UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549







FORM
10-K/A


AMENDMENT NO.
1







x ANNUAL REPORT UNDER
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934





For the
fiscal year ended December 31,
2007








333-60880


(Commission
File Number)








The KingThomason Group,
Inc.


(Exact
name of registrant as specified in its charter)





Nevada
              (State
      of Incorporation)
            
            73-1602395
              (IRS
      EmployerI.D.
      Number)







21702
Evalyn Ave.


Torrance,
CA 90277


310-540-1960


(Address
and telephone number of registrant's principal executive offices and principal
place of business)








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





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












Check
whether the registrant is a well-known seasoned issuer, as defined in Rule 405
of the Securities Act.  Yes o   No
x







Check
whether the issuer is not required to file reports pursuant to Section 13 or
15(d) of the Exchange Act.  Yes o   No
x







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 twelve months (or for
such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90
days.  Yes x   No
o







Check if
there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-K is not contained in this form, and no disclosure will be
contained, to the best of the registrant’s knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. x







Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.    Smaller reporting company  x







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







State the
aggregate market value of the 10,722,209 voting and non-voting common equity
held by non-affiliates computed by reference to the $0.04 average bid and asked
price of such common equity, as of March 31, 2008: $428,888.







As of
April 11, 2008, there were 32,985,922 shares of the Registrant's Common Stock,
par value $0.001 per share, outstanding.







DOCUMENTS
INCORPORATED BY REFERENCE





If the
following documents are incorporated by reference, briefly describe them and
identify the part of the Form 10-K (e.g., Part I, Part II, etc.) into which the
document is incorporated:  (1) any annual report to security holders;
(2) any proxy or information statement; and (3) any prospectus filed pursuant to
Rule 424(b) or (c) of the Securities Act of 1933 (“Securities
Act”).  The listed documents should be clearly described for
identification purposes (e.g., annual report to security holders for fiscal year
ended December 24, 1990).  None




- 2
-


TABLE
OF CONTENTS




PagePART
      IItem 1.
              Business
              4Business Development
              4Our Business
              4Employees
              4Item 2.
              Properties
              4Item 3.
              Legal Proceedings
              4Item 4.
              Submission of Matters to Vote of Security
      Holders
              4PART
      IIItem 5.
              Market for Common Equity, Related Stockholder Matters and
      Issuer Purchases of Equity Securities
              4Holders
              5Dividends
              5Sales of Unregistered Securities
              5Item
      6.
              Selected
      Financial Data [not required]Item 7.
              Management’s Discussion and Analysis
              5Liquidity
              5Capital Resources
              5Results of Operations
              6Off-Balance Sheet Arrangements
              6Item
      7A.
              Quantitative
      and Qualitative Disclosures About Market Risk [not
    required]Item 8.
              Financial Statements
              7Item 9.
              Changes In and Disagreements With Accountants on Accounting and
      Financial Disclosure
              19Item 9A(T).
              Disclosure Controls and Procedures
              19Item 9B.
              Other Information
              19PART
      IIIItem 10.
              Directors, Executive Officers and Corporate Governance;
      Compliance with Section 16(a) of the Exchange Act
              20Directors, Executive Officers and Significant
      EmployeesCode of Ethics
              22Corporate GovernanceSecurity Holder Recommendations of Candidates for the
      Board of Directors
              22Audit Committee
              22Compliance with Section 16(a) of the Exchange
      Act
              22Item 11.
              Executive Compensation
              22Summary Compensation Table
              22Outstanding Equity Awards at Fiscal
    Year-End
              22Compensation of Directors
              22Equity Compensation Plans
              22Item 12.
              Security Ownership of Certain Beneficial Owners and Management
      and Related Stockholder Matters
              23Item 13.
              Certain Relationships and Related Transactions, and Director
      Independence
              23Item 14.
              Principal Accounting Fees and Services
              23Audit Fees
              23Audit-Related Fees
              23Tax Fees
              23All Other Fees
              23Pre-Approval of Audit and Non-Audit
      Services
              23PART
      IVItem
      15.
              Exhibits
              24Signatures
              25
  - 3
-


PART I





ITEM
1.     BUSINESS.





