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U.S. SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-QSB
  þ
    
    QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2008
 o
    
    TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission file number 000-50929
 Ignis Petroleum Group, Inc.
  
  
  
  
   þ o
  o þ




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Page No.PART I  FINANCIAL INFORMATIONItem 1. Financial Statements.
    
    
    1Condensed Consolidated Balance Sheet at March 31, 2008 (unaudited).
    
    
    1Condensed Consolidated Statements of Operations for the Three and Nine Months
Ended March 31, 2008 and restated 2007 (unaudited).
    
    
    2Condensed Consolidated Statements of Cash Flows for the Nine Months ended
March 31, 2008 and restated 2007 (unaudited).
    
    
    3Selected Notes to the Condensed Consolidated Financial Statements (unaudited).
    
    
    4Item 2. Managements Discussion and Analysis or Plan of Operation.
    
    
    11Item 3. Controls and Procedures.
    
    
    18PART II  OTHER INFORMATION
    
    
    19Item 1. Legal Proceedings.
    
    
    19Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
    
    
    19Item 3. Defaults Upon Senior Securities.
    
    
    20Item 4. Submission of Matters to a Vote of Security Holders.
    
    
    20Item 5. Other Information.
    
    
    20Item 6. Exhibits.
    
    
    21SIGNATURES
    
    
    22EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1EXHIBIT 32.2




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PART I  FINANCIAL INFORMATION
 
 Item 1. Financial Statements.
 
 Ignis Petroleum Group, Inc. and Subsidiary
Condensed Consolidated Balance Sheet
(unaudited)
 March 31, 2008ASSETSCurrent assets:Cash and cash equivalents
    
    $
    268,602Accounts receivable
    
    
    193,350Prepaid expenses and other current assets
    
    
    43,500Total current assets
    
    
    505,452Property and equipment:Oil and Gas Properties, net (successful efforts method)
    
    
    157,648Other assets
    
    
    392,253Total assets
    
    $
    1,055,353LIABILITIES AND STOCKHOLDERS DEFICITCurrent liabilities:Accounts payable and accrued expenses
    
    $
    270,790Accrued interest
    
    
    876,592Current portion of asset retirement obligation
    
    
    59,947Current portion of long-term debt
    
    
    4,787,000Current portion of debt discount
    
    
    (4,752,626
    )Current portion of derivative liability
    
    
    117,406Contingent liability
    
    
    1,600,000Total current liabilities
    
    
    2,959,109Long-term liabilities:Long-term debt
    
    
    1,000,000Total long-term liabilities
    
    
    1,000,000Commitments and contingencies (NOTE 9)
    
    
    Stockholders deficit:Preferred stock, $0.001 par value, 5,000,000 shares authorized, none issued and outstanding
Common stock, $0.001 par value, 300,000,000 shares authorized 57,841,982 issued and
outstanding, net of 18,250,000 shares held in escrow
    
    
    57,842Additional paid-in capital
    
    
    12,763,304Accumulated deficit
    
    
    (15,724,902
    )Total stockholders deficit
    
    
    (2,903,756
    )TOTAL LIABILITIES AND STOCKHOLDERS DEFICIT
    
    $
    1,055,353
  1




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For the
    
    
    For theThree Months Ended
    
    
    Nine Months EndedMarch 31,
    
    
    March 31,(Restated)
    
    
    
    
    
    
    (Restated)2008
    
    
    2007
    
    
    2008
    
    
    2007Oil and natural gas sales
    
    $
    593,449
    
    
    $
    205,188
    
    
    
    1,424,886
    
    
    
    911,311Management fees
    
    
    
    
    
    
    57,000
    
    
    
    90,000
    
    
    
    79,500Total revenue
    
    
    593,449
    
    
    
    262,188
    
    
    
    1,514,886
    
    
    
    990,811Operating expenses:Lease operating expense
    
    
    73,752
    
    
    
    18,298
    
    
    
    160,004
    
    
    
    27,623Production and ad valorem taxes
    
    
    32,019
    
    
    
    10,602
    
    
    
    72,948
    
    
    
