UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB
                                   (Mark One)

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

                  For the quarterly period ended March 31, 2007

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

           For the transition period from ___________ to _____________

                       Commission file number: 333-121070

                                ABC FUNDING, INC.

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

          Nevada                                        56-2458730
          ------                                        ----------
(State or other jurisdiction of                (IRS Employer Identification No.)
incorporation or organization)

                      Alan Gaines, Chief Executive Officer
                           c/o Eaton & Van Winkle LLP
                                  3 Park Avenue
                            New York, New York 10016
                    ----------------------------------------
                    (Address of principal executive offices)
                                 (212) 561-3626
                           ---------------------------
                           (Issuer's telephone number)

              (Former name, former address and former fiscal year,
                          if changed since last report)

   Check whether the registrant (1) filed all reports required to be filed by
 Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
 shorter period that the registrant was required to file such reports), and (2)
 has been subject to such filing requirements for the past 90 days. Yes |X| No
|_|

Indicate by check mark whether the Registrant is a shell company (as defined in
 Rule 12b-2 of the Securities Exchange Act of 1934) (check one): Yes |X| No |_|

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 22,065,000 shares of Common Stock, as
                                of May 3, 2007.

   Transitional Small Business Disclosure Format (check one): Yes |_| No |X|


                                       1
<PAGE>

                                ABC FUNDING, INC.

                                                                        Page No.
PART I - Financial Information

Item 1.  Financial Statements

         Unaudited Balance Sheets as of March 31, 2007 and June 30, 2006     3

         Unaudited Statements of Expenses for the Three and Nine Month       4
         Periods Ended March 31, 2007 and for the Periods from
         February 21, 2006 (Inception) Through March 31, 2006
         and March 31, 2007

         Unaudited Statements of Cash Flows for the Nine Months Ended        5
         March 31,2007 and for the Periods from February 21, 2006
         (Inception)
         Through March 31, 2006 and March 31, 2007

         Notes to Unaudited Financial Statements                             6

Item 2.  Management's Discussion and Analysis or Plan of Operation           8

Item 3.  Controls and Procedures                                            16

PART II. Other Information

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds         17

Item 6. Exhibits                                                            17

Signature Page                                                              18


                                       2
<PAGE>

                                ABC Funding, Inc.
                         (Formerly Energy Venture, Inc.)
                          (A Development Stage Company)
                                 BALANCE SHEETS
                                   (unaudited)

<TABLE>
<CAPTION>
                                                           March 31,               June 30,
                                                              2007                   2006
                                                           ---------               --------
<S>                                                      <C>                     <C>
ASSETS
Cash and cash equivalents                                $   660,971             $   894,516
Prepaid and other current assets                               8,708                  66,461
                                                         -----------             -----------
Total current assets                                         669,679                 960,977
                                                         -----------             -----------
Total assets                                             $   669,679             $   960,977
                                                         ===========             ===========
LIABILITIES & STOCKHOLDERS' DEFICIT
Accounts payable                                         $     5,032             $    58,657
Accrued liabilities                                          151,599                  59,509
Convertible debt, net of discount of $88,684               1,411,316                      --
                                                         -----------             -----------
Total current liabilities                                  1,567,947                 118,166

Convertible debt, net of discount of $219,455                     --               1,265,545
                                                         -----------             -----------
Total liabilities                                          1,567,947               1,383,711
                                                         -----------             -----------
STOCKHOLDERS' DEFICIT

Preferred stock, $.001 par value,
1,000,000 shares authorized, none outstanding                     --                      --

Common stock, $.001 par value,
30,000,000 shares authorized,
22,065,000 issued and outstanding                             22,065                  22,065

Additional paid-in-capital                                   950,142                 655,420

Deficit accumulated in the development stage              (1,870,475)             (1,100,219)
                                                         -----------             -----------
Total stockholders' deficit                                 (898,268)               (422,734)
                                                         -----------             -----------
Total liabilities & stockholders' deficit                $   669,679             $   960,977
                                                         ===========             ===========
</TABLE>

                 See accompanying summary of accounting policies
                       and notes to financial statements.


                                       3
<PAGE>

                                ABC Funding, Inc.
                         (Formerly Energy Venture, Inc.)
                          (A Development Stage Company)
                              STATEMENT OF EXPENSES
              Three and Nine Month Periods Ended March 31, 2007 and
             the Periods from February 21, 2006 (Inception) Through
                        March 31, 2006 and March 31, 2007
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                 February 21,                                       February 21,
                                                                     2006                                              2006
                                          Three Months            (Inception)              Nine Months              (Inception)
                                              Ended                 Through                  Ended                    Through
                                            March 31,              March 31,                March 31,                March 31,
                                              2007                   2006                      2007                    2007
                                        ---------------------------------------------------------------------------------------

