UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549





FORM
10-Q




x
            QUARTERLY REPORT PURSUANT TO
      SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934




For
the quarterly period ended June 30, 2008




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




For
the transition period from 
to




333-64122


(Commission
file number)









Blast
Energy Services, Inc.


(Exact
name of registrant as specified in its charter)









Texas
            22-3755993(State
      or other jurisdiction of
              incorporation
      or organization)
            (IRS
      Employer
              Identification
      No.)




14550
Torrey Chase Blvd, Suite 330


Houston,
Texas 77014


(Address
of principal executive offices)




(281)
453-2888


(Issuer’s
telephone number)







Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 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 large accelerated filer, and
accelerated filer, a non-accelerated filer, or a smaller reporting
company.  See the definitions of “large accelerated filer,”
“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act.


Large accelerated
filer   ̈                                                                                           Accelerated
filer    ̈


Non-accelerated filer   ̈                                                                                           Smaller
reporting company  x





Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act.


Yes    ̈No   x




APPLICABLE
ONLY TO ISSUERS INVOLVED IN BANKRUPTCY


PROCEEDINGS
DURING THE PRECEDING FIVE YEARS:


Indicate
by check mark whether the registrant has filed all documents and reports
required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act
of 1934 subsequent to the distribution of securities under a plan confirmed by a
court.


Yes   x No    ̈





The
number of shares outstanding of each of the issuer’s classes of equity as of
August 12, 2008 is 59,349,904 including 1,150,000 approved but unissued shares
arising from the class action settlement from 2005.








Blast
Energy Services, Inc.





For
the Quarter Ended June 30, 2008





INDEX










PART
      I – FINANCIAL INFORMATION
            PageItem
      1.
            Financial
      StatementsUnaudited
      Consolidated Balance Sheets as of June 30, 2008 and December 31,
      2007
            2Unaudited
      Consolidated Statements of Operations
              For
      the Three and Six Months Ended June 30, 2008 and 2007
            3Unaudited
      Consolidated Statements of Cash Flows
              For
      the Six Months Ended June 30, 2008 and 2007
            4Notes
      to Unaudited Consolidated Financial Statements
            5Item
      2.
            Management’s
      Discussion and Analysis of Condition and Results of
    Operations
            12Item
      3.
            Quantitative
      and Qualitative Disclosures About Market Risk
            16Item
      4.
            Controls
      and Procedures
            16PART
      II – OTHER INFORMATIONItem
      1.
            Legal
      Proceedings
            17Item
      1A.
            Risk
      Factors
            19Item
    2.
            Unregistered
      Sales of Equity Securities and Use of Proceeds
            19Item
      6.
            Exhibits
            22Signatures
            
            23


1





PART
I – FINANCIAL INFORMATION





Item 1.
Financial Statements





BLAST
ENERGY SERVICES, INC.


CONSOLIDATED
BALANCE SHEETS


(Unaudited)





June
      30,
                2008
              
              
              December
      31,
                2007AssetsCurrent
      Assets:Cash
              
              $
              741,222
              
              
              $
              48,833Accounts
      receivable, net
              
              
              59,059
              
              
              
              46,292Other
      assets
              
              
              159,892
              
              
              
              57,409Total
      Current Assets
              
              
              960,173
              
              
              
              152,534Equipment,
      net of accumulated depreciation of $34,440 and $35,488
              
              
              1,160,065
              
              
              
              1,083,645Total
      Assets
              
              $
              2,120,238
              
              
              $
              1,236,179Liabilities
      and Stockholders’ DeficitCurrent
      Liabilities:Accounts
      payable
              
              $
              192,162
              
              
              $
              1,384,929Accrued
      expenses
              
              
              443,603
              
              
              
              612,476Deferred
      revenue
              
              
              19,666
              
              
              
              10,517Advances
      - related parties
              
              
              -
              
              
              
              1,700,000Notes
      payable – other
              
              
              66,594
              
              
              
              542,500Liabilities
      of discontinued operations
              
              
              -
              
              
              
              2,112,413Short
      term portion of senior debt
              
              
              216,668
              
              
              
              -Total
      Current Liabilities
              
              
              938,693
              
              
              
              6,362,835Long
      Term Liabilities:Senior
      debt
              
              
              1,883,332
              
              
              
              2,100,000Notes
      payable – related party
              
              
              1,120,000
              
              
              
              -Liabilities
      of discontinued operations
              
              
              125,000
              
              
              
              125,000Total
      Liabilities
              
              
              4,067,025
              
              
              
              8,587,835Stockholders’
      Deficit:Preferred
      stock, $.001 par value, 20,000,000 shares authorized; 8,000,000
      and
                –0–
      shares issued and outstanding
              
              
              8,000
              
              
              
              -Common
      stock, $.001 par value, 180,000,000 shares authorized; 59,219,904
      and  52,027,404 shares issued and outstanding
              
              
              59,219
              
              
              
              52,027Additional
      paid-in capital
              
              
              75,851,186
              
              
              
              70,471,873Accumulated
      deficit
              
              
              (77,865,192
              )
              
              
              (77,875,556
              )Total
      Stockholders’ Deficit
              
              
              (1,946,787
              )
              
              
              (7,351,656
              )Total
      Liabilities and Stockholders’ Deficit
              
              $
              2,120,238
              
              
              $
              1,236,179







See
accompanying notes to consolidated financial statements




2




BLAST
ENERGY SERVICES, INC.


CONSOLIDATED
STATEMENTS OF OPERATIONS


For
the Three and Six Months Ended June 30, 2008 and 2007


(Unaudited)





For
      the Three Months Ended
              
              
              For
      the Six Months EndedJune
      30,
              
              
              June
      30,2008
              
              
              2007
              
              
              2008
              
              
              2007Revenue:Satellite
      Communications
              
              $
              79,973
              
              
              $
              111,189
              
              
              $
              151,625
              
              
              $
              273,608Down-hole
      Solutions
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -Total
      Revenue
              
              
              79,973
              
              
              
              111,189
              
              
              
              151,625
              
              
              
              273,608Cost
      of Services Provided:Satellite
      Communications
              
              
              96,935
              
              
              
              104,537
              
              
              
              193,235
              
              
              
              221,930Down-hole
      Solutions
              
              
              100,612
              
              
              
              -
              
              
              
              124,433
              
              
              
              6,794Total
      Cost of Services Provided
              
              
              197,547
              
              
              
              104,537
              
              
              
              317,668
              
              
              
              228,724Depreciation
      and amortization
              
              
              2,467
              
              
              
              22,907
              
              
              
              4,617
              
              
              
              47,327Gross
      Loss
              
              
              (120,041
              )
              
              
              (16,255
              )
              
              
              (170,660
              )
              
              
              (2,443
              )Operating
      Expenses:Selling,
      general and administrative
              
              
              876,409
              
              
              
              1,000,687
              
              
              
              1,462,356
              
              
              
              2,879,767Operating
      Loss
              
              
              (996,450
              )
              
              
              (1,016,942
              )
              
              
              (1,633,016
              )
              
              
              (2,882,210
              )Other
      Income (Expense):Other
      income
              
              
              158
              
              
              
              28,045
              
              
              
              8,158
              
              
              
              28,045Interest
      income
              
              
              2,025
              
              
              
              805
              
              
              
              13,128
              
              
              
              2,717Interest
      expense
              
              
              (23,485
              )
              
              
              (1,104
              )
              
              
              (65,978
              )
              
              
              (21,494
              )Loss
      on disposal of equipment
              
              
              (1,270
              )
              
              
              -
              
              
              
              (1,270
              )
              
              
              -Total
      other income (expense)
              
              
              (22,572
              )
              
              
              27,746
              
              
              
              (45,962
              )
              
              
              9,268Loss
      from continuing operations
              
              
              (1,019,022
              )
              
              
              (989,196
              )
              
              
              (1,678,978
              )
              
              
              (2,872,942
              )Income
      (loss) from discontinued operations
              
              
              1,695,670
              
              
              
              (2,347,508
              )
              
              
              1,689,342
              
              
              
              (3,993,102
              )Net
      income (loss)
              
              $
              676,648
              
              
              $
              (3,336,704
              )
              
              $
              10,364
              
              
              $
              (6,866,044
              )Preferred
      dividends
              
              
              78,904
              
              
              
              -
              
              
              
              108,712
              
              
              
              -Net
      income (loss) available to common shareholders
              
              $
              597,744
              
              
              $
              (3,336,704
              )
              
              $
              (98,348
              )
              
              $
              (6,866,044
              )Basic
      income (loss) per common share:Continuing
      operations
              
              $
              (0.02
              )
              
              $
              (0.02
              )
              
              $
              (0.03
              )
              
              $
              (0.04
              )Discontinued
      operations
              
              $
              0.03
              
              
              $
              (0.03
              )
              
              $
              0.03
              
              
              $
              (
      0.06
              )Net
      income/(loss)
              
              $
              0.01
              
              
              $
              (0.05
              )
              
              $
              0.00
              
              
              $
              (0.10
              )Diluted
      net income (loss) per common share:Continuing
      operations
              
              $
              (0.02
              )
              
              $
              (0.02
              )
              
              $
              (0.03
              )
              
              $
              (0.04
              )Discontinued
      operations
              
              $
              0.02
              
              
              $
              (0.03
              )
              
              $
              0.03
              
              
              $
              (0.06
              )Net
      income/(loss)
              
              $
              0.00
              
              
              $
              (0.05
              )
              
              $
              0.00
              
              
              $
              (0.10
              )Weighted
      average common stock shares outstandingBasic
              
              
              57,790,618
              
              
              
              67,609,904
              
              
              
              55,619,780
              
              
              
              67,609,904Diluted
              
              
              70,796,686
              
              
              
              67,609,904
              
              
              
              65,707,716
              
              
              
              67,609,904






See
accompanying notes to consolidated financial statements.


