        |
| Item 6. Exhibits                                                                                                                                                                                          | 18          |
|                                                                                                                                                                                                      |        |
| Signatures                                                                                                                                                                                                | 19          |

----

|                                                                                                                                                                                |   | October 31, 2009(Restated) |        |   | July 31, 2009 |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------|-------------|--------|---------------|--------|
| ASSETS                                                                                                                                                                              |   |                       |        |   |
| Current Assets:                                                                                                                                                                     |   |                       |        |   |
| Cash                                                                                                                                                                                |   | $                          | 28,575      |   |          | $      | 3 |   |
| Accounts Receivable                                                                                                                                                                 |   |                       | 6,589       |   |          |   | - |   |
| Other Current Assets                                                                                                                                                                |   |                       | 11,194      |   |          |   | 8,561 |   |
| Total Current Assets                                                                                                                                                                |   |                       | 46,358      |   |          |   | 8,564 |   |
|  Oil and Gas Properties:Proved Properties, Net                                                                                                                            |   |                       | 5,864,485   |   |          |   | - |   |
| Furniture, fixtures and equipment, net                                                                                                                                              |   |                       | 365,709     |   |          |   | 395,338 |   |
| Other Assets:                                                                                                                                                                       |   |                       |        |   |          |   |   |   |
| Patents, net                                                                                                                                                                        |   |                       | -           |   |          |   | 1 |   |
| Intangibles, net                                                                                                                                                                    |   |                       | 6,568       |   |          |   | 6,568 |   |
| TOTAL ASSETS                                                                                                                                                                        |   | $                          | 6,283,120   |   |          | $      | 410,471 |   |
|                                                                                                                                                                                |   |                       |        |   |          |   |   |   |
| LIABILITIES AND STOCKHOLDERS' DEFICIT                                                                                                                                               |   |                       |        |   |          |   |   |   |
| Current Liabilities:                                                                                                                                                                |   |                       |        |   |          |   |   |   |
| Accounts Payable                                                                                                                                                                    |   | $                          | 776,550     |   |          | $      | 432,621 |   |
| Accounts Payable-Stockholders                                                                                                                                                       |   |                       | 2,576       |   |          |   | 2,594 |   |
| Accrued Liabilities                                                                                                                                                                 |   |                       | 467,492     |   |          |   | 314,964 |   |
| Advances from Stockholders                                                                                                                                                          |   |                       | 883,343     |   |          |   | 875,081 |   |
| Note Payable                                                                                                                                                                        |   |                       | 30,000      |   |          |   | 30,000 |   |
| Deferred Income                                                                                                                                                                     |   |                       | -           |   |          |   | 1,400 |   |
| Total Current Liabilities                                                                                                                                                           |   |                       | 2,159,961   |   |          |   | 1,656,660 |   |
|                                                                                                                                                                                |   |                       |        |   |          |   |   |   |
| Long Term Liabilities:                                                                                                                                                              |   |                       |        |   |          |   |   |   |
| Long Term Note (5 yr., 7.5% interest, Convertible at $0.21 per share)                                                                                                          |   |                       | 1,500,000   |   |          |   | - |   |
| Asset Retirement Obligation                                                                                                                                                         |   |                       | 273,075     |   |          |   | - |   |
| Discount on Convertible Note                                                                                                                                                        |   |                       | (1,285,714  |   |          |   | - |   |
| Long Term Note                                                                                                                                                                      |   |                       | 2,800,000   |   |          |   | - |   |
|                                                                                                                                                                                |   |                       |        |   |          |   |   |   |
| Total Long Term Liabilities                                                                                                                                                         |   |                       | 3,287,361   |   |          |   | - |   |
| TOTAL LIABILITIES                                                                                                                                                                   |   |                       | 5,447,322   |   |          |   | 1,656,660 |   |
|                                                                                                                                                                                |   |                       |        |   |          |   |   |   |
| STOCKHOLDERS' DEFICIT                                                                                                                                                               |   |                       |        |   |          |   |   |   |
| Preferred stock:                                                                                                                                                                    |   |                       |        |   |          |   |   |   |
| Series A convertible preferred stock, $0.001 par, 2,500,000 shares authorized, 1,378 and 1,378 shares issued and outstanding as of October 31, 2009 and July 31, 2009, respectively |   |                       | 1           |   |          |   | 1 |   |
|  Series E convertible preferred stock, $0.001 par, 1,163,000 and  0 shares issued and outstanding as of October 31, 2009 and July 31, 2009, respectively             |   |                       | -           |   |          |   | -- |   |
| Common stock, $0.001 par value, 500,000,000 shares authorized, 371,250,303and 460,664,395 shares issued and outstanding at October 31, 2009 and July 31 2009, respectively          |   |                       | 398,607     |   |          |   | 460,664 |   |
| Additional paid-in capital                                                                                                                                                          |   |                       | 18,150,849  |   |          |   | 14,481,168 |   |
| Deficit accumulated during development stage                                                                                                                                        |   |                       | (17,713,659 |   |          |   | (16,188,022 | ) |
| Total stockholders' deficit                                                                                                                                                         |   |                       | 835,798     |   |          |   | (1,246,189 | ) |
| TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                                                                                                                                         |   |                       | 6,283,120   |   |          |   | 410,471 |   |