    19,650Depreciation, depletion and amortization
    
    
    56,434
    
    
    
    205,038
    
    
    
    178,769
    
    
    
    872,113Accretion of asset retirement obligation
    
    
    3,783
    
    
    
    2,676
    
    
    
    11,349
    
    
    
    8,711Exploration expenses, including dry holes
    
    
    
    
    
    
    32,906
    
    
    
    
    
    
    
    461,317General and administrative expenses
    
    
    439,058
    
    
    
    764,471
    
    
    
    1,543,730
    
    
    
    1,941,443Total operating expenses
    
    
    605,046
    
    
    
    1,033,991
    
    
    
    1,966,800
    
    
    
    3,330,857Loss from operations
    
    
    (11,597
    )
    
    
    (771,803
    )
    
    
    (451,914
    )
    
    
    (2,340,046
    )Other income (expense)Gain (loss) from valuation of derivative liability
    
    
    21,528
    
    
    
    (613,541
    )
    
    
    249,162
    
    
    
    3,991,713Interest expense
    
    
    (217,987
    )
    
    
    (488,164
    )
    
    
    (588,721
    )
    
    
    (974,611
    )Gain on sales of oil and gas property
    
    
    
    
    
    
    
    
    
    
    60,000
    
    
    
    (196,459
    )
    
    
    (1,101,705
    )
    
    
    (279,559
    )
    
    
    3,017,102Net Income (loss)
    
    
    (208,056
    )
    
    
    (1,873,508
    )
    
    
    (731,473
    )
    
    
    677,056Basic income (loss) per common share:
    
    $
    
    
    
    $
    (0.04
    )
    
    $
    (0.01
    )
    
    $
    0.01Weighted average number of common shares outstanding
    
    
    57,841,982
    
    
    
    51,095,329
    
    
    
    56,537,480
    
    
    
    50,555,824Diluted income (loss) per common share:
    
    $
    
    
    
    $
    (0.04
    )
    
    $
    (0.01
    )
    
    $
    (0.05
    )Diluted weighted average number of common shares
outstanding
    
    
    57,841,982
    
    
    
    51,095,329
    
    
    
    56,537,480
    
    
    
    53,145,371
  2




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For the
    
    
    For theNine Months Ended
    
    
    Nine Months EndedMarch 31,
    
    
    March 31,2008
    
    
    2007(Restated)Cash flow from operating activitiesNet income (loss)
    
    $
    (731,473
    )
    
    $
    677,056Adjustments to reconcile net income (loss) to net cash used
in operating activitiesDepreciation and depletion
    
    
    178,769
    
    
    
    872,113Amortization of debt cost
    
    
    235,971
    
    
    
    50,103Loss from valuation adjustment of oil and gas properties
    
    
    
    
    
    
    461,098Stock issued for compensation and services
    
    
    39,484
    
    
    
    464,319Amortization of discount of debentures
    
    
    25,773
    
    
    
    Accretion of asset retirement obligation expense
    
    
    11,349
    
    
    
    8,711Gain on derivative financial instrument
    
    
    (249,162
    )
    
    
    (3,991,713
    )Change in current assets and liabilities:Accounts receivable
    
    
    (31,039
    )
    
    
    (85,642
    )Prepaid expenses and other current assets
    
    
    29,643
    
    
    
    161,196Accounts payable and accrued expenses
    
    
    383,352
    
    
    
    53,577Cash used in operating activities
    
    
    (107,333
    )
    
    
    (1,329,182
    )Cash flow from investing activitiesSale of oil and gas property
    
    
    60,000
    
    
    
    138,984Cash provided by/(used) investing activities
    
    
    60,000
    
    
    
    138,984Cash flow from financing activitiesProceeds from note payable
    
    
    
    
    
    
    900,000Cash provided by financing activities
    
    
    
    
    
    
    900,000Net increase(decrease) in cash
    
    
    (47,333
    )
    
    
    (290,198
    )Cash at beginning of period
    
    
    315,935
    
    
    
    872,572Cash at end of period
    
    $
    268,602
    
    
    $
    582,374Supplemental non-cash financing transactions:Conversion of debenture into equity
    