3


BLAST
ENERGY SERVICES, INC.


CONSOLIDATED
STATEMENTS OF CASH FLOWS


For
the Six Months Ended June 30, 2008 and 2007


(Unaudited)




2008
            
            
            2007Cash
      Flows from Operating Activities:Net
      income (loss)
            
            $
            10,364
            
            
            $
            (6,866,044
            )(Income)
      loss from discontinued operations
            
            
            (1,689,342
            )
            
            
            3,993,102Loss
      from continuing operations
            
            $
            (1,678,978
            )
            
            $
            (2,872,942
            )Adjustments
      to reconcile net loss to net cash used in operating
      activities:Depreciation
      and amortization
            
            
            4,617
            
            
            
            47,327Option
      and warrant expense
            
            
            360,111
            
            
            
            1,151,359Loss
      on disposition of equipment
            
            
            1,270
            
            
            
            -Stock
      issued for services
            
            
            42,500
            
            
            
            -Change
      in:Accounts
      receivable
            
            
            (12,767
            )
            
            
            42,614Other
      current assets
            
            
            4,392
            
            
            
            68,980Accounts
      payable
            
            
            (1,615,839
            )
            
            
            821,325Deferred
      revenue
            
            
            9,149
            
            
            
            (36,217
            )Accrued
      expenses
            
            
            143,921
            
            
            
            381,940Net
      Cash Used in Operating Activities
            
            
            (2,741,624
            )
            
            
            (395,614
            )Cash
      Flows From Investing Activities:Proceeds
      from restricted cash
            
            
            -
            
            
            
            30,000Cash
      paid for purchase of fixed assets
            
            
            (6,528
            )
            
            
            -Cash
      paid for construction of equipment
            
            
            (75,778
            )
            
            
            -Net
      Cash (Used in) Provided by Investing Activities
            
            
            (82,306
            )
            
            
            30,000Cash
      Flows From Financing Activities:Payments
      on short term debt
            
            
            (582,781
            )
            
            
            (51,322
            )Proceeds
      from advances – related parties
            
            
            -
            
            
            
            200,000Borrowings
      on DIP financing
            
            
            100,000
            
            
            
            -Repurchase
      common shares
            
            
            (900
            )
            
            
            -Issuance
      of convertible preferred stock
            
            
            4,000,000
            
            
            
            -Net
      Cash Provided by Financing Activities
            
            
            3,516,319
            
            
            
            148,678Discontinued
      operating activities
            
            
            -
            
            
            
            (975,637
            )Discontinued
      investing activities
            
            
            -
            
            
            
            94,131Discontinued
      financing activities
            
            
            -
            
            
            
            (285,302
            )Net
      Cash Provided by Discontinued Operations
            
            
            -
            
            
            
            (1,166,808
            )Net
      change in cash
            
            
            692,389
            
            
            
            (1,383,744
            )Cash
      at beginning of period
            
            
            48,833
            
            
            
            1,534,603Cash
      at end of period
            
            $
            741,222
            
            
            $
            150,859Cash
      paid for:Interest
            
            $
            31,589
            
            
            $
            -Income
      taxes
            
            
            -
            
            
            
            -Non-Cash
      Transactions:Conversion
      of deferred board compensation to common stock
            
            $
            161,000
            
            
            $
            -Conversion
      of related party interest to common stock
            
            
            31,794
            
            
            
            -Conversion
      of related party advances to common shares
            
            
            800,000
            
            
            
            -Cashless
      exercise of warrants
            
            
            2,900
            
            
            
            -Issuance
      of  note payable for related party debt and accrued
      interest
            
            
            1,120,000
            
            
            
            -Exchange
      of rigs for debt
            
            
            -
            
            
            
            45,822,321Prepaid
      insurance financed with note payable
            
            
            106,875
            
            
            
            112,907Cancellation
      of insurance finance note
            
            
            -
            
            
            
            186,325





See
accompanying notes to consolidated financial statements.


4


BLAST
ENERGY SERVICES, INC.


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)





NOTE
1 - BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION





The
accompanying unaudited interim financial statements of Blast Energy Services,
Inc. (“Blast”), have been prepared in accordance with accounting principles
generally accepted in the United States of America and the rules of the
Securities and Exchange Commission and should be read in conjunction with the
audited financial statements and notes thereto contained in Blast’s latest
Annual Report filed with the SEC on Form 10-KSB. In the opinion of management,
all adjustments, consisting of normal recurring adjustments, necessary for a
fair presentation of financial position and the results 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 that would
substantially duplicate the disclosure contained in the audited financial
statements for the most recent fiscal year as reported in the Form 10-KSB, have
been omitted.





Blast’s
consolidated financial statements have been prepared on a going concern basis in
accordance with accounting principles generally accepted in the United States of
America (“GAAP”). This contemplates the realization of assets and satisfaction
of liabilities in the ordinary course of business. Accordingly, Blast’s
Consolidated Financial Statements do not include any adjustments relating to the
recoverability of assets and classification of liabilities that might be
necessary should Blast be unable to continue as a going concern.




Business


Our
mission is to substantially improve the economics of existing and evolving oil
and gas operations through the application of Blast licensed and owned
technologies. We are an emerging technology company in the energy sector and
strive to assist oil and gas companies in producing more economically. We seek
to provide quality services to the energy industry through our two
divisions:




·
            Satellite
      Communications services to remote oilfield locations,
  and


·
            Down-hole
      Solutions, such as our abrasive fluid jetting
  technology.





Our
strategy is to grow our businesses by maximizing revenues from the
communications and down-hole segments and controlling costs while analyzing
potential acquisitions and new technology opportunities in the energy service
sector. In the near term, we will also seek to maximize value from the customer
litigation proceedings described below.





On
February 26, 2008, the Bankruptcy Court confirmed our Second Amended Plan of
Reorganization (the “Plan”) allowing Blast to emerge from Chapter 11 bankruptcy.
The overall impact of the confirmed Plan was for Blast to emerge with unsecured
creditors fully paid, have no debt service scheduled for at least two years, and
keep equity shareholders’ interests intact.





Amendments to Articles of
Incorporation


In
connection with the approval of the Plan, the Bankruptcy Court, and the Board of
Directors of Blast (the “Board”) approved a change in Blast’s domicile from
California to Texas.  Blast effected the re-domicile by forming a
wholly owned subsidiary, Blast Energy Services, Inc., in the State of
Texas.  Blast then merged with and into this subsidiary thereby
becoming a Texas corporation (the “Merger”).  Following the Merger,
Blast has 200,000,000 authorized shares of stock, of which 180,000,000 shares
are common stock, $0.001 par value per share and 20,000,000 shares are preferred
stock, $0.001 par value per share.  The Certificate of Formation
of the resulting Texas corporation also allows Blast’s Board to issue “blank
check” preferred stock with rights and privileges as it may decide in its sole
discretion, but which shares must have voting rights.  Blast also
authorized 8,000,000 shares of Series A Convertible Preferred Stock and adopted
new bylaws in support of the Merger.





Management
Estimates


The
preparation of financial statements in conformity with GAAP requires management
to make estimates and assumptions that affect the reported amounts of assets,
liabilities, revenues and expenses, as well as certain financial statement
disclosures.  While management believes that the estimates and
assumptions used in the preparation of the financial statements are appropriate,
actual results could differ from these estimates.





5


Credit
Risk


Blast
does not require collateral from its customers with respect to accounts
receivable but performs periodic credit evaluations of such customer’s financial
condition. Blast determines any required allowance by considering a number of
factors including lengths of time accounts receivable are past due and Blast’s
previous loss history. Blast provides reserves for accounts receivable when they
become uncollectible, and payments subsequently received on such receivables are
credited to the allowance for doubtful accounts. As of June 30, 2008, Blast has
determined that no amount for allowance for doubtful accounts is
required.





Earnings Per
Share


Basic
earnings per share equals net earnings divided by weighted average shares
outstanding during the year.  Diluted earnings per share includes the
impact on dilution from all contingently issuable shares, including options,
warrants and convertible securities.  The common stock equivalents
from contingent shares are determined by the treasury stock
method.  Blast has incurred net losses for all periods in 2007 and
therefore, basic and diluted earnings per share are the same for those periods
as all potential common equivalent shares would be anti-dilutive.





Reclassifications


Certain
amounts in the consolidated financial statements of the prior year have been
reclassified to conform to the presentation of the current year for comparative
purposes.