----

|                                                  |   | Quarter Ended October 31, |        |   | Quarter Ended October 31, |   |        | Period from October 21, 2002 (Inception) To October 31, |   |
|-------------------------------------------------------|--------|--------------------------------|-------------|--------|--------------------------------|--------|-------------|-------------------------------------------------------------------|--------|
|                                                  |   | 2009 (Restated)                |        |   | 2008                           |   |        | 2009 (Restated)                                                   |   |
| Revenues                                              |   | $                              | 7,783       |   |                           | $      | -           |                                                              |   | $ | 7,783 |   |
| Cost of Revenue                                       |   |                           | 9,057       |   |                           |   | -           |                                                              |   |   | 23,714 |   |
| Gross Loss                                            |   |                           | (1,274      | )      |                           |   | -           |                                                              |   |   | (15,931 | ) |
|                                                  |   |                           |        |   |                           |   |        |                                                              |   |   |   |   |
| Operating Expenses:                                   |   |                           |        |   |                           |   |        |                                                              |   |   |   |   |
| General & administrative                          |   |                           | 1,153,356   |   |                           |   | 158,746     |                                                              |   |   | 5,831,533 |   |
| Depreciation and amortization                         |   |                           | 31,655      |   |                           |   | 20,785      |                                                              |   |   | 159,991 |   |
| Professional fees                                     |   |                           | 135,069     |   |                           |   | 403,497     |                                                              |   |   | 4,347,407 |   |
| Payroll expenses                                      |   |                           | 273,295     |   |                           |   | 311,470     |                                                              |   |   | 6,153,442 |   |
| Software Development Expense                          |   |                           |        |   |                           |   | -           |                                                              |   |   | 902,824 |   |
| Loss on disposal of assets                            |   |                           |        |   |                           |   | -           |                                                              |   |   | 9,855 |   |
| Loss on impairment of assets                          |   |                           |        |   |                           |   | -           |                                                              |   |   | 50,591 |   |
| Lease Operating ExpensesResearch and development      |   |                           | 4,05921,094 |   |                           |   | -           |                                                              |   |   | 4,059309,353 |   |
|                                                  |   |                           |        |   |                           |   |        |                                                              |   |   |   |   |
| Total Operating Expenses                              |   |                           | 1,618,528   |   |                           |   | 894,498     |                                                              |   |   | 17,769,055 |   |
|                                                  |   |                           |        |   |                           |   |        |                                                              |   |   |   |   |
| Loss from Operations                                  |   |                           | 1,619,802   |   |                           |   | 894,498     |                                                              |   |   | 17,784,986 |   |
| Other Income (Expenses):                              |   |                           |        |   |                           |   |        |                                                              |   |   |   |   |
| Gain on derivatives                                   |   |                           | -           |   |                           |   | -           |                                                              |   |   | 100,000 |   |
| Gain on sale of patent                                |   |                           | 95,000      |   |                           |   |        |                                                              |   |   | 95,000 |   |
| Gain on extinguishment of Accounts Payable            |   |                           |        |   |                           |   | -           |                                                              |   |   | 84,065 |   |
| Gain on extinguishment of note                        |   |                           | -           |   |                           |   | -           |                                                              |   |   | 7,137 |   |
| Interest income                                       |   |                           |        |   |                           |   | 1,323       |                                                              |   |   | 3,578 |   |
| Interest expense                                      |   |                           | (835        | )      |                           |   | (625        | )                                                                 |   |   | (218,453 | ) |
| Total Other Income                                    |   |                           | 94,165      |   |                           |   | 698         |                                                              |   |   | 71,327 |   |
|                                                  |   |                           |        |   |                           |   |        |                                                              |   |   |   |   |
| Loss Before Income Taxes                              |   |                           | 1,525,637   |   |                           |   | 893,800     |                                                              |   |   | 17,713,659 |   |
|                                                  |   |                           |        |   |                           |   |        |                                                              |   |   |   |   |
| Provision for Income Taxes                            |   |                           | -           |   |                           |   | -           |                                                              |   |   | - |   |
| Net Loss                                              |   | $                              | (1,525,637  | )      |                           | $      | (893,800    | )                                                                 |   | $ | (17,713,659 | ) |
|                                                  |   |                           |        |   |                           |   |        |                                                              |   |   |   |   |
| Basic and diluted                                     |   |                           |        |   |                           |   |        |                                                              |   |   |   |   |
| Net loss per common share-basic and diluted           |   |                           | (0.003      | )      |                           |   | (0.00       | )                                                                 |   |   |   |   |
|                                                  |   |                           |        |   |                           |   |        |                                                              |   |   |   |   |
| Weighted average shares outstanding-basic and diluted |   |                           | 466,672,824 |   |                           |   | 398,844,984 |                                                              |   |   |   |   |