Business
Development.





The KingThomason Group, Inc. was
incorporated in Nevada on November 8, 2000.  During the last three
years, there have been no bankruptcy, receivership or similar proceeding and no
material reclassification, merger, consolidation, or purchase or sale of a
significant amount of assets not in the ordinary course of
business.





Our
Business.





Presently
the Company is actively seeking a business combination partner, most probably
through a reverse merger, to pursue common goals and interests in creating
shareholder value for both entities through substantial business operations and
raising additional capital in the future to further expand the combined entity’s
business plan.





Employees.





We have
one full-time employee and no part-time employees.





ITEM
2.     PROPERTIES.





We own no
plants or manufacturing equipment, only office furniture, computers and related
equipment.





ITEM
3.     LEGAL PROCEEDINGS.





Neither our company nor any of our
property is a party to, or the subject of, any material pending legal
proceedings other than ordinary, routine litigation incidental to our
business.





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





There were no matters submitted, during
the fourth quarter of the fiscal year covered by this report, to a vote of
security holders of our company through the solicitation of proxies or
otherwise.





PART
      II





ITEM
      5.
            MARKET
      FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF
      EQUITY SECURITIES.





KingThomason’s Common Stock trades on
the Pink Sheets under the symbol KGTH.  The high and low bid and asked
prices, as reported by the Pink Sheets, are as follows for 2006 and
2007.  The quotations reflect inter-dealer prices, without retail
mark-up, mark-down or commission and may not represent actual
transactions.




High
              
              
              Low2006:1st
      Qtr
              
              $
              0.04
              
              
              $
              0.0252nd
      Qtr
              
              $
              0.04
              
              
              $
              0.013rd
      Qtr
              
              $
              0.04
              
              
              $
              0.0154th
      Qtr
              
              $
              0.04
              
              
              $
              0.0152007:1st
      Qtr
              
              $
              0.03
              
              
              $
              0.022nd
      Qtr
              
              $
              0.04
              
              
              $
              0.013rd
      Qtr
              
              $
              0.03
              
              
              $
              0.014th
      Qtr
              
              $
              0.02
              
              
              $
              0.01
  - 4
-


Holders.





There are approximately 537 holders of
record of our company’s common stock.





Dividends.





We have declared no cash dividends on
our common stock since inception.  There are no restrictions that
limit our ability to pay dividends on our common stock or that are likely to do
so in the future other than the restrictions set forth in Nevada Revised
Statutes, 78.288.  These restrictions provide that no distribution may
be made to our shareholders if, after giving effect to the distribution, (1) we
would not be able to pay our debts as they mature or (2) our total assets would
be less than our total liabilities plus any amounts needed, were we to be
dissolved at the time of the distribution, to satisfy the preferential rights
upon dissolution of any shareholders over the rights of the common stock
shareholders.





Sales of Unregistered
Securities.





During the period covered by this
report, the registrant sold the following equity securities (common stock) in
transactions that were not registered under the Securities Act of
1933.





Date
            
            Persons
      or Class of Persons to Whom the Securities
              Were
      Sold
            
            No.
      of
              Shares
            
            Cash
              Consideration
            
            Value
      and Nature of
              Other
      ThanCash
      Consideration09-14-07
            
            T.E.
      King III
            
            2,000,000
            
            $15,000
            
            Services
      as director of company09-14-07
            
            T.E.
      King Jr.
            
            1,500,000
            
            $11,250
            
            Services as director of company02-20-08
            
            5
      persons
            
            4,761,905
            
            $15,00002-20-08
            
            Corporation
            
            952,381
            
            -
            
            Services valued at $3,000 for raising
capital




All of the above sales were made
pursuant to the provisions of Regulation D, Rule 506.  All purchasers
were provided copies of our most recent Forms 10-KSB, Forms 10-QSB and 8-K and
were known to our management prior to the sales.  All purchasers were
given the opportunity to ask questions of management before making their
investment decisions.  There were no underwriters
involved.





There were no repurchases of our
securities made by us or any affiliated purchasers in the fourth quarter of our
last fiscal year.





ITEM 7.     MANAGEMENT’SDISCUSSION AND
ANALYSIS.