<S>                                     <C>                      <C>                      <C>                      <C>
Selling, general and
administrative expense                  $     74,032             $    425,518             $    551,096             $  1,586,807
                                        ------------             ------------             ------------             ------------

Operating loss                                74,032                  425,518                  551,096                1,586,807
                                        ------------             ------------             ------------             ------------

Other (income) expense:
Interest income                               (7,059)                      --                  (24,060)                 (29,247)
Interest expense                              84,459                       --                  243,220                  312,915
                                        ------------             ------------             ------------             ------------

Total other (income) expense                  77,400                       --                  219,160                  283,668
                                        ------------             ------------             ------------             ------------

Total expenses                               151,432                  425,518                  770,256                1,870,475
                                        ------------             ------------             ------------             ------------

Net loss                                $   (151,432)            $   (425,518)            $   (770,256)            $ (1,870,475)
                                        ============             ============             ============             ============
Basic and diluted net loss
per common share                        $      (0.01)            $      (0.02)            $      (0.03)

Weighted average common
shares outstanding                        22,065,000               19,665,000               22,065,000
</TABLE>

                 See accompanying summary of accounting policies
                       and notes to financial statements.


                                       4
<PAGE>

                                ABC Funding, Inc.
                         (Formerly Energy Venture, Inc.)
                          (A Development Stage Company)
                            STATEMENTS OF CASH FLOWS
                     Nine Month Period Ended March 31, 2007
    and the Periods from February 21, 2006 (Inception) Through March 31, 2006
                               and March 31, 2007
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                                     February 21,            February 21,
                                                                                         2006                    2006
                                                               Nine Months            (Inception)             (Inception)
                                                                  Ended                 Through                 Through
                                                                March 31,              March 31,               March 31,
                                                                  2007                   2006                    2007
                                                             -----------------------------------------------------------
<S>                                                          <C>                     <C>                     <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss                                                     $  (770,256)            $  (425,518)            $(1,870,475)
Adjustments to reconcile net loss to cash
used in operating activities:
Share based compensation                                         294,723                 425,518                 720,240
Amortization of debt discount                                    130,770                      --                 161,316

Changes in:
Prepaid and other current assets                                  57,753                (181,824)                 (8,708)
Accounts payables and accrued liabilities                         38,465                      --                 156,631
                                                             -----------             -----------             -----------
NET CASH USED IN OPERATING ACTIVITIES                           (248,545)               (181,824)               (840,996)
                                                             -----------             -----------             -----------

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from sale of common stock                                    --                 251,967                 251,967
Proceeds from convertible notes                                   15,000               1,235,000               1,250,000
                                                             -----------             -----------             -----------
NET CASH PROVIDED BY FINANCING ACTIVITIES                         15,000               1,486,967               1,501,967
                                                             -----------             -----------             -----------

NET CHANGE IN CASH                                              (233,545)              1,305,143                 660,971
Cash and equivalents balance, beginning of period                894,516                      --                      --
                                                             -----------             -----------             -----------
Cash and equivalents balance, end of period                  $   660,971             $ 1,305,143             $   660,971
                                                             ===========             ===========             ===========

SUPPLEMENTAL DISCLOSURES:
Cash paid for interest                                       $        --             $        --             $        --
Cash paid for income taxes                                   $        --             $        --             $        --
</TABLE>

                 See accompanying summary of accounting policies
                       and notes to financial statements.


                                       5
<PAGE>

                                ABC Funding, Inc.
                         (Formerly Energy Venture, Inc.)
                          (A Development Stage Company)
                          Notes To Financial Statements
                                   (unaudited)

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Business. ABC Funding, Inc. ("ABC" or "Company") was incorporated in
Nevada on May 13, 2004. ABC merged with Energy Venture, Inc. in May of 2006. The
merger transaction was accounted for as a reverse merger with Energy Venture
being deemed the acquiring entity for financial accounting purposes. Thus, the
historical financial statements of the Company prior to the effective date of
the Energy Venture merger have been restated to be those of Energy Venture. ABC,
formerly Energy Venture, Inc. ("EVI'), since inception, has primarily been
involved in conducting business planning and capital-raising activities. ABC
intends to engage in the oil and natural gas industry either by making
acquisitions or by participating in strategic joint ventures.

Basis of Presentation. The accompanying unaudited interim financial statements
of ABC have been prepared in accordance with accounting principles generally
accepted in the United Sates of America and the rules of the Securities and
Exchange Commission, and should be read in conjunction with ABC's audited 2006
annual financial statements and notes thereto. In the opinion of management, all
adjustments, consisting of normal recurring adjustments, necessary for a fair
presentation of financial position and the result of operations for the interim
periods presented have been reflected herein. The results of operations for
interim periods are not necessarily indicative of the results to be expected for
the full year. Notes to the financial statements, which would substantially
duplicate the disclosure required in ABC's 2006 annual financial statements have
been omitted.