    $
    103,000
    
    
    $
    75,000
  3




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IGNIS PETROLEUM GROUP, INC. AND SUBSIDIARY
SELECTED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
      4




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As PreviouslyReported
    
    
    
    
    
    As RestatedAs of March 31, 2007
    
    Adjustments
    
    As of March 31, 2007Current portion of long term debt
    
    
    
    
    
    
    4,925,000
    
    
    
    4,925,000Less current portion of debt discount
    
    
    
    
    
    
    (4,874,867
    )
    
    
    (4,874,867
    )Current portion of derivative liability
    
    
    
    
    
    
    542,618
    
    
    
    542,618Current portion of warrant liability
    
    
    
    
    
    
    1,589,110
    
    
    
    1,589,110Long term debt
    
    
    4,089,188
    
    
    
    (4,089,188
    )
    
    
    Derivative liability
    
    
    3,332,420
    
    
    
    (3,332,420
    )
    
    
    Warrant liability
    
    
    1,268,095
    
    
    
    (1,268,095
    )
    
    
    Accumulated deficit
    
    
    (15,857,106
    )
    
    
    5,504,842
    
    
    
    (10,352,264
    )
 For The Nine Months
    
    
    
    
    
    For The Nine MonthsEnded March 31, 2007
    
    
    
    
    
    Ended March 31, 2007Gain (loss) from valuation of derivative liability
    
    
    1,698,590
    
    
    
    2,293,123
    
    
    
    3,991,713Interest expense
    
    
    (2,432,858
    )
    
    
    1,458,247
    
    
    
    (974,611
    )Net income (loss)
    
    
    (3,074,314
    )
    
    
    3,751,370
    
    
    
    677,056Basic income (loss) per common share
    
    
    (0.06
    )
    
    
    0.07
    
    
    
    0.01Diluted income (loss) per common share
    
    
    (0.06
    )
    
    
    0.01
    
    
    
    (0.05
    )
 For The Three Months
    
    
    
    
    
    For The Three MonthsEnded March 31, 2007
    
    
    
    
    
    Ended March 31, 2007Gain (loss) from valuation of derivative liability
    
    
    840,347
    
    
    
    (1,453,888
    )
    
    
    (613,541
    )Interest expense
    
    
    (874,675
    )
    
    
    386,511
    
    
    
    (488,164
    )Net income (loss)
    
    
    (806,129
    )
    
    
    (295,576
    )
    
    
    (1,101,705
    )Basic and diluted income (loss) per common share
    
    
    (0.02
    )
    
    
    (0.02
    )
    
    
    (0.04
    )
    5




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6




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Convertible debentures payable
    
    $
    4,787,000Less: unamortized discount on debentures
    
    
    (4,752,626
    )Convertible debentures, net
    
    $
    34,374
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8




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2008Asset retirement obligation at June 30, 2007
    
    
    48,598Liabilities incurred
    
    
    Liabilities settled
    
    
    Accretion expense
    
    
    11,349Cumulative effect adjustment
    
    
    Asset retirement obligation at March 31, 2008
    
    
    59,947
         9




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-
    
 Item 2. Managements Discussion and Analysis or Plan of Operation.
 Forward-Looking Statements
  11




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Plan of Operation
     12




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Liquidity and Capital Resources
   13




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Financing Activities
  Operating Activities
  14




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Results of Operations
   Overall
  Three Months Ended March 31,
    
    

    Increase
    
    
    Nine Months Ended March 31,
    
    
    
    Increase2008
    
    
    2007
    
    

    (Decrease)
    
    
    2008
    
    
    2007
    
    
    
    
    (Decrease)Results of oil and gas
producing operations
    
    $
    427,462
    
    
    
    (7,332
    )
    

    
    434,794
    
    
    $
    1,091,816
    
    
    
    (398,603
    )
    
    
    
    1,490,419General & administrative expense
    
    $
    (439,058
    )
    
    
    (764,471
    )
    

    
    325,413
    
    
    $
    (1,543,730
    )
    
    
    (1,941,443
    )
    
    
    
    397,713Gain/(loss) from valuation
of derivative liability
    
    $
    21,528
    
    
    