----

|                                                                                      |   | Quarter Ended October 31, |               | Quarter Ended October 31, |   |     | October 21, 2002 (Inception) to October 31, |   |
|-------------------------------------------------------------------------------------------|--------|--------------------------------|--------------------|--------------------------------|--------|----------|-------------------------------------------------------|--------|
|                                                                                      |   | 2009 (Restated)                |               | 2008                           |   |     | 2009 (Restated)                                       |   |
| CASH FLOWS FROM OPERATING ACTIVITIES                                                      |   |                           |               |                           |   |     |                                                  |   |
| Net Loss                                                                                  |   | $                              | (1,525,637         | )                              | $      | (893,800 | )                                                     |   | $ | (17,713,659 | ) |
| Adjustments to reconcile net loss to net cash used in operating activities:               |   |                           |               |                           |   |     |                                                  |   |   |   |   |
| Shares issued for services                                                                |   |                           | 1,059,191          |                           |   | -        |                                                  |   |   | 4,761,445 |   |
| Warrant issued for consulting services                                                    |   |                           | -                  |                           |   | -        |                                                  |   |   | 446,660 |   |
| Loss on disposal of assets                                                                |   |                           | -                  |                           |   | -        |                                                  |   |   | 9,856 |   |
| Loss on impairment of assets                                                              |   |                           | -                  |                           |   | -        |                                                  |   |   | 50,591 |   |
| Depreciation and amortization                                                             |   |                           | 31,655             |                           |   | 20,785   |                                                  |   |   | 159,991 |   |
| Share-based compensation                                                                  |   |                           | 6,112              |                           |   | 186,740  |                                                  |   |   | 2,902,889 |   |
| (Gain) Loss on derivative                                                                 |   |                           | -                  |                           |   | -        |                                                  |   |   | 5,000 |   |
| Gain on debt extinguishment                                                               |   |                           | -                  |                           |   | -        |                                                  |   |   | (7,137 | ) |
| (Gain)Loss on accounts payable                                                            |   |                           | -                  |                           |   | -        |                                                  |   |   | (84,065 | ) |
| (Gain)Loss on sale of patent                                                              |   |                           | (95,000            | )                              |   |     |                                                  |   |   | (95,000 | ) |
| Contributed capital                                                                       |   |                           | 12,911             |                           |   | -        |                                                  |   |   | 75,433 |   |
| Amortization of debt discount                                                             |   |                           | 304                |                           |   | -        |                                                  |   |   | 80,304 |   |
| Changes in operating assets and  liabilities                                    |   |                           |               |                           |   |     |                                                  |   |   |   |   |
| Prepaid and other current assets                                                          |   |                           | (2,633             | )                              |   | 44,577   |                                                  |   |   | (11,194 | ) |
| Accounts payable                                                                          |   |                           | 140,720            |                           |   | 99,429   |                                                  |   |   | 693,264 |   |
| Accounts receivable                                                                       |   |                           | (2,530             | )                              |   |     |                                                  |   |   | (2,530 | ) |
| Accrued expenses                                                                          |   |                           | 152,528            |                           |   | (9,160   | )                                                     |   |   | 2,220,659 |   |
| Deferred income                                                                           |   |                           | (1,400             | )                              |   | -        |                                                  |   |   | - |   |
| Accounts payables to stockholders                                                         |   |                           | (17                | )                              |   |     |                                                  |   |   | 2,576 |   |
| NET CASH USED IN OPERATING ACTIVITIES                                                     |   |                           | (223,796           | )                              |   | (551,429 | )                                                     |   |   | (6,504,915 | ) |
|                                                                                      |   |                           |               |                           |   |     |                                                  |   |   |   |   |
| CASH FLOW FROM INVESTING ACTIVITIES                                                       |   |                           |               |                           |   |     |                                                  |   |   |   |   |
| Proceeds from sale of patents                                                             |   |                           | 95,000             |                           |   | -        |                                                  |   |   | 95,000 |   |
| Investment in patents                                                                     |   |                           | -                  |                           |   | -        |                                                  |   |   | (67,233 | ) |
| Investment in intangible assets                                                           |   |                           | -                  |                           |   | -        |                                                  |   |   | (16,000 | ) |
| Investment in property and equipment                                                      |   |                           | -                  |                           |   | (195,121 | )                                                     |   |   | (458,498 | ) |
| NET CASH USED IN INVESTING ACTIVITIES                                                     |   |                           | 95,000             |                           |   | (195,121 | )                                                     |   |   | (446,731 | ) |
|                                                                                      |   |                           |               |                           |   |     |                                                  |   |   |   |   |
| CASH FLOWS FROM FINANCING ACTIVITIES                                                      |   |                           |               |                           |   |     |                                                  |   |   |   |   |
| Proceeds from sale of stock                                                               |   |                           | 112,000            |                           |   | -        |                                                  |   |   | 5,395,200 |   |
| Advances from stockholders                                                                |   |                           | 6,368              |                           |   | -        |                                                  |   |   | 1,434,949 |   |
| Proceeds from warrants exercised                                                          |   |                           | 9,000              |                           |   | -        |                                                  |   |   | 546,502 |   |
| Repayment of advances from stockholders                                                   |   |                           | -                  |                           |   | -        |                                                  |   |   | (501,430 | ) |
| Convertible note proceeds                                                                 |   |                           | 30,000             |                           |   | -        |                                                  |   |   | 210,000 |   |
| Proceeds from third party debt, net                                                       |   |                           | -                  |                           |   | -        |                                                  |   |   | (105,000 | ) |
| NET CASH PROVIDED BY FINANCING ACTIVITIES                                                 |   |                           | 157,368            |                           |   | -        |                                                  |   |   | 6,980,221 |   |
|                                                                                      |   |                           |               |                           |   |     |                                                  |   |   |   |   |
| NET CHANGE IN CASH AND CASH EQUIVALENTS                                                   |   |                           | 28,572             |                           |   | (746,550 | )                                                     |   |   | 28,575 |   |
| Cash and cash equivalents at beginning of period                                          |   |                           | 3                  |                           |   | 767,338  |                                                  |   |   | - |   |
| Cash and cash equivalents at end of period                                                |   | $                              | 28,575             |                           | $      | 20,788   |                                                  |   | $ | 28,575 |   |
|                                                                                      |   |                           |               |                           |   |     |                                                  |   |   |   |   |
| SUPPLEMENTAL DISCLOSURES                                                                  |   |                           |               |                           |   |     |                                                  |   |   |   |   |
| Cash paid for interest                                                                    |   |                           |               |                           | $      | 625      |                                                  |   |   |   |   |
| Cash paid for income taxes                                                                |   |                           |               |                           |   | -        |                                                  |   |   |   |   |
|                                                                                      |   |                           |               |                           |   |     |                                                  |   |   |   |   |
| NON-CASH TRANSACTIONS                                                                     |   |                           |               |                           |   |     |                                                  |   |   |   |   |
| Shares Returned and Cancelled                                                             |   | $                              | 128,069            |                           | $      | -        |                                                  |   |   |   |   |
| Discount on Convertible Note                                                              |   |                           | 1,314,124          |                           |   | -        |                                                  |   |   |   |   |
| Stock Issued for Oil & Gas AcquisitionDebt assumed from the Oil & Gas Acquisition |   |                           | 1,094,2864,300,000 |                           |   |     |                                                  |   |   |   |   |
| Purchase of O&G properties on accounts payable                                        |   |                           | 204,059            |                           |   |     |                                                  |   |   |   |   |
| Oil & Gas accounts receivable from purchase of oil and gas properties                 |   |                           | 3,883              |                           |   |     |                                                  |   |   |   |   |
| Purchase of oil and gas properties                                                        |   |                           | 5,867,361          |                           |   |     |                                                  |   |   |   |   |

----

----

| Expected volatility     |   |   | 174%- 243%    |   |
|-------------------------|--------|--------|---------------|--------|
| Term (years)            |   |   | 1.5 – 3 |   |
| Risk-free interest rate |   |   | 1.16% - 3.01% |   |
| Expected dividend yield |   |   | 0%            |   |

|                          |   | Options |       |   | Weighted Average Exercise Price |   |
|-------------------------------|--------|---------|------------|--------|---------------------------------|--------|
| Outstanding July 31, 2009     |   |    | 20,225,000 |   |                            |   | 0.28 |   |
| Granted                       |   |    | 25,000     |   |                            |   | 0.25 |   |
| Expired                       |   |    | -          |   |                            |   | - |   |
| Exercised                     |   |    | -          |   |                            |   | - |   |
| Outstanding, October 31, 2009 |   |    | 20,250,000 |   |                            | $      | 0.28 |   |