NOTE
2 – GOING CONCERN





As shown
in the accompanying financial statements, Blast incurred a loss from continuing
operations of $1,678,978 for the six months ended June 30, 2008, has an
accumulated deficit of $77,865,192 and working capital surplus of $21,480 as of
June 30, 2008 and has several significant future financial
obligations.  The consolidated financial statements do not include any
adjustments that might be necessary if Blast is unable to continue as a going
concern.  These conditions create an uncertainty as to Blast’s ability
to continue as a going concern.  Management is trying to grow the
existing businesses but may need to raise additional capital through sales of
common stock or convertible instruments as well as obtain financing from third
parties.





NOTE
3 – EQUIPMENT





Equipment
consisted of the following at June 30, 2008:





Description
            Life
            BalanceComputer
      equipment
            3
      years
            $        21,000Automobile
            4
      years
            26,265Service
      Trailer
            5
      years
            4,784AFJ
      Rig, in progress
            12
      years
            1,110,248Remote
      Sensor Unit, in progress
            12
      years
            32,2081,194,505Less:  accumulated
      depreciation
            
            (34,440)$
      1,160,065





NOTE
4 – RELATED PARTY TRANSACTIONS





Convertible Preferred
Stock


Under the
terms of the confirmed Plan, Blast raised $4.0 million in cash from the sale of
convertible preferred securities to Clyde Berg and McAfee Capital, two parties
related to Blast’s largest shareholder, Berg McAfee Companies.  $2.4
million of the proceeds from the sale of the securities were used to pay 100% of
the unsecured creditor claims, all administrative claims, and all statutory
priority claims.  The remaining $1.6 million was used to execute an
operational plan including, but not limited to, reinvesting in the Satellite
Services and Down-hole Solutions businesses and pursue an emerging Remote Sensor
business. The sale of the convertible preferred securities was conditioned on
approval of the Plan and as such, the securities were issued after the Merger
became effective in March 2008.





Note
Extension


A
pre-existing secured $1.12 million note with Berg McAfee Companies has been
extended for an additional three years from the Plan effective date of February
27, 2008.  This note bears interest at 8% and contains an option for
the principal and interest to be convertible into Company stock at the rate of
one share for each $0.20 of the note outstanding.


6


Debtor-in-Possession (“DIP”)
Loan


The
Bankruptcy court approved Blast’s ability to draw $800,000 from Berg McAfee and
related entities to finance Blast’s working capital needs on a temporary
basis.  The Plan allowed Berg McAfee to convert the outstanding
balance of the DIP loan and accrued interest into Company common stock at the
rate of one share for each $0.20 of the DIP loan outstanding.  In
March 2008 after the Merger became effective, 4,160,000 shares of common stock
were issued in full payment of the principal and accrued interest on this
obligation.





Director Fees
Conversions


During
2008 Blast’s Directors converted unsecured claims for unpaid directors fees from
2006 totaling $164,000, into 820,000 shares of Blast’s common stock at the rate
of one share for each $0.20 of the deferred amount owed.





NOTE
5 – NOTES PAYABLE





In
accordance with the terms of the Plan, Blast maintains the following three
secured obligations:





·
            A
      $2.1 million interest-free senior obligation with Laurus Master Fund,
      Ltd., secured by the assets of Blast and payable only with 65% of any net
      proceeds that may be received from customer litigation or asset sales that
      may occur in the future;





·
            A
      $125,000 note to McClain County, Oklahoma for property taxes, which must
      be paid from any receipts of litigation proceeds from Quicksilver, or if
      not paid, it will convert into a 6.5% interest bearing note due February
      27, 2010, and due in twelve monthly installments of
      $10,417;  and





·
            A
      pre-existing secured $1.12 million note with Berg McAfee Companies has
      been extended for an additional three years from the effective date of the
      Plan (February 27, 2008) at 8% interest, and contains an option for the
      principal and interest to be convertible into common stock at the rate of
      one share for each $0.20 of the note
  outstanding.





During
July 2008, Blast received a $500,000 cash payment under the terms of the
settlement agreement in the Hallwood Energy / Hallwood Petroleum lawsuit (see
Note 8). Accordingly, Blast has reclassified $216,668 of the $2.1 million
interest-free senior obligation to current liabilities at June 30,
2008.





NOTE
6 – PREFERRED STOCK





In
January 2008, Blast sold the rights to an aggregate of 2,000,000 units each
consisting of four shares of Series A Convertible Preferred Stock, and one three
year warrant with an exercise price of $0.10 per share (the “Units”), for an
aggregate of $4,000,000 or $2.00 per Unit, to Clyde Berg and to McAfee Capital
LLC.  The sale of the Units was conditioned upon approval of the
Plan.  The shares of common stock issuable in connection with the
exercise of the warrants and in connection with the conversion of the Preferred
Stock were granted registration rights in connection with the sale of the
Units.  The proceeds from the sale of the Units were used to satisfy
creditor claims of about $2.4 million under the terms of the Plan and provide
working capital of $1.6 million.





Series A Convertible
Preferred Stock


The
8,000,000 shares of Series A Preferred Stock (the “Preferred Stock”) accrue
dividends at the rate of 8% per annum, in arrears for each month that the
Preferred Stock is outstanding.  Blast has the right to repay any or
all of the accrued dividends at any time by providing the holders of the
Preferred Stock at least five days written notice of their intent to repay such
dividends.  In the event Blast receives a “Cash Settlement,” defined
as an aggregate total cash settlement received by Blast, net of legal fees and
expenses, in connection with either (or both) of Blast’s pending litigation
proceedings with Hallwood and Quicksilver in excess of $4,000,000, Blast is
required to pay any and all outstanding dividends within thirty days in cash or
stock at the holder’s option.  If the dividends are not paid within
thirty days of the date the Cash Settlement is received, a “Dividend Default”
occurs. As of June 30, 2008, the aggregate and per share arrearages were
$108,712 and $0.014, respectively.





The
Preferred Stock, and any accrued and unpaid dividends, have optional conversion
rights, which provide the holders  the right to convert into shares of
Blast’s common stock at a conversion price of $0.50 per share. The Preferred
Stock automatically converts if Blast’s common stock trades for a period of more
than twenty consecutive trading days at a price greater than $3.00 per share and
if the average trading volume of Blast’s common stock exceeds 50,000 shares per
day.





7


The
Preferred Stockholder has the right to vote at any shareholder vote the number
of underlying common shares of voting stock that the Preferred Stock is then
convertible into.  The Preferred Stock may be redeemed at the sole
option of Blast upon the receipt by Blast of a cash settlement from the pending
litigation in excess of $7,500,000, provided that the holders, at their sole
option, may have six months from the date of Blast’s receipt of the cash
settlement to either accept the redemption of the Preferred Stock or convert
into shares of Blast’s common stock.





Warrants


Blast
also issued warrants to the Preferred Stockholders to purchase up to 4,000,000
shares of common stock at an exercise price of $0.10 per share.  These
warrants have a three-year term. The relative fair value of the warrants was
approximately $446,000 on the date of sale.  The relative fair value
was determined utilizing the Black-Scholes model.  The significant
assumptions used in the valuation were: the exercise price of $0.10; the market
value of Blast’s common stock on the date of issuance, $0.29; expected
volatility of 131%; risk free interest rate of 2.25%; and a term of three
years.  Management has evaluated the terms of the Convertible
Preferred Stock and the issuance of warrants in accordance with EITF 98-5 and
EITF 00-27, and concluded that there is not a beneficial conversion feature at
the date of issuance.





NOTE
7 – BUSINESS SEGMENTS





Blast has
two reportable segments: Satellite Communications and Down-hole Solutions. The
accounting policies of the reportable segments are the same as those described
in the summary of significant accounting policies.  The table below
reports certain financial information by reportable segment for the three and
six months ended June 30, 2008 and 2007:








For
      the Three Months Ended
            
            
            For
      the Six Months EndedJune
      30,
            
            
            June
      30,2008
            
            
            2007
            
            
            2008
            
            
            2007Revenues
      from external customersSatellite
      Communications
            
            $
            79,973
            
            
            $
            111,189
            
            
            $
            151,625
            
            
            $
            273,608Down-hole
      Solutions
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -Total
      Revenue
            
            $
            79,973
            
            
            $
            111,189
            
            
            $
            151,625
            
            
            $
            273,608Operating
      profit (loss):Satellite
      Communications
            
            $
            (16,962
            )
            
            $
            6,652
            
            
            $
            (41,610
            )
            
            $
            51,678Down-hole
      Solutions
            
            
            (100,612
            )
            
            
            -
            
            
            
            (124,433
            )
            
            
            (6,794
            )Corporate
            
            
            (878,876
            )
            
            
            (1,023,599
            )
            
            
            (1,466,973
            )
            
            
            (2,927,094
            )Operating
      Loss
            
            $
            (996,450
            )
            
            $
            (1,016,942
            )
            
            $
            (1,633,016
            )
            
            $
            (2,882,210
            )








NOTE
8 - LITIGATION





Hallwood
Energy/Hallwood Petroleum Lawsuit


On
September 1, 2006, Hallwood Petroleum, LLC and Hallwood Energy, LP (“Hallwood”)
filed suit in the state district court of Tarrant County, Texas, against Eagle
Domestic Drilling Operations, LLC (“Eagle”), a wholly owned subsidiary of Blast,
and a separate company, Eagle Drilling, LLC. The lawsuit sought to rescind two
IADC two-year term day rate drilling contracts between Eagle Drilling and
Hallwood, which had been assigned to Eagle by Eagle Drilling prior to Blast’s
acquisition of the membership interests of Eagle.  Hallwood alleged Eagle
Drilling and Eagle were in breach of the IADC contracts.  Hallwood
purported to terminate the two IADC day rate drilling contracts on September 6,
2006.  Hallwood claimed that the rigs provided for use under the IADC
contracts did not meet contract specifications and that the failures to meet
such specifications are material breaches of the contracts.  In addition,
Hallwood demanded that the remaining balance of funds advanced under the
contracts, in the amount of approximately $1.65 million, be returned. Eagle
vigorously contested the claims by Hallwood and instituted a proceeding (“the
Adversary Proceeding”) to prosecute causes of action for breach of contract,
tortious interference and business disparagement against Hallwood in the US
Bankruptcy Court for the Southern District of Texas in Houston.  Hallwood
filed its counterclaim in the Adversary Proceeding, largely mirroring the claim
that was filed in the Tarrant County litigation.