    (613,541
    )
    

    
    635,069
    
    
    $
    249,162
    
    
    
    3,991,713
    
    
    
    
    (3,742,551
    )Interest expense
    
    $
    (217,987
    )
    
    
    (488,164
    )
    

    
    270,177
    
    
    
    (588,721
    )
    
    
    (974,611
    )
    
    
    
    385,890Gain on sale of property
    
    $
    
    
    
    
    
    
    

    
    
    
    
    $
    60,000
    
    
    
    0Net income/(loss)
    
    $
    (208,056
    )
    
    
    (1,873,508
    )
    

    
    1,665,452
    
    
    
    (731,473
    )
    
    
    677,056
    
    
    
    
    (2,263,955
    )
  15




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Three Months Ended
    
    Three Months Ended
    
    Nine Months Ended
    
    Nine Months EndedMarch 31, 2008
    
    March 31, 2007
    
    March 31, 2008
    
    March 31, 2007Operating revenues
    
    $
    593,449
    
    
    
    205,188
    
    
    
    1,424,886
    
    
    
    911,311SalesCondensate (Mbbls)
    
    
    4.1
    
    
    
    3.2
    
    
    
    11.9
    
    
    
    11.4Natural Gas (MMcf)
    
    
    15.5
    
    
    
    6.7
    
    
    
    38.8
    
    
    
    35.8Total (BOE)
    
    
    6.6
    
    
    
    4.3
    
    
    
    18.4
    
    
    
    17.4Average priceCondensate ($/Bbl)
    
    $
    100.85
    
    
    
    56.7
    
    
    
    90.52
    
    
    
    61.9Natural Gas ($/Mcf)
    
    $
    9.77
    
    
    
    7.27
    
    
    
    8.93
    
    
    
    7.40
 Operating revenues
    16




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Operating expenses
     Interest Expense
  Gain on valuation of derivative liability
  17




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Off Balance Sheet Arrangements
  
 Item 3. Controls and Procedures.
     18




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PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings.
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
      19




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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
  20




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Item 6. Exhibits.
  Exhibit No.
    
    Description*31.1
    
    Certification by Chief Executive Officer, required by Rule
13a-14(a) or Rule 15d-14(a) of the Exchange Act, promulgated
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*31.2
    
    Certification by Chief Financial Officer, required by Rule
13a-14(a) or Rule 15d-14(a) of the Exchange Act, promulgated
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*32.1
    
    Certification by Chief Executive Officer, required by Rule
13a-14(b) or Rule 15d-14(b) of the Exchange Act and Section
1350 of Chapter 63 of Title 18 of the United States Code,
promulgated pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.*32.2
    
    Certification by Chief Financial Officer, required by Rule
13a-14(b) or Rule 15d-14(b) of the Exchange Act and Section
1350 of Chapter 63 of Title 18 of the United States Code,
promulgated pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.
 
 *
    
    Filed herewith 21




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SIGNATURES
  Ignis Petroleum Group, Inc. (Registrant)Date: May 20, 2008
    By:
    /s/ Geoff EvettGeoff EvettPresident and Chief Executive OfficerDate: May 20, 2008
    By:
    /s/ Geoff LongGeoff LongChief Financial Officer 22




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Exhibit Index
 Exhibit No.
    
    Description*31.1
    
    Certification by Chief Executive Officer, required by Rule
13a-14(a) or Rule 15d-14(a) of the Exchange Act, promulgated
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*31.2
    
    Certification by Chief Financial Officer, required by Rule
13a-14(a) or Rule 15d-14(a) of the Exchange Act, promulgated
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*32.1
    
    Certification by Chief Executive Officer, required by Rule
13a-14(b) or Rule 15d-14(b) of the Exchange Act and Section
1350 of Chapter 63 of Title 18 of the United States Code,
promulgated pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.*32.2
    
    Certification by Chief Financial Officer, required by Rule
13a-14(b) or Rule 15d-14(b) of the Exchange Act and Section
1350 of Chapter 63 of Title 18 of the United States Code,
promulgated pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.
 
 *
    
    Filed herewith 23