Use of Estimates. In preparing financial statements, management makes estimates
and assumptions that affect the reported amounts of assets and liabilities in
the balance sheet and revenue and expenses in the statement of expenses. Actual
results could differ from those estimates.

NOTE 2 PROCEEDS FROM CONVERTIBLE NOTE SUBSCRIPTION

Between February 21, 2006 and April 30, 2006, ABC circulated a Private Placement
Memorandum ("PPM") offering convertible notes on the following terms: each note
matures August 31, 2007, a 10% interest rate payable in either cash or shares
and a conversion rate of $0.50 per share, and each investor would be issued upon
subscription, as an inducement to participate in the offering, a number of
shares of Common Stock equal to 40% of his or her investment. The original PPM
offered up to $1,500,000 in notes. Actual subscriptions received and accepted
were for $1,500,000, $15,000 of which was received in the nine month period
ended March 31, 2007. If all $1,500,000 of notes are converted at maturity, then
including interest and the additional shares issued upon subscription, 4,009,139
shares will be issued.

Such additional shares of common stock issued to the investors upon their
subscription for convertible notes amounted to 600,000 shares. The relative fair
value of these shares is $250,000 and was recorded as a debt discount and as
additional paid in capital. The debt discount is being amortized over the term
of the notes payable using the effective interest method. The original issue
discount rate was 23.44%. During the period from February 21, 2006 (inception)
to March 31, 2007, a total of $161,316 was amortized and recorded as interest
expense.


                                       6
<PAGE>

NOTE 3 STOCK OPTION GRANT

On December 28, 2006, ABC granted two non-employees options to purchase up to an
aggregate of 1,500,000 shares of ABC common stock at an exercise price of $0.25
per share for services rendered. The options vested immediately and terminate on
December 28, 2011.

The fair value of the options was determined utilizing the Black-Scholes stock
option valuation model. The significant assumptions used in the valuation were:
the exercise price as noted above; the market value of ABC's common stock on
December 28, 2006, $0.25; expected volatility of 105%; risk free interest rate
of 4.69%; and a term of five years. The fair value of the options was $294,723
at December 28, 2006 and was recorded as share based compensation.


                                       7
<PAGE>

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

      Plan of Operations. ABC Funding, Inc. ("we" or the "Company") has not had
any revenues from operations since we commenced business in February 2006. See
Item 1 "Financial Statements." Accordingly, the information provided in this
Item 2 is a plan of operation pursuant to Regulation S-B Item 303(a) promulgated
by the SEC.

      The merger transaction with Energy Venture in May 2006 resulted in the
Energy Venture stockholders controlling approximately 92% of our issued and
outstanding shares of Common Stock immediately following its completion.
Consequently, the transaction was accounted for as a reverse merger with Energy
Venture being deemed the acquiring entity for financial accounting purposes.
Since the transaction involved the merger of a private company (Energy Venture)
into a public shell company, it was considered to be a capital transaction
rather than a business combination for financial accounting purposes. Thus, for
financial accounting and reporting purposes, the historical financial statements
of the Company prior to the effective date of the Energy Venture merger have
been restated to be those of Energy Venture.

      Since the merger with Energy Venture, the Company has primarily been
involved in conducting business planning and capital-raising activities. The
Company intends to engage in the oil and natural gas industry either by making
acquisitions or by participating in strategic joint ventures. To date no
acquisitions have been made nor has the Company entered into any joint ventures.

      Capital Resources. During 2006, we raised funds by issuances of our debt
and equity securities to pay current expenses and funds for our proposed
operations. See Item 1 "Financial Statements" - Note 2 of Notes to Financial
Statements.

      From March through July 2006, the Company conducted a private placement
offering, pursuant to a Private Placement Memorandum, of convertible promissory
notes and common stock (the "Private Placement"). As a result of the merger we
were provided with needed working capital in the form of a capital infusion of
approximately $1,500,000 from the Private Placement.

      Despite the merger, if we are unable to raise additional capital from
conventional sources, including lines of credit and additional sales of
additional stock in the future, we may be forced nevertheless to curtail or
cease our business operations. Even if we are able to continue our operations,
the failure to obtain sufficient financing could have a substantial adverse
effect on our business and financial results.

      In the future, we may be required to seek additional capital by selling
debt or equity securities, curtailing operations, selling assets, or otherwise
be required to bring cash flows in balance when we approach a condition of cash
insufficiency. The sale of additional equity securities, if accomplished, may
result in dilution to our shareholders. We cannot assure you, however, that
financing will be available in amounts or on terms acceptable to us, or at all.
Our inability to obtain sufficient financing will adversely affect our operating
results and prospects.