----

| Number of Common Stock Equivalents |   | Expiration Date |   | Remaining Contracted Life (Years) |   | Exercise Price |   |
|------------------------------------|--------|-----------------|--------|-----------------------------------|--------|----------------|--------|
| 50,000                             |   | 10/14/2011      |   | 2.00                              |   | 0.25           |   |
| 25,000                             |   | 11/14/2011      |   | 2.08                              |   | 0.25           |   |
| 50,000                             |   | 12/7/2011       |   | 2.17                              |   | 0.25           |   |
| 75,000                             |   | 12/16/2011      |   | 2.17                              |   | 0.25           |   |
| 50,000                             |   | 10/14/2012      |   | 3.00                              |   | 0.25           |   |
| 25,000                             |   | 11/14/2012      |   | 3.08                              |   | 0.25           |   |
| 50,000                             |   | 10/14/2013      |   | 4.00                              |   | 0.25           |   |
| 25,000                             |   | 11/14/2013      |   | 4.08                              |   | 0.25           |   |
| 50,000                             |   | 10/14/2014      |   | 5.00                              |   | 0.25           |   |
| 25,000                             |   | 11/14/2014      |   | 5.08                              |   | 0.25           |   |
| 25,000                             |   | 4/1/2012        |   | 2.42                              |   | 0.25           |   |
| 50,000                             |   | 4/28/2012       |   | 2.50                              |   | 0.25           |   |
| 25,000                             |   | 5/28/2012       |   | 2.58                              |   | 0.25           |   |
| 25,000                             |   | 6/17/2012       |   | 2.67                              |   | 0.25           |   |
| 25,000                             |   | 6/28/2012       |   | 2.67                              |   | 0.25           |   |
| 25,000                             |   | 7/28/2012       |   | 2.75                              |   | 0.25           |   |
| 25,000                             |   | 8/28/2012       |   | 2.83                              |   | 0.25           |   |
| 25,000                             |   | 9/28/2012       |   | 2.92                              |   | 0.25           |   |
| 25,000                             |   | 10/28/2012      |   | 3.00                              |   | 0.25           |   |
| 25,000                             |   | 4/1/2013        |   | 3.42                              |   | 0.25           |   |
| 25,000                             |   | 4/1/2014        |   | 4.42                              |   | 0.25           |   |
| 25,000                             |   | 4/1/2015        |   | 5.42                              |   | 0.25           |   |
| 2,500,000                          |   | 1/1/2014        |   | 4.17                              |   | 0.15           |   |
| 1,500,000                          |   | 1/1/2014        |   | 4.17                              |   | 0.25           |   |
| 1,500,000                          |   | 1/1/2014        |   | 4.17                              |   | 0.40           |   |
| 1,000,000                          |   | 1/1/2014        |   | 4.17                              |   | 0.15           |   |
| 1,000,000                          |   | 1/1/2014        |   | 4.17                              |   | 0.25           |   |
| 2,500,000                          |   | 5/18/2011       |   | 1.58                              |   | 0.15           |   |
| 2,000,000                          |   | 5/18/2011       |   | 1.58                              |   | 0.25           |   |
| 1,500,000                          |   | 5/18/2011       |   | 1.58                              |   | 0.40           |   |
| 2,500,000                          |   | 5/18/2011       |   | 1.58                              |   | 0.15           |   |
| 2,000,000                          |   | 5/18/2011       |   | 1.58                              |   | 0.25           |   |
| 1,500,000                          |   | 5/18/2011       |   | 1.58                              |   | 0.40           |   |
| 20,250,000                         |   |            |   | 3.00                              |   | 0.28           |   |

|                                  |   | OPTIONS |     |
|---------------------------------------|--------|---------|----------|
| Non-vested shares at July 31, 2009    |   |    | 386,198  |   |
| Granted                               |   |    | 0        |   |
| Vested                                |   |    | (107,813 | ) |
| Expired                               |   |    | -        |   |
| Exercised                             |   |    | -        |   |
| Non-vested shares at October 31, 2009 |   |    | 278,385  |   |

----

| Warrants Outstanding and Exercisable |   | Warrants |       |    | Weighted Average Exercise Price |   |
|--------------------------------------|--------|----------|------------|---------|---------------------------------|--------|
| Outstanding, July 31, 2009           |   |     | 15,994,284 |    |                            | $      | 0.47 |   |
| Granted                              |   |     | -          |    |                            |   | - |   |
| Expired                              |   |     | -          |    |                            |   | - |   |
| Exercised                            |   |     | (150,000   | )  |                            |   |  (.06) |   |
| Outstanding, October 31, 2009        |   |     | 15,844,284 |    |                            | $      | 0.41 |   |

| Number of Common Stock Equivalents |   | Expiration Date |   | Remaining Contracted Life (Years) |   | Exercise Price |   |
|------------------------------------|--------|-----------------|--------|-----------------------------------|--------|----------------|--------|
| 2,902,500                          |   | 10/31/2010      |   | 1.00                              |   | $              | 0.20   |   |
| 50,000                             |   | 7/31/2011       |   | 1.75                              |   | $              | 0.25   |   |
| 5,400,000                          |   | 12/31/2011      |   | 2.17                              |   | $              | 1.00   |   |
| 1,600,000                          |   | 4/30/2012       |   | 2.50                              |   | $              | 0.03   |   |
| 825,000                            |   | 6/1/2012        |   | 2.58                              |   | $              | 0.03   |   |
| 2,075,000                          |   | 6/4/2012        |   | 2.58                              |   | $              | 0.03   |   |
| 83,333                             |   | 6/12/2012       |   | 2.58                              |   | $              | 0.03   |   |
| 1,408,451                          |   | 6/29/2012       |   | 2.66                              |   | $              | 0.03   |   |
| 1,500,000                          |   | 9/24/2012       |   | 2.92                              |   | $              | 0.30   |   |