8


On April
3, 2008, Eagle and Hallwood signed an agreement to settle the litigation between
them for a total settlement amount of approximately $6.5 million. Under the
terms of this agreement, Hallwood will pay to Eagle $2.0 million in cash, issue
$2.75 million in equity and has irrevocably forgiven approximately $1.65 million
in deposits paid to Eagle effective immediately.  In return, Eagle
agreed to suspend its legal actions against Hallwood for approximately six
months. Upon receipt of the entire settlement amount by Eagle, the parties
and their affiliates will be fully and mutually released from all and any claims
between them. This settlement agreement was approved by both companies’ boards
but is subject to certain conditions set forth in the Blast Plan of
Reorganization, as amended and confirmed by the Bankruptcy Court.





Quicksilver Resources
Lawsuit


On
October 13, 2006, Quicksilver Resources, Inc. (“Quicksilver”) filed suit in the
state district court of Tarrant County, Texas against Eagle and a separate
company, Eagle Drilling, LLC. The lawsuit seeks to rescind three IADC two-year
term day rate contracts between Eagle Drilling and Quicksilver, which had been
assigned to Eagle by Eagle Drilling prior to Blast’s acquisition of Eagle. 
The lawsuit includes further allegations of other material breaches of the
contracts and negligent operation by Eagle and Eagle Drilling under the
contracts. Quicksilver asserts that performance under one of the contracts was
not timely and that mechanical problems of the rig provided under the contract
caused delays in its drilling operations.  Quicksilver repudiated the
remaining two contracts prior to the time for performance set forth in each
respective contract.  After Blast and Eagle filed their petition for
reorganization in the US Bankruptcy Court in Houston, Eagle and Quicksilver
entered into a stipulation that the lawsuit would be tried in the Bankruptcy
Court before a jury and the case was set for a jury trial in September
2008.  On motion filed by Eagle Drilling, the US Bankruptcy
Court  recommended that the US District Court  withdraw its
reference of the adversary proceeding.





Alberta Energy
Partners


Alberta
Energy Partners (“Alberta”) took a number of actions adverse to Blast during the
course of the Chapter 11 case. Alberta filed a motion to appoint a trustee. That
motion was denied. Alberta filed a motion to deem rejected the Technology
Purchase Agreement (the “Agreement”) between Alberta and Blast. That motion was
denied. Alberta filed a motion to require Blast to reject the Agreement. That
motion was denied, and Alberta appealed the bankruptcy court’s rulings. No
decision has been rendered on that consolidated appeal of two orders. However,
the District Court has ordered that the consolidated appeal is stayed and
administratively closed until Alberta has exhausted its appeal of the
confirmation order. Alberta objected to the confirmation of Blast’s plan of
reorganization. That objection was overruled by the bankruptcy court, and
Alberta appealed. This appeal was dismissed by the district court as moot.
Alberta filed a motion for reconsideration and rehearing of the District Court’s
order. That matter is presently pending. Blast objected to the proof of claim
filed by Alberta seeking rescission of the Agreement. Blast’s objection to the
proof of claim was sustained, and Alberta’s claim for rescission was disallowed
by the bankruptcy court. Alberta appealed the ruling on its claim, but that
appeal has subsequently been withdrawn by Alberta.





General





As part
of its regular operations, Blast may become a party to various pending or
threatened claims, lawsuits and administrative proceedings seeking damages or
other remedies concerning its commercial operations, products, employees and
other matters.  Although Blast can give no assurance about the outcome
of these or any other pending legal and administrative proceedings and the
effect such outcomes may have on Blast, except as described above, Blast
believes that any ultimate liability resulting from the outcome of such
proceedings, to the extent not otherwise provided for or covered by insurance,
will not have a material adverse effect on Blast‘s financial condition or
results of operations.





NOTE
9 – STOCK OPTIONS AND WARRANTS





Under the
Plan, Blast’s Board was given the authority to enter into long-term warrant
agreements with Blast’s management, and grant such senior management up to
4,000,000 warrants to purchase shares of Blast’s common stock at $0.20 per
share, for a period of five years.  In April 2008, the Board awarded
900,000 warrants to management. These warrants were determined to have a fair
value of $143,802 by using the Black-Scholes pricing model.  Variables
used in the Black-Scholes pricing model for warrants issued during the quarter
included (1) a discount rate of 2.70%, (2) an expected life of 3 years, (3) an
expected volatility of 131.82% and (4) no expected dividends. The total fair
value of these warrants was recorded as a current period expense.





9


During
May, 2008 options to purchase 750,000 shares of common stock were granted by
Blast to its directors at an exercise price of $0.20 per share.  These
options have a term of ten years of which 100,000 shares vested immediately on
the date of grant and the remainder vest 1/12th per
quarter thereafter.  These options were determined to have a fair
value of $167,266 by using the Black-Scholes pricing model.  Variables
used in the Black-Scholes pricing model for options issued during the quarter
included (1) a discount rate range of 3.14% to 3.36%, (2) an expected life of 6
years, (3) an expected volatility of 150% and (4) no expected dividends. The
current period expense recorded for these options was $116,150.





NOTE
10 – SUBSEQUENT EVENTS





Hallwood Energy/Hallwood
Petroleum Lawsuit


On July
7, 2008, Hallwood paid  $500,000 as an advance on its cash obligation
under the terms of the settlement agreement, and in return, Eagle agreed to
suspend the legal proceeding against Hallwood until September 30, 2008 pursuant
to the terms of the settlement agreement.





Quicksilver Resources
Lawsuit


On August
1, 2008, the US District Court for the Southern District of Texas (the “Court”)
issued various orders and rulings in connection with the pending litigation
between Quicksilver, Eagle and Eagle Drilling.





The
Court:


·
            approved
      Eagle’s motion for summary judgment on the issue of whether the three
      International Association of Drilling Contactors (“IADC”) drilling
      contracts, which are subject to the litigation, were properly assigned by
      Eagle Drilling finding that the contracts were properly assigned by Eagle
      Drilling to Eagle;·
            denied
      Quicksilver’s motion for summary judgment contending that the substitution
      by Eagle of a Chinese manufactured derrick constituted a material breach
      of the IADC contract; and·
            denied
      Eagle Drilling’s motion to transfer venue of the trial from the Southern
      District of Texas to the Western District of
  Oklahoma.




Additionally,
on August 4, 2008, the Court approved an order granting a ninety (90) day
continuance of the trial due to the illness of Quicksilver’s attorney and
setting a new trial date for December 15, 2008.





NOTE
11 – DISCONTINUED OPERATIONS





There are
no assets associated with the discontinued operations.  The
liabilities of the discontinued operations of Eagle are presented separately
under the captions “Current liabilities of discontinued operations” and
“Long-term liabilities” in the accompanying balance sheet and are represented by
the following:





June
      30,
              2008
            
            
            December
      31,
              2007Liabilities:Current
      Liabilities:Accrued
      liabilities
            
            $
            -
            
            
            $
            1,783,557Accounts
      payable
            
            
            -
            
            
            
            328,856Total
      Current Liabilities
            
            $
            -
            
            
            $
            2,112,413Long
      Term Liabilities:Notes
      payable
            
            
            125,000
            
            
            
            125,000Total
      Liabilities
            
            $
            125,000
            
            
            $
            2,237,413





10


Loss from
the discontinuance of drilling operations for the three and six months ended
June 30, 2008 and 2007 are as follows:





For
      the Three Months Ended
            
            
            For
      the Six Months EndedJune
      30,
            
            
            June
      30,2008
            
            
            2007
            
            
            2008
            
            
            2007Revenue:Drilling
      Services
            
            $
            -
            
            
            $
            -
            
            
            $
            -
            
            
            $
            1,102,150Cost
      of services provided:Drilling
      Services
            
            
            (47,070
            )
            
            
            295,794
            
            
            
            (43,403
            )
            
            
            1,596,868Depreciation
      and amortization
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            95,196Gross
      income (loss)
            
            
            47,070
            
            
            
            (295,794
            )
            
            
            43,403
            
            
            
            (589,914
            )Operating
      Expenses:Selling,
      general and administrative
            
            
            -
            
            
            
            7,214
            
            
            
            644
            
            
            
            17,398Interest
      expense
            
            
            -
            
            
            
            612
            
            
            
            1,047
            
            
            
            1,349,014Total
      operating expenses
            
            
            -
            
            
            