      Our forecasted operating needs and funding requirements, as well as our
projected ability to obtain adequate financial resources, involve risks and
uncertainties, and actual results could vary as a result of a number of factors,
including the "Risk Factors" set forth below. The risks described therein are
not the only ones facing us and additional risks that we do not yet know of or
that we currently think are not material may also have an adverse effect on our
business operations. If any of the risks actually occur, our business could be
adversely affected as well as the value of our shares.


                                       8
<PAGE>

Critical Accounting Policies

      The preparation of financial statements and related notes requires us to
make judgments, estimates, and assumptions that affect the reported amounts of
assets, liabilities, revenue and expenses, and related disclosure of contingent
assets and liabilities. An accounting policy is considered to be critical if it
requires an accounting estimate to be made based on assumptions about matters
that are highly uncertain at the time the estimate is made, and if different
estimates that reasonably could have been used, or changes in the accounting
estimates that are reasonably likely to occur periodically, could materially
impact the financial statements.

      Because of our limited level of operations, we have not had to make
material assumptions or estimates other than our assumption that we are a going
concern. If our business increases, our principal estimates will involve whether
engagements in process will be profitable.

Forward Looking Statements

      The Company desires to take advantage of the "safe harbor" provisions of
the Private Securities Litigation Reform Act of 1995. This report contains a
number of forward-looking statements that reflect management's current views and
expectations with respect to our business, strategies, future results and events
and financial performance. All statements made in this annual report other than
statements of historical fact, including statements that address operating
performance, events or developments that management expects or anticipates will
or may occur in the future, including statements related to future reserves,
cash flows, revenues, profitability, adequacy of funds from operations,
statements expressing general optimism about future operating results and
non-historical information, are forward-looking statements. In particular, the
words "believe," "expect," "intend," " anticipate," "estimate," "may," "will,"
variations of such words and similar expressions identify forward-looking
statements, but are not the exclusive means of identifying such statements and
their absence does not mean that the statement is not forward-looking. These
forward-looking statements are subject to certain risks and uncertainties,
including those discussed below. Our actual results, performance or achievements
could differ materially from historical results as well as those expressed in,
anticipated or implied by these forward-looking statements. We do not undertake
any obligation to revise these forward-looking statements to reflect any future
events or circumstances.

      Readers should not place undue reliance on these forward-looking
statements, which are based on management's current expectations and projections
about future events, are not guarantees of future performance, are subject to
risks, uncertainties and assumptions (including those described below) and apply
only as of the date of this report. Our actual results, performance or
achievements could differ materially from the results expressed in, or implied
by, these forward-looking statements. Factors that could cause or contribute to
such differences include, but are not limited to, those discussed in "Risk
Factors" below as well as those discussed elsewhere in this report, and the
risks discussed in our press releases and other communications to shareholders
issued by us from time to time, which attempt to advise interested parties of
the risks and factors that may affect our business. We undertake no obligation
to publicly update or revise any forward-looking statements, whether as a result
of new information, future events or otherwise.


                                       9
<PAGE>

Risk Factors

      The reader should carefully consider each of the risks described below. If
any of the following risks develop into actual events, our business, financial
condition or results of operations could be materially adversely affected and
the trading price of our common stock could decline significantly.

We are a company with limited operating history and very limited resources.

      We have commenced business of a limited basis, and to date have been
engaged principally in organization, capital-raising activities and early
business development planning matters related primarily to making acquisitions
or participating in strategic joint ventures in the oil and natural gas
industry. To date no acquisitions have been made nor have any joint ventures
been entered into by the Company; in addition, we have had no revenues and
anticipate significant expenses relating to the development of our
infrastructure and business. Our prospects must be considered in light of the
risks, expenses, delays, problems and difficulties frequently encountered in the
establishment of a new business in the energy industry, given the volatile
nature of the energy markets. There can be no assurance that the Company will
achieve its objective and business plan, or that it will be able to succeed in
achieving its objective and business plan. Given factors that are described
below, there exists a possibility that an investor could suffer a substantial
loss as a result of an investment in the Company.

      Our common stock is listed on the OTC Bulletin Board. Our common stock is
not quoted on the NASDAQ National Market System or listed on a national
securities exchange. The NASDAQ National Market System and national securities
exchanges require companies to fulfill certain requirements in order for their
shares to be listed and to continue to be listed. The securities of a company
may be ineligible for listing or, if listed, may be considered for delisting if
the company fails to meet certain financial thresholds, including if the company
has sustained losses from continuing operations and/or net losses in recent
fiscal years. There can be no assurance that we will not report additional
losses in the future or that we will be able to list or have our common stock
quoted on the NASDAQ National Market or a national securities exchange. An
inability to list our common stock could adversely affect our ability to raise
capital in the future by issuing common stock or securities convertible into or
exercisable for our common stock.

      Continuing losses may mean that additional funding may not be available on
acceptable terms, if at all. If adequate funds are unavailable from our
operations or additional sources of financing, we might be forced to reduce or
delay acquisitions or capital expenditures, sell assets, reduce operating
expenses, refinance all or a portion of our debt, or delay or reduce important
drilling or enhanced production initiatives.