|   | (a) | The assumption of approximately $3.0 million in total existing debt associated with these Assets. Debt is valued at face value of $3 million which approximates the market value on October 22, 2009. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | 5-year, 7.5% convertible note in the amount of $1.5 million and convertible into common stock at $0.21 per share.  Debt is valued at face value of $1.5 million which approximates the market value on October 22, 2009. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (c) | 1,163,000 shares of Series E Convertible Preferred Stock which is convertible into common stock at $0.04 for stock value of $949,929. The stock value is based on the closing market value on October 22, 2009. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (d) | 3,000,000 shares of restricted Exobox common stock for value of $120,000.  The stock value is $.04 which is based on the closing market value on the October 22, 2009. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                                                                                                                                                           |   | October 22, 2009  |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------|--------|
|                                                                                                                                                                                           |   | Exobox Historical      |   | Purchase price allocation |   | Pro Forma |   |
| ASSETS                                                                                                                                                                                         |   |                   |   |   |   |   |   |
| Current Assets:                                                                                                                                                                                |   |                   |   |   |   |   |   |
| Cash                                                                                                                                                                                           |   | 3                      |   | - |   | 3 |   |
| Other Current Assets                                                                                                                                                                           |   | 8,561                  |   | - |   | 8,561 |   |
| Total Current Assets                                                                                                                                                                           |   | 8,561                  |   | - |   | 8,561 |   |
|                                                                                                                                                                                           |   |                   |   |   |   |   |   |
| Oil and gas properties:                                                                                                                                                                        |   |                   |   |   |   |   |   |
| Proved Properties, net                                                                                                                                                                         |   | -                      |   | 5,864,485 |   | 5,864,485 |   |
|                                                                                                                                                                                           |   |                   |   |   |   |   |   |
| Furniture, fixtures and equipment, net                                                                                                                                                         |   | 395,338                |   | - |   | 395,338 |   |
| Other Assets:                                                                                                                                                                                  |   |                   |   |   |   |   |   |
| Patents, net                                                                                                                                                                                   |   | 1                      |   | - |   | 1 |   |
| Intangibles, net                                                                                                                                                                               |   | 6,568                  |   | - |   | 6,568 |   |
|                                                                                                                                                                                           |   |                   |   |   |   |   |   |
| TOTAL ASSETS                                                                                                                                                                                   |   | 410,471                |   | 5,957,127 |   | 6,367,598 |   |
|                                                                                                                                                                                           |   |                   |   |   |   |   |   |
| LIABILITIES AND STOCKHOLDERS' DEFICIT                                                                                                                                                          |   |                   |   |   |   |   |   |
| Current Liabilities:                                                                                                                                                                           |   |                   |   |   |   |   |   |
| Accounts Payable                                                                                                                                                                               |   | 432,621                |   | 204,059 |   | 636,680 |   |
| Accounts Payable-Stockholders                                                                                                                                                                  |   | 2,594                  |   | - |   | 2,594 |   |
| Advances from Stockholders                                                                                                                                                                     |   | 875,081                |   | - |   | 875,081 |   |
| Note Payable                                                                                                                                                                                   |   | 30,000                 |   | - |   | 30,000 |   |
| Accrued Liabilities                                                                                                                                                                            |   | 314,964                |   |   |   | 314,964 |   |
| Deferred Income                                                                                                                                                                                |   | -                      |   | - |   | - |   |
| Total Current Liabilities                                                                                                                                                                      |   | 1,656,660              |   | 204,059 |   | 1,860,719 |   |
|                                                                                                                                                                                           |   |                   |   |   |   |   |   |
| Long Term Liabilities:                                                                                                                                                                         |   |                   |   |   |   |   |   |
|    Convertible Note                                                                                                                                                             |   | -                      |   | 1,500,000 |   | 1,500,000 |   |
|    Asset Retirement Obligation                                                                                                                                                  |   |                   |   | 273,075 |   | 273,075 |   |
|    Discount on Convertible Note                                                                                                                                                 |   | -                      |   | (1,285,714 | ) | (1,285,714 | ) |
|    Long Term Debt                                                                                                                                                               |   | -                      |   | 2,800,000 |   | 2,800,000 |   |
| Total Long Term Liabilities                                                                                                                                                                    |   | -                      |   | 3,287,361 |   | 3,287,361,3 |   |
|                                                                                                                                                                                           |   |                   |   |   |   |   |   |
| TOTAL LIABILITIES                                                                                                                                                                              |   | 1,656,660              |   |  3,491,420 |   | 5,447,322 |   |
|                                                                                                                                                                                           |   |                   |   |   |   |   |   |
| STOCKHOLDERS' EQUITY (DEFICIT)                                                                                                                                                                 |   |                   |   |   |   |   |   |
| Preferred stock:                                                                                                                                                                               |   |                   |   |   |   |   |   |
| Series A convertible preferred stock, $0.001 par, 2,500,000 shares authorized, 1,378 and 6,378 shares issued and outstanding as of January 31, 2010 and  July 31, 2009, respectively |   | 1                      |   | - |   | 1 |   |
|  Series E convertible preferred stock, $0.001 par, 1,163,000 shares authorized, 1,163,000 and 0 shares issued and outstanding as of January 31, 2010 and July 31, 2009, respectively      |   | -                      |   | 24,357 |   | 24,357 |   |
| Common stock, $0.001 par value, 500,000,000 shares authorized, 371,137,803 and 460,664,395 shares issued and outstanding at January 31, 2010 and July 31 2009, respectively                    |   | 460,664                |   | 3,000 |   | 463,664 |   |
| Additional paid-in capital                                                                                                                                                                     |   | 14,481,168             |   | 2,345,708 |   | 16,826,876 |   |
| Deficit accumulated during development stage                                                                                                                                                   |   | (16,188,022            | )      | - |   | (16,188,022 | ) |
|                                                                                                                                                                                           |   |                   |   |   |   |   |   |
| Total stockholders' equity (deficit)                                                                                                                                                           |   | (1,246,189             | )      | 2,373,065 |   | 1,126,876 |   |
|                                                                                                                                                                                           |   |                   |   |   |   |   |   |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)                                                                                                                                           |   | 410,471                |   | 5,957,127 |   | 6,367,598 |   |