            7,826
            
            
            
            1,691
            
            
            
            1,366,412Gain
      (loss) from discontinued operations
            
            
            47,070
            
            
            
            (303,620
            )
            
            
            41,712
            
            
            
            (1,956,326
            )Gain
      on forgiveness of debt
            
            
            1,648,600
            
            
            
            -
            
            
            
            1,648,600
            
            
            
            -Interest
      income
            
            
            -
            
            
            
            296
            
            
            
            37
            
            
            
            -Other
      (expenses)
            
            
            -
            
            
            
            (10,470
            )
            
            
            (1,007
            )
            
            
            (3,062
            )Loss
      on sale of equipment
            
            
            -
            
            
            
            (2,033,714
            )
            
            
            -
            
            
            
            (2,033,714
            )Net
      income (loss) from discontinued operations
            
            $
            1,695,670
            
            
            $
            (2,347,508
            )
            
            $
            1,689,342
            
            
            $
            (3,993,102
            )


11


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




Forward-Looking
Statements




All
statements that are included in this Quarterly Report, other than statements of
historical fact, are forward-looking statements. You can identify
forward-looking statements by words such as “anticipate”, “believe” and similar
expressions and statements regarding our business strategy, plans and objectives
for future operations. Although management believes that the expectations
reflected in these forward-looking statements are reasonable, it can give no
assurance that such expectations will prove to have been correct. The
forward-looking statements in this filing involve known risks and uncertainties,
which may cause our actual results in future periods to be materially different
from any future performance suggested in this report. Such factors may include,
but are not limited to, such risk factors as: changes in technology, reservoir
or sub-surface conditions, the introduction of new services, commercial
acceptance and viability of new services, fluctuations in customer demand and
commitments, pricing and competition, reliance upon subcontractors, the ability
of our customers to pay for our services, together with such other risk factors
as may be included in our Annual Report on


Form
10-K.





All
dollar amounts discussed in “Item 2” are rounded to the nearest $1,000, or for
larger numbers, to the nearest tenth of a million.  Please consult the
financial statements in “Item 1” for exact dollar amounts.




Three
Months Ended June 30, 2008 Compared to Three Months Ended June 30,
2007




Satellite Communications
Services





Satellite
Communication Services’ revenues decreased by $31,000 to $80,000 for the three
months ended June 30, 2008 compared to $111,000 for the three months ended June
30, 2007. The decrease was caused by the decline in new business and customer
renewals during the time the Company was in Chapter 11 bankruptcy. The operating
margin from Satellite Communication Services decreased by $24,000 to a loss of
$17,000 for the three months ended June 30, 2008 compared to a gross profit of
$7,000 for the three months ended June 30, 2007.





As
hardware is sold, we recognize the revenue in the period it is delivered to the
customer. There were no significant hardware sales during the three months ended
June 30, 2008 and 2007. We bill some of our bandwidth contracts in advance, but
recognize the revenue over the period benefited.





Down-hole
Solutions





There
were no Down-hole Solutions’ revenues for the three months ended June 30, 2008
and June30, 2007.
The development of this technology was put on hold due to cash constraints prior
to and while the Company was in Chapter 11. The operating loss increased by
$101,000 to a loss of $101,000 for the three months endedJune 30, 2008 compared
to a loss of $-0-for the three months ended June 30, 2007. Cost of services
provided for the three months ended June 30, 2008 represents repair and
maintenance costs being spent to bring the abrasive fluid jetting (“AFJ”) rig
back into good operating condition.





Depreciation and
Amortization





Depreciation
and amortization expense decreased by $21,000 to $2,000 for the three months
ended June 30, 2008 compared to $23,000 for the three months ended June 30, 2007
due to the impairment of AFJ related intellectual property in December
2007.





12


Selling,
General and Administrative




Selling,
general and administrative (“SG&A”) expenses decreased by $125,000 to
$876,000 for the three months ended June 30, 2008 compared to $1,001,000 for the
three months ended June 30, 2007. The following table details the major
components:




For
      the Three Months Ended June 30,
            Increase
              (Decrease)(in
      thousands)
            2008
            2007Payroll
      and related costs
            $
      122
            $
      109
            $
      13Option
      and warrant expense
            308
            88
            220Legal
      fees & settlements
            234
            593
            (359)External
      services
            150
            138
            12Insurance
            32
            40
            (8)Travel
      & entertainment
            17
            19
            (2)Office
      rent, communications, misc.
            13
            14
            (1)$
      876
            $
      1,001
            $
      (125)





Lower
administrative costs were primarily a result of lower legal fees as the
bankruptcy proceedings wound down partially offset by higher non-cash expenses
associated with the warrants issued to management and options issued to
directors in the second quarter of 2008.


Interest
Expense





Interest
expense increased by $22,000 to $23,000 for the three months ended June 30, 2008
compared to $1,000 for the three months ended June 30, 2007 due to the accrued
interest on the note payable – related party (the AFJ note).





Loss from Continuing
Operations





Loss from
continuing operations increased by $30,000 to $1,019,000 for the three months
ended June 30, 2008 compared to $989,000 for the three months ended June 30,
2007 primarily due to repair and maintenance of the AFJ rig.





Income (Loss) from
Discontinued Operations





The
results from discontinued operations improved by $4,044,000 to income of
$1,696,000 for the three months ended June 30, 2008 compared to a loss of
$2,348,000 for the three months ended June 30, 2007. The change to a gain
from a loss is primarily due to the significant reduction in operational
activity during the second quarter of 2008 and the benefit of the April 2008
settlement with Hallwood which irrevocably forgave an accumulated liability of
$1,648,600 previously accrued to cover an advance made by Hallwood.





Net
Income (Loss)





The net
loss for the three months ended June 30, 2008 decreased by $4.0 million to a net
income of $0.7 million compared to a loss of $3.3 million for the corresponding
period in 2007. This decrease is primarily related to the change from a net loss
in discontinued operations to a net income arising from the sale of our contract
drilling business during 2007 and the April 2008 settlement with Hallwood which
included a provision that irrevocably forgave an accumulated liability of $1.6
million.





Six
Months Ended June 30, 2008 Compared to Six Months Ended June 30,
2007




Satellite Communications
Services





Satellite
Communication Services’ revenues decreased by $122,000 to $152,000 for the six
months ended June 30, 2008 compared to $274,000 for the six months ended June
30, 2007. The decrease can be attributed to the decline in new business and
customer renewals during the time the Company was in Chapter 11 bankruptcy. The
operating margin decreased by $93,000 to a loss of $41,000 for the six months
ended June 30, 2008 compared to a gross profit of $52,000 for the six months
ended June 30, 2007.





13


As
hardware is sold, we recognize the revenue in the period it is delivered to the
customer. There were no significant hardware sales during the six months ended
June 30, 2008 and 2007. We bill some of our bandwidth contracts in advance, but
recognize the revenue over the period benefited.





Down-hole
Solutions





There
were no Down-hole Solutions’ revenues for the six months ended June 30, 2008 and
June30, 2007. The
development of this technology was put on hold due to cash constraints prior to
and while the Company was in Chapter 11 bankruptcy. The operating loss increased
by $117,000 to a loss of $124,000 for the six months ended June 30, 2008
compared to a loss of $7,000 for the six months ended June 30, 2007. Cost of
services provided for the six months ended June 30, 2008 represents repair and
maintenance costs being spent to bring the AFJ rig back into good operating
condition.





Depreciation and
Amortization





Depreciation
and amortization expense decreased by $42,000 to $5,000 for the six months ended
June 30, 2008 compared to $47,000 for the six months ended June 30, 2007 due to
the impairment of AFJ related intellectual property in December
2007.





Selling,
General and Administrative




Selling,
general and administrative (“SG&A”) expenses decreased by $1,418,000 to
$1,462,000 for the six months ended June 30, 2008 compared to $2,880,000 for the
six months ended June 30, 2007. The following table details major
components:




For
      the Six Months Ended June 30,
            Increase
              (Decrease)(in
      thousands)
            2008
            2007Payroll
      and related costs
            $
      291
            $
      190
            $
      101Option
      and warrant expense
            360
            1,151
            (791)Legal
      fees & settlements
            461
            1,199
            (738)External
      services
            221
            235
            (14)Insurance
            63
            21
            42Travel
      & entertainment
            30
            42
            (12)Office
      rent, communications, misc.
            36
            42
            (6)$
      1,462
            $
      2,880
            $
      (1,418)





Lower
administrative costs were primarily a result of lower legal fees as the
bankruptcy proceedings wound down.  Additionally, the administrative
costs in 2007 included the calculation of non-cash expense associated with the
employee options issued with the acquisition of Eagle.





Interest
Expense





Interest
expense increased by $45,000 to $66,000 for the six months ended June 30, 2008
compared to $21,000 for the six  months ended June 30, 2007 due to the
accrued interest on the note payable – related party (the AFJ
note)..





Loss from Continuing
Operations





Loss from
continuing operations decreased by $1.2 million to $1.7 million for the six
months ended June 30, 2008 compared to $2.9 million for the six months ended
June 30, 2007 primarily due to lower expenses.