      In addition, in that instance, we may seek to raise any necessary
additional funds through equity or debt financings, convertible debt financing,
joint ventures with corporate partners or other sources, which may be dilutive
to our existing shareholders and may cause the price of our common stock to
decline.

We have future capital needs and without adequate capital we may go out of
business.

      Our growth and continued operations could be impaired by limitations on
our access to the capital markets or traditional secured sources of credit.
There is no assurance that capital will be available to us, or if available,
would be adequate for the long-range growth of our Company. If financing is
available, it may involve issuing securities senior to our shares or equity
financings which are dilutive to holders of our shares. In addition, in the
event we do not raise additional capital from conventional sources, such as our
existing investors or commercial banks, there is every likelihood that our
growth will be restricted and we may need to scale back or curtail implementing
our business plan. Even if we are successful in raising capital, we will likely
need to raise additional capital to continue and/or expand our operations. If we
do not raise the additional capital, the value of our shares may become
substantially devalued.


                                       10
<PAGE>

New management's decision to change the business focus of the Company from the
mortgage industry to the oil and natural gas industry could ultimately prove to
be unsuccessful, harming our business operations and prospects.

      New management has recently changed the Company's business focus from the
mortgage industry to the oil and natural gas industry. Accordingly, a
substantial portion of our management's time will be directed toward the pursuit
of identifying and acquiring business opportunities in the oil and natural gas
industry. There can be no assurance that new management will be able to properly
manage the direction of the Company or that any ultimate change in the Company's
business focus will be successful. If new management fails to properly manage
and direct the Company, the Company may be forced to scale back or abandon its
existing operations, which will cause the value of our shares to decline.

Our new Chief Executive Officer possesses significant control over our
operations based, in part, upon his interest in our controlling stockholder, and
because of this he could choose a plan of action which could devalue our
outstanding securities.

      Our Chief Executive Officer and Chairman, Alan Gaines controls 56% of our
outstanding shares of capital stock as of the date hereof. Accordingly, our
chief executive officer could significantly influence the Company on matters
submitted to the stockholders for approval. These matters include the election
of directors, mergers, consolidations, the sale of all or substantially all of
our assets, and also the power to prevent or cause a change in control. This
amount of control gives Mr. Gaines virtually limitless ability to determine the
future of our Company, and as such, he could unilaterally elect to close the
business, change the business plan or make any number of other major business
decisions without the approval of other stockholders. This control may
eventually make the value of our shares worthless.

Conflicts of interest for our Chief Executive Officer may exist with regards to
his obligations to the Company and his obligations to businesses in which he
continues to own interests and manage.

      Our Chief Executive Officer, Alan Gaines, also serves as an executive
officer and director of each of Dune Energy, Inc. and Baseline Oil & Gas Corp.,
public companies also engaged in the oil and gas industry. Mr. Gaines is
required to devote his time (and in the case of Dune Energy, Inc., substantially
all of his business time as provided in his employment agreement) to the
business and affairs of each of these entities, and his responsibilities to
these other entities may have the effect of diverting his time and attention
that he might have otherwise had available to devote solely to the business and
operations of our Company. There can be no guarantee that Mr. Gaines will be
able to devote adequate time to the affairs of the Company given his fiduciary
and contractual obligations to Dune Energy, Inc. and Baseline Oil & Gas Corp.

      In addition, our officers and directors are be subject to the certain
duties imposed on them under the Nevada law, including a general requirement
that opportunities which come to their attention may be considered opportunities
that should be made available to our Company as well as the companies that they
may be affiliated with on an equal basis. A breach of this requirement will be a
breach of the fiduciary duties of the officer and director. If our Company or
any of the other companies with which any of our officers or directors is
affiliated both desire to take advantage of an opportunity, then those officers
and directors would abstain from negotiating and voting upon the business
opportunity. Even in the event these procedures are followed, we cannot assure
you that conflicts of interests among us, our officers and directors, and such
other companies will not develop.


                                       11
<PAGE>

We have not and do not anticipate paying any cash dividends on our common stock,
because of this our securities could face devaluation in the market

      We have paid no cash dividends on our common stock to date and it is not
anticipated that any cash dividends will be paid to holders of our common stock
in the foreseeable future. While our dividend policy will be based on the
operating results and capital needs of the business, it is anticipated that any
earnings will be retained to finance our future expansion. As an investor, you
should take note of the fact that a lack of a dividend can further affect the
market value of our stock, and could significantly affect the value of any
investment in our Company.

Notwithstanding our financial predicament, we will continue to incur significant
increased costs as a result of operating as a public company, and our management
will be required to devote substantial time to new compliance requirements.