----

----

|                                                                                                                                                                                           |   |     |        |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------|-------------|
|                                                                                                                                                                                           |   | Original |        |   | Change |   |   | Restated |   |
| ASSETS                                                                                                                                                                                         |   |     |        |   |   |   |   |   |   |
| Current Assets:                                                                                                                                                                                |   |     |        |   |   |   |   |   |   |
| Cash                                                                                                                                                                                           |   | $   | 28,575      |   |   | $  | - |   |   | $  | 28,575 |   |
| Accounts Receivable                                                                                                                                                                            |   |     | 2,706       |   |   |   | 3,883 |   |   |   | 6,589 |   |
| Other Current Assets                                                                                                                                                                           |   |     | 11,194      |   |   |   | - |   |   |   | 11,194 |   |
| Total Current Assets                                                                                                                                                                           |   |     | 42,475      |   |   |   | 3,883 |   |   |   | 46,358 |   |
|                                                                                                                                                                                           |   |     |        |   |   |   |   |   |   |   |   |   |
| Oil and gas properties:                                                                                                                                                                        |   |     |        |   |   |   |   |   |   |   |   |   |
| Proved Properties, net                                                                                                                                                                         |   |     | -           |   |   |   | 5,864,485 |   |   |   | 5,864,485 |   |
|                                                                                                                                                                                           |   |     |        |   |   |   |   |   |   |   |   |   |
| Furniture, fixtures and equipment, net                                                                                                                                                         |   |     | 365,709     |   |   |   | - |   |   |   | 365,709 |   |
| Other Assets:                                                                                                                                                                                  |   |     |        |   |   |   |   |   |   |   |   |   |
| Patents, net                                                                                                                                                                                   |   |     | -           |   |   |   | - |   |   |   | - |   |
| Intangibles, net                                                                                                                                                                               |   |     | 6,568       |   |   |   | - |   |   |   | 6,568 |   |
|                                                                                                                                                                                           |   |     |        |   |   |   |   |   |   |   |   |   |
| TOTAL ASSETS                                                                                                                                                                                   |   |     | 414,752     |   |   |   | 5,868,368 |   |   |   | 6,283,120 |   |
|                                                                                                                                                                                           |   |     |        |   |   |   |   |   |   |   |   |   |
| LIABILITIES AND STOCKHOLDERS' DEFICIT                                                                                                                                                          |   |     |        |   |   |   |   |   |   |   |   |   |
| Current Liabilities:                                                                                                                                                                           |   |     |        |   |   |   |   |   |   |   |   |   |
| Accounts Payable                                                                                                                                                                               |   |     | 572,491     |   |   |   | 204,059 |   |   |   | 776,550 |   |
| Accounts Payable-Stockholders                                                                                                                                                                  |   |     | 2,576       |   |   |   | - |   |   |   | 2,576 |   |
| Advances from Stockholders                                                                                                                                                                     |   |     | 883,343     |   |   |   | - |   |   |   | 883,343 |   |
| Note Payable                                                                                                                                                                                   |   |     | 30,000      |   |   |   | - |   |   |   | 30,000 |   |
| Accrued Liabilities                                                                                                                                                                            |   |     | 467,492     |   |   |   |   |   |   |   | 467,492 |   |
| Deferred Income                                                                                                                                                                                |   |     | -           |   |   |   | - |   |   |   | - |   |
| Total Current Liabilities                                                                                                                                                                      |   |     | 1,955,902   |   |   |   | 204,059 |   |   |   | 2,159,961 |   |
|                                                                                                                                                                                           |   |     |        |   |   |   |   |   |   |   |   |   |
| Long Term Liabilities:                                                                                                                                                                         |   |     |        |   |   |   |   |   |   |   |   |   |
|    Long Term Note (5 yr, 7.5% interest, Convertible at $0.21 per share)                                                                                                         |   |     | -           |   |   |   | 1,500,000 |   |   |   | 1,500,000 |   |
|    Asset Retirement Obligation                                                                                                                                                  |   |     |        |   |   |   | 273,075 |   |   |   | 273,075 |   |
|    Discount on Convertible Note                                                                                                                                                 |   |     | -           |   |   |   | (1,285,714 |   |   |   | (1,285,714 | )  |
|    Long Term Debt                                                                                                                                                               |   |     | -           |   |   |   | 2,800,000 |   |   |   | 2,800,000 |   |
| Total Long Term Liabilities                                                                                                                                                                    |   |     | -           |   |   |   | 3,287,361 |   |   |   | 3,287,361,3 |   |
|                                                                                                                                                                                           |   |     |        |   |   |   |   |   |   |   |   |   |
| TOTAL LIABILITIES                                                                                                                                                                              |   |     | 1,955,902   |   |   |   | 3,491,420 |   |   |   | 5,447,322 |   |
|                                                                                                                                                                                           |   |     |        |   |   |   |   |   |   |   |   |   |
| STOCKHOLDERS' EQUITY (DEFICIT)                                                                                                                                                                 |   |     |        |   |   |   |   |   |   |   |   |   |
| Preferred stock:                                                                                                                                                                               |   |     |        |   |   |   |   |   |   |   |   |   |
| Series A convertible preferred stock, $0.001 par, 2,500,000 shares authorized, 1,378 and 6,378 shares issued and outstanding as of October 31, 2009 and  July 31, 2009, respectively |   |     | 1           |   |   |   | - |   |   |   | 1 |   |
|  Series E convertible preferred stock, $0.001 par, 1,163,000 shares authorized, 1,163,000 and 0 shares issued and outstanding as of October 31, 2009 and July 31, 2009, respectively      |   |     | -           |   |   |   | - |   |   |   | - |   |
| Common stock, $0.001 par value, 500,000,000 shares authorized, 371,137,803 and 460,664,395 shares issued and outstanding at October 31, 2009 and July 31 2009, respectively                    |   |     | 371,250     |   |   |   | 27,357 |   |   |   | 398,607 |   |
| Additional paid-in capital                                                                                                                                                                     |   |     | 15,798,206  |   |   |   | 2,352,643 |   |   |   | 1,850,849 |   |
| Deficit accumulated during development stage                                                                                                                                                   |   |     | (17,710,607 | ) |   |   | (3,052 | ) |   |   | (17,713,659 | )  |
|                                                                                                                                                                                           |   |     |        |   |   |   |   |   |   |   |   |   |
| Total stockholders' equity (deficit)                                                                                                                                                           |   |     | (1,541,150  | ) |   |   | 2,376,948 |   |   |   | 835,798 |   |
|                                                                                                                                                                                           |   |     |        |   |   |   |   |   |   |   |   |   |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)                                                                                                                                           |   |     | 414,752     |   |   |   | 5,868,368 |   |   |   | 6,283,120 |   |