Income (Loss) from
Discontinued Operations





The
results from discontinued operations improved by $5.7 million to income of $1.7
million for the six months ended June 30, 2008 compared to a loss of $4.0
million for the six months ended June 30, 2007.  This improvement is
primarily due to the significant reduction in operational activity resulting
from operations being discontinued during the second quarter of 2007 and the
April 2008 settlement with Hallwood which included a provision that irrevocably
forgave an accumulated liability of $1.6 million previously accrued to cover an
advance made by Hallwood.


14


Net Income
(Loss)




The
income for the six months ended June 30, 2008 was approximately $0 compared to a
loss of $6.9 million for the corresponding period in 2007. The decrease in net
loss is primarily related to the lower loss from discontinued operations arising
from the sale of our contract drilling business during 2007, reduced
administrative costs and benefit of the April 2008 settlement with Hallwood
which irrevocably forgave an accumulated liability of $1.6 million. The tax
benefit associated with our loss has been fully reserved as we have recurring
net losses and it is more likely than not that the tax benefits will not be
realized. The cumulative net operating loss carry-forward is approximately $30
million at December 31, 2007, and will expire in the years 2019 through
2027.





Liquidity
and Capital Resources




Blast had
total current assets of $960,000 as of June 30, 2008, including a cash balance
of $741,000, compared to total current assets of $153,000 as of December 31,
2007, including a cash balance of $49,000.  The increase in current
assets is principally due to the $4.0 million cash infusion from the sale of
convertible preferred securities after payments of $2.4 million were made to
creditors and legal professionals.





Blast had
total assets as of June 30, 2008 of $2.1 million compared to total assets of
$1.2 million as of December 31, 2007.  This increase is related to the
increase in current assets as described above.





Blast had
total liabilities of $4.1 million as of June 30, 2008, consisting of current
liabilities of $0.9 million compared to total liabilities of $8.6 million as of
December 31, 2007, consisting of current liabilities of $6.4
million.  The decrease in liabilities is principally due to the
reduction in accrued liabilities and accounts payable from payments made to
creditors and legal professionals following confirmation of the Plan and the
settlement with Hallwood which included a provision that irrevocably forgave an
accumulated liability of $1.6 million. Blast had net working capital of $21,000
and a total accumulated deficit of $78 million as of June 30, 2008.





Included
in total long-term liabilities are:





·
            A
      $2.1 million interest-free senior obligation with Laurus Master Fund,
      Ltd., secured by the assets of Blast and payable only by way of a 65%
      portion of the proceeds that may be received for the customer litigation
      lawsuits or any asset sales that may occur in the
  future.





·
            A
      $125,000 note to McClain County, Oklahoma for property taxes, which can
      also be paid from the receipt of Quicksilver litigation proceeds, or if
      not paid, it will convert into a 6.5% interest bearing note due February
      27, 2010, and due in twelve monthly installments of $10,417;
      and





·
            A
      pre-existing secured $1.12 million note with Berg McAfee Companies has
      been extended for an additional three years from the effective date of the
      Plan (February 27, 2008) at 8% interest, and contains an option for the
      principal and interest to be convertible into Company stock at the rate of
      one share for each $0.20 of the note
  outstanding.





During
July 2008, Blast received a $500,000 cash payment under the terms of the
settlement agreement in the Hallwood Energy / Hallwood Petroleum lawsuit (see
Note 8). Accordingly, Blast has reclassified $216,668 of the $2.1 million
interest-free senior obligation to short term liabilities at June 30,
2008.





Cash Flows from Operating
Activities





Blast had
net cash used in operating activities of approximately $2.7 million for the six
months ended June 30, 2008, which was mainly due to the loss from continuing
operations of $1.7 million and a $1.6 million decrease in accounts payable to
pay creditors and professionals in emerging from bankruptcy.





Cash Flows used for
Investing Activities





Blast had
net cash used by investing activities of $82,000 for the six months ended June
30, 2008, which consisted solely of capitalized improvements to bring the AFJ
rig back into good operating condition.





15


Cash Flows from Financing
Activities





Blast had
net cash provided by financing activities of $3.5 million for the six months
ended June 30, 2008, which included $4,000,000 from issuing convertible
preferred stock and $100,000 of borrowings under our DIP loan facility offset by
$583,000 of payments on short term debt.





In
connection with the approval of the Bankruptcy Plan, Blast raised $4.0 million
in cash proceeds from the sale of convertible preferred securities to Clyde Berg
and McAfee Capital, two parties related to Blast’s largest shareholder, Berg
McAfee Companies.  The proceeds from the sale of the securities were
used to pay 100% of the unsecured creditor claims, all administrative claims,
and all statutory priority claims, for a total amount of approximately $2.4
million.  The remaining  $1.6 million is being used to
execute an operational plan including, but not limited to, reinvesting in the
Down-hole Solutions and Satellite Communications businesses and pursuing an
emerging Remote Sensor business.





The April
2008 settlement with Hallwood had several provisions, one of which had immediate
effect, namely to reverse an accumulated debt of $1,648,600 previously accrued
to cover an advance of costs made by Hallwood when rigs 11 and 12 were
originally constructed.





We have
no current commitment from our officers and Directors or any of our shareholders
to supplement our operations or provide us with financing in the future. If we
are unable to raise additional capital from conventional sources and/or
additional sales of stock in the future, we may be forced to curtail or cease
our operations. Even if we are able to continue our operations, the failure to
obtain 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, 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 or debt securities, if accomplished, may result in dilution to
our then shareholders. We provide no assurance that financing will be available
in amounts or on terms acceptable to us, or at all.





Cash Flows from Discontinued
Operations





We had
approximately $-0- and $1.2 million of net cash used by discontinued operations
for the six months ended June 30, 2008 and 2007, respectively.





Item
3. Quantitative and Qualitative Disclosures about Market Risk





Pursuant
to Item 305(e) of Regulation S-K (§ 229.305(e)), the Company is not required to
provide the information required by this Item as it is a “smaller reporting
company,” as defined by Rule 229.10(f)(1).





Item
4. Controls and Procedures





Based on
management’s evaluation as of the end of the period covered by this report, our
Principal Executive Officer and Principal Financial Officer have participated in
the evaluation and concluded that our disclosure controls and procedures were
effective to ensure that information we are required to disclose in reports
filed or submitted under the Securities Exchange Act of 1934, as amended, is
recorded, processed, summarized, and reported within the periods specified and
in accordance with the SEC’s rules and forms.





There
have been no changes in our internal control over financial reporting during the
period covered by this report that have materially affected, or are reasonably
likely to materially affect, our internal control over financial
reporting.








16


Part
II. OTHER INFORMATION




Item
1. Legal Proceedings





Emergence from
Bankruptcy





On
February 26, 2008, the Court entered an order confirming our Second Amended Plan
of Reorganization (the “Plan”).  This ruling allows the Debtors to
emerge from Chapter 11 bankruptcy, which became effective February 27,
2008.





The
overall impact of the confirmed Plan was for Blast to emerge from Chapter 11
bankruptcy which allowed unsecured claims to be fully paid, have no debt service
scheduled for at least two years, and to keep equity shareholders’ interests
intact.  The major components of the Plan, which was approved by
creditors and shareholders, are detailed below.





Under the
terms of this confirmed Plan, Blast has raised $4.0 million in cash proceeds
from the sale of convertible preferred securities to Clyde Berg and McAfee
Capital, two parties related to Blast’s largest shareholder, Berg McAfee
Companies.  The proceeds from the sale of the securities were used to
pay 100% of the allowed unsecured  claims, all allowed unsecured
administrative claims, and all statutory priority claims (unless a contrary
agreement was reached), for a total amount of $2.4 million.  The sale
of the convertible preferred securities was conditioned on approval of the Plan
and as such, the securities were issued after Blast successfully merged with its
wholly owned subsidiary, Blast Energy Services, Inc., a Texas corporation,
whereby Blast re-domiciled in the State of Texas.





This Plan
also preserved the equity interests of our shareholders. Furthermore, Blast will
continue to prosecute the litigation against Quicksilver and Hallwood, if they
are unable to meet the terms of the settlement agreement. Blast can make no
assurances as to the outcome or success of the Quicksilver litigation or that
Hallwood can complete their major financing and satisfy the terms of their
settlement agreement.





Other Litigation
Matters





Hallwood Energy/Hallwood
Petroleum Lawsuit


On
September 1, 2006, Hallwood Petroleum, LLC and Hallwood Energy, LP (“Hallwood”)
filed suit in the state district court of Tarrant County, Texas, against Eagle
Domestic Drilling Operations, LLC (“Eagle”), a wholly owned subsidiary of Blast,
and a separate company, Eagle Drilling, LLC. The lawsuit sought to rescind two
IADC two-year term day rate drilling contracts between Eagle Drilling and
Hallwood, which had been assigned to Eagle by Eagle Drilling prior to Blast’s
acquisition of the membership interests of Eagle.  Hallwood alleged Eagle
Drilling and Eagle were in breach of the IADC contracts.  Hallwood
purported to terminate the two IADC day rate drilling contracts on September 6,
2006.  Hallwood claimed that the rigs provided for use under the IADC
contracts did not meet contract specifications and that the failures to meet
such specifications are material breaches of the contracts.  In addition,
Hallwood demanded that the remaining balance of funds advanced under the
contracts, in the amount of approximately $1.65 million, be returned. Eagle
vigorously contested the claims by Hallwood and instituted a proceeding (“the
Adversary Proceeding”) to prosecute causes of action for breach of contract,
tortious interference and business disparagement against Hallwood in the US
Bankruptcy Court for the Southern District of Texas in Houston.  Hallwood
filed its counterclaim in the Adversary Proceeding, largely mirroring the claim
that was filed in the Tarrant County litigation.