      In January 2006, we registered our common stock under the Securities
Exchange Act of 1934, as amended, and thereby became subject to the reporting
requirements promulgated by the Securities and Exchange Commission. As a public
company, we incur significant legal, accounting and other expenses under the
Sarbanes-Oxley Act of 2002, together with rules implemented by the Securities
and Exchange Commission and applicable market regulators. These rules impose
various requirements on public companies, including requiring certain corporate
governance practices. Our management and other personnel will need to devote a
substantial amount of time to these new compliance requirements. Moreover, these
rules and regulations will increase our legal and financial compliance costs and
will make some activities more time-consuming and costly.

      In addition, the Sarbanes-Oxley Act requires, among other things, that we
maintain effective internal controls for financial reporting and disclosure
controls and procedures. In particular, for fiscal years ending on or after
December 15, 2007, we must perform system and process evaluation and testing of
our internal controls over financial reporting to allow management to report on
the effectiveness of our internal controls over financial reporting, as required
by Section 404 of the Sarbanes-Oxley Act. For fiscal years ending on or after
December 15, 2008, we must perform system and process evaluation and testing of
our internal controls over financial reporting to allow management and our
independent registered public accounting firm to report on the effectiveness of
our internal controls over financial reporting, as required by Section 404 of
the Sarbanes-Oxley Act. Our testing, or the subsequent testing by our
independent registered public accounting firm, may reveal deficiencies in our
internal controls over financial reporting that are deemed to be material
weaknesses. Compliance with Section 404 may require that we incur substantial
accounting expense and expend significant management efforts. If we are not able
to comply with the requirements of Section 404 in a timely manner or if our
accountants later identify deficiencies in our internal controls over financial
reporting that are deemed to be material weaknesses, the market price of our
stock could decline and we could be subject to sanctions or investigations by
the SEC or other applicable regulatory authorities.

Our articles of incorporation provide for indemnification of officers and
directors at our expense and limit their liability.

      Our articles of incorporation and applicable Nevada law provide for the
indemnification of our directors, officers, employees, and agents, under certain
circumstances, against attorney's fees and other expenses incurred by them in
any litigation to which they become a party arising from their association with
or activities on behalf of the Company. We will also bear the expenses of such
litigation for any of our directors, officers, employees, or agents, upon such
person's promise to repay us if it is ultimately determined that any such person
shall not have been entitled to indemnification. This indemnification policy
could result in substantial expenditures by us which we will be unable to
recoup.


                                       12
<PAGE>

      We have been advised that in the opinion of the SEC, this type of
indemnification is against public policy as expressed in the Securities Act of
1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against these types of liabilities, other than the payment by us
of expenses incurred or paid by a director, officer or controlling person in the
successful defense of any action, suit or proceeding, is asserted by a director,
officer or controlling person in connection with the securities being
registered, we will (unless in the opinion of our counsel, the matter has been
settled by controlling precedent) submit to a court of appropriate jurisdiction,
the question whether indemnification by us is against public policy as expressed
in the Securities Act and will be governed by the final adjudication of such
issue.

Our board of directors has the authority, without stockholder approval, to issue
preferred stock with terms that may not be beneficial to common stock holders
and with the ability to adversely affect stockholder voting power and perpetuate
the board's control over the Company.

      Our certificate of incorporation authorizes the issuance of up to
1,000,000 shares of preferred stock, par value $0.001 per share.

      The specific terms of the preferred stock have not been determined,
including: designations; preferences; conversions rights; cumulative, relative;
participating; and optional or other rights, including: voting rights;
qualifications; limitations; or restrictions of the preferred stock.

      The board of directors is entitled to authorize the issuance of up to
1,000,000 shares of preferred stock in one or more series with such limitations
and restrictions as may be determined in its sole discretion, with no further
authorization by security holders required for the issuance thereof.

      The issuance of preferred stock could adversely affect the voting power
and other rights of the holders of common stock. Preferred stock may be issued
quickly with terms calculated to discourage, make more difficult, delay or
prevent a change in control of our Company or make removal of management more
difficult. As a result, the board of directors' ability to issue preferred stock
may discourage the potential hostile acquirer, possibly resulting in beneficial
negotiations. Negotiating with an unfriendly acquirer may result in, among other
things, terms more favorable to us and our stockholders. Conversely, the
issuance of preferred stock may adversely affect any market price of, and the
voting and other rights of the holders of the common stock. We presently have no
plans to issue any preferred stock.

      Oil and Natural Gas Prices are Volatile.