----

|                                                  |   |     |        |   |   |   |                                                          |     |   |
|-------------------------------------------------------|--------|----------|-------------|--------|--------|--------|---------------------------------------------------------------|----------|--------|
|                                                  |   | Original |        |   | Change |   |                                                          | Restated |   |
| Revenues                                              |   | $        | 3,900       |   |   | $      | 3,883                                                         |     |   | $ | 7,783 |   |
| Cost of Revenue                                       |   |     | 9,057       |   |   |   |  -                                                       |     |   |   | 9,057 |   |
| Gross Loss                                            |   |     | (5,157)     |   |   |   | 3,883                                                         |     |   |   | (1,274) |   |
|                                                  |   |     |        |   |   |   |                                                          |     |   |   |   |   |
| Operating Expenses:                                   |   |     |        |   |   |   |                                                          |     |   |   |   |   |
| General & administrative                          |   |     | 1,153,356   |   |   |   |                                                          |     |   |   | 1.153,356 |   |
| Depreciation and amortization                         |   |     | 28,779      |   |   |   | 2,876                                                         |     |   |   | 31,655 |   |
| Professional fees                                     |   |     | 135,069     |   |   |   |                                                          |     |   |   | 135,069 |   |
| Payroll expenses                                      |   |     | 273,295     |   |   |   |                                                          |     |   |   | 273,295 |   |
| Software Development Expense                          |   |     |        |   |   |   | -                                                             |     |   |   |   |   |
| Loss on disposal of assets                            |   |     |        |   |   |   | -                                                             |     |   |   |   |   |
| Loss on impairment of assets                          |   |     |        |   |   |   | -                                                             |     |   |   |   |   |
| Lease Operating ExpensesResearch and development      |   |     | -21,094     |   |   |   | 4,059-                                                        |     |   |   | 4,05921,094 |   |
|                                                  |   |     |        |   |   |   |                                                          |     |   |   |   |   |
| Total Operating Expenses                              |   |     | 1,611,593   |   |   |   | 6,935                                                         |     |   |   | 1,618,528 |   |
|                                                  |   |     |        |   |   |   |                                                          |     |   |   |   |   |
| Loss from Operations                                  |   |     | 1,616,750   |   |   |   | (3,052)                                                       |     |   |   | (1,619,802) |   |
| Other Income (Expenses):                              |   |     |        |   |   |   |                                                          |     |   |   |   |   |
| Gain on derivatives                                   |   |     | -           |   |   |   |                                                          |     |   |   |   |   |
| Gain on sale of patent                                |   |     | 95,000      |   |   |   |                                                          |     |   |   | 95,000 |   |
| Gain on extinguishment of Accounts Payable            |   |     |        |   |   |   |                                                          |     |   |   |   |   |
| Gain on extinguishment of note                        |   |     | -           |   |   |   |                                                          |     |   |   |   |   |
| Interest income                                       |   |     |        |   |   |   |                                                          |     |   |   |   |   |
| Interest expense                                      |   |     | (835)       |   |   |   |                                                          |     |   |   | (835) |   |
| Total Other Income                                    |   |     | 94,165      |   |   |   |           0 |     |   |   | 94,165 |   |
|                                                  |   |     |        |   |   |   |                                                          |     |   |   |   |   |
| Loss Before Income Taxes                              |   |     | 1,522,585   |   |   |   | (3,052)                                                       |     |   |   | (1,525,637) |   |
|                                                  |   |     |        |   |   |   |                                                          |     |   |   |   |   |
| Provision for Income Taxes                            |   |     | -           |   |   |   | -                                                             |     |   |   | - |   |
| Net Loss                                              |   | $        | (1,522,585) |   |   | $      | (3,052                                                        | )        |   | $ | (1,525,637) |   |
|                                                  |   |     |        |   |   |   |                                                          |     |   |   |   |   |
| Basic and diluted                                     |   |     |        |   |   |   |                                                          |     |   |   |   |   |
| Net loss per common share-basic and diluted           |   | $        | (0.003)     |   |   | $      | (0.00                                                         | )        |   |   |   |   |
|                                                  |   |     |        |   |   |   |                                                          |     |   |   |   |   |
| Weighted average shares outstanding-basic and diluted |   |     | 466,672,824 |   |   |   |  398,844,984                                             |     |   |   |   |   |