On April
3, 2008, Eagle and Hallwood signed an agreement to settle the litigation between
them for a total settlement amount of approximately $6.5 million. Under the
terms of this agreement, Hallwood will pay to Eagle $2.0 million in cash, issue
$2.75 million in equity and has irrevocably forgiven approximately $1.65 million
in deposits paid to Eagle effective immediately.  In return, Eagle
agreed to suspend its legal actions against Hallwood for approximately six
months. Upon receipt of the entire settlement amount by Eagle, the parties
and their affiliates will be fully and mutually released from all and any claims
between them. This settlement agreement was approved by both companies’ boards
but is subject to certain conditions set forth in the Blast Plan of
Reorganization, as amended and confirmed by the Bankruptcy Court. On July
7, 2008, Hallwood paid $500,000 as an advance on its cash obligation under the
terms of the settlement agreement, which amount is being held in trust pending
full settlement





17


Quicksilver Resources
Lawsuit


On
October 13, 2006, Quicksilver Resources, Inc. (“Quicksilver”) filed suit in the
state district court of Tarrant County, Texas against Eagle and a separate
company, Eagle Drilling, LLC. The lawsuit seeks to rescind three IADC two-year
term day rate contracts between Eagle Drilling and Quicksilver, which had been
assigned to Eagle by Eagle Drilling prior to Blast’s acquisition of Eagle. 
The lawsuit includes further allegations of other material breaches of the
contracts and negligent operation by Eagle and Eagle Drilling under the
contracts. Quicksilver asserts that performance under one of the contracts was
not timely and that mechanical problems of the rig provided under the contract
caused delays in its drilling operations.  Quicksilver repudiated the
remaining two contracts prior to the time for performance set forth in each
respective contract.  After Blast and Eagle filed their petition for
reorganization in the US Bankruptcy Court in Houston, Eagle and Quicksilver
entered into a stipulation that the lawsuit would be tried in the Bankruptcy
Court before a jury and the case was set for a jury trial in September
2008.  On motion filed by Eagle Drilling, the US Bankruptcy Court
recommended that the US District Court withdraw its reference of the adversary
proceeding.  On August 1, 2008, the US District Court for the Southern
District of Texas (the “Court”) issued various orders and rulings in connection
with the pending litigation between Quicksilver, Eagle and Eagle
Drilling.





The
Court:





·
            approved
      Eagle’s motion for summary judgment on the issue of whether the three
      International Association of Drilling Contactors (“IADC”) drilling
      contracts, which are subject to the litigation, were properly assigned by
      Eagle Drilling finding that the contracts were properly assigned by Eagle
      Drilling to Eagle;·
            denied
      Quicksilver’s motion for summary judgment contending that the substitution
      by Eagle of a Chinese manufactured derrick constituted a material breach
      of the IADC contract; and·
            denied
      Eagle Drilling’s motion to transfer venue of the trial from the Southern
      District of Texas to the Western District of
  Oklahoma.





Additionally,
on August 4, 2008, the Court approved an order granting a ninety (90) day
continuance of the trial due to the illness of Quicksilver’s attorney and
setting a new trial date for December 15, 2008.





Alberta Energy
Partners


Alberta
Energy Partners (“Alberta”) took a number of actions adverse to Blast during the
course of the Chapter 11 case. Alberta filed a motion to appoint a trustee. That
motion was denied. Alberta filed a motion to deem rejected the Technology
Purchase Agreement (the “Agreement”) between Alberta and Blast. That motion was
denied. Alberta filed a motion to require Blast to reject the Agreement. That
motion was denied, and Alberta appealed the bankruptcy court’s rulings. No
decision has been rendered on that consolidated appeal of two orders. However,
the District Court has ordered that the consolidated appeal is stayed and
administratively closed until Alberta has exhausted its appeal of the
confirmation order. Alberta objected to the confirmation of Blast’s plan of
reorganization. That objection was overruled by the bankruptcy court, and
Alberta appealed. This appeal was dismissed by the district court as moot.
Alberta filed a motion for reconsideration and rehearing of the District Court’s
order. That matter is presently pending. Blast objected to the proof of claim
filed by Alberta seeking rescission of the Agreement. Blast’s objection to the
proof of claim was sustained, and Alberta’s claim for rescission was disallowed
by the bankruptcy court. Alberta appealed the ruling on its claim, but that
appeal has subsequently been withdrawn by Alberta.





General


Other
than the aforementioned legal matters, Blast is not aware of any other pending
or threatened legal proceedings.  The foregoing is also true with
respect to each officer, director and control shareholder as well as any entity
owned by any officer, director and control shareholder, over the last five
years.





As part
of its regular operations, Blast may become party to various pending or
threatened claims, lawsuits and administrative proceedings seeking damages or
other remedies concerning its’ commercial operations, products, employees and
other matters.  Although Blast can give no assurance about the outcome
of these or any other pending legal and administrative proceedings and the
effect such outcomes may have on Blast, except as described above, Blast
believes that any ultimate liability resulting from the outcome of such
proceedings, to the extent not otherwise provided for or covered by insurance,
will not have a material adverse effect on Blast‘s financial condition or
results of operations.





18


Item
1A. Risk Factors





There
have been no material changes from the risk factors previously disclosed in the
registrant’s Form 10-KSB, filed with the Commission on April 7,
2008.





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





In
January 2008, Blast sold the rights to an aggregate of 2,000,000 units each
consisting of four shares of Series A Convertible Preferred Stock, and one three
year warrant with an exercise price of $0.10 per share (the “Units”), for an
aggregate of $4,000,000 or $2.00 per Unit, to Clyde Berg, an individual and to
McAfee Capital LLC.  The shares of common stock issuable in connection
with the exercise of the warrants and in connection with the conversion of the
Preferred Stock were granted registration rights in connection with the sale of
the Units.  The proceeds from the sale of the Units were used to
satisfy creditor claims of about $2.4 million under the terms of the Plan and
provide working capital of $1.6 million.





We claim
an exemption from registration afforded by Section 4(2) of the Act since the
foregoing issuances did not involve a public offering, the recipients took the
shares for investment and not resale and we took appropriate measures to
restrict transfer.





Series A Convertible
Preferred Stock


The
8,000,000 shares of Series A Preferred Stock (the “Preferred Stock”) accrue
dividends at the rate of 8% per annum, in arrears for each month that the
Preferred Stock is outstanding.  Blast has the right to repay any or
all of the accrued dividends at any time by providing the holders of the
Preferred Stock at least five days written notice of their intent to repay such
dividends.  In the event Blast receives a “Cash Settlement,” defined
as an aggregate total cash settlement received by Blast, net of legal fees and
expenses, in connection with either (or both) of Blast’s pending litigation
proceedings with Hallwood and Quicksilver in excess of $4,000,000, Blast is
required to pay any and all outstanding dividends within thirty days in cash or
stock at the holder’s option.  If the dividends are not paid within
thirty days of the date the Cash Settlement is received, a “Dividend Default”
occurs. As of June 30, 2008, the aggregate and per share arrearages were
$108,712 and $0.014, respectively.





The
Preferred Stock (and any accrued and unpaid dividends) have optional conversion
rights, which provide the holders  the right, to convert Stock into
shares of Blast’s common stock at a conversion price of $0.50 per share. The
Preferred Stock automatically converts if Blast’s common stock trades for a
period of more than twenty consecutive trading days at a price greater than
$3.00 per share and if the average trading volume of Blast’s common stock
exceeds 50,000 shares per day.





The
Preferred Stockholder has the right to vote at any shareholder vote the number
of underlying common shares of voting stock that the Preferred Stock is then
convertible into.  The Preferred Stock may be redeemed at the sole
option of Blast upon the receipt by Blast of a Cash Settlement from the pending
litigation in excess of $7,500,000, provided that the holders, at their sole
option, may have six months from the date of Blast’s receipt of the Cash
Settlement to either accept the redemption of the Preferred Stock or convert
such Preferred Stock into common stock.





Warrants


Blast
also issued warrants to the Preferred Stockholders to purchase up to 4,000,000
shares of common stock at an exercise price of $0.10 per share.  These
warrants have a three-year term. The relative fair value of the warrants was
approximately $446,000 on the date of sale.  The relative fair value
was determined utilizing the Black-Scholes model.  The significant
assumptions used in the valuation were: the exercise price of $0.10; the market
value of Blast’s common stock on the date of issuance, $0.29; expected
volatility of 131%; risk free interest rate of 2.25%; and a term of three
years.  Management has evaluated the terms of the Convertible
Preferred Stock and the issuance of warrants in accordance with EITF 98-5 and
EITF 00-27, and concluded that there is not a beneficial conversion feature at
the date of issuance.





We claim
an exemption from registration afforded by Section 4(2) of the Act since the
foregoing issuances did not involve a public offering, the recipients took the
securities for investment and not resale and we took appropriate measures to
restrict transfer.