      If any of the projects we participate in are successful, the prices we
receive for future oil and natural gas production will heavily influence our
revenue, profitability, access to capital and rate of growth. Oil and natural
gas are commodities and their prices are subject to wide fluctuations in
response to relatively minor changes in supply and demand or global
macroeconomic disruptions. Historically, the markets for oil and natural gas
have been volatile. These markets will likely continue to be volatile in the
future. The prices we may receive for any future production, and the levels of
this production, depend on numerous factors beyond our control. These factors
include the following:

o     changes in global supply and demand for oil and natural gas;
o     the actions of the Organization of Petroleum Exporting Countries, or OPEC;
o     the price and quantity of imports of foreign oil and natural gas in the
      U.S.;


                                       13
<PAGE>

o     political conditions, including embargoes, which affect other
      oil-producing activities;
o     the level of global oil and natural gas exploration and production
      activity;
o     the level of global oil and natural gas inventories;
o     weather conditions affecting energy consumption;
o     technological advances affecting energy consumption; and
o     the price and availability of alternative fuels.

      Lower oil and natural gas prices may not only decrease our revenues on a
per unit basis but also may reduce the amount of oil and natural gas that we can
produce economically. Lower prices will also negatively impact the value of our
proved reserves. A substantial or extended decline in oil or natural gas prices
may materially and adversely affect our future business, financial condition,
results of operations, liquidity or ability to finance planned capital
expenditures.

Competition in the oil and natural gas industry is intense.

      We intend to operate in a highly competitive environment for developing
properties, marketing of oil and natural gas and securing trained personnel.
Many of our competitors possess and employ financial, technical and personnel
resources substantially greater than ours, which can be particularly important
in the areas in which we operate. Those companies may be able to pay more for
productive oil and natural gas properties and prospects and to evaluate, bid for
and purchase a greater number of properties and prospects than our financial or
personnel resources permit. Our ability to acquire additional prospects and to
find and develop reserves in the future will depend on our ability to evaluate
and select suitable properties and to consummate transactions in a highly
competitive environment. In addition, there is substantial competition for
capital available for investment in the oil and natural gas industry. We may not
be able to compete successfully in the future in acquiring prospective reserves,
developing reserves, marketing oil and natural gas, attracting and retaining
quality personnel and raising additional capital.

Drilling for and producing oil and natural gas are high risk activities with
many uncertainties that could adversely affect our business, financial condition
or results of operations.

      Our future success will depend on the success of our exploitation,
exploration, development and production activities. Our oil and natural gas
exploration and production activities will be subject to numerous risks beyond
our control, including the risk that drilling will not result in commercially
viable oil or natural gas production. Our decisions to purchase, explore,
develop or otherwise exploit prospects or properties will depend in part on the
evaluation of data obtained through geophysical and geological analyses,
production data and engineering studies, the results of which are often
inconclusive or subject to varying interpretations. Our costs of drilling,
completing and operating wells is often uncertain before drilling commences.
Overruns in budgeted expenditures are common risks that can make a particular
project uneconomical. Further, many factors may curtail, delay or cancel
drilling, including the following:

      o     delays imposed by or resulting from compliance with regulatory
            requirements;
      o     pressure or irregularities in geological formations;
      o     shortages of or delays in obtaining equipment and qualified
            personnel;
      o     equipment failures or accidents;
      o     adverse weather conditions;
      o     reductions in oil and natural gas prices;
      o     oil and natural gas property title problems; and
      o     market limitations for oil and natural gas.


                                       14
<PAGE>

Prospects that we decide to drill may not yield oil or natural gas in
commercially viable quantities.

      There is no way to predict in advance of drilling and testing whether any
particular prospect will yield oil or natural gas in sufficient quantities to
recover drilling or completion costs or to be economically viable. The use of
seismic data and other technologies and the study of producing fields in the
same area will not enable us to know conclusively prior to drilling whether oil
or natural gas will be present or, if present, whether oil or natural gas will
be present in commercial quantities. We cannot assure you that the analogies we
draw from available data from other wells, more fully explored prospects or
producing fields will be applicable to our drilling prospects.

We may incur substantial losses and be subject to substantial liability claims
as a result of our oil and natural gas operations.

      We are not insured against all risks. Losses and liabilities arising from
uninsured and underinsured events could materially and adversely affect our
business, financial condition or results of operations. Our oil and natural gas
exploration and production activities will be subject to all of the operating
risks associated with drilling for and producing oil and natural gas, including
the possibility of:

      o     environmental hazards, such as uncontrollable flows of oil, natural
            gas, brine, well fluids, toxic gas or other pollution into the
            environment, including groundwater and shoreline contamination;
      o     abnormally pressured formations;
      o     mechanical difficulties, such as stuck oil field drilling and
            service tools and casing collapses;
      o     fires and explosions;
      o     personal injuries and death; and
      o     natural disasters.

      Any of these risks could adversely affect our ability to conduct
operations or result in substantial losses to the Company. We may elect not to
obtain insurance if we believe that the cost of available insurance is excessive
relative to the risks presented. In addition, pollution and environmental risks
generally are not fully insurable. If a significant accident or other event
occurs and is not fully covered by insurance, then that accident or other event
could adversely affect our results of operations, financial condition and cash
flows.