The following discussion and analysis
should be read in conjunction with the financial statements and the accompanying
notes thereto and is qualified in its entirety by the foregoing and by more
detailed financial information appearing elsewhere.  See "Financial
Statements."





On June 30, 2007 we spun off to our
shareholders our two operating subsidiaries:





·
            KingThomason,
      Inc., that operated our only business that produced income – the marketing
      of healthcare insurance products, on a wholesale basis, to retail
      insurance brokerage firms that offer the products to the underinsured and
      the uninsured, and





·
            KingThomason
      Credit Card Services, Inc., that had failed to capitalize our planned,
      proprietary, patient-pay medical accounts receivable recovery program,
      TotalCare.  TotalCare was based on a credit card that would
      enable physicians and hospitals recover that portion of a medical
      provider’s bill not covered by insurance and that is the responsibility of
      the patient.





We now have no business
operations.  We are a public shell corporation in search of a
suitable, going-concern private company for the purpose of a business
combination through a reverse merger.  Our search efforts are
conducted through our management and friends of our management.





Liquidity.  With
assets of $182 and liabilities of $114,198, we are not liquid.  The
only event reasonably likely to increase our liquidity would be a reverse merger
with a going-concern, private company, an event we are pursuing but have not yet
identified.  We have no unused sources of liquid assets and have to
rely on our officers and directors to provide the ongoing expenses of searching
for a reverse merger candidate.





Capital
resources.  We have no material commitments for capital
expenditures as of the end of the last fiscal year.  We have no
capital resources.





- 5
-


Resultsof operations.  On June 30, 2007 we spun off to our
shareholders our two operating subsidiaries and ceased all continued
operations.  Our gross revenue of $36,933 in 2006 thereby decreased to
zero in 2007.  Our net loss of $243,623 in 2006 was thereby reduced to
$52,871 in 2007.  Neither inflation nor changing prices had any
appreciable impact on the results of our operations.  We failed to
adequately capitalize our planned patient-pay, medical accounts receivable,
recovery program based on a credit card.  Our wholesale healthcare
insurance business could not carry the overhead of our two business
segments.





We are in discussions with a possible
candidate for a business combination reverse merger, but no definitive agreement
or letter of intent has been reached.





Off-BalanceSheet Arrangements





Our company has not entered into any
transaction, agreement or other contractual arrangement with an entity
unconsolidated with us under which we have





·
            an
      obligation under a guarantee
contract,


·
            a
      retained or contingent interest in assets transferred to the
      unconsolidated entity or similar arrangement that serves as credit,
      liquidity or market risk support to such entity for such
      assets,


·
            an
      obligation, including a contingent obligation, under a contract that would
      be accounted for as a derivative instrument,
or


·
            an
      obligation, including a contingent obligation, arising out of a variable
      interest in an unconsolidated entity that is held by, and material to, us
      where such entity provides financing, liquidity, market risk or credit
      risk support to, or engages in leasing, hedging, or research and
      development services with, us.







- 6
-




ITEM 8.     FINANCIAL STATEMENTS.




KingThomason
Group, Inc. and Subsidiaries
   Index to Financial
Statements
   PageReport of Independent Registered Public Accounting
      Firm
              
              8Consolidated Balance Sheet (Audited) December 31, 2006 and
      December 31, 2007
              
              9Consolidated Statements of Operations (Audited) for the
      Years Ended December 31, 2007 and 2006
              
              10Consolidated Statement of Stockholders’ Equity (Deficit)
      (Audited) for the Years Ended December 31, 2007 and
    2006
              
              11Consolidated Statements of Cash Flows (Audited) for the Years
      Ended December 31, 2007 and 2006
              
              12Notes to Consolidated Financial
    Statements
              
              13
      - 18








- 7
-






REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM










THE
BOARD OF KINGTHOMASON GROUP, INC.







We have
audited the accompanying balance sheet of KingThomason Group, Inc. and
Subsidiaries as of December 31, 2007 and 2006, and the related statements of
operations, stockholders equity and cash flows for the periods then
ended.  These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.





We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform our 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. Our audit included 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 includes examining
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.