19


Debtor-in-Possession (“DIP”)
Loan


The
Bankruptcy court approved Blast’s ability to draw $800,000 from Berg McAfee and
related entities to finance Blast on a temporary basis.  The Plan
allowed Berg McAfee to convert the outstanding balance of the DIP loan and
accrued interest into Company common stock at the rate of one share of common
stock for each $0.20 outstanding.  In March 2008 after the Merger
became effective, 4,000,000 shares of common stock were issued in full payment
of the principal on this loan, and 160,000 shares of common stock were issued
for the accrued interest on the obligation.  We claim an exemption
from registration afforded by Section 4(2) of the Act since the foregoing
issuances did not involve a public offering, the recipients took the shares for
investment and not resale and we took appropriate measures to restrict transfer.
No underwriters or agents were involved in the foregoing issuances and no
underwriting discounts or commissions were paid by us.





Director Fees
Conversions


Blast’s
Directors converted unsecured claims for unpaid directors’ fees from 2006
totaling $164,000, into 820,000 shares of Blast’s common stock at the rate of
one share for each $0.20 of the deferred amount owed as follows:





Roger
      P. Herbert
            120,000
      sharesO.
      James Woodward III
            177,500
      sharesJoseph
      J. Penbera
            202,500
      sharesFrederick
      R. Ruiz
            100,000
      sharesJohn
      Block
            92,500
      sharesScott
      W. Johnson
            72,500
      sharesJeffery
      R. Pendergraft
            55,000
      shares





We claim
an exemption from registration afforded by Section 4(2) of the Act since the
foregoing issuances did not involve a public offering, the recipients took the
shares for investment and not resale and we took appropriate measures to
restrict transfer. No underwriters or agents were involved in the foregoing
issuances and no underwriting discounts or commissions were paid by
us.





Additionally,
under the Plan, Blast’s Board was given the authority to enter into long-term
warrant agreements with  management, and grant them the right to
purchase up to 4,000,000 warrants to purchase shares of Blast’s common stock at
$0.20 per share, for a period of five years.  During May, 2008 five
year warrants to purchase 900,000 shares of common stock were granted to the
following executives, Directors and employees at an exercise price of $0.20 per
share:





John
      O’Keefe
            Chief
      Executive Officer
            400,000
      warrantsJohn
      MacDonald
            Chief
      Financial Officer
            200,000
      warrantsAndrew
      Wilson
            GM
      Satellite Division
            200,000
      warrantsCharley
      Gallo
            Satellite
      Technician
            50,000
      warrantsCara
      Phelps
            Office
      Manager
            50,000
      warrants





We claim
an exemption from registration afforded by Section 4(2) of the Act since the
foregoing issuances did not involve a public offering, the recipients took the
warrants for investment and not resale and we took appropriate measures to
restrict transfer. No underwriters or agents were involved in the foregoing
grants and no underwriting discounts or commissions were paid by
us.





Laurus Warrant
Exercise


On or
around May 9, 2008, Laurus Master Fund, Ltd. (“Laurus”) affected a cashless
exercise of certain of its outstanding warrants, and exercised 3,026,087 of such
warrants for 2,900,000 shares of our restricted common stock (with 126,087
exercised shares being used in the cashless exercise to effectively purchase
such exercised shares).  We claim an exemption from registration
afforded by Section 4(2) of the Act since the foregoing issuance did not involve
a public offering, the recipient took the shares for investment and not resale
and we took appropriate measures to restrict transfer. No underwriters or agents
were involved in the foregoing issuance and no underwriting discounts or
commissions were paid by us.





Second Bridge Share
Cancellation


Under the
terms of the Plan and pursuant to the settlement agreement approved on May 14,
2007, Blast repurchased 900,000 shares of common stock previously issued to
Second Bridge LLC for $900. These shares were returned to Blast’s transfer agent
and cancelled.





Shares Approved But Not
Issued at Quarter End


In April
and May 2008, the Board of Directors approved the issuance of 45,000 and 62,500
shares of common stock, respectively, in partial consideration of technical
consulting services.


20


Also in
May 2008, the Board of Directors approved the issuance of up to 300,000 shares
of Blast’s common stock to an consultant in consideration for market
surveillance and financial consulting services provided.  The shares
will be earned by the consultant as follows: 150,000 shares immediately and
37,500 shares at the end of each quarter for the one year period of the
engagement.





The
issuances described above were issued in July 2008.  As a result, none
of the issuances described above are included in the number of issued and
outstanding shares disclosed throughout this Form 10-Q.  We claim an
exemption from registration afforded by Section 4(2) of the Act since the
foregoing issuances will not involve a public offering, the recipients will take
the shares for investment and not resale and we took appropriate measures to
restrict transfer.





Director
Options


In May
2008, the Board of Directors approved compensation of $2,500 per month for each
Director of Blast and an additional $2,500 for the Chairman, as well as $1,500
per month for the Audit Committee Chair and $1,000 additional per month for the
Chairman of each additional committee. However, the Board elected to defer the
payment of any cash compensation pending a favorable resolution of the
Quicksilver litigation. If cash proceeds are not received from the Quicksilver
matter by July 1, 2009, each member will then have the option to convert the
amount owed to them into shares of common stock at a rate of $0.20 per share.
 Additionally, the Board approved the grant of 100,000 options to each
Director which would vest immediately and additional compensation of 50,000
warrants for each quarter vesting over the next three years as described in Note
9 to the Financial Statements above.


We claim
an exemption from registration afforded by Section 4(2) of the Act since the
foregoing grants did not involve a public offering, the recipients took the
securities for investment and not resale and we took appropriate measures to
restrict transfer.




In July
2008, Blast’s former Director, Frederick R. Ruiz exercised 50,000 of the options
he was granted in April 2003, pursuant to Blast’s 2003 stock option plan and
purchased 50,000 shares of common stock.  The options had an exercise
price of $0.10 per share and Mr. Ruiz paid Blast $5,000 in connection with his
exercise.
 
 We claim
an exemption from registration afforded by Section 4(2) of the Act since the
foregoing issuance did not involve a public offering, the recipient took the
securities for investment and not resale and we took appropriate measures to
restrict transfer.


21


Item
6. Exhibits





2.1
            
            Agreement
      and Plan of Reorganization, dated April 24, 2003, as amended June 30,
      2003;
              Filed
      July 18, 2003 with the SEC, Report on Form 8-K2.2
            
            Articles
      of Merger (California and Texas)
              Filed
      on April 7, 2008, as an Exhibit to our Form 10-KSB
  filing3.1
            
            Certificate
      of Formation Texas
              Filed
      March 6, 2008 with the SEC, Form 8-K3.2
            
            Certificate
      of Designation of Series A Preferred Stock
              Filed
      March 6, 2008 with the SEC, Form 8-K3.3
            
            Bylaws
      of Blast Energy Services, Inc., Texas
              Filed
      March 6, 2008 with the SEC, Form 8-K4.1
            
            $800,000
      Secured Promissory Note dated July 15, 2005 by and among Blast Energy
      Services, Inc. and Berg McAfee Companies, LLC
              Filed
      July 26, 2005 with the SEC, Form 8-K4.2
            
            $200,000
      Secured Subordinated Promissory Note dated July 15, 2005 by and among
      Blast Energy Services, Inc. and Berg McAfee Companies, LLC
              Filed
      July 26, 2005 with the SEC, Form 8-K10.1
            
            Second
      Amended Plan of Reorganization
              Filed
      March 6, 2008 with the SEC, Form 8-K10.2
            
            First
      Amended Plan of Reorganization
              Filed
      March 6, 2008 with the SEC, Form 8-K10.3
            
            Subscription
      Agreement and Related Exhibits with Clyde Berg
              Filed
      March 6, 2008 with the SEC, Form 8-K10.4
            
            Subscription
      Agreement and Related Exhibits with McAfee Capital, LLC
              Filed
      March 6, 2008 with the SEC, Form 8-K10.5
            
            Laurus
      Master Fund, Ltd. $2.1 million Security Agreement
              Filed
      March 6, 2008 with the SEC, Form 8-K10.6
            
            Berg
      McAfee Companies $1.12 million Note
              Filed
      March 6, 2008 with the SEC, Form 8-K10.7
            
            Settlement
      Agreement
              Filed
      on May 14, 2007 with the SEC, Form 8-K10.8
            
            Eagle
      Domestic Drilling Operations LLC and Hallwood Energy, LP and Hallwood
      Petroleum LLC  Settlement Agreement
              Filed
      on April 7, 2008, as an Exhibit to our Form 10-KSB
  filing*31.1
            
            Certification
      of Principal Executive Officer pursuant to Section 302*31.2
            
            Certification
      of Principal Accounting Officer pursuant to Section 302*32.1
            
            Certification
      of Principal Executive Officer pursuant to Section 1350*32.2
            
            Certification
      of Principal Accounting Officer pursuant to Section
  1350





*Filed
herewith


22





SIGNATURES




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




Blast Energy Services,
      Inc.By:
            /s/
      John O’Keefe, CEOJohn
      O’KeefeChief
      Executive OfficerPrincipal
      Executive OfficerDate:
      August 12, 2008By:
            /s/
      John MacDonald, CFOJohn
      MacDonaldChief
      Financial OfficerPrincipal
      Accounting OfficerDate:
      August 12, 2008