**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


Washington,
      D.C. 20549




**FORM
      10-KSB**




(Mark
      One)




**x
      ANNUAL REPORT UNDER
      SECTION l3 OR l5(d) OF THE SECURITIES EXCHANGE ACT OF**




l934




For
      the
      fiscal year ended December 31, 2007




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


**OF
      1934**




For
      the
      transition period from




_____________to_____________




*Commission
      file number 000-23901*




**GSV,
      INC.**


(Name
      of
      small business issuer in its charter)




Delaware
              (State
                or other jurisdiction of incorporation ororganization)
            13-3979226
              (I.R.S.
                Employer Identification No.)191
                Post Road West
              Westport,
                Connecticut
              (Address
                of principal executive offices)
            06880
              (Zip
                Code)




Issuer's
      telephone number: (203) 221-2690




Securities
      registered under Section 12(b) of the Act: None




Securities
      registered under Section


12(g)
      of
      the Act:




Common
      Stock, par value $.001 per share


(Title
      of
      Class)





Check
      whether the issuer is not required to file reports pursuant to Section
      13


or
      15(d)
      of the Exchange Act. | |





Check
      whether the issuer (1) filed all reports required to be filed by Section 13
      or
      15(d) of the Securities Exchange Act during the past 12 months (or for such
      shorter period that the registrant was required to file such reports), and (2)
      has
      been subject to such filing requirements for the past 90
      days. x Yes
      oNo












Check
      if
      there is no disclosure of delinquent filers pursuant to Item 405 of Regulation
      S-B contained in this form, and no disclosure will be contained, to the best
      of
      registrant's knowledge, in definitive proxy or information statements
      incorporated by reference in Part III of this Form 10-KSB or any amendment
      to
      this Form 10-KSB. x





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act).o Yes x No





The
      issuer's revenues for the year ended December 31, 2007 were
      $837,760.




As
      of
      March 13, 2008, the aggregate market value of the voting stock held by
      non-affiliates, based on the average of the high and the low bid and asked
      prices reported on such date, was $236,797.33.




As
      of
      March 13, 2008, there were 7,502,703 shares of the issuer's common stock
      outstanding, excluding 168,592 shares held in treasury.




Transitional
      Small Business Disclosure Format (check one):  o Yes x No










**Statement
      Regarding Forward-Looking Statements**




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




-
      "may"


-
      "will"


-
      "should"


-
      "estimates"


-
      "plans"


-
      "expects"


-
      "believes"


-
      "intends"




and
      similar expressions. We cannot guarantee our future results, performance or
      achievements. Our actual results and the timing of corporate events may differ
      significantly from the expectations discussed in the forward-looking statements.
      You are cautioned not to place undue reliance on any forward-looking statements.
      Potential risks and uncertainties that could affect our future operating results
      include, but are not limited to, our limited operating history, history of
      losses, need to raise additional capital, the high risk nature of our business
      and the other risks described in Exhibit 99.1 to this report.





3


**PART
      I**




**Item
      1. Description of Business.**




We
      were
      formed as a Delaware corporation on October 29, 1997.




Since
      July 2003, our business operations have been focused on managing our existing
      investments in oil and gas assets and looking for additional opportunities
      in
      this field. From June 2001 to July 2003, our business operations included
      managing our existing investments and entering into new business operations
      through acquisitions or mergers.




Prior
      to
      June 2001, we had sought to identify and develop attractive early stage Internet
      companies in exchange for equity positions in such companies. We have since
      made
      substantial write downs of these investments to more accurately reflect current
      market valuations, and these investments do not represent a significant asset.
      As of December 31, 2007, these investments were valued at approximately 1.7%
      of
      the total value of our assets. We are continuing to investigate whether or
      not
      there are any business prospects through which material value can be realized
      from the remaining Internet investments.




**Louisiana
      Interests**




We
      hold
      working interests in two oil and gas wells in the state of
      Louisiana.




Production
      from the wells in Louisiana was suspended temporarily on February 9, 2006
      because the water level had risen in one of the wells. On or about May 8, 2006
      work to recomplete the wells in a different sand zone was completed and
      production was restarted. The wells returned to full production at the beginning
      of July 2006. Our share of the costs of recompletion, which was about $70,300,
      was deducted from the royalty payments we received from the operator. Also,
      because of the delay between sales of gas by the operator and our receipt of
      royalty payments from the operator, the temporary suspension of production
      had
      the effect of reducing our royalty revenues for the second and the third
      quarters of 2006.




On
      November 1, 2006, Southwestern Energy Production Company, the operator of the
      wells in Louisiana, designated White Oak Operating Company LLC to be the
      operator of the wells. We did not experience any change in production as a
      result.




**Texas
      Interests**




Through
      our subsidiary Cybershop, L.L.C., a New Jersey limited liability company
      ("Cybershop"), we own interests in certain oil and gas properties in Texas
      and
      an undivided one-third interest in Century Royalty LLC ("Century Royalty"),
      a
      Texas limited liability company that manages the oil and gas properties in
      Texas. Through Cybershop we also own an additional interest in the Louisiana
      properties in which we already held an interest. Century Royalty also holds
      the
      rights to certain geological studies. Century Royalty is a member of a working
      interest partnership that has identified several prospects derived from the
      geological studies and is
      working towards drilling these prospects. Century Royalty had a carried interest
      with this partnership of 20% for the first well drilled in the first 5 prospects
      or $1.25 million of investment, whichever comes first. Century Royalty has
      a 20%
      participation interest in all subsequent wells drilled in the first 5 prospects.
      As these joint interest partnership agreements have expired, they relate only
      to
      prospects for which leases have already been taken and not expired. We are
      entitled to the first $4,168,659 of net income in Century Royalty and to 75%
      of
      net income thereafter. We have received $1,512,370 of this amount as of March
      1,
      2008.




On
      June
      28, 2006, the working interest partnership commenced drilling on one of the
      prospects and planned to drill a second prospect once the first was completed.
      The costs of drilling these prospects were expected to exceed Century Royalty's
      carried interest in the working interest partnership. On June 20, 2006, we
      agreed to contribute a maximum of $100,000 towards the drilling of these two
      prospects and decrease our working interest in these two prospects to
      11.918%.




4




On
      October 5, 2006, we announced the successful completion of drilling in the
      first
      prospect, located in Liberty County, Texas. The pipeline tie-in of the
      "Friendswood No. 2 RE" gas well was completed successfully in June 2007. On
      or
      about September 14, 2007, efforts to increase the pressure of the flow of gas
      from the well were successful and the sale of gas through the pipeline
      commenced. On February 4, 2008, we successfully completed fracturing of the
      well. All 1150 bbls of frac water have been recovered, and the well has been
      tested at various pressures. On February 21, 2008, the well was put back on
      line
      full-time. Since then, it has produced around 350-400 Mcf per day, up from
      about
      60 Mcf per day prior to fracturing. The well continues to produce a small amount
      of water, up to about 20 bbls per day. An independent engineering company has
      been hired to conduct a reserve and engineering report to establish the
      estimated size and projected cash flow to be generated by the well. The
      engineering report has not yet been generated because the flow of gas from
      the
      well has not yet become sufficiently steady and established. Based on initial
      reports, we expect that up to four additional wells may be required to obtain
      maximum flow from the anticipated reserves. Century Royalty and its partners
      are
      preparing to commence drilling a second well near "Friendswood No. 2 RE" in
      the
      near future.




In
      October 2006, we granted one of the members of the Texas working interest
      partnership the right to drill a well based on the geological seismic data
      that
      Century Royalty holds. In return, we received a 2% carried interest in the
      proposed well until completion, and a 2% working interest thereafter. The
      "Shirley Gay" well was completed in the beginning of March 2007. Pipeline tie-in
      was completed in February 2008 and sales began shortly thereafter. We expect
      to
      start receiving proceeds from these sales in the second quarter of 2008. Through
      March 1, 2008, our expenses related to completion of the "Shirley Gay" well
      total $25,547. We are currently awaiting the completion of an independent
      engineering report to establish the estimated size and projected cash flow
      to be
      generated by the well.




When
      the
      engineering reports on the “Friendswood No. 2 RE" and "Shirley Gay" Wells become
      available, we will adjust the value of the geological studies accordingly.
      If
      the report shows that the reserves are low we may be required to write-down
      their value or possibly write them off completely.




Our
      management has little practical experience in the oil and gas industry. Our
      management relies to a great extent on the employees of Century Royalty to
      monitor and implement strategy with respect to our oil and gas assets. Our
      management's inexperience may detrimentally affect our operations and results
      because, for example, it could prevent us from taking advantage of opportunities
      that arise on a timely basis or cause us to take actions that a more experienced
      management team might determine are not in our best interests. We are currently
      seeking to engage additional professional managers to assist in extracting
      value
      from the properties.




We
      own
      less than 100% of the working interest in our oil and gas holdings. We do not
      conduct any operations. Operations are conducted by operating companies that
      follow the instructions of the working interest owners. Because of this
      structure, drilling and operating decisions are not entirely within our control.
      If we disagree with the decision of a majority of working interest owners,
      we
      may be required, among other things, to decline to participate in a particular
      activity. If we decline to participate, we might be required to relinquish
      our
      interest. Under most operating agreements, the operator is given direct and
      full
      control over all operations on the property and is obligated to conduct
      operations in a workman-like manner; however the operator is usually not liable
      to the working interest owners for losses sustained or for liabilities incurred,
      except those resulting from its own gross negligence or willful
      misconduct.




Each
      working interest owner is generally liable for its share of the costs of
      developing and operating jointly owned properties. The operator is required
      to
      pay the expenses of developing and operating the property and will invoice
      working interest owners for their proportionate share of such
      costs.




We
      face
      intense competition for good exploratory prospects or existing developmental
      prospects from entities possessing substantially larger financial resources
      and
      staffs. The demand for domestically produced gas remains substantial and should
      remain substantial in the foreseeable future especially in light of the turmoil
      in the Middle East.




5




As
      of
      December 31, 2007, we had one full-time employee (including management). Our
      employee is not represented by any collective bargaining organization.




**Item
      2.** **Description
      of Property.**




Our
      corporate headquarters are located at 191 Post Road West, Westport, Connecticut
      06880. We lease approximately 150 square feet of office space at these
      facilities at a cost of $1,424 per month. We have a revolving six-month lease.
      We believe that our existing facilities are adequate for our current
      requirements and that additional space can be obtained to meet our requirements
      for the foreseeable future.




**Wells
      and acreage**




At
      March
      18, 2008, we owned non-operated working interests in 2 producing wells on 746
      gross (62 net) acres covered by state leases in Assumption Parish, Louisiana.
      The properties were operated until November 2006 by Southwestern Energy
      Production Company and from November 2006 by White Oak Operating Company LLC.
      The
      wells are producing oil and gas. For the year ended December 31, 2007, the
      wells
      produced 52,146 gross, 3,131 net barrels of oil at an average price of $74.95
      per barrel, and 1,569,278 million cubic feet (mcf) gross, 94,239 mcf net natural
      gas at an average price of $6.4 per mcf. For the year ended December 31, 2006,
      the wells produced 20,134 gross, 1,209 net barrels of oil at an average price
      of
      $60.28 per barrel, and 553,069 million cubic feet (mcf) gross, 33,213 mcf net
      natural gas at an average price of $5.75 per mcf. For the year ended December
      31, 2005, the wells produced 36,721 gross, 2,205 net barrels of oil at an
      average price of $53.57 per barrel, and 1,178.2 million cubic feet (mcf) gross,
      70,751.7 mcf net natural gas at an average price of $8.42 per mcf. We pay White
      Oak Operating Company LLC a monthly fee to support production
      costs.




At
      March
      18, 2008, we owned non-operating working interests in one well producing 1,301
      gross (155 net) covered by the leases in Liberty County, Texas. The property
      is
      operated by Century 2000 LLC, a Texas LLC that is partially owned by other
      members in Century Royalty. For the year ended December 31, 2007, the well
      produced 41.3 gross, 3.4 net barrels of oil at an average price of $84.10 per
      barrel and 5,952 million cubic feet (mcf) gross, 496 mcf net natural gas at
      an
      average price of $6.70 per mcf. There was no production in previous years.




We
      have
      not reported to, nor filed with, any other Federal authority or agency any
      estimates of total, proved net oil or gas reserves since the beginning of our
      last fiscal year.




**Undeveloped
      Acreage**




The
      working interest partnership of which Century Royalty is a partner has
      identified 10 prospects in Texas derived from geological studies that Century
      Royalty holds. Currently, there is no undeveloped acreage held, as leases taken
      in the past have expired during 2007 and the beginning of 2008.




**Drilling
      Activity**




On
      June
      28, 2006, the working interest partnership commenced drilling on one of the
      prospects and planned to drill a second prospect once the first was completed.
      The costs of drilling these prospects were expected to exceed Century Royalty's
      carried interest in the working interest partnership. On June 20, 2006, we
      agreed to contribute a maximum of $100,000 towards the drilling of these two
      prospects and decrease our working interest in these two prospects to
      11.918%.




On
      October 5, 2006, we announced the successful completion of drilling in the
      first
      prospect, located in Liberty County, Texas. The pipeline tie-in of the
      "Friendswood No. 2 RE" gas well was completed successfully in June 2007. On
      or
      about September 14, 2007, efforts to increase the pressure of the flow of gas
      from the well were successful and the sale of gas through the pipeline
      commenced. On February 4, 2008, we successfully completed fracturing of the
      well. All 1150 bbls of frac water have been recovered, and the well has been
      tested at various pressures. On February 21, 2008, the well was put back on
      line
      full-time. Since then, it has produced around 350-400 Mcf per day, up from
      about
      60 Mcf per day prior to fracturing. The well continues to produce a small amount
      of water, up to about 20 bbls per day. An independent engineering company has
      been hired to conduct a reserve and engineering report to establish the
      estimated size and projected cash flow to be generated by the well. The
      engineering report has not yet been generated because the flow of gas from
      the
      well has not yet become sufficiently steady and established. Based on initial
      reports, we expect that up to four additional wells may be required to obtain
      maximum flow from the anticipated reserves. Century Royalty and its partners
      are
      preparing to commence drilling a second well near "Friendswood No. 2 RE" in
      the
      near future.




6




In
      October 2006, we granted one of the members of the Texas working interest
      partnership the right to drill a well based on the geological seismic data
      that
      Century Royalty holds. In return, we received a 2% carried interest in the
      proposed well until completion, and a 2% working interest thereafter. The
      "Shirley Gay" well was completed in the beginning of March 2007. Pipeline tie-in
      was completed in February 2008 and sales began shortly thereafter. We expect
      to
      start receiving proceeds from these sales in the second quarter of 2008. Through
      March 1, 2008, our expenses related to completion of the "Shirley Gay" well
      total $25,547. Production is expected to commence shortly after pipeline tie-in
      connections are completed. We are currently awaiting the completion of an
      independent engineering report to establish the estimated size and projected
      cash flow to be generated by the well.




In
      June
      2001, we sublet to Nekema.com our former offices in Jersey City, New Jersey
      through December 31, 2008. The rent on the sublease was guaranteed by Lumbermens
      Mutual Casualty Company, d/b/a Kemper Insurance Company, until May 2003. In
      September 2002 Nekema ceased business operations and defaulted on the sublease.
      Kemper Insurance Company made all payments of rent due under the sublease
      through May 2003. We ceased paying rent under the lease for this space in July
      2003. On May 5, 2004 we filed a proof of claim against Nekema's estate in the
      United States Bankruptcy Court for the Southern District of New York. The proof
      of claim was for the total sum of $421,455.15 as permitted by law and the court
      approved a settlement of $363,048.88. On November 15, 2005, the trustee in
      the
      bankruptcy filed a notice of filing of final accounts. On February 15, 2006,
      we
      received $22,300.77 in settlement of our claim.




On
      January 3, 2006, we entered into a Termination, Settlement and Release Agreement
      with 116 Newark Avenue Corporation, dated as of November 30, 2005, pursuant
      to
      which we agreed to terminate the lease for our former offices in Jersey City,
      New Jersey. Under the terms of the agreement, we paid 116 Newark $70,000 in
      cash, issued a promissory note in the principal amount of $356,249.04 and
      200,000 shares of Series C preferred stock to 116 Newark and reimbursed 116
      Newark for $10,000 of its legal fees. The promissory note bears interest at
      a
      rate of 7% per annum and is secured by a pledge agreement between Polystick
      and
      116 Newark pursuant to which Polystick has pledged 356,249 shares of our Series
      B Preferred Stock that it holds to 116 Newark. On
      January 9, 2008, we entered into an agreement, dated as of January 3, 2008,
      with
      116 Newark to amend and restate the terms of the promissory note. Pursuant
      to
      the agreement, we paid all accrued and unpaid interest on the promissory note
      through the date of the agreement, and the original note was amended and
      restated in a substitute note with a maturity date of December 20, 2009. We
      agreed to pay the substitute note’s outstanding principal balance of $356,249.04
      in 24 consecutive monthly installments of $14,843.71, each payable on or before
      the 20th day of the month, beginning in January 2008. The substitute note will
      not accrue interest, except that if any monthly installment is not received
      by
      116 Newark within ten days of its applicable monthly installment date (the
      "Trigger Date") then (i) interest at the rate of 7% per annum shall be deemed
      to
      have begun to accrue from the date of the agreement on the then unpaid principal
      balance of the substitute note, and shall continue to accrue until all principal
      and accrued interest on the substitute note is paid in full; (ii) all interest
      that is accrued and unpaid as of the Trigger Date shall be immediately due
      and
      payable on the Trigger Date; and (iii) with each monthly installment following
      the Trigger Date, we will pay all then accrued and unpaid interest on the unpaid
      principal balance of the substitute note through the relevant monthly
      installment date. Payment and performance under the substitute note has been
      guaranteed by Polystick and secured by a pledge agreement between Polystick
      and
      116 Newark pursuant to which Polystick has pledged 356,249 shares of our Series
      B Preferred Stock to 116 Newark.




**Item
      3. Legal Proceedings.**




None




7




**Item
      4. Submission of Matters to a Vote of Security Holders.**




None.




8


**PART
      II**




**Item
      5. Market for Common Equity and Related Stockholder Matters and Small Business
      Issuer Purchases of Equity Securities.**




**Market
      Information**




Our
      common stock is currently trading on the OTC Bulletin Board under the symbol
      "GSVI."




The
      following table sets forth the range of quarterly high and low sales prices
      for
      shares of our common stock for the periods indicated, as reported on the OTC
      Bulletin Board.





2008
            
            2007
            
            2006High
            
            Low
            
            High
            
            Low
            
            High
            
            LowQuarter
                ended March 31
            
            
            
            
            
            
            
            $
            0.20
            
            $
            0.11
            
            $
            0.17
            
            $
            0.12Quarter
                ended June 30
            
            
            
            
            
            
            
            $
            0.45
            
            $
            0.12
            
            $
            0.17
            
            $
            0.12Quarter
                ended September 30
            
            
            
            
            
            
            
            $
            0.45
            
            $
            0.20
            
            $
            0.13
            
            $
            0.11Quarter
                ended December 31
            
            
            
            
            
            
            
            $
            0.38
            
            $
            0.17
            
            $
            0.16
            
            $
            0.11January
                1 through March 13
            
            $
            0.25
            
            $
            0.06




Our
      common stock trades only sporadically. The public market for our common stock
      is
      limited and you should not assume that these quotations reflect prices that
      you
      might be able to obtain in actual market transactions or in transactions
      involving substantial numbers of shares.




As
      of
      March 13, 2008, there were 107 holders of record of our common
      stock.




**Dividends**




We
      do not
      anticipate paying cash dividends in the foreseeable future. We presently intend
      to reinvest our cash back into the company rather than pay dividends to our
      common stockholders.




**Recent
      Sales of Unregistered Securities**




None.




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




**Overview**




Since
      July 2003 our business operations have been focused on managing our existing
      investments in oil and gas assets and entering into new investments in this
      industry. From June 2001 to July 2003, our business operations included managing
      our existing investments and entering into new business operations through
      acquisitions or mergers.




Prior
      to
      June 2001, we had sought to identify and develop attractive early stage Internet
      companies in exchange for equity positions in such companies. We have since
      made
      substantial write downs of these investments to more accurately reflect current
      market valuations, and these investments do not represent a significant asset.
      As of December 31, 2007, these investments were valued at approximately 1.7%
      of
      the total value of our assets. We are continuing to investigate whether or
      not
      there are any business prospects through which material value can be realized
      from the remaining Internet investments.




We
      hold
      working interests in two oil and gas wells in the state of
      Louisiana.




9




Through
      our subsidiary Cybershop, a New Jersey limited liability company ("Cybershop")
      we own interests in certain oil and gas properties in Texas and an interest
      in
      Century Royalty LLC ("Century Royalty"), a Texas limited liability company
      that
      manages the oil and gas properties in Texas. Through Cybershop we also own
      an
      additional interest in the Louisiana properties in which we already held an
      interest. Century Royalty also holds the rights to certain geologic studies.
      Century Royalty has a carried interest with this partnership of 20% for the
      first well drilled in the first 5 prospects or $1.25 million of investment,
      whichever comes first. Century Royalty has a 20% participation interest in
      all
      subsequent wells drilled in the first 5 prospects. As these agreements pursuant
      to which Century Royalty held these interests have expired, we are entitled
      to
      the first $4,168,659 of net income in Century Royalty and to 75% of net income
      thereafter. We have already received $942,012 of this amount as of March 16,
      2007. Due to the existence of these revenue overrides, the operations of Century
      Royalty are included in the accompanying statements of operations.




On
      June
      28, 2006, the working interest partnership of which Century Royalty is a member
      commenced drilling on one of the prospects and planned to drill on a second
      prospect once the first was completed. The costs of drilling these prospects
      were expected to exceed Century Royalty's carried interest in the working
      interest partnership. On June 20, 2006, we agreed to contribute a maximum of
      $100,000 towards the drilling of these two prospects and decrease our working
      interest in these two prospects to 11.918%.




On
      October 5, 2006, we announced the successful completion of drilling in the
      first
      prospect, located in Liberty County, Texas. The pipeline tie-in of the
      "Friendswood No. 2 RE" gas well was completed successfully in June 2007. On
      or
      about September 14, 2007, efforts to increase the pressure of the flow of gas
      from the well were successful and the sale of gas through the pipeline
      commenced. On February 4, 2008, we successfully completed fracturing of the
      well. All 1150 bbls of frac water have been recovered, and the well has been
      tested at various pressures. On February 21, 2008, the well was put back on
      line
      full-time. Since then, it has produced around 400 Mcf per day, up from about
      60
      Mcf per day prior to fracturing. The well continues to produce a small amount
      of
      water, up to about 20 bbls per day. An independent engineering company has
      been
      hired to conduct a reserve and engineering report to establish the estimated
      size and projected cash flow to be generated by the well. The engineering report
      has not yet been generated because the flow of gas from the well has not yet
      become sufficiently steady and established. Based on initial reports, we expect
      that up to four additional wells may be required to obtain maximum flow from
      the
      anticipated reserves. Century Royalty and its partners are preparing to commence
      drilling a second well near "Friendswood No. 2 RE" in the near
      future.




In
      October 2006, we granted one of the members of the Texas working interest
      partnership the right to drill a well based on the geological seismic data
      that
      Century Royalty holds. In return, we received a 2% carried interest in the
      proposed well until completion, and a 2% working interest thereafter. The
      "Shirley Gay" well was completed in the beginning of March 2007. Pipeline tie-in
      was completed in February 2008 and sales began shortly thereafter. We expect
      to
      start receiving proceeds from these sales in the second quarter of 2008. Through
      March 1, 2008, our expenses related to completion of the "Shirley Gay" well
      total $25,547. Production is expected to commence shortly after pipeline tie-in
      connections are completed. We are currently awaiting the completion of an
      independent engineering report to establish the estimated size and projected
      cash flow to be generated by the well.




When
      the
      engineering reports on the “Friendswood No. 2 RE" and "Shirley Gay" Wells become
      available, we will adjust the value of the geological studies accordingly.
      If
      the report shows that the reserves are low we may be required to write-down
      their value or possibly write them off completely.




Our
      management has little practical experience in the oil and gas industry. Our
      management relies to a great extent on the employees of Century Royalty to
      monitor and implement strategy with respect to our oil and gas assets. Our
      management's inexperience may detrimentally affect our operations and results
      because, for example, it could prevent us from taking advantage of opportunities
      that arise on a timely basis or cause us to take actions that a more experienced
      management team might determine are not in our best interests.




The
      sole
      shareholder of Polystick is RT Sagi Holding Ltd., an Israeli corporation. The
      sole stockholder of RT Sagi and indirect owner of Polystick is Mr. Sagi Matza.
      Effective as of the consummation of the Merger, Mr. Matza was appointed to
      our
      board of directors as the designee of Polystick. Polystick has the right to
      elect two additional persons to our board of directors but has not yet done
      so.




10




Each
      share of Series B convertible preferred stock is convertible at any time at
      the
      holder's option into a number of shares of common stock equal to $1.00 divided
      by the conversion price then in effect. The terms upon which the Series B
      convertible preferred stock may be converted into common stock are set forth
      in
      the Certificate of Designations, Preferences and Rights of Series B Convertible
      Preferred Stock filed by the Company with the Secretary of State of the State
      of
      Delaware on July 18, 2003 ("Series B Certificate of Designations"). As of
      November 11, 2005, the Series B convertible preferred stock owned by Polystick
      was convertible into 1,500,000 shares of common stock.




No
      dividends are payable on the Series B convertible preferred stock, except that
      in the event dividends are declared with respect to the common stock each holder
      of shares of Series B convertible preferred stock will be entitled to receive
      an
      amount equal to the amount of dividends that would have been paid on the shares
      of common stock issuable upon conversion of such shares of Series B convertible
      preferred stock had such shares of Series B convertible preferred stock been
      converted into common stock immediately before the dividend was
      declared.




Upon
      any
      Liquidation Event, as defined in the Series B Certificate of Designations,
      the
      holders of the outstanding Series B convertible preferred stock will be
      entitled, before any distribution or payment is made to any holder of common
      stock or any other Junior Stock (as defined in the Series B Certificate of
      Designations), to be paid an amount equal to $1.00 per share plus the amount
      of
      any declared and unpaid dividends thereon. If upon any Liquidation Event our
      net
      assets distributable among the holders of the Series B convertible preferred
      stock are insufficient to permit the payment in full of such preferential amount
      to the holders of the Series B convertible preferred stock, then our net assets
      will be distributed ratably among the holders of the Series B convertible
      preferred stock in proportion to the amounts they otherwise would have been
      entitled to receive.




The
      Series B Certificate of Designations provides that so long as any shares of
      Series B convertible preferred stock are outstanding, we will not, without
      the
      written approval of the holders of at least a majority of the then-outstanding
      Series B convertible preferred stock, increase the maximum number of directors
      constituting our board of directors to more than seven. The Series B Certificate
      of Designations also provides that, so long as any shares of Series B
      convertible preferred stock are outstanding, the holders of the Series B
      convertible preferred stock, voting separately as a class, will be entitled
      to
      designate and elect three of the members of our board of directors. Also, a
      vacancy in any directorship elected by the holders of the Series B convertible
      preferred stock may be filled only by vote or written consent of the holders
      of
      at least a majority of the then outstanding shares of Series B convertible
      preferred stock. The Series B convertible preferred stock has no other voting
      rights except as provided by applicable law.




In
      June
      2001, we sublet to Nekema.com our former offices in Jersey City, New Jersey
      through December 31, 2008. The rent on the sublease was guaranteed by Lumbermens
      Mutual Casualty Company, d/b/a Kemper Insurance Company, until May 2003. In
      September 2002 Nekema ceased business operations and defaulted on the sublease.
      Kemper Insurance Company made all payments of rent due under the sublease
      through May 2003. We ceased paying rent under the lease for this space in July
      2003. On May 5, 2004 we filed a proof of claim against Nekema's estate in the
      United States Bankruptcy Court for the Southern District of New York. The proof
      of claim was for the total sum of $421,455.15 as permitted by law and the court
      approved a settlement of $363,048.88. On November 15, 2005, the trustee in
      the
      bankruptcy filed a notice of filing of final accounts. On February 15, 2006,
      we
      received $22,300.77 in settlement of our claim.




On
      January 3, 2006, we entered into a Termination, Settlement and Release Agreement
      with 116 Newark Avenue Corporation ("116 Newark"), dated as of November 30,
      2005, pursuant to which we agreed to terminate the lease for our former offices
      in Jersey City, New Jersey. Under the terms of the agreement, we paid 116 Newark
      $70,000 in cash, issued a promissory note in the principal amount of $356,249.04
      and 200,000 shares of Series C preferred stock to 116 Newark and reimbursed
      116
      Newark for $10,000 of its legal fees. The promissory note bears interest at
      a
      rate of 7% per annum and is secured by a pledge agreement between Polystick
      and
      116 Newark pursuant to which Polystick has pledged 356,249 shares of our Series
      B Preferred Stock that it holds to 116 Newark. On January 9, 2008, we entered
      into an agreement, dated as of January 3, 2008, with 116 Newark to amend and
      restate the terms of the promissory note. Pursuant to the agreement, we paid
      all
      accrued and unpaid interest on the promissory note through the date of the
      agreement, and the original note was amended and restated in a substitute note
      with a maturity date of December 20, 2009. We agreed to pay the substitute
      note’s outstanding principal balance of $356,249.04 in 24 consecutive monthly
      installments of $14,843.71, each payable on or before the 20th day of the month,
      beginning in January 2008. The substitute note will not accrue interest, except
      that if any monthly installment is not received by 116 Newark within ten days
      of
      its applicable monthly installment date (the "Trigger Date") then (i) interest
      at the rate of 7% per annum shall be deemed to have begun to accrue from the
      date of the agreement on the then unpaid principal balance of the substitute
      note, and shall continue to accrue until all principal and accrued interest
      on
      the substitute note is paid in full; (ii) all interest that is accrued and
      unpaid as of the Trigger Date shall be immediately due and payable on the
      Trigger Date; and (iii) with each monthly installment following the Trigger
      Date, we will pay all then accrued and unpaid interest on the unpaid principal
      balance of the substitute note through the relevant monthly installment date.
      Payment and performance under the substitute note has been guaranteed by
      Polystick and secured by a pledge agreement between Polystick and 116 Newark
      pursuant to which Polystick has pledged 356,249 shares of our Series B Preferred
      Stock to 116 Newark.




11




Each
      share of Series C preferred stock is convertible at any time into a number
      of
      shares of common stock equal to $1.00 divided by the conversion rate then in
      effect. The terms upon which the Series C convertible preferred stock may be
      converted into common stock are set forth in the Certificate of Designations,
      Preferences and Rights of Series C Convertible Preferred Stock filed by the
      Company with the Secretary of State of the State of Delaware on January 3,
      2006
      ("Series C Certificate of Designations"). As of March 16, 2007, the Series
      C
      convertible preferred stock owned by 116 Newark was convertible into 200,000
      shares of common stock.




No
      dividends are payable on the Series C convertible preferred stock.




Upon
      any
      Liquidation Event, as defined in the Series C Certificate of Designations,
      the
      holders of the outstanding Series C convertible preferred stock will be
      entitled, before any distribution or payment is made to any holder of common
      stock or any other Junior Stock (as defined in the Series C Certificate of
      Designations), to be paid an amount equal to $1.00 per share. If upon any
      Liquidation Event our net assets distributable among the holders of the Series
      C
      convertible preferred stock are insufficient to permit the payment in full
      of
      such preferential amount to the holders of the Series C convertible preferred
      stock, then our net assets will be distributed ratably among the holders of
      the
      Series C convertible preferred stock in proportion to the amounts they otherwise
      would have been entitled to receive.




The
      Series C Certificate of Designations provides that so long as any shares of
      Series C convertible preferred stock are outstanding, we will not, without
      the
      written approval of the holders of at least a majority of the then-outstanding
      Series C convertible preferred stock, (i) issue any additional shares of Series
      C convertible preferred stock, or (ii) issue any Senior Stock or Parity Stock
      (as such terms are defined in the Series C Certificate of Designations), unless
      such Senior Stock or Parity Stock is to be issued in exchange for (A) cash
      or
      services rendered or to be rendered by parties who are not Affiliates (as
      defined in the Series C Certificate of Designations) of the Company, in either
      case having a value greater than the aggregate liquidation preference of such
      Senior Stock or Parity Stock, or (B) equity securities or assets of one or
      more
      businesses that are not Affiliates of the Company, in either case having a
      value
      that is equal to or greater than the aggregate liquidation preference of such
      Senior Stock or Parity Stock. The Series C convertible preferred stock has
      no
      other voting rights except as provided by applicable law.




**Results
      of Operations**




Year
      Ended December 31, 2007 compared to Year Ended December 31, 2006.




Revenue:
      Revenue in 2007 consisted primarily of royalty payments from our working
      interests in two oil and gas wells in the state of Louisiana. Revenues increased
      by 217.5%, or $573,893, to $837,760 in 2007 from $263,867 in 2006. The increase
      in revenues for 2007 is primarily a result of the increase in oil prices and
      the
      increase in production. On February 9, 2006, we were advised by the operator
      of
      the oil and gas wells in Louisiana that production from the wells would be
      suspended temporarily because the water level had risen in one of the wells.
      On
      or about May 8, 2006 work to recomplete the wells in a different sand zone
      was
      completed and production was restarted. Our share of the costs of recompletion,
      which was about $70,300, was deducted from the royalty payments we received
      from
      the operator.




12




General
      and administrative: General and administrative expenses consisted primarily
      of
      payroll and payroll-related expenses for administrative, information technology,
      accounting, and management personnel, recruiting, legal fees, depreciation,
      depletion, finance expenses and general corporate expenses. General and
      administrative expenses increased by 67.8%, or $252,621, to $625,172 in the
      year
      ended December 31, 2007, from $372,551 in the prior year. The increase in 2007
      was primarily the result of the increase in depletion.




Net
      Income: Income from operations increased by $321,271 to $212,587 in the year
      ended December 31, 2007, or $0.04 per basic and $0.03 per diluted common share,
      from a loss of $108,684 in the prior year, or ($0.01) per basic and diluted
      common share. Net income available to common stockholders in the year ended
      December 31, 2007, was $156,050, or $0.02 per basic and diluted common share,
      as
      compared to a net loss of $165,621 or ($0.02) per basic and diluted common
      share, in the prior year. The increase in net income is in line with the
      increase in revenues from oil and gas wells.




**Liquidity
      and Capital Resources**




Net
      cash
      provided by operations increased by 1,091.2%, or $449,999, from $41,209 in
      the
      year ended December 31, 2006, to $491,208 in the year ended December 31, 2007.
      The increase was due primarily to an increase in cash from revenues of the
      Louisiana wells.




On
      February 9, 2006, we were advised by the operator of the Louisiana wells that
      production from the wells would be suspended temporarily because the water
      level
      had risen in one of the wells. On or about May 8, 2006 work to recomplete the
      wells in a different sand zone was completed and production was restarted.
      Our
      share of the costs of recompletion, which was about $70,300, was deducted from
      the royalty payments we received from the operator. Also, because of the delay
      between sales of gas by the operator and our receipt of royalty payments from
      the operator, the temporary suspension of production had the effect of reducing
      our royalty revenues for the second and third quarters of 2006.




Net
      cash
      used in investing activities during the year ended December 31, 2007, was
      $111,206, as compared to $177,688 in the prior year. The decrease was primarily
      attributable to the decrease in work done in the wells in Louisiana and
      Texas.




Net
      cash
      used by financing activities during the year ended December 31, 2007, was
      $20,000, as compared to $3,000 provided by financing activities in the prior
      year. The cash used in 2007 was attributable to a repayment of principle on
      a
      note payable. The cash provided by financing activities in 2006 was received
      for
      stock option exercises.




In
      2003,
      we issued to Polystick 4,500,000 shares of common stock and 1,500,000 shares
      of
      Series B convertible preferred stock valued at $2,625,000 to acquire assets
      in a
      non-cash transaction.




On
      February 11, 2004, we borrowed $25,000 from Brooks Station Holdings, Inc.,
      a
      private investment corporation ("Brooks Station"). In partial consideration
      for
      the loan, we issued 100,000 shares of common stock to Brooks Station. On March
      18, 2004, we borrowed another $25,000 from Brooks Station and in partial
      consideration for the loan issued another 100,000 shares of common stock to
      Brooks Station. Each loan was evidenced by a promissory note bearing interest
      at
      8% per annum secured by a lien on all of our assets. On September 20, 2004,
      we
      negotiated an extension of the maturity of the notes from their original
      maturity date of September 1, 2004 to March 1, 2005. On March 10, 2005, we
      repaid the note issued on February 11, 2004 and negotiated an extension of
      the
      maturity of the note dated March 18, 2004 to September 1, 2005. We also extended
      to the same date the maturity of an 8% secured promissory note we issued to
      Brooks Station on July 21, 2003 in the principal amount of $200,000. On August
      31, 2005, we repaid the March 18, 2004 note and negotiated an extension of
      the
      maturity date of the July 21, 2003 note to March 1, 2006. On March 20, 2006,
      we
      repaid $20,000 of the accrued and unpaid interest on the July 21, 2003 note
      and
      negotiated an extension of the maturity date of the note to September 1, 2006.
      On September 20, 2006, we negotiated an extension of the maturity date of the
      note to March 1, 2007. On March 1, 2007, we negotiated an extension of the
      maturity date of the note to September 1, 2007. On September 6, 2007, we repaid
      $20,000 of the accrued and unpaid interest on the note and $20,000 of the
      principal balance of the note and negotiated an extension of the maturity date
      of the note to March 1, 2008. On March 13, 2008, we repaid $20,000 of the
      accrued and unpaid interest on the note and $10,000 of the principal balance
      of
      the note and negotiated an extension of the maturity date of the note to
      September 1, 2008.




13




On
      May
      11, 2004, we sold a convertible promissory note in the principal amount of
      $200,000 and a warrant to purchase up to 1,142,857 shares of our common stock
      at
      a price of $.70 per share to D. Emerald Investments Ltd., a private investment
      corporation ("Emerald"). The note bears interest at the rate of 8% per annum
      and
      is convertible into shares of our common stock at a price of $.70 per share.
      The
      aggregate purchase price of these securities was $200,000. In connection with
      the sale of these securities we agreed that if Emerald exercises the warrant
      in
      full and converts the convertible note in full, then, at Emerald's request,
      we
      will appoint a person designated by Emerald to our Board of Directors and,
      in
      addition, for so long as Emerald holds at least eighty-five percent (85%) of
      the
      common stock issued upon such exercise and conversion, we will nominate such
      person (or a different person designated by Emerald) to be reelected to the
      Board of Directors in connection with any meeting of our stockholders at which
      directors are to be elected. We also agreed that within 120 days of the exercise
      of the warrant and/or conversion of the note for an aggregate of at least
      428,572 shares of common stock (subject to adjustment for dilutive events as
      set
      forth in the warrant and the note) we will register all of the shares issuable
      upon conversion of the note and exercise of the warrant under the Securities
      Act
      of 1933. Additionally, we granted Emerald rights to have the shares included
      in
      other registration statements we may file for the public offering of our
      securities for cash proceeds. In 2004, we recorded an expense of $129,000 for
      the value of the warrants and the conversion feature of the note calculated
      using the Black-Scholes method.




Our
      principal stockholder, Polystick, entered into a guaranty and a pledge agreement
      with Emerald under which Polystick pledged 200,000 shares of our Series B
      convertible preferred stock as collateral security for the note. Polystick
      also
      entered into a voting agreement with Emerald under which Polystick agreed that
      if we fail to fully and timely fulfill our obligations to appoint or nominate
      a
      representative for election to our board of directors, then, at Emerald's
      request, Polystick will vote its shares of Series B convertible preferred stock
      in favor of a nominee designated by Emerald in any election of directors
      occurring during such time and for so long as Emerald holds at least 85% of
      the
      common stock issued upon exercise of the warrant and conversion of the note.
      Polystick also agreed that, provided that Polystick continues to have the right
      to designate and elect three directors to the Company's board of directors
      under
      the terms of the Series B convertible preferred stock, any such nominee will
      count as one of such directors. Additionally, Polystick agreed to use all its
      power and authority as provided by our by-laws and the Series B convertible
      preferred stock to convene, at Emerald's request, meetings of stockholders
      as
      may be necessary to elect Emerald's nominee to the board of
      directors.




On
      July
      3, 2005, we entered into an agreement with Emerald dated as of May 10, 2005,
      pursuant to which we agreed to extend and renew the note and the warrant. Under
      the terms of the agreement, the maturity date of the note was extended from
      May
      10, 2006 to May 10, 2007 and Emerald's right to convert the note and all accrued
      interest on the note into common stock at a price of $.70 per share was extended
      until any time prior to May 10, 2006. The term of the warrant was also extended
      from May 10, 2005 to May 10, 2006.




On
      July
      11, 2006, we entered into an agreement with Emerald dated as of May 10, 2006,
      pursuant to which we agreed to extend and renew the note and the warrant. Under
      the terms of the agreement, the maturity date of the note was extended from
      May
      10, 2007 to January 10, 2008 and Emerald's right to convert the note and all
      accrued interest on the note into common stock at a price of $.70 per share
      was
      extended until any time prior to May 10, 2007. The term of the warrant was
      also
      extended from May 10, 2006 to May 10, 2007.




On
      May 7,
      2007, we entered into an agreement with Emerald dated as of May 7, 2007,
      pursuant to which we agreed to further extend and renew the note and the
      warrant. Under the terms of the agreement, the maturity date of the note was
      extended from January 10, 2008 to July 10, 2008, and Emerald's right to convert
      the note and all accrued interest on the note into common stock at a price
      of
      $.70 per share was extended until any time prior to July 10, 2008. The term
      of
      the warrant was also extended from May 10, 2007 to May 10, 2008.




14




On
      January 3, 2006, we entered into a Termination, Settlement and Release Agreement
      with 116 Newark Avenue Corporation, dated as of November 30, 2005, pursuant
      to
      which we agreed to terminate the lease for our former offices in Jersey City,
      New Jersey. Under the terms of the agreement, we paid 116 Newark $70,000 in
      cash, issued a promissory note in the principal amount of $356,249.04 and
      200,000 shares of Series C preferred stock to 116 Newark and reimbursed 116
      Newark for $10,000 of its legal fees. The promissory note matured on November
      29, 2007 and bore interest at a rate of 7% per annum. Payment and performance
      under the promissory note was guaranteed by Polystick and secured by a pledge
      agreement between Polystick and 116 Newark pursuant to which Polystick pledged
      356,249 shares of our Series B Preferred Stock that it holds to 116 Newark.
      116
      Newark has the right to include any shares of common stock received upon
      conversion of the Series C preferred stock and upon conversion of the pledged
      shares as part of any registration statement that we may file in connection
      with
      any public offering of our securities (excluding registration statements on
      Forms S-4 and S-8). On January 9, 2008, we entered into an agreement, dated
      as
      of January 3, 2008, with 116 Newark to amend and restate the terms of the
      promissory note. Pursuant to the agreement, we paid all accrued and unpaid
      interest on the promissory note through the date of the agreement, and the
      original note was amended and restated in a substitute note with a maturity
      date
      of December 20, 2009. We agreed to pay the substitute note’s outstanding
      principal balance of $356,249.04 in 24 consecutive monthly installments of
      $14,843.71, each payable on or before the 20th day of the month, beginning
      in
      January 2008. The substitute note will not accrue interest, except that if
      any
      monthly installment is not received by 116 Newark within ten days of its
      applicable monthly installment date (the "Trigger Date") then (i) interest
      at
      the rate of 7% per annum shall be deemed to have begun to accrue from the date
      of the agreement on the then unpaid principal balance of the substitute note,
      and shall continue to accrue until all principal and accrued interest on the
      substitute note is paid in full; and (ii) all interest that is accrued and
      unpaid as of the Trigger Date shall be immediately due and payable on the
      Trigger Date; and (iii) with each monthly installment following the Trigger
      Date, we will pay all then accrued and unpaid interest on the unpaid principal
      balance of the substitute note through the relevant monthly installment date.
      Payment and performance under the substitute note has been guaranteed by
      Polystick and secured by a pledge agreement between Polystick and 116 Newark
      pursuant to which Polystick has pledged 356,249 shares of our Series B Preferred
      Stock to 116 Newark.




We
      believe that our existing capital resources will enable us to maintain our
      operations at existing levels for at least the next 12 months, assuming that
      we
      can extend the maturities of the notes we issued to Brooks Station and Emerald
      beyond the next 12 months. However, it is difficult to project our capital
      needs. We cannot assure you that any additional financing or other sources
      of
      capital will be available to us upon acceptable terms, if at all. The inability
      to obtain additional financing, when needed, would have a material adverse
      effect on our business, financial condition and operating results.




**Critical
      Accounting Policies and Use of Estimates**




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




**Oil
      and Natural Gas Activities**




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




15




**Full
      Cost Method**




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




**Proved
      Oil and Natural Gas Reserves**




Estimates
      of our proved reserves included in this report are prepared in accordance with
      accounting principles generally accepted in the United States of America and
      SEC
      guidelines. Our engineering estimates of proved oil and natural gas reserves
      directly impact financial accounting estimates, including depreciation,
      depletion and amortization expense and the full cost ceiling limitation. Proved
      oil and natural gas reserves are the estimated quantities of oil and natural
      gas
      reserves that geological and engineering data demonstrate with reasonable
      certainty to be recoverable in future years from known reservoirs under
      period-end economic and operating conditions. The process of estimating
      quantities of proved reserves is very complex, requiring significant subjective
      decisions in the evaluation of all geological, engineering and economic data
      for
      each reservoir. The accuracy of a reserve estimate is a function of: (i) the
      quality and quantity of available data; (ii) the interpretation of that data;
      (iii) the accuracy of various mandated economic assumptions and (iv) the
      judgment of the persons preparing the estimate. The data for a given reservoir
      may change substantially over time as a result of numerous factors, including
      additional development activity, evolving production history and continual
      reassessment of the viability of production under varying economic conditions.
      Changes in oil and natural gas prices, operating costs and expected performance
      from a given reservoir also will result in revisions to the amount of our
      estimated proved reserves. Our estimated proved reserves for the years ended
      December 31, 2007 and 2006 were prepared by Pressler Petroleum Consultants
      Inc., an independent oil and natural gas reservoir engineering consulting
      firm.




**Depreciation,
      Depletion and Amortization**




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




**Future
      Development and Abandonment Costs**




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




16




**Asset
      Retirement Obligations**




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




**Stock-based
      Compensation**




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




**Valuation
      of Investments in Non-Publicly Traded Companies**




In
      the
      past, we have been making strategic equity investments in non-publicly traded
      internet-related companies. Depending on our level of ownership and whether
      or
      not we have the ability to exercise significant influence, we account for these
      investments on either the cost or equity method, and review such investments
      periodically for impairment. The appropriate reductions in carrying values
      are
      recorded when, and if, necessary. The process of assessing whether a particular
      investment's net realizable value is less than its carrying cost requires a
      significant amount of judgment. In making this judgment, we carefully consider
      the investee's cash position, projected cash flows (both short and long-term),
      financing needs, most recent valuation data, the current investing environment,
      management / ownership changes, and competition. This evaluation process is
      based on information that we request from these privately held companies. This
      information is not subject to the same disclosure and audit requirements as
      the
      reports required of U.S. public companies, and as such, the reliability and
      accuracy of the data may vary. Based on our evaluations, we did not record
      impairment charges related to our investments in non-publicly traded companies
      during December 31, 2007 and 2006, respectively. The total investment in
      non-public companies was $50,000 as of December 31, 2007 and 2006,
      respectively.




**Off-Balance
      Sheet Arrangements**




We
      have
      no off-balance sheet arrangements that have or are reasonably likely to have
      a
      current or future material effect on our financial condition, changes in
      financial condition, revenues or expenses, results of operations, liquidity,
      capital expenditures or capital resources.




**Item
      7. Financial Statements.**




The
      financial statements required by Item 7 are included in this report beginning
      on
      page F-1.




17




**Item
      8. Changes In and Disagreements With Accountants on Accounting and Financial
      Disclosure.**




There
      have been no changes in or disagreements with our principal independent
      accountants on accounting and financial disclosure.




**Item
      8** **A(T).
      Controls and Procedures.**




(a) *Evaluation
      of Disclosure Controls and Procedures* .
      Our
      management, including our chief executive officer and chief financial officer,
      evaluated the effectiveness of our disclosure controls and procedures as of
      the
      end of the period covered by this report. Based on that evaluation, our
      management, including our chief executive officer and chief financial officer,
      concluded that our disclosure controls and procedures as of the end of the
      period covered by this report were effective such that the information required
      to be disclosed by us in reports filed under the Securities Exchange Act of
      1934
      is (i) recorded, processed, summarized and reported within the time periods
      specified in the SEC’s rules and forms and (ii) accumulated and communicated to
      our management, including our chief executive officer and chief financial
      officer, as appropriate to allow timely decisions regarding disclosure. A
      controls system cannot provide absolute assurance, however, that the objectives
      of the controls system are met, and no evaluation of controls can provide
      absolute assurance that all control issues and instances of fraud, if any,
      within a company have been detected.




*Management’s
      Annual Report on Internal Control over Financial Reporting.* Our
      management is responsible for establishing and maintaining adequate internal
      control over financial reporting (as defined in Rule 13a-15(f) under the
      Securities Exchange Act of 1934). Our internal control over financial
      reporting is a process designed to provide reasonable assurance regarding the
      reliability of financial reporting and the preparation of financial statements
      for external purposes in accordance with accounting principles
      generally accepted in the United States.




Because
      of its inherent limitations, internal control over financial reporting may
      not
      prevent or detect misstatements. Therefore, even those systems determined to
      be
      effective can provide only reasonable assurance of achieving their control
      objectives.




In
      making
      this assessment, our management used the criteria set forth by the Committee
      of
      Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control
—
Integrated Framework. Based on this evaluation, our management, including our
      chief executive officer and chief financial officer, concluded that, as of
      December 31, 2007, our internal control over financial reporting was
      effective.




(b) *Changes
      in Internal Control over Financial Reporting.* There
      has been no change in our internal control over financial reporting, known
      to
      the chief executive officer or the chief financial officer, that occurred during
      the quarter ended December 31, 2007 that has materially affected, or is
      reasonably likely to materially affect, our internal control over financial
      reporting.




**Item
      8B. Other Information.**




Not
      applicable.




18


**PART
      III**




**Item
      9. Directors, Executive Officers, Promoters, Control Persons and
      Corporate** **Governance; Compliance With Section 16(a) of the Exchange
      Act.**




Our
      directors and executive officers are as follows:





Name
            
            Age
            
            TitleSagi
                Matza
            
            39
            
            Chairman
                of the BoardGilad
                Gat
            
            44
            
            Chief
                Executive Officer, Chief Financial Officer, President and
                DirectorYoav
                Bitter
            
            40
            
            Director




**Sagi
      Matza** has
      served as Chairman of the Board of GSV, Inc. since July 28, 2003 and as a
      director since July 21, 2003. He has been the Chief Executive Officer of
      Polystick U.S. Corp., a New York corporation engaged in the business of
      investing in oil and gas assets, since April 1999. From October 1999 to July
      2003, he was also the chief operating officer of Century Royalty. From 1989
      until April 1999 he was the Chief Executive Officer of Polystick Ltd., an
      Israeli corporation engaged in chemical manufacturing, petrochemical trading
      and
      manufacturing and adhesives manufacturing and distribution. Mr. Sagi founded
      Polystick U.S. Corp.




**Gilad
      Gat** has
      served as Chief Executive Officer and President of GSV, Inc. since May 2001
      and
      as Chief Financial Officer since September 30, 2002. He served as Chairman
      of
      the Board from May 2001 until July 28, 2003. Mr. Gat was the President and
      a
      director of Brooks Station Holdings, Inc., a private investment corporation,
      from February 2001 to December 2002. From 1996 until May 2001, Mr. Gat was
      a
      self-employed entrepreneur. Prior to 1996, Mr. Gat held various positions in
      the
      banking industry in Israel. Mr. Gat holds a BA in economics and an MBA from
      the
      Hebrew University in Jerusalem.




**Yoav
      Bitter** has
      served as a director of GSV, Inc. since May 2001. Since December 1999, Mr.
      Bitter has been President of TIG Ventures, a company engaged in strategic
      consulting and implementation. From August 1999 until May 2002, he was Executive
      Vice President of Strategic Business Development of ElephantX Online Securities
      LLC, an internet financial services company, which he co-founded. From 1997
      until August 1999, Mr. Bitter was a partner and Director, Marketing/Sales at
      Hambro America Securities, Inc., a private equity investment corporation. Mr.
      Bitter holds a B.A. in economics from Queens College and an M.B.A. with honors
      (Beta Gamma Sigma) from Zicklin School of Business, Baruch College.




**Audit
      Committee**




Currently,
      our entire board acts as our audit committee. Our board presently does not
      include any member who qualifies as an "audit committee financial expert" (as
      defined in Regulation 228.407(d)(5)(ii) of Regulation S-B). Given our limited
      financial resources and operations at present the board does not believe that
      it
      is necessary at this time to establish a separate audit committee or appoint
      an
      "audit committee financial expert" to the board.




**Compliance
      with Section 16(a) of the Exchange Act**




Section
      16(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
      requires our officers and directors and holders of more than 10% of our common
      stock (collectively "Reporting Persons") to file reports of initial ownership,
      ownership and changes in ownership of the common stock with the Securities
      and
      Exchange Commission within certain time periods and to furnish the Company
      with
      copies of all such reports. Based solely on our review of copies of such reports
      furnished to us by such Reporting Persons or on the written representations
      of
      such Reporting Persons that no reports on Form 5 were required, the Company
      believes that during the fiscal year ended December 31, 2007, all of the
      Reporting Persons complied with their Section 16(a) filing
      requirements.




19




**Code
      of Ethics**




We
      adopted a code of ethics for our officers, directors and employees in April
      2004. We filed a copy of the code of ethics as Exhibit 14.1 to our annual report
      for the year ended December 31, 2003.




**Item
      10. Executive Compensation.**




The
      following table sets forth all compensation awarded to, earned by, or paid
      for
      all services rendered to us during the fiscal year ended December 31, 2007,
      by
      our chief executive officer.





**Name
                and PrincipalPosition**
            
            **Year**
            
            **Salary**
              **($)**
            
            **Bonus**
              **($)**
            
            **Total**
              **($)**Gilad
                Gat,
            
            
            2007
            
            $
            120,000
            
            $
            20,000
            
            $
            140,000President




**Employment
      Agreement**




On
      January 7, 2008, we entered into a consulting agreement with Sagi Matza. Under
      the consulting agreement, Mr. Matza provides consulting and advisory services
      to
      GSV, Inc. on a nonexclusive basis in exchange for a fee of $8,000 per
      month.




On
      May 4,
      2001, we entered into an employment agreement with Gilad Gat pursuant to which
      Mr. Gat was hired to be our President and Chief Executive Officer. Mr. Gat's
      salary is $120,000 per annum. Mr. Gat is an "at will" employee of GSV, Inc.,
      provided however that, if he is terminated without cause, he is entitled to
      a
      severance payment of $120,000.




Outstanding
      Equity Awards at Fiscal Year-End


**Option
                Awards**
            
            **Stock
                Awards****Name**
            
            **Number ofSecuritiesUnderlyingUnexercisedOptions****(#)****Exercisable**
            
            **Number ofSecuritiesUnderlyingUnexercisedOptions****(#)****Unexercisable**
            
            **Equity Incentive
                Plan Awards:Number
                ofSecuritiesUnderlyingUnexercisedUnearned**
              **Options**
              **(#)**
            
            **Option
                ExercisePrice**
              **($)**
            
            **Option
                ExpirationDate**
            
            **Number ofShares orUnits of StockThat HaveNot Vested**
              **(#)**
            
            **MarketValue of
                Shares orUnits ofStock That Have Not
                Vested**
              **($)**Gilad
                Gat
            
            
            120,000
            
            
            0
            
            
            0
            
            $
            0.60
            
            
            10/31/08
            
            
            0
            
            $
            0




**Director
      Compensation**




All
      directors are reimbursed for certain expenses in connection with attendance
      at
      board of directors and committee meetings. Directors are eligible to be granted
      options to purchase common stock under the GSV, Inc. 1998 Stock Option Plan.
      Our
      non-employee directors did not receive any compensation for their services
      to
      the Company in 2007.





20


**Equity
      Compensation Plan Information**




The
      following table sets forth certain information at December 31, 2007, with
      respect to our equity compensation plans that provide for the issuance of
      options, warrants or rights to purchase our securities.




Plan Category
            
            Number of Securities to beissued upon exercise ofoutstanding options,warrants and rights
            
            Weighted average price ofoutstanding options,warrants, and rights
            
            Number of securitiesremaining available forfuture issuance underequity compensation plansEquity
                compensation plansapproved by securityholders
            
            
            370,000
            
            $
            0.60
                per share
            
            
            200,000Equity
                compensation plansnot approved by securityholders
            
            
            0
            
            $
            0
            
            
            14,000**Total**
            
            
            **370,000**
            
            **$**
            **.60
                per share**
            
            
            **214,000**




In
      March
      1998, the Board adopted the 1998 Directors' Stock Option Plan (the "Directors'
      Plan"), pursuant to which each member of the Board of Directors who is not
      an
      employee of the Company who is elected or continues as a member of the Board
      of
      Directors is entitled to receive annually options to purchase 600 shares of
      Common Stock at an exercise price equal to fair market value on the date of
      grant. A Compensation Committee administers the Directors' Plan; however, it
      cannot direct the number, timing or price of options granted to eligible
      recipients thereunder.




Each
      option grant under the Directors' Plan vests after the first anniversary of
      the
      date of grant and expires three years thereafter. The number of shares of common
      stock related to awards that expire unexercised or are forfeited, surrendered,
      terminated or canceled are available for future awards under the Directors'
      Plan. If a director's service on the Board terminates for any reason other
      than
      death, all vested options may be exercised by such director until the expiration
      date of the option grant. In the event of a director's death, any options that
      such director was entitled to exercise on the date immediately preceding his
      or
      her death may be exercised by a transferee of such director for the six-month
      period after the date of the director's death; provided that such options may
      not be exercised after their expiration date. In the case of a director who
      represents an institutional investor that is entitled to the compensation paid
      by the Company to such director, option grants shall be made directly to the
      institutional investor on whose behalf such director serves on the
      Board.




The
      maximum number of shares of Common Stock reserved for issuance under the
      Directors' Plan is 14,000 shares. No options are currently outstanding under
      the
      Directors' Plan.




**Item
      11.** **Security
      Ownership of Certain Beneficial Owners and Management and Related Stockholder
      Matters**




The
      following table sets forth certain information as of March 18, 2008, regarding
      the beneficial ownership of our common stock by (i) each person who is known
      to
      us to be the beneficial owner of more than five percent (5%) of our common
      stock; (ii) each director and each executive officer; and (iii) all current
      directors and executive officers as a group. Information contained in this
      report with regard to stock ownership was obtained from our stockholder list,
      filings with governmental authorities, or from the named individual, directors
      and officers. The persons identified in the following table disclaim beneficial
      ownership of shares owned or held in trust for the benefit of members of their
      families or entities with which they may be associated.




Beneficial
      ownership has been determined in accordance with the rules and regulations
      of
      the SEC and includes voting or investment power with respect to the shares.
      Unless otherwise indicated, the persons named in the table below have sole
      voting and investment power with respect to the number of shares indicated
      as
      beneficially owned by them.




21





**NAME AND ADDRESS OFBENEFICIAL OWNER****(1)**
            
            **NUMBER OF SHARESBENEFICIALLY OWNED**
            
            **PERCENTAGE OF COMMONSTOCK**Yoav
                Bitter
            
            
            120,000
            (2)
            
            *Gilad
                Gat
            
            
            120,000
            (3)
            
            *Sagi
                Matza
            
            
            6,970,000
            (4)
            
            76.4
            %Doron
                Ofer
              85
                Medinat Ha-Yehudim Street,Herzelya Pituach, 46140,
                Israel
            
            
            1,428,571
            (5)
            
            16.0
            %All
                executive officers and directors as a group (3 persons)
            
            
            7,210,000
            
            
            77.0
            %




*
      less
      than 1 percent.




(1)
            Unless
                otherwise indicated, the address of each beneficial owner identified
                is
                c/o GSV, Inc., 191 Post Road West, Westport, Connecticut
                06880.(2)
            Includes
                120,000 shares of common stock issuable upon exercise of options
                owned by
                Mr. Bitter.(3)
            Includes
                120,000 shares of common stock issuable upon exercise of options
                owned by
                Mr. Gat.(4)
            Includes
                5,350,000 shares of common stock and 1,500,000 shares of common stock
                issuable upon conversion of an equal number of shares of Series B
                Preferred Stock held by Polystick U.S. Corp. Mr. Matza is the Chief
                Executive Officer of Polystick U.S. Corp. and is the indirect owner
                of all
                of its outstanding voting securities. Also includes 120,000 shares
                of
                common stock issuable upon exercise of options owned by Mr.
                Matza.(5)
            Includes
                285,714 shares of Common Stock issuable upon conversion of a promissory
                note held by D. Emerald Investments Ltd. ("Emerald") and 1,142,857
                shares
                of Common Stock issuable upon exercise of a warrant owned by Emerald.
                Doron Ofer is the sole owner of
                Emerald.




**Item
      12. Certain Relationships and Related Transactions** **,
      and Director Independence.**




Gilad
      Gat, our President, and Chief Executive Officer, was the President and a
      director of Brooks Station Holdings, Inc., (“Brooks Station”) a private
      investment corporation, from February 2001 until December 2002. Brooks Station
      acquired 363,637 shares of our Series A Convertible Preferred Stock in a private
      placement offering consummated in March 2001.




In
      connection with and as a condition to consummation of the merger in July 2003
      in
      which we acquired an interest in Century Royalty, we redeemed all of the
      outstanding Series A Preferred Stock from Brooks Station for $400,001 plus
      dividends payable. We paid $263,801 of the redemption price in cash and $200,000
      by a promissory note secured by a lien on all of our assets.




On
      February 11, 2004, we borrowed $25,000 from Brooks Station. In partial
      consideration for the loan, we issued 100,000 shares of common stock to Brooks
      Station. On March 18, 2004, we borrowed another $25,000 from Brooks Station
      and
      in partial consideration for the loan issued another 100,000 shares of common
      stock to Brooks Station. Each loan was evidenced by a promissory note bearing
      interest at 8% per annum secured by a lien on all of our assets.




On
      September 20, 2004, we negotiated an extension of the maturity of the notes
      from
      their original maturity date of September 1, 2004 to March 1, 2005. On March
      10,
      2005, we repaid the note issued on February 11, 2004 and negotiated an extension
      of the maturity of the note dated March 18, 2004 to September 1, 2005. We also
      extended to the same date the maturity of an 8% secured promissory note we
      issued to Brooks Station on July 21, 2003 in the principal amount of $200,000.
      On August 31, 2005, we repaid the March 18, 2004 note and negotiated an
      extension of the maturity date of the July 21, 2003 note to March 1, 2006.
      On
      March 20, 2006, we repaid $20,000 of the accrued and unpaid interest on the
      July
      21, 2003 note and negotiated an extension of the maturity date of the note
      to
      September 1, 2006. On September 20, 2006, we negotiated an extension of the
      maturity date of the note to March 1, 2007. On March 30, 2007, we negotiated
      an
      extension of the maturity date of the note to September 1, 2007. On September
      6,
      2007, we repaid $20,000 of the accrued and unpaid interest on the note and
      $20,000 of the principal balance of the note and negotiated an extension of
      the
      maturity date of the note to March 1, 2008. On March 21, 2008, we repaid $20,000
      of the accrued and unpaid interest on the note and $10,000 of the principal
      balance of the note and negotiated an extension of the maturity date of the
      note
      to September 1, 2008.




22




On
      July
      21, 2003 we entered into an Agreement and Plan of Merger with Polystick U.S.
      Corp., a privately held New York corporation ("Polystick"), Cybershop, a New
      Jersey limited liability company and wholly-owned subsidiary of GSV, Inc. and
      Polystick Oil & Gas, Inc., a Delaware corporation and wholly-owned
      subsidiary of Polystick ("POGI"), pursuant to which, on the same day, POGI
      was
      merged into Cybershop and in consideration thereof we issued to Polystick
      4,500,000 shares of our common stock and 1,500,000 shares of our Series B
      Preferred Stock.




The
      sole
      shareholder of Polystick is RT Sagi Holding Ltd., an Israeli corporation. The
      sole stockholder of RT Sagi and indirect owner of Polystick is Mr. Sagi Matza.
      Effective as of the consummation of the Merger, Mr. Matza was appointed to
      our
      board of directors as the designee of Polystick. On July 28, 2003, he was
      elected Chairman of the board. Polystick has the right to elect two additional
      persons to our board, but has not yet done so. On
      January 7, 2008, we entered into a consulting agreement with Sagi Matza. Under
      the consulting agreement, Mr. Matza provides consulting and advisory services
      to
      GSV, Inc. on a nonexclusive basis in exchange for a fee of $8,000 per
      month.




**Item
      13. Exhibits**




**Exhibit
                No.**
            
            **Description**2.1
            
            Asset
                Purchase Agreement, dated as of June 1, 2002, by and between GSV,
                Inc.,
                Cybershop LLC and Polystick U.S. Corp. (incorporated by reference
                to
                Exhibit 2.1 of the Company's report on Form 8-K filed June 5,
                2002).2.2
            
            Agreement
                and Plan of Merger dated as of July 21, 2003, by and among GSV, Inc.,
                Cybershop L.L.C., Polystick Oil & Gas, Inc. and Polystick U.S. Corp.
                (incorporated by reference to Exhibit 2.2 of the Company's report
                on Form
                8-K, filed July 21, 2003).3.1
            
            Certificate
                of Incorporation, as amended (incorporated by reference to Exhibit
                3.1 to
                the Company's Registration Statement on Form S-1, File No.
                333-42707).3.2
            
            Certificate
                of Amendment of the Certificate of Incorporation of Cybershop
                International, Inc. (incorporated by reference to Exhibit 3.2 of
                the
                Company's report on Form 10-QSB for the fiscal quarter ended June
                30,
                1999, File No. 000-23901).3.3
            
            Certificate
                of Merger of GSV, Inc into Cybershop.com, Inc. (incorporated by reference
                to Exhibit 3.5 of the Company's report on Form 10-KSB for the year
                ended
                December 31, 1999, File No. 000-23901).3.4
            
            Certificate
                of designations, preferences and rights of Series A Convertible Preferred
                Stock of GSV, Inc. (incorporated by reference to Exhibit 3.1 of the
                Company's report on Form 8-K, filed March 6, 2001).3.5
            
            Certificate
                of designations, preferences and rights of Series B Convertible Preferred
                Stock of GSV, Inc. (incorporated by reference to Exhibit 4.1 of the
                Company's report on Form 8-K, filed July 21, 2003).3.6
            
            Certificate
                of designations, preferences and rights of Series C Convertible Preferred
                Stock of GSV, Inc. (incorporated by reference to Exhibit 3.1 of the
                Company's report on Form 8-K, filed January 5,
                2006).




23




**Exhibit
                No.**
            
            **Description**


3.7
            
            By-Laws.
                (incorporated by reference to Exhibit 3.5 of the Company's report
                on Form
                10-KSB for the year ended December 31, 2003, File No.
                000-23901).4.1
            
            Specimen
                Common Stock Certificate (incorporated by reference to Exhibit 4.1
                to the
                Company's Registration Statement on Form S-1, File No.
                333-42707).4.2
            
            Convertible
                Stock Purchase Agreement, dated March 1, 2001, by and between GSV,
                Inc.
                and Brooks Station Holding, Inc. (incorporated by reference to Exhibit
                4.1
                of the Company's report on Form 8-K filed March 6,
                2001).10.1
            
            Form
                of Officer and Director Indemnification Agreement (incorporated by
                reference to Exhibit 10.4 to the Company's Registration Statement
                on Form
                S-1, File No. 333-42707).10.2
            
            1998
                Stock Option Plan of the Company (incorporated by reference to Exhibit
                10.5 to the Company's Registration Statement on Form S-1, File No.
                333-42707).10.3
            
            1998
                Directors' Stock Option Plan (incorporated by reference to Exhibit
                10.6 to
                the Company's Registration Statement on Form S-1, File No.
                333-42707).10.4
            
            Employment
                Agreement dated May 4, 2001, by and between GSV, Inc. and Gilad Gat
                (incorporated by reference to Exhibit 10.1 of the Company's report
                on Form
                8-K, filed May 11, 2001).10.5
            
            Form
                of promissory note issued to Brooks Station Holdings, Inc. (incorporated
                by reference to Exhibit 4.3 of the Company's report on Form 8-K,
                filed
                July 21, 2003).10.6
            
            Security
                Agreement dated as of July 21, 2003, by and between the Company and
                Brooks
                Station Holdings, Inc. (incorporated by reference to Exhibit 4.4
                of the
                Company's report on Form 8-K, filed July 21, 2003).10.7
            
            Purchase
                Agreement dated as of May 11, 2004, by and between GSV, Inc. and
                D.
                Emerald Investments Ltd. (incorporated by reference to Exhibit 10.1
                of the
                Company's report on Form 8-K, filed May 14, 2004).10.8
            
            Guaranty
                dated as of May 11, 2004, by Polystick U.S. Corporation in favor
                of D.
                Emerald Investments Ltd. (incorporated by reference to Exhibit 10.2
                to the
                Company's report on form 8-K filed May 14, 2004).10.9
            
            Pledge
                Agreement dated as of May 11, 2004, by and between Polystick U.S.
                Corporation and D. Emerald Investments Ltd. (incorporated by reference
                to
                Exhibit 10.3 to the Company's report on Form 8-K filed May 14,
                2004).10.10
            
            Voting
                Agreement dated May 11, 2004, by and between Polystick U.S. Corporation
                and D. Emerald Investments Ltd. (incorporated by reference to Exhibit
                10.4
                to the Company's report on Form 8-K filed May 14,
                2004).10.11
            
            Letter
                agreement between GSV, Inc. and Brooks Station Holdings, Inc. dated
                September 20, 2004. (incorporated by reference to Exhibit 10.1 of
                the
                Company's report on Form 10-QSB for the fiscal quarter ended September
                30,
                2004, File No. 000-23901).10.12
            
            Letter
                agreement between GSV, Inc. and Brooks Station Holdings, Inc. dated
                March
                10, 2005. (incorporated by reference to Exhibit 10.16 of the Company's
                report on Form 10-KSB for the year ended December 31, 2004, File
                No.
                000-23901).10.13
            
            Agreement
                by and between GSV, Inc. and D. Emerald Investments Ltd. dated as
                of May
                10, 2005. (incorporated by reference to Exhibit 10.1 to the Company's
                Quarterly Report on Form 10-QSB for the quarter ended June 30,
                2005).10.14
            
            Letter
                agreement between GSV, Inc. and Brooks Station Holdings, Inc. dated
                August
                31, 2005. (incorporated by reference to Exhibit 10.2 to the Company's
                Quarterly Report on Form 10-QSB for the quarter ended September 30,
                2005).




24




**Exhibit
                No.**
            
            **Description**


10.15
            
            Termination,
                Settlement and Release Agreement dated as of November 30, 2005 by
                and
                between GSV, Inc. and 116 Newark Avenue Corporation (incorporated
                by
                reference to Exhibit 10.1 of the Company's report on Form 8-K, filed
                January 5, 2006).10.16
            
            Promissory
                Note issued to 116 Newark Avenue Corporation dated as of November
                30, 2005
                (incorporated by reference to Exhibit 10.2 of the Company's report
                on Form
                8-K, filed January 5, 2006).10.17
            
            Guaranty
                dated as of November 30, 2005, by Polystick U.S. Corporation in favor
                of
                116 Newark Avenue Corporation (incorporated by reference to Exhibit
                10.3
                of the Company's report on Form 8-K, filed January 5,
                2006).10.18
            
            Pledge
                Agreement dated as of November 30, 2005, by and between Polystick
                U.S.
                Corporation and 116 Newark Avenue Corporation (incorporated by reference
                to Exhibit 10.4 of the Company's report on Form 8-K, filed January
                5,
                2006).10.19
            
            Letter
                agreement between GSV, Inc. and Brooks Station Holdings, Inc. dated
                March
                20, 2006. (incorporated by reference to Exhibit 10.19 of the Company's
                report on Form 10-KSB for the year ended December 31, 2005, File
                No.
                000-23901).10.20
            
            Agreement
                by and between GSV, Inc. and D. Emerald Investments Ltd. dated as
                of May
                10, 2006. (incorporated by reference to Exhibit 10.1 of the Company's
                report on Form 10-QSB for the quarter ended June 30,
                2006).10.21
            
            Letter
                agreement between GSV, Inc. and Brooks Station Holdings, Inc. dated
                September 20, 2006 (incorporated by reference to Exhibit 10.1 of
                the
                Company's report on Form 10-QSB for the quarter ended September 30,
                2006).10.22
            
            Letter
                agreement between GSV, Inc. and Brooks Station Holdings, Inc. dated
                March
                9, 2007 (incorporated by reference to Exhibit 10.22 of the Company’s
                report on Form 10-KSB for the year ended December 31, 2006).10.23
            
            Agreement
                by and between GSV, Inc. and D. Emerald Investments Ltd. Dated as
                of May
                7, 2007 (incorporated by reference to Exhibit 10.1 of the Company’s report
                on Form 10-QSB for the quarter ended March 31, 2007).10.24
            
            Form
                of agreement between GSV, Inc. and 116 Newark Avenue Corporation
                dated as
                of January 3, 2008 (incorporated by reference to Exhibit 10.1 of
                the
                Company’s report on Form 8-K, filed January 11, 2008).10.25
            
            Form
                of promissory note issued to 116 Newark Avenue Corporation dated
                as of
                January 3, 2008 (incorporated by reference to Exhibit 10.2 of the
                Company’s report on Form 8-K, filed January 11, 2008).10.26
            
            Form
                of Guarantor’s Consent by Polystick U.S. Corporation in favor of 116
                Newark Avenue Corporation (incorporated by reference to Exhibit 10.3
                of
                the Company’s report on Form 8-K, filed January 7,
                2008).10.27
            
            Form
                of Consulting Agreement dated January 7, 2008, by and between GSV
                and Sagi
                Matza (incorporated by reference to Exhibit 10.4 of the Company’s report
                on Form 8-K, filed January 11, 2008).10.28
            
            Form
                of Letter agreement between GSV, Inc. and Brooks Station Holdings,
                Inc.
                dated August 31, 2008*10.29
            
            Form
                of Letter agreement between GSV, Inc. and Brooks Station Holdings,
                Inc.
                dated March 11, 2008*14.1
            
            Code
                of Ethics (incorporated by reference to Exhibit 14.1 of the Company's
                report on Form 10-KSB for the year ended December 31, 2003, File
                No.
                000-23901).21.1
            
            List
                of Subsidiaries (incorporated by reference to Exhibit 21.1 of the
                Company's report on Form 10-KSB for the year ended December 31, 2005,
                File
                No. 000-23901).




25




**Exhibit
                No.**
            
            **Description**


23.1
            
            Consent
                of UHY LLP*31.1
            
            Section
                302 Certification*32.1
            
            Section
                906 Certification*99.1
            
            Risk
                Factors*




*
          Filed
          herewith




**Item
      14. Principal Accountant Fees and Services** **.**




2007
            
            2006Audit
                Fees (1)
            
            $
            44,500
            
            $
            37,000Total
            
            $
            41,447
            
            $
            30,603





(1)
            Represents
                the aggregate fees billed for professional services rendered by our
                principal accountants, UHY LLP, for the audit of our annual financial
                statements for the years ended December 31, 2007, and December 31,
                2006
                and review of financial statements included in our quarterly reports
                on
                Form 10-QSB or services that are normally provided by the accountant
                in
                connection with statutory and regulatory filings or engagements for
                those
                periods. There were no additional fees billed by our principal accountant
                during the years ended December 31, 2007 and 2006.




Our
      entire board of directors acts as our audit committee. In accordance with
      Section 10A(i) of the Securities Exchange Act of 1934, before we engage our
      independent accountant to render audit or non-audit services, the engagement
      is
      approved by our full board of directors. Our entire board of directors approved
      all of the fees referred to in the sections entitled "Audit Fees,"
      "Audit-Related Fees," "Tax Fees" and "All Other Fees" above.




26


**SIGNATURES**




Pursuant
      to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
      1934, GSV, Inc. has duly caused this report to be signed on its behalf by the
      undersigned, thereunto duly authorized.





**GSV,
              INC.**By:
            /s/
                Gilad GatGilad
                GatChief
                Executive Officer, President and Chief Financial
                OfficerDate:
                March 25,
                2008




In
      accordance with the Exchange Act, this report has been signed below by the
      following persons on behalf of the registrant and in the capacities and on
      the
      dates indicated below.





**Signature**
            
            **Title**
            
            **Date**/s/
                Gilad Gat
            
            Chief
                Executive Officer, President and Chief Financial Officer
            
            March
                25, 2008Gilad
                Gat
            
            (Principal
                Executive Officer, Principal Financial andAccounting
                Officer)/s/
                Yoav Bitter
            
            Director
            
            March
                25, 2008Yoav
                Bitter/s/
                Sagi Matza
            
            Director
            
            March
                25, 2008Sagi
                Matza




27




**INDEX
      TO FINANCIAL STATEMENTS**




**GSV,
      INC.**




Report
                of Independent Registered Public Accounting Firm
            
            F-1Consolidated
                Balance Sheet as of December 31, 2007
            
            F-2Consolidated
                Statements of Operations for the years ended December 31, 2007 and
                2006
            
            F-3Consolidated
                Statements of Changes in Stockholders' Equity for the years ended
                December
                31, 2007 and 2006
            
            F-4Consolidated
                Statements of Cash Flows for the years ended December 31, 2007 and
                2006
            
            F-5Notes
                to Consolidated Financials Statements
            
            F-6
                - F-22




28




**REPORT
        OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**
  To
        the
        Stockholders and Board of Directors
 GSV,
        Inc.
 
 We
        have
        audited the accompanying consolidated balance sheet of GSV, Inc. (the “Company”)
        as of December 31, 2007, and the related consolidated statements of
        operations, changes in stockholders’ equity
        and cash
        flows for each of the years in the two-year period ended December 31, 2007.
        The
        Company’s management
        is responsible for these consolidated financial statements. Our responsibility
        is to express an opinion on these consolidated financial statements based
        on our
        audits.
  We
        conducted our audits in accordance with the standards of the Public Company
        Accounting Oversight Board (United States). Those standards require that
        we plan
        and perform the audit to obtain reasonable assurance about whether
        the financial statements are free of material misstatement. The Company is
        not required to have, nor were we engaged to perform, an audit of its internal
        control over financial reporting. An audit includes consideration of internal
        control over financial reporting as a basis for designing audit procedures
        that
        are appropriate in the circumstances, but not for the purpose of expressing
        an
        opinion on the effectiveness of the Company’s internal control over financial
        reporting. Accordingly, we express no such opinion. An audit also includes
        examining, on a test basis, evidence supporting the amounts and disclosures
        in
        the financial statements, assessing the accounting principles used and
        significant estimates made by management, as well as evaluating the overall
        financial statement presentation. We believe that our audits provide a
        reasonable basis for our opinion.
  In
        our
        opinion, the financial statements referred to above present fairly, in all
        material respects, the consolidated financial position of the Company as
        of
        December 31, 2007, and the consolidated results of its operations and its
        cash
        flows for each of the years in the two-year period ended December 31, 2007
        in
        conformity with accounting principles generally accepted in the United States
        of
        America.
 As
          discussed in Note 8 to the consolidated financial statements, the Company
          adopted FIN 48,  *Accounting for Uncertainty in Income Taxes - an
          Interpretation of FASB Statement No. 109*, effective January 1,
          2007.
 The
        accompanying consolidated financial statements are prepared assuming that
        the
        Company will continue as a going concern. As more fully described in note
        1, the
        Company has incurred recurring operating losses, and it has negligible working
        capital as of December 31, 2007. The Company's expected future sources of
        revenue will be derived from its investments in oil and gas wells.
        However, the attainment of profitability from these investments is not
        assured. The Company will be required to obtain financing to fund drilling
        and
        development to recover its investment in geologic studies and to pay certain
        indebtedness as it becomes due. In addition, the discovery of proved reserves
        in
        properties under evaluation is not assured. These conditions raise substantial
        doubt about the Company's ability to continue as a going concern. Management's
        plans to overcome this uncertainty are also described in note 1. The
        accompanying consolidated financial statements do not include any adjustments
        which may be necessary if the Company is unable to continue as a going
        concern.
  
 /s/
        UHY
        LLP
 New
        Haven, Connecticut
 March
        28,
        2008




F-1






PART
      I.
      FINANCIAL INFORMATION





Item
      1. -
      Financial Statements


**GSV,
        Inc.**
 **CONSOLIDATED
        BALANCE SHEET**
 December
        31, 2007





ASSETSCURRENT
                ASSETSCash
                and cash equivalents
            
            $
            398,261Accounts
                receivable and other current assets
            
            
            170,094Total
                current assets
            
            
            568,355INVESTMENTSInternet
                related
            
            
            50,000Geologic
                studies
            
            
            2,316,721Oil
                and gas wells, net of accumulated depletion of $977,225
            
            
            45,5782,412,299Total
                assets
            
            $
            2,980,654LIABILITIES
                AND STOCKHOLDERS' EQUITYCURRENT
                LIABILITIESCurrent
                portion of long-term debt
            
            $
            558,125Accounts
                payable
            
            
            98,030Other
                current liabilities
            
            
            106,352Accrued
                interest
            
            
            121,899Total
                current liabilities
            
            
            884,405LONG-TERM
                DEBT, LESS CURRENT PORTION
            
            
            178,125Total
                liabilities
            
            
            1,062,530STOCKHOLDERS'
                EQUITYSeries
                B preferred stock, $0.001 par value; 1,500,000 shares authorized;
                1,500,000 shares issued and outstanding
            
            
            1,500Series
                C preferred stock, $ 0.001 par value; 200,000 shares authorized,
                issued
                and outstanding
            
            
            200Common
                stock, $0.001 par value; 75,000,000 shares authorized;
                7,671,303 shares issued
            
            
            7,671Additional
                paid-in capital
            
            
            41,048,955Treasury
                stock (168, 600 shares) - at cost
            
            
            (558,998
            )Accumulated
                deficit
            
            
            (38,581,204
            )Total
                stockholders' equity
            
            
            1,918,124Total
                liabilities and stockholders' equity
            
            $
            2,980,654




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




F-2




**GSV,
      Inc.**


**CONSOLIDATED
      STATEMENTS OF OPERATIONS**




Years
                ended  December 31,2007
            
            2006Revenues
                from oil and gas investments
            
            $
            837,760
            
            $
            263,867General
                  and administrative expenses
            
            
            625,172
            
            
            372,551Income
                (loss) from operations
            
            
            212,587
            
            
            (108,684
            )Interest
                expense
            
            
            56,537
            
            
            56,937NET
                INCOME (LOSS)
            
            $
            156,050
            
            $
            (165,621
            )Net
                income (loss) per common share:Basic
            
            $
            0.02
            
            $
            (0.02
            )Diluted
            
            $
            0.02
            
            $
            (0.02
            )Weighted
                average common shares outstanding:Basic
            
            
            7,502,703
            
            
            7,502,703Diluted
            
            
            10,285,560
            
            
            7,502,703





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




F-3




**GSV,
      Inc.**


**CONSOLIDATED
      STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY**


Preferred
                    stock, Series B
                
                Preferred
                    stock, Series C
                
                Common
                    stock
                
                Additional
                
                
                
                
                
                
                TotalShares
                
                Par
                    Value
                
                Shares
                
                Par
                    Value
                
                Shares
                
                Par
                  Value
                
                Paid-In
                    Capital
                
                Treasury
                  Stock
                
                
                Accumulated
                  deficit
                
                Stockholders'
                    EquityDecember
                    31, 2005
                
                
                1,500,000
                
                $
                1,500
                
                
                -
                
                $
                -
                
                
                7,472,703
                
                $
                7,641
                
                $
                41,016,185
                
                $
                (558,998
                )
                
                $
                (38,571,633
                )
                $
                1,894,695Issuance
                    of common stock for option exercise
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                30,000
                
                
                30
                
                
                2,970
                
                
                -
                
                
                
                -
                
                
                3,000Issuance
                    of preferred stock for settlement of lease obligation
                
                
                
                
                
                
                
                
                200,000
                
                
                200
                
                
                -
                
                
                -
                
                
                29,800
                
                
                -
                
                
                
                -
                
                
                30,000Net
                    Loss
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                
                (165,621
                )
                
                (165,621
                )December
                    31, 2006
                
                
                1,500,000
                
                
                1,500
                
                
                200,000
                
                
                200
                
                
                7,502,703
                
                
                7,671
                
                
                41,048,955
                
                
                (558,998
                )
                
                
                (38,737,254
                )
                
                1,762,074Net
                    Income
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                
                156,050
                
                
                156,050December
                    31, 2007
                
                
                1,500,000
                
                $
                1,500
                
                
                200,000
                
                $
                200
                
                
                7,502,703
                
                $
                7,671
                
                $
                41,048,955
                
                $
                (558,998
                )
                
                $
                (38,581,204
                )
                $
                1,918,124




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





F-4






**GSV,
      Inc.**


**CONSOLIDATED
      STATEMENTS OF CASH FLOWS**





Years
                ended December 31,2007
            
            2006OPERATING
                ACTIVITIESNet
                income (loss)
            
            $
            156,050
            
            $
            (165,621
            )Adjustments
                to reconcile net income (loss) to net cash provided by operating
                activities:Preferred
                Stock issued for settlement
            
            
            -
            
            
            30,000Depreciation
            
            
            2,424
            
            
            3,000Depletion
            
            
            259,864
            
            
            62,033Changes
                in operating assets and liabilitiesAccount
                receivable and other current assets
            
            
            (66,119
            )
            
            114,217Accounts
                payable and other current liabilities
            
            
            138,989
            
            
            (2,419
            )Net
                cash provided by operating activities
            
            
            491,208
            
            
            41,209INVESTING
                ACTIVITIESInvestment in
                oil and gas wells
            
            
            (111,206
            )
            
            (177,688
            )Net
                cash used by investing activities
            
            
            (111,206
            )
            
            (177,688
            )FINANCING
                ACTIVITIESRepayment
                of long-term debt
            
            
            (20,000
            )
            
            -Cash
                received from exercised options
            
            
            -
            
            
            3,000Net
                cash (used) provided by financing activities
            
            
            (20,000
            )
            
            3,000Net change
                in cash
            
            
            360,002
            
            
            (133,479
            )CASH
                AND CASH EQUIVALENTS, BEGINNING OF YEAR
            
            
            38,260
            
            
            171,738CASH
                AND CASH EQUIVALENTS, END OF YEAR
            
            $
            **398,261**
            
            $
            **38,260**SUPPLEMENTAL
                INFORMATIONCash
                paid for interest
            
            $
            20,000
            
            $
            20,000





The
      accompanying notes are an integral part of the financial statements




F-5





**GSV,
      Inc.**





**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**




**1.
        Description of the Business**
  GSV
        Inc.
        (the “Company”) manages investments in oil and gas wells. The Company
        currently is seeking additional related opportunities. The Company
        also has limited internet related investments.
  **2.
        Summary of Significant Accounting Policies**
 Presentation
          as a Going Concern
  The
          Company has incurred substantial operating losses, resulting in an accumulated
          deficit of $38,581,204 as of December 31, 2007. Its current investments
          are
          limited to certain oil and gas producing properties in Louisiana and an
          interest
          in Century Royalty. Century Royalty’s primary asset consists of geologic studies
          to exploit oil and gas properties that are not owned and one completed
          producing
          gas wells. In recent periods cash flows from the Company’s oil and gas
          investments has been sufficient to enable the Company to fund its operating,
          investing and financing needs. However, the Company will be required to
          obtain
          additional financing to fund drilling and development to recover its investment
          in geologic studies and to pay certain indebtedness as it becomes due.
          There is
          no assurance that the Company will obtain additional adequate financing
          nor is
          there any assurance that proved reserves will be discovered. These conditions
          raise substantial doubt about the Company’s ability to continue as a going
          concern. The accompanying financial statements do not include any adjustments
          that may result from the outcome of this uncertainty.
 F-6
 Use
        of
        Estimates
  The
        preparation of financial statements in conformity with generally accepted
        accounting principles requires management to make estimates and assumptions
        that
        affect the reported amounts of assets and liabilities and disclosure of
        contingent assets and liabilities at the date of the financial statements
        and
        the reported amounts of revenues and expenses during the reporting period.
        Actual results could differ from those estimates.
  F-7
  Principles
        of Consolidation
  The
        consolidated financial statements include the accounts of the Company and
        its
        subsidiaries. All significant intercompany accounts and transactions have
        been
        eliminated. The Company considers Century Royalty a variable interest
        entity and, as such, consolidates the financial statements of Century Royalty
        with these of the Company. The Company is responsible for all of Century
        Royalty’s liabilities and is entitled to all of its net income until the
        production payout is reached, which at March 1, 2008 was $2,656,289. The
        Company
        is entitled to 75% of the net income thereafter.
  Cash
        and
        Cash Equivalents
  The
        Company considers all short-term marketable securities with a maturity of
        three
        months or less when purchased to be cash equivalents. From time-to-time,
        the Company maintains cash balances in excess of FDIC insured
        limits.
  Advertising
  Advertising
        costs are expensed as incurred. Advertising expense was insignificant in
        2007
        and 2006.
  Investments
 Internet-related
 The
            Company has an investment in an internet related company that is accounted
            for
            using the cost method. This investment is reviewed at least
            annually for impairment.
 
 Oil
            and gas wells and Geologic studies
 The
        Company follows the full cost method of accounting for oil and gas properties.
        Under this method, all direct costs and certain indirect costs associated
        with
        acquisition of properties and successful as well as unsuccessful exploration
        and
        development activities are capitalized. Depletion of capitalized oil and
        gas
        properties and estimated future development costs, excluding unproved
        properties, is based on the units-of-production method based on proved reserves.
        Net capitalized costs of crude oil and natural gas properties, as adjusted
        for
        asset retirement obligations, less related deferred taxes (estimated with
        an
        effective tax rate of zero), are limited to the lower of unamortized cost
        or the
        cost ceiling, defined as the sum of the present value of estimated future
        net
        revenues from proved reserves based on a 10 percent discount, plus the cost
        of
        properties not being amortized, less related income taxes (estimated at an
        effective tax rate of zero). No gain or loss is recognized upon sale or
        disposition of oil and gas properties, except in unusual
        circumstances.
  Geologic
        studies represent costs associated with properties on which the Company is
        performing exploration activities or intends to commence such activities.
        Geologic studies are reviewed annually for impairment or reduction in value
        based on expected conditions in properties under evaluation. The Company
        believes that the properties underlying the geologic studies will be
        substantially evaluated within the next 6 to 12 months and it will begin
        to
        amortize these costs at such time. The evaluation will be influenced by the
        receipt of independent engineering reports from independent consultants.
        When
        these reports become available the Company will adjust the value of the
        geological studies accordingly. If the report shows that the reserves are
        low
        the Company may be required to write-down the geologic studies
        to reserve value or possibly write them off completely.
  Asset
          Retirement Obligations
  The
          Company has obligations to remove tangible equipment and facilities and
          to
          restore land at the end of oil and gas production operations. These removal
          and
          restoration obligations are associated with plugging and abandoning wells.
          Estimating the future restoration and removal costs is difficult and requires
          the Company to make estimates and judgements because most of the removal
          obligations are many years in the future and contracts and regulations
          often
          have vague descriptions of what constitutes removal. Asset removal technologies
          and costs are constantly changing, as are regulatory, political, environmental,
          safety and public relations considerations. Inherent in the present value
          calculations are numerous assumptions and judgements including the ultimate
          settlement amounts, inflation factors, credit adjusted discount rates,
          timing of
          settlements and changes in the legal, regulatory, environmental and political
          environments. The present value of Company's portion of the asset retirement
          obligation of the Louisiana wells is $7,092, which the Company expects
          to incur
          in 2009. The Company is recognizing this expense over the life of the wells,
          and
          has accrued $6,492 as of December 31, 2007, which is included in other
          current
          liabilities.
  Property
        and Equipment
  The
        Company's property and equipment is fully depreciated as of December 31,
        2007.
        Depreciation expense for 2007 and 2006 was recognized by the straight-line
        method over the lives of the assets which ranged from three to ten
        years.
  F-8
   Revenue
        Recognition
 Revenue
          from oil and gas investments is recognized when produced by the
          operator.
  Income
        Taxes
  The
        Company recognizes deferred income tax assets and liabilities on
        differences between the financial reporting and income tax bases of assets
        and liabilities and
        net
        operating loss and capital loss carry forwards. Deferred income tax assets
        and
        liabilities are measured using enacted tax rates expected to apply in the
        years
        in which those temporary differences are expected to be recovered or settled.
        A
        valuation allowance is provided to the extent that it is more likely than
        not
        that the Company will not be able to utilize deferred income tax assets in
        the
        future.
  Fair
        Value of Financial Instruments
  In
        general, the fair value of all reported assets and liabilities that represent
        financial instruments approximate their carrying values. The
        fair
        value of the internet related investment is not readily
        determinable.
 Net
              Income (loss) Per Common Share
  Basic
                earning (loss) per share is computed by dividing net income (loss)
                by the
                weighted average number of common shares outstanding at year end.
                Diluted
                earning (loss) per share is computed by dividing net income (loss) by the
                weighted average number of common shares and dilutive potential common
                shares
                outstanding.
 
 A
                summary
                of the denominators used to compute basic and dilutive earnings (loss)
                per share
                follow:
 
 2007
                      
                      2006Weighted
                          average shares outstanding - used to compute basic earnings
                          (loss) per
                          share
                      
                      
                      7,502,703
                      
                      
                      7,502,703Dilution
                        applicable to:Warrant
                      
                      
                      1,142,857
                      
                      
                      -Convertible
                          note payable
                      
                      
                      140,000
                      
                      
                      -The
                          Series B Stock
                      
                      
                      1,500,000
                      
                      
                      -Weighted
                          average shares outstanding - used to compute diluted earnings
                          (loss) per share
                      
                      
                      10,285,560
                      
                      
                      7,502,703
 Recently
          Issued Accounting Pronouncements
  The
            Company continually assesses any new accounting pronouncements to determine
            their applicability to the Company. In the case where it is determined
            that a
            new accounting pronouncement effects the Company’s financial reporting, the
            Company undertakes a study to determine the consequence of the change
            to its
            financial reporting, and assures that there are proper controls in place
            to
            ascertain that the Company’s financials properly reflect the change. New
            pronouncements assessed by the Company are discussed below:
  In
            September 2006, the FASB issued Statement of Financial Accounting Standards
            No. 157, “Fair Value Measurements” *,* (“SFAS
            157”). SFAS 157 defines fair value, establishes a framework for measuring
            fair
            value, and expands disclosure requirements regarding fair value measurement.
            This statement simplifies and codifies fair value related guidance previously
            issued and is effective for financial statements issued for fiscal years
            beginning after November 15, 2007, and interim periods within those fiscal
            years. The Company does not believe that SFAS 157 will significantly
            effect its
            financial statements.
  In
            February 2007, the FASB issued SFAS 159, “The Fair Value Option for
            Financial Assets and Liabilities—Including an amendment of FASB Statement
            No. 115” (“SFAS 159”). SFAS 159 expands the use of fair value
            accounting but does not affect existing standards which requires assets
            or
            liabilities to be carried at fair value. The objective of SFAS 159 is to
            improve financial reporting by providing companies with the opportunity
            to
            mitigate volatility in reported earnings caused by measuring related
            assets and
            liabilities differently without having to apply complex hedge accounting
            provisions. Under SFAS 159, a company may elect to use fair value to
            measure eligible items at specified election dates and report unrealized
            gains
            and losses on items for which the fair value option has been elected
            in earnings
            at each subsequent reporting date. Eligible items include, but are limited
            to,
            accounts receivable, accounts payable, and issued debt. If elected,
            SFAS 159 is effective for fiscal years beginning after November 15,
            2007. The Company is currently evaluating the effect of adopting SFAS 159
            on its consolidated financial statements.
  In
            December 2007, the FASB issued SFAS No. 141 (revised 2007), “Business
            Combinations *”* (“SFAS 141(R)”). SFAS 141(R) establishes principles and requirements
            for how an acquirer recognizes and measures in its financial statements
            the
            identifiable assets acquired, the liabilities assumed, any non-controlling
            interest in the acquiree and the goodwill acquired. SFAS 141(R) also
            establishes disclosure requirements to enable the evaluation of the nature
            and
            financial effects of the business combination. SFAS 141(R) is effective for
            fiscal years beginning after December 15, 2008. The Company will adopt
            SFAS 141(R) in the first quarter of 2009 and apply its provisions to any
            acquisition after the adoption date.
 
 F-9
  **3.
        Investments in oil and gas wells**
  The
        Company has working interests in two oil and gas wells in Louisiana. Production
        from the wells in Louisiana was suspended temporarily on or about February
        9,
        2006, because the water level had risen in one of the wells. On or about
        May 8,
        2006, work to recomplete the wells in a different sand zone was completed
        and
        production was restarted. The wells returned to full production at the beginning
        of July 2006. The Company’s share of the costs of recompletion was $70,300. The
        delay between sales of gas by the operator and the Company’s receipt of payments
        from the operator reduced revenues in the second and third quarters of 2006.
        An
        independent reserve study performed, effective January 2008, estimated that
        the
        remaining reserve in the wells including PDP and PDNP, net of expenses and
        discounted at 10%, was $985,829.
  The
        Company has interests in certain oil and gas properties in Texas and an
        undivided one-third interest in Century Royalty, which manages oil and gas
        properties in Texas and Louisiana. Century Royalty also holds the rights to
        certain geologic studies that are included under the caption "Investments"
        in the accompanying balance sheet. These geologic studies are being carried
        at cost. On June 28, 2006, the working interest partnership of which Century
        Royalty is a member commenced drilling on one of the prospects and planned
        to
        commence drilling on a second prospect once the first was completed. The
        costs
        of drilling these prospects were expected to exceed Century Royalty’s carried
        interest in the working interest partnership. On June 20, 2006, the Company
        agreed to contribute a maximum of $100,000 towards the drilling of the first
        prospect and decrease its working interest in these two prospects to
        11.918%.
  F-10




On
      October 5, 2006, the Company announced the successful completion of drilling
      in
      the first prospect, located in Liberty County, Texas. The pipeline tie-in of
      the
      "Friendswood No. 2 RE" gas well was completed successfully in June 2007. On
      or
      about September 14, 2007, efforts to increase the pressure of the flow of gas
      from the well were successful and the sale of gas through the pipeline
      commenced. On February 4, 2008, fracturing of the well was completed
      successfully. All 1150 bbls of frac water have been recovered, and the well
      has
      been tested at various pressures. On February 21, 2008, the well was put back
      on
      line full-time. Although the Company has not yet completed a study to evaluate
      the underlying reserves, it believes that the reserves are at least adequate
      to
      recover the costs of the geologic studies.


In
        October 2006, the Company granted one of the members of the Texas working
        interest partnership the right to drill a well based on the geological seismic
        data that Century Royalty holds. In return, the Company received a 2% carried
        interest in the proposed well until completion, and a 2% working interest
        thereafter. The "Shirley Gay" well was completed in March 2007. Pipeline
        tie-in
        was completed in February 2008 and sales began shortly thereafter. The Company
        expects to start receiving proceeds from sales in the second quarter of 2008.
        Through March 1, 2008, the Company’s expenses related to completion of the
        "Shirley Gay" well total $25,547. The Company is currently awaiting the
        completion of an independent engineering report to establish the estimated
        size
        and projected cash flow to be generated by the well.
 
 The
        working interest partnership began a drilling program for the subject properties
        in 2006. If the drilling program is not successful, the Company will likely
        record an impairment loss of some or all of the carrying value of its geologic
        studies.
  F-11
  4.
        Preferred stock
  Series
        B
        Preferred Stock (the "Series B Stock") is convertible at any time at the
        holder’s option into a number of shares of common stock equal to $1.00 divided
        by the conversion price then in effect. The conversion price is initially
        $1.00.
        No dividends are payable on the Series B Stock, except that in the event
        dividends are declared with respect to common stock, each holder of a share
        of
        the Series B shall be entitled to receive an amount equal to the amount of
        dividends that would have been paid on the shares of common stock issuable
        upon
        conversion of such shares of the Series B Stock had such shares been converted
        into common stock immediately before such dividend was declared. Upon any
        liquidation event, as defined, the holders of the outstanding Series B
        Stock will be entitled to be paid an amount equal to $1.00 per share plus
        the
        amount of any declared and unpaid dividends thereon. If upon any liquidation
        event, the net assets of the Company are insufficient to permit payment in
        full
        of such preferential amount to the holders of Series B Stock then the entire
        net
        assets of the Company will be distributed ratably among the holders of the
        Series B Stock. The
        holder of 200,000 shares of Series B Stock has pledged such shares as collateral
        for the note payable to D. Emerald Investments, Ltd.
  F-12
  On
        January 3, 2006, the Company issued 200,000 shares of Series C Preferred
        Stock
        (the "Series C Stock") to 116 Newark Avenue Corporation. Each share of the
        Series C Stock is convertible at any time into a number of shares of common
        stock equal to $1.00 divided by the conversion rate then in effect. No dividends
        are payable on the Series C Stock. On January 9, 2008, the Company entered
        into an agreement with 116 Newark to amend and restate the terms of the
        promissory note. Pursuant to the agreement, the Company paid all accrued
        and
        unpaid interest on the promissory note through the date of the agreement,
        and
        the original note was amended and restated in a substitute note with a maturity
        date of December 20, 2009. The Company agreed to pay the substitute note’s
        outstanding principal balance of $356,249 in monthly installments through
        December 2009. Payment and performance under the substitute note has been
        guaranteed by the holder of 356,249 shares of the Series B Stock.
 
 On
        October 27, 2006, the Company issued and sold an aggregate of 30,000 shares
        of
        common stock at a price of $0.10 per share to Walter M. Epstein upon his
        exercise of an option to purchase such shares. The
        instrinsic value of the options exercised was $600.
  **5.
        Stock Options and Warrant**
  The
        Company has a single stock option plan. Under this plan, stock options may
        be granted to directors, officers, employees, and consultants of the Company.
        As
        of December 31, 2007, options for 600,000 shares of common stock are available
        for issuance.
  A
          summary
          of stock option maturity follows:
  Shares
              
              Weighted AverageExercise PriceOutstanding
                  at December 31, 2005
              
              
              440,000
              
              $
              0.54Granted
              
              
              —
              
              
              —Cancelled
              
              
              (40,000
              )
              
              0.20Exercised
              
              
              (30,000
              )
              
              0.10Outstanding
                  at December 31, 2006
              
              
              370,000
              
              $
              0.60Granted
              
              
              —
              
              
              —Cancelled
              
              
              —
              
              
              —Exercised
              
              
              —
              
              
              —Outstanding
                  at December 31, 2007
              
              
              370,000
              
              $
              0.60
  All
        options granted and outstanding as of January 1, 2006 were fully vested and
        excercisable. As of December 31, 2007, the exercise price of the outstanding
        options exceeds its fair market value.
  As
          of
          December 31, 2007 and 2006, a warrant issued prior to December 31, 2005
          to
          purchase 1,142,857 shares of common stock at $0.70 a share was outstanding.
          The
          warrant expires, as amended in 2007, on July 10, 2008.
 F-13
  **6.
        Long-term debt**
  Long-term
        debt consist of :
 
 Note
                    payable to Brooks Station Holdings, Inc. with interest at 8%, due
                    September 1, 2008 (as ammended in 2007)
              
              $
              180,000Note
                    payable to D. Emarald Investments, Ltd., with interest at 8%,
                    due May 8,
                    2008 (as ammended in 2007) (1)
              
              
              200,000Note
                    payable to 116 Newark Ave Corp., due in monthly installments
                    of $14,844,
                    with interest at 7%, due December 20, 2009 (as ammended in
                    2008)
              
              
              356,249736,249Less current
                  portion
              
              
              558,125$
              178,125
  (1) Convertible
          into 140,000 shares of common stock.
  **7.
        Leases**
  The
        Company leases office space under a revolving six-month operating lease.
        Future minimum lease payments on this operating lease for 2008 are approximately
        $8,400.
  Rent
        expense was $24,264 in 2007 and $ 30,513
        in
        2006.
  F-14
  **8.
        Income Taxes**
  The
        Company adopted FIN 48, Accounting for Uncertainty in Income Taxes, effective
        January 1, 2007. FIN 48 clarifies and sets forth consistent rules for
        accounting for uncertain income tax positions in accordance with FAS 109
        Accounting for Income Taxes. There were no material unrecognized income tax
        benefits upon adoption. Further, no significant changes in the unrecognized
        income tax benefits are expected to occur over the next year. Due
        to
        the Company’s net operating loss position in the U.S., any subsequent
        recognition of these tax benefits would not likely change the Company’s
        effective tax rate.
  Historically
        the Company has not accrued or paid significant interest and penalties for
        underpayments of income taxes. Interest and penalties related to underpayment
        of
        income taxes would be classified as a component of income tax expense in
        the
        consolidated statement of operations. No interest and penalties for
        underpayments of income taxes were required to be accrued through
        December 31, 2007.
  F-15
  The
        Company has not extended the statute of limitations to assess additional
        taxes
        and has effectively settled U.S. Federal tax positions taken through 2002
        in
        accordance with FSP FIN 48-1. However, the Company is subject to adjustment
        in
        each of these periods, to the extent of its net operating loss carry forwards.
        The open tax years are 1998 through 2007 for U.S. state and local jurisdictions.
 A
                    reconciliation of the U.S. federal statutory rate to the effective
                    income
                    tax rate follows:
  **2007**
                
                **2006**U.S.
                    federal statutory tax rate
                
                
                (34
                )%
                
                (34
                )%State
                    taxes
                
                
                (0
                )
                
                (0
                )Change
                    in valuation allowance
                
                
                34
                
                
                34Effective
                    income tax rate
                
                
                0
                %
                
                0
                %
    The
                    tax effects of temporary differences that give rise to deferred
                    income
                    taxes follow:**2007**
                
                **2006**Deferred
                    income tax assets:Oil
                    and gas properties
                
                $
                103,388
                
                $
                111,243Net
                    operating loss carry-forwards
                
                
                8,121,211
                
                
                7,579,082Capital
                    loss carry forwards
                
                
                706,492
                
                
                655,588Other
                
                
                -
                
                
                (919,638
                )Total
                    gross deferred income tax assets
                
                
                8,931,092
                
                
                7,426,275Valuation
                    allowance
                
                
                (8,931,092
                )
                
                (7,426,275
                )Net
                    deferred income tax assets
                
                $
                -
                
                $
                -
  At
        December 31, 2007, the Company had available, for federal income tax
        purposes, net operating loss (“NOL”) carry-forwards of approximately $24.3
        million and capital loss carry-forwards of approximately $1.9 million expiring
        in varying amounts from 2013 through 2026.
  Certain
        transactions involving the Company’s beneficial ownership have occurred in prior
        years, which resulted in a stock ownership change for purposes of
        Section 382 of the Internal Revenue Code of 1986, as amended. Consequently,
        approximately $22.8 million of the NOL carry-forwards may be subject to certain
        limitations. The Company has not yet determined if any of the NOL generated
        through 2007 will be subject to limitation under Section 382.
 
  F-16




**9** **.
      Unaudited Oil and Gas Reserve Quantities**


This
        section provides information required by Statement of Financial Accounting
        Standards No. 69, “Disclosures about Oil and Gas Producing
        Activities.”
  The
        following unaudited reserve estimates were prepared internally, based upon
        a
        study conducted by Pressler Petroleum Consultants, Inc., an independent
        engineering company, as of January, 2008, and adjusted by the Company for
        production through Dec. 31, 2007. There are many uncertainties inherent in
        estimated proved reserve quantities and in projecting future production rates
        and the timing of development expenditures. In addition, reserve estimates
        of
        new discoveries that have little production history are more imprecise than
        those of properties with more production history. The Company communicates
        with
        Southwest Energy Production Company, the operator of the two wells in Louisiana
        until November 1, 2006, and with White Oak Operating Company LLC, the operator
        of the two wells in Louisiana, since November 1, 2006 on a regular basis,
        obtaining daily production trends, the amount of water produced in the wells,
        output pressures and choke position. The Company then reviews the data from
        the
        operator with an independent engineering consultant hired by the Company
        to
        obtain a reserve estimate, as none of the Company’s employees have the
        engineering or geologic expertise to provide reserve estimates. Finally,
        the
        Company compares the resulting data with the reports produced by Pressler
        Petroleum Consultants. To date the differences have not been material and
        the
        Company has adopted the Pressler reports. In the event there are material
        differences in the future the Company intends to confer with Pressler and
        the
        Company’s independent engineering consultant in order to understand the reasons
        for the differences and come to a conclusion regarding the appropriate reserve
        estimate.
  F-17
  The
        Company is awaiting the completion of the engineering reports regarding the
        Friendswood # 2 re and the Shirley gay prospects that have started production
        recently. These reports are being prepared by Pressler as well. The Company
        is
        in constant contact with the operators of these well and monitors the production
        and activity.
  Proved
        oil and gas reserves are the estimated quantities of crude oil, condensate,
        natural gas, and natural gas liquids that geological and engineering data
        demonstrate with reasonable certainty to be recoverable in future years from
        known reservoirs under existing economic and operating conditions.
  Proved
        developed oil and gas reserves are those reserves expected to be recovered
        through existing wells with existing equipment and operating
        methods.
  Unaudited
        net quantities of proved and proved developed reserves of crude oil (including
        condensate) and natural gas, all of which are located within the continental
        United States, are summarized below:
  F-18
  Changes
          in Proved Reserves:
  (BBLS)
              
              (MCF)Estimated
                  quantity, December 31, 2005
              
              1,613
              
              58,501Production
              
              (1,209
              )
              (33,213
              )Revisions
                  of previous estimates
              
              3,140
              
              80,158Estimated
                  quantity, December 31, 2006
              
              
              3,544
              
              
              105,446Production
              
              
              (3,131
              )
              
              (94,239
              )Acquisitions
              
              
              —
              
              
              —Discoveries
              
              
              —
              
              
              —Revisions
                  of previous estimates
              
              
              3,916
              
              
              116,139Estimated
                  quantity, December 31, 2007
              
              
              4,329
              
              
              127,346
 
 Proved
                  developed reserves:Oil
                  (BBLS)December
                  31, 2006
              
              
              3,544December
                  31, 2007
              
              
              4,329Gas
                  (MCF)December
                  31, 2006
              
              
              105,446December
                  31, 2007
              
              
              127,346Proved
                  undeveloped reserves:Oil
                  (BBLS)December
                  31, 2007
              
              
              —December
                  31, 2006
              
              
              —
 
 The
        following table presents a standardized measure of the discounted future
        net
        cash flows attributable to the Company’s proved oil and gas reserves. Future
        cash inflows were computed by applying period-end prices of oil and gas to
        the
        estimated future production of proved oil and gas reserves. The future
        production and development costs represent the estimated future expenditures
        (based on current costs) to be incurred in developing and producing the proved
        reserves, assuming continuation of existing economic conditions. Future
        unexpected costs or changes in production could affect discounted future
        net
        cash flows.
  A
        discount factor of 10% was used to reflect the timing of future net cash
        flows.
        The standardized measure of discounted future net cash flows is not intended
        to
        represent the replacement cost or fair market value of the Company’s oil and gas
        properties.
  F-19
  December 31,2007
              
              
              2006Future
                  cash inflows
              
              $
              1,258,684
              
              $
              876,860Future
                  development and production costs
              
              
              (168,108
              )
              
              (193,800
              )Future
                  net cash flows
              
              
              1,090,576
              
              
              683,06010%
                  annual discount for Estimating timing of cash flows
              
              
              (104,747
              )
              
              (88,946
              )Standardized
                  measure of discounted future net cash flows
              
              $
              985,829
              
              $
              594,114
  Changes
        in Standardized measure are as follows:
  Standardized
                  measure of discounted future net cash flows, December 31, 2006
                  and
                  2005
              
              $
              594,114
              
              $
              263,847Purchase
                  of reserves in place
              
              
              —
              
              
              —Changes
                  in price, net of future production costs
              
              
              197,695
              
              
              (75,491
              )Changes
                  in estimated future development costs
              
              
              (57,500
              
              )
              (37,208
              )Changes
                  in estimated quantities
              
              
              1,184,474
              
              
              694,960Changes
                  due to operations:Production
              
              
              (956,463
              
              )
              (283,332
              )Accretion
                  of discount
              
              
              15,801
              
              
              15,588Other
              
              
              7,728
              
              
              15,750Standardized
                  measure of discounted future net cash flows, December 31, 2007
                  and
                  2006
              
              $
              985,829
              
              $
              594,114
  For
        purposes of its depletion calculation, the Company excluded from its
        amortization base certain exploration costs, comprising geologic studies,
        on
        specified properties, until it has been determined that proved reserves are
        contained within the subject properties. The
        Company is currently in the process of evaluating a prospect associated with
        the
        geologic study. The well was drilled in late 2006, tied into pipeline during
        mid-2007 and was fractured in early 2008. A reserve study at this time would
        not
        be meaningful as enough data is not available. The Company expects to obtain
        a
        reserve report on this property in the near-term at which time the geologic
        study with be evaluated.
  F-20
  As
        of
        December, 31, 2007, the following capitalized costs by category have been
        excluded from the amortization base:
  Acquisition
              
              $
              —Exploration
              
              
              2,316,721Development
              
              
              —Capitalized
                  interest
              
              
              —
  The
        Company incurred the costs as follows:
  2007
              
              $
              —2006
              
              
              —2005
              
              
              —2004
              
              
              —2003
                  and prior
              
              
              2,316,721
 
 F-21


**Exhibit
                Index**




**Exhibit No.**
            
            **Description**10.28
            
            Form
                of Letter agreement between GSV, Inc. and Brooks Station Holdings,
                Inc.
                dated August 31, 200810.29
            
            Form
                of Letter agreement between GSV, Inc. and Brooks Station Holdings,
                Inc.
                dated March 11, 200823.1
            
            Consent
                of UHY LLP31.1
            
            Section
                302 Certification32.1
            
            Section
                906 Certification99.1
            
            Risk
                Factors





F-22