We may not have enough insurance to cover all of the risks that we face.

      In accordance with customary industry practices, we will maintain
insurance coverage against some, but not all, potential losses in order to
protect against the risks we face. We do not carry business interruption
insurance. We may elect not to carry insurance if our management believes that
the cost of available insurance is excessive relative to the risks presented. In
addition, we cannot insure fully against pollution and environmental risks. The
occurrence of an event not fully covered by insurance could have a material
adverse effect on our financial condition and results of operations.

Our operations may cause us to incur substantial liabilities for failure to
comply with environmental laws and regulations.

      Our oil and natural gas operations will be subject to stringent federal,
state and local laws and regulations relating to the release or disposal of
materials into the environment or otherwise relating to environmental
protection. These laws and regulations may require the acquisition of a permit
before drilling commences, restrict the types, quantities and concentration of


                                       15
<PAGE>

substances that can be released into the environment in connection with drilling
and production activities, limit or prohibit drilling activities on certain
lands lying within wilderness, wetlands and other protected areas, and impose
substantial liabilities for pollution resulting from our operations. Failure to
comply with these laws and regulations may result in the assessment of
administrative, civil and criminal penalties, incurrence of investigatory or
remedial obligations or the imposition of injunctive relief. Changes in
environmental laws and regulations occur frequently, and any changes that result
in more stringent or costly waste handling, storage, transport, disposal or
cleanup requirements could require us to make significant expenditures to
maintain compliance, and may otherwise have a material adverse effect on our
results of operations, competitive position or financial condition as well as
the industry in general. Under these environmental laws and regulations, we
could be held strictly liable for the removal or remediation of previously
released materials or property contamination regardless of whether we were
responsible for the release or if our operations were standard in the industry
at the time they were performed.

If our access to markets is restricted, it could negatively impact our
production, our income and ultimately our ability to retain our leases.

      Market conditions or the unavailability of satisfactory oil and natural
gas transportation arrangements may hinder our access to oil and natural gas
markets or delay our production. The availability of a ready market for our oil
and natural gas production depends on a number of factors, including the demand
for and supply of oil and natural gas and the proximity of reserves to pipelines
and terminal facilities. Our ability to market our production depends in
substantial part on the availability and capacity of gathering systems,
pipelines and processing facilities owned and operated by third parties. Our
failure to obtain such services on acceptable terms could materially harm our
business.

      Our productive properties may be located in areas with limited or no
access to pipelines, thereby necessitating delivery by other means, such as
trucking, or requiring compression facilities. Such restrictions on our ability
to sell our oil or natural gas could have several adverse affects, including
higher transportation costs, fewer potential purchasers (thereby potentially
resulting in a lower selling price) or, in the event we were unable to market
and sustain production from a particular lease for an extended time, possibly
causing us to lose a lease due to lack of production.

Item 3. Controls and Procedures

      An evaluation of the effectiveness of the design and operation of the
Company's disclosure controls and procedures as of the end of the period covered
by this Quarterly Report on Form 10-QSB was carried out by the Company under the
supervision and with the participation of our Chief Executive Officer and Chief
Financial Officer. Based on that evaluation, the Chief Executive Officer and
Chief Financial Officer concluded that our disclosure controls and procedures
are effective to ensure that the information required to be disclosed by the
Company in reports filed under the Securities Exchange Act of 1934, as amended,
is recorded, processed, summarized and reported within the time periods
specified in the SEC's rules and forms. A system of controls, no matter how well
designed and operated, cannot provide absolute assurance that the objectives of
the system of controls are met, and no evaluation of controls can provide
absolute assurance that all control issues and instances of fraud, if any,
within a company have been detected. There have been no changes in our internal
controls over financial reporting that occurred during the most recent fiscal
quarter that have materially affected, or are reasonably likely to materially
affect, our internal controls over financial reporting.


                                       16
<PAGE>

PART II OTHER INFORMATION

Item 2 Unregistered Sales of Equity Securities and Uses of Proceeds

      On December 28, 2006, the Company granted options to two (2) non-employees
(the "Optionees") exercisable for a period of five (5) years to purchase in the
aggregate up to 1,500,000 shares of its common stock at an exercise price of
$0.25 per share, pursuant to a stock option agreement between the Company and
each of the Optionees.

Item 6 Exhibits

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

        31.1        Section 302 Certification of Chief Executive Officer

        31.2        Section 302 Certification of Chief Financial Officer

        32.1        Section 906 Certification of Chief Executive Officer and
                    Chief Financial Officer


                                       17
<PAGE>

                                   SIGNATURES

      In accordance with the requirements of the Securities and Exchange Act of
1934, the registrant has caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

Dated: May 11, 2007                         ABC Funding, Inc.


                                            By: /s/ Alan Gaines
                                                --------------------------------
                                            Alan Gaines, Chief Executive Officer


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