In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of KingThomason Group, Inc. and
Subsidiaries at December 31, 2007 and 2006 and the results of its operations and
its stockholders equity and cash flows for the periods then ended in conformity
with accounting principles generally accepted in the United States of
America.





The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. The Company's viability is dependent upon its
ability to obtain future financing and the success of its future operations.
These factors raise substantial doubt as to the Company's ability to continue as
a going concern. Management's plan in regard to these matters is described in
Note 2. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.







/s/
Gruber & Company, LLC


Gruber
& Company, LLC Saint Louis, Missouri


March
25, 2008






- 8
-




KingThomason Group, Inc. and Subsidiaries
 Consolidated
Balance Sheets
 December
      31,2007
                
                
                2006AssetsCurrent
      AssetsCash
      & Equivalents
                
                $
                182
                
                
                $
                5,326Total
      Current Assets
                
                
                182
                
                
                
                5,326Property
      & Equipment, Net
                
                
                -
                
                
                
                185Total Assets
                
                $
                182
                
                
                $
                5,511Liabilities
      & Stockholders' Equity (Deficit)Current
      LiabilitiesAccounts
      Payable & Accrued Expenses
                
                $
                104,608
                
                
                $
                968,157Accrued
      Interest
                
                
                -
                
                
                
                74,459Note
      Payable-Other
                
                
                -
                
                
                
                54,180Note
      Payable-Officer
                
                
                9,590
                
                
                
                9,590Total
      Current Liabilities
                
                
                114,198
                
                
                
                1,106,386Commitments
      & Contingencies
                
                
                -
                
                
                
                -Stockholders'
      Equity (Deficit)Preferred
      Stock, $100 par value, 10,000,000 shares authorized; 9,544 and 4,544
      shares issued and outstanding, respectively
                
                
                954,400
                
                
                
                454,400Common
      Stock, $0.001 par value, 40,000,000 shares authorized; 27,271,636 and
      21,771,636 shares issued and outstanding, respectively
                
                
                27,272
                
                
                
                21,772Additional
      Paid-in Capital
                
                
                1,777,847
                
                
                
                1,281,157Unamortized
      Prepaid Expenses
                
                
                -
                
                
                
                (37,540
                )Accumulated
      Deficit
                
                
                (2,873,535
                )
                
                
                (2,820,664
                )Total
      Stockholders' Equity (Deficit)
                
                
                (114,016
                )
                
                
                (1,100,875
                )Total Liabilities & Stockholders' Equity (Deficit)
                
                $
                182
                
                
                $
                5,511
 
 
 - 9
-
 
 KingThomason Group, Inc. and Subsidiaries
 Consolidated
Statements of Operations
 
 For
      the Year EndedDecember
      31,2007
                
                
                2006Revenues
                
                $
                -
                
                
                $
                36,953Cost
      of Revenues
                
                
                -
                
                
                
                -Gross
      Profit
                
                
                -
                
                
                
                36,953Operating
      ExpensesConsulting
      Expense
                
                
                5,458
                
                
                
                6,250General
      and Administrative
                
                
                38,464
                
                
                
                218,590Stock
      Based Compensation
                
                
                38,500
                
                
                
                -Total
      Operating Expenses
                
                
                82,422
                
                
                
                224,840Operating
      Loss
                
                
                (82,422
                )
                
                
                (187,887
                )Other
      Income (Expense)Interest
      Income
                
                
                -
                
                
                
                -Interest
      Expense
                
                
                (24,125
                )
                
                
                (52,536
                )Total
      Other  Income (Expense)
                
                
                (24,125
                )
                
                
                (52,536
                )Net
      Income (Loss) Before Discontinued Operations
                
                
                (106,547
                )
                
                
                (240,423
                )Discontinued
      Operations Gain (Loss)Gain
      on Disposition of Assets
                
                
                58,954
                
                
                
                -Loss
      on Discontinued Operations
                
                
                (5,278
                )
                
                
                -Total
      Other  Income (Expense)
                
                
                53,676
                
                
                
                -Net
      Income (Loss) Before Income Taxes
                
                
                (52,871
                )
                