----

|                                                                                            |     |        |   |   |         |
|-------------------------------------------------------------------------------------------------|----------|-------------|--------|--------|--------------|
|                                                                                            | Original |        | Change |   | Restatement  |
| CASH FLOWS FROM OPERATING ACTIVITIES                                                            |     |        |   |   |         |
| Net Loss                                                                                        | $        | (1,522,585) |   | $      | (3,052       | ) | $ | (1,525,637) |
| Adjustments to reconcile net loss to net cash used in operating activities:                     |     |        |   |   |         |   |   |   |
| Shares issued for services                                                                      |     | 1,059,191   |   |   | -            |   |   | 1,059,191 |
| Warrant issued for consulting services                                                          |     | -           |   |   | -            |   |   | - |
| Loss on disposal of assets                                                                      |     | -           |   |   | -            |   |   | - |
| Loss on impairment of assets                                                                    |     | -           |   |   | -            |   |   | - |
| Depreciation and amortization                                                                   |     | 28,779      |   |   | 2,876        |   |   | 31,655 |
| Share-based compensation                                                                        |     | 6,112       |   |   | -            |   |   | 6,112 |
| (Gain) Loss on derivative                                                                       |     | -           |   |   | -            |   |   | - |
| Gain on debt extinguishment                                                                     |     | -           |   |   | -            |   |   | - |
| (Gain)Loss on accounts payable                                                                  |     | -           |   |   | -            |   |   | - |
| (Gain)Loss on sale of patent                                                                    |     | (95,000)    |   |   |         |   |   | (95,000) |
| Contributed capital                                                                             |     | 12,911      |   |   | -            |   |   | 12,911 |
| Amortization of debt discount                                                                   |     | 304         |   |   | -            |   |   | 304 |
| Changes in operating assets and  liabilities                                          |     |        |   |   |    |   |   |   |
| Prepaid and other current assets                                                                |     | (2,633)     |   |   | -            |   |   | (2,633) |
| Accounts payable                                                                                |     | 140,720     |   |   | -            |   |   | 140,720 |
| Accounts receivable                                                                             |     | (2,706)     |   |   | 3,833        |   |   | (2,530) |
| Accrued expenses                                                                                |     | 152,528     |   |   | -            |   |   | 152,528 |
| Deferred income                                                                                 |     | (1,400)     |   |   | -            |   |   | (1,400) |
| Accounts payables to stockholders                                                               |     | (17)        |   |   |         |   |   | (17) |
| NET CASH USED IN OPERATING ACTIVITIES                                                           |     | (223,796)   |   |   | -            |   |   | (223,796) |
|                                                                                            |     |        |   |   |         |   |   |   |
| CASH FLOW FROM INVESTING ACTIVITIES                                                             |     |        |   |   |         |   |   |   |
| Proceeds from sale of patents                                                                   |     | 95,000      |   |   | -            |   |   | 95,000 |
| Investment in patents                                                                           |     | -           |   |   | -            |   |   | - |
| Investment in intangible assets                                                                 |     | -           |   |   | -            |   |   | - |
| Investment in property and equipment                                                            |     | -           |   |   | -            |   |   | - |
| NET CASH USED IN INVESTING ACTIVITIES                                                           |     | 95,000      |   |   | -            |   |   | 95,000 |
|                                                                                            |     |        |   |   |         |   |   |   |
| CASH FLOWS FROM FINANCING ACTIVITIES                                                            |     |        |   |   |         |   |   |   |
| Proceeds from sale of stock                                                                     |     | 112,000     |   |   | -            |   |   | 112,000 |
| Advances from stockholders                                                                      |     | 6,368       |   |   | -            |   |   | 6,368 |
| Proceeds from warrants exercised                                                                |     | 9,000       |   |   | -            |   |   | 9,000 |
| Repayment of advances from stockholders                                                         |     | -           |   |   | -            |   |   | - |
| Convertible note proceeds                                                                       |     | 30,000      |   |   | -            |   |   | 30,000 |
| Proceeds from third party debt, net                                                             |     | -           |   |   | -            |   |   | - |
| NET CASH PROVIDED BY FINANCING ACTIVITIES                                                       |     | 157,368     |   |   | -            |   |   | 157,368 |
|                                                                                            |     |        |   |   |         |   |   |   |
| NET CHANGE IN CASH AND CASH EQUIVALENTS                                                         |     | 28,572      |   |   | -            |   |   | 28,572 |
| Cash and cash equivalents at beginning of period                                                |     | 3           |   |   | -            |   |   | 3 |
| Cash and cash equivalents at end of period                                                      | $        | 28,575      |   | $      | -            |   | $ | 28,575 |
|                                                                                            |     |        |   |   |         |   |   |   |
| SUPPLEMENTAL DISCLOSURES                                                                        |     |        |   |   |         |   |   |   |
| Cash paid for interest                                                                          | $        |        |   | $      | -            |   |   |   |
| Cash paid for income taxes                                                                      |     |        |   |   | -            |   |   |   |
|                                                                                            |     |        |   |   |         |   |   |   |
| NON-CASH TRANSACTIONS                                                                           |     |        |   |   |         |   |   |   |
| Shares Returned and Cancelled                                                                   | $        | 128,069     |   | $      | -            |   |   |  128,069 |
| Discount on Convertible Note                                                                    |     | 28,410      |   |   | -            |   |   | 1,314,124 |
|  Stock Issued for Oil & Gas Assets                                                     |     |        |   |   |         |   |   | 1,094,286 |
| O&G accounts receivable from purchase of oil &gas propertyDebt for Oil & Gas Assets |     |        |   |   |         |   |   | 3,8834,300,000 |
| Purchase of Oil & Gas Assets                                                                |     |        |   |   |         |   |   | 5,867,361 |
| Purchase of  Oil & Gas Assets on accounts payable                                 |     |        |   |   |         |   |   | 204,059 |

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|   | · | We appointed Richard J. Kampa as President, Chief Executive Officer and Director to lead the strategic and daily operations of the company and brought back Michael G. Wirtz as Chief Financial Officer. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | We brought the ExoDetectTM product to general availability.  ExoDetectTM is our first product. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------|

|   | · | We released ExoDetectTM at the end of June 2009.  This first product is an affordable, software-as-a-service (SaaS) data leak detection (DLD) software solution that discovers and rates the risk of unauthorized “data in the wild.”  ExoDetectTM reports on the knowledge needed to tighten an organization’s data leak prevention (DLP) controls, while providing the first step in mitigating the financial and legal risks associated with stolen or misappropriated confidential information.  ExoDetect TM performs scans for compromised data on any exposed area in the Internet Cloud; classifies the discovered information according to confidence and severity ratings; and captures the forensic evidence needed to address the breach, including litigation or prosecution. We have an ongoing process of updating and refining the ExoDetectTM product. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The Company is focused on marketing to its clients its current products, ExoDetectTM and ExoWatchTM and developing its other proprietary technology. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The purchase of the oil & gas assets occurred under the prior CEO of the company.   Exobox’s current management believes that these assets have value but are not  a good fit for the company as current management’s priority is software development.  As such, the company is prepared to divest itself of these oil & gas assets and related debt and is prepared to solicit reasonable offers to complete a sale.  Gains, if any, from the sale of these assets would be directed towards the goal of software development. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| ITEM 3. | QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK |
|---------|------------------------------------------------------------|

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| ITEM 1. | LEGAL PROCEEDINGS |
|---------|-------------------|

| ITEM 1A. | RISK FACTORS |
|----------|--------------|

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|  ITEM 3. |  DEFAULTS UPON SENIOR SECURITIES |
|---------------|---------------------------------------|

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

|  ITEM 5. |  OTHER INFORMATION |
|---------------|-------------------------|

|   | (a) | Exhibits |
|--------|-----|----------|

| EXHIBIT NUMBER | DESCRIPTION OF EXHIBIT                                                                                                                            |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------|
| 31.1           | Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                |
| 31.2           | Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                |
| 32.1           | Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
| 32.2           | Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |

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| Dated: June 17, 2010 | By:  /s/ Norman D. Smith   |
|----------------------|--------------------------------------|
|                 | Norman D. Smith                      |
|                 | Chief Executive Officer and Director |
|                 | (Principal Executive Officer)        |

| Dated: June 17, 2010 | By: /s/ Michael G. Wirtz                     |
|----------------------|----------------------------------------------|
|                 | Michael G. Wirtz                             |
|                 | Chief Financial Officer                      |
|                 | (Principal Financial and Accounting Officer) |
|                 |                                         |
|                 |                                         |

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