                
                (240,423
                )Provision
      for Income Taxes
                
                
                -
                
                
                
                (3,200
                )Net
      Income (Loss)
                
                $
                (52,871
                )
                
                $
                (243,623
                )Net
      Income per ShareBasic
                
                $
                (0.00
                )
                
                $
                (0.01
                )Diluted
                
                $
                (0.00
                )
                
                $
                (0.01
                )Number
      of Shares Used in Per Share CalculationsBasic
                
                
                24,746,978
                
                
                
                20,431,088Diluted
                
                
                24,756,522
                
                
                
                20,435,632
   
 - 10
-
 KingThomason Group, Inc. and Subsidiaries
 Consolidated
Statements of Stockholders' Equity (Deficit)
  Preferred
      Stock
                
                
                Common
      StockNumber
      of Shares
                
                
                Par
      Value ($100) Amount
                
                
                Number
      of Shares
                
                
                Par
      Value ($0.001) Amount
                
                
                Additional
      Paid-In-Capital
                
                
                Unamortized
      Prepaid Expenses
                
                
                Accumulated
      Deficit
                
                
                Total
      Stockholders' Equity (Deficit)Balance
      at December 31, 2005
                
                
                4,544
                
                
                $
                454,400
                
                
                
                19,671,636
                
                
                $
                19,672
                
                
                $
                1,253,857
                
                
                $
                (168,828
                )
                
                $
                (2,577,041
                )
                
                $
                (1,017,940
                )Shares
      Issued for Consulting and Legal Services
                
                
                -
                
                
                
                -
                
                
                
                2,100,000
                
                
                
                2,100
                
                
                
                27,300
                
                
                
                -
                
                
                
                -
                
                
                
                29,400Amortization
      of Prepaid Expenses
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                131,288
                
                
                
                -
                
                
                
                131,288Net
      Loss
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (243,623
                )
                
                
                (243,623
                )Balance
      at December 31, 2006
                
                
                4,544
                
                
                $
                454,400
                
                
                
                21,771,636
                
                
                $
                21,772
                
                
                $
                1,281,157
                
                
                $
                (37,540
                )
                
                $
                (2,820,664
                )
                
                $
                (1,100,875
                )Preferred
      Stock Issued for Settlement of Debt
                
                
                5,000
                
                
                
                500,000
                
                
                
                -
                
                
                
                -
                
                
                
                325,002
                
                
                
                -
                
                
                
                -
                
                
                
                825,002Common
      Stock Issued to Officers for Services
                
                
                -
                
                
                
                -
                
                
                
                5,500,000
                
                
                
                5,500
                
                
                
                33,000
                
                
                
                -
                
                
                
                -
                
                
                
                38,500Amortization
      of Prepaid Expenses
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                37,540
                
                
                
                -
                
                
                
                37,540APIC
      Adjustment Related to Divesture of Subsidiaries
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                138,688
                
                
                
                -
                
                
                
                -
                
                
                
                138,688Net
      Loss
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (52,871
                )
                
                
                (52,871
                )Balance
      at December 31, 2007
                
                
                9,544
                
                
                $
                954,400
                
                
                
                27,271,636
                
                
                $
                27,272
                
                
                $
                1,777,847
                
                
                $
                -
                
                
                $
                (2,873,535
                )
                
                $
                (114,016
                )
   
 - 11
-
 KingThomason Group, Inc. and Subsidiaries
 Consolidated
Statements of Cash Flows
  For
      the Year EndedDecember
      31,2007
                  
                  
                  2006Cash
      Flows from Operating ActivitiesNet
      Income (Loss)
                  
                  $
                  (52,871
                  )
                  
                  $
                  (243,623
                  )Adjustments
      to reconcile net loss to net cash used in operating
      activities:Common
      Stock Issued for Services
                  
                  
                  38,500
                  
                  
                  
                  29,400Depreciation
      & Amortization
                  
                  
                  37,540
                  
                  
                  
                  135,827Gain
      on Disposition of Assets
                  
                  
                  (58,954
                  )
                  
                  
                  -Changes
      in operating assets and liabilities:Accounts
      Receivable
                  
                  
                  -
                  
                  
                  
                  255Accounts
      Payable & Accrued Expenses
                  
                  
                  (804,410
                  )
                  
                  
                  78,677Accrued
      Interest
                  
                  
                  (74,459
                  )
                  
                  
                  -Note
      Payable-Other
                  
                  
                  (54,180
                  )
                  
                  
                  -Note
      Payable-Officer
                  
                  
                  -
                  
                  
                  
                  -Net
      Cash Used in Operating Activities
                  
                  
                  (968,834
                  )
                  
                  
                  536Cash
      Flows from Financing ActivitiesPreferred
      Stock Issued for Settlement of Debt
                  
                  
                  825,002
                  
                  
                  
                  -APIC
      Related to Spin Off of Subsidiaries
                  
                  
                  138,688
                  
                  
                  
                  -Net
      Cash Provided by Financing Activities
                  
                  
                  963,690
                  
                  
                  
                  -Net
      Increase (Decrease) in Cash
                  
                  
                  (5,144
                  )
                  
                  
                  536Cash
      Beginning of Period
                  
                  
                  5,326
                  
                  
                  
                  4,790Cash
      End of Year
                  
                  $
                  182
                  
                  
                  $
                  5,326
 
 - 12
-
  KING THOMASONGROUP, INC.
 Notes to
Financial Statements






Note
1 – Organization, Business & Operations





The
KingThomason Group, Inc. (KTGI) was organized in accordance with the General
Corporation Act of the State of Nevada on November 8, 2000, for the purpose of
merging with KingThomason, Inc. (KT), a Nevada corporation and subsidiaries.
KTGI had no business operation through December 31, 2001 and was a
development-stage company through December 7, 2001, organized for the merger.
KTGI effected a merger on December 7, 2001 with KingThomason, Inc. pursuant to
approving votes of the shareholders of both corporations.





King
Thomason, Inc. (KT) was incorporated in the state of Nevada on July 21, 2000.
KT’s activities from inception until December 31, 2000 consisted primarily of
reviewing possible business opportunities and developing the business
model.





Pursuant
to reorganization agreement dated December 31, 2000, the Company acquired one
hundred percent (100%) of the common shares of following
subsidiaries:





·
            King
      Thomason, Inc. CA (KTI): KTI was incorporated in the state of California
      on September 11, 1998 to market and sell the cash security retirement plan
      and personal lines of insurance including homeowners and automobile. KTI’s
      activities consisted primarily of acting as a broker for insurance
      companies working on commission.  KTI was spun off to the
      Company’s shareholders in 2007.


·
            King
      Thomason Financial Services, Inc. (KTFS): KTFS was incorporated in the
      state of California on April 7, 1999, to market and sell the financial and
      estate planning service, assets management services and the sale of
      stocks, bonds and mutual funds. The Company had no activity since the end
      of 2004.


·
            King
      Thomason Insurance Marketing, Inc. (KTIM): KTIM was incorporated in the
      state of California on January 28, 2000 to market and sell insurance
      policies. The Company began its operations in the period ended June 30,
      2001. KTIM’s activities consisted primarily of acting as a broker for
      dental insurance companies working on commission.  It ceased
      activities in 2007.


·
            King
      Thomason Credit Card Services, Inc. (KTCC): KTCC was incorporated in the
      state of California on January 28, 2000 to underwrite and issue a private
      label credit card for use with its medical and dental insurance products.
      The Company realized no revenues from this business and it was spun off to
      the Company’s shareholders in 2007.


·
            King
      Thomason Franchising, Inc. (KTFI): KTFI was incorporated in the state of
      California on August 17, 2000 to franchise a “Financial Center” to offer
      and sell various financial and insurance products. The Company never had
      any activity.


·




During
June 2007, the Board of Directors of KingThomason Group, Inc. completely
divested all of its wholly owned subsidiaries through a stock
dividend.  Therefore, at this point, KingThomason Group, Inc. is
effectively functioning as a shell corporation.




Principles
of Consolidation and Recapitalization





The
accompanying consolidated financial statements for the year ended December 31,
2007 and 2006 include the accounts of KTGI and its wholly owned subsidiaries,
KTI, KTFS, KTFI, KTCC and KTIM. (collectively the “Company”). All significant
inter-company accounts and transactions have been eliminated in
consolidation.





Note
2 - Going Concern and Management's Plans




The
accompanying consolidated financial statements have been prepared in conformity
with generally accepted   accounting principles which contemplate
continuation of the company as a going concern. However, the Company has an
accumulated deficit of $2,873,535 as of December 31, 2007. The Company’s total
liabilities exceed its total assets by $114,016. In view of the matters
described above, recoverability of a major portion of the recorded asset amounts
shown in the accompanying consolidated balance sheet is dependent upon continued
operations of the company, which in turn is dependent upon the Company’s ability
to raise additional capital, obtain financing and succeed in its future
operations. The financial statements do not include any adjustments relating to
the recoverability and classification of recorded asset amounts or amounts and
classification of liabilities that might be necessary should the Company be
unable to continue as a going concern.




KingThomason
Group, Inc. has not been successful in raising capital in an amount necessary to
fund the execution of the business plan. To that end in June of 2007 the Board
resolved that it would divest itself of dormant subsidiaries by spinning them
off to its shareholders in the form of a stock dividend. The effect of this
action, together with the settlement of a lawsuit, is that KingThomason Group,
Inc. has insubstantial assets, no business operations and a balance sheet with
less than $115,000 in debt and is a shell corporation.




Note
3 - Summary of Significant Accounting Policies




Cash
and cash equivalents





The
Company considers all liquid investments with a maturity of three months or less
from the date of purchase that are readily convertible into cash to be cash
equivalents.




- 13
-




KING
THOMASON GROUP, INC.
 Notes to
Financial Statements
 (continued)






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.




Property
and equipment





Property
and equipment are recorded at cost. Depreciation is computed using the
straight-line method over useful lives of 1.5 to 7 years. The cost of assets
sold or retired and the related amounts of accumulated depreciation are removed
from the accounts in the year of disposal. Any resulting gain or loss is
reflected in current operations. Assets held under capital leases are recorded
at the lesser of the present value of the future minimum lease payments or the
fair value of the leased property. Expenditures for maintenance and repairs are
charged to operations as incurred.




Impairment
of long-lived assets





Effective
January 1, 2002, the Company adopted Statement of Financial Accounting Standards
No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" ("SFAS
144"), which addresses financial accounting and reporting for the impairment or
disposal of long-lived assets and supersedes SFAS No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of,"
and the accounting and reporting provisions of APB Opinion No. 30, "Reporting
the Results of Operations for a Disposal of a Segment of a Business." The
Company periodically evaluates the carrying value of long-lived assets to be
held and used in accordance with SFAS 144. SFAS 144 requires impairment losses
to be recorded on long-lived assets used in operations when indicators of
impairment are present and the undiscounted cash flows estimated to be generated
by those assets are less than the assets' carrying amounts. In that event, a
loss is recognized based on the amount by which the carrying amount exceeds the
fair market value of the long-lived assets. Loss on long-lived assets to be
disposed of is determined in a similar manner, except that fair market values
are reduced for the cost of disposal.




Basic
and diluted net loss per share





Net loss
per share is calculated in accordance with the Statement of financial accounting
standards No. 128 (SFAS No. 128), “Earnings per share”. SFAS No. 128 superseded
Accounting Principles Board Opinion No.15 (APB 15). Net loss per share for all
periods presented has been restated to reflect the adoption of SFAS No. 128.
Basic net loss per share is based upon the weighted average number of common
shares outstanding. Diluted net loss per share is based on the assumption that
all dilutive convertible shares and stock options were converted or exercised.
Dilution is computed by applying the treasury stock method. Under this method,
options and warrants are assumed to be exercised at the beginning of the period
(or at the time of issuance, if later), and as if funds obtained thereby were
used to purchase common stock at the average market price during the
period.




Stock-based
compensation





The
Company has adopted the disclosure provisions only of SFAS 123 and continues to
account for stock based compensation using the intrinsic value method prescribed
in accordance with the provisions of APB No. 25, Accounting for Stock Issued to
Employees, and related interpretations. Common stock issued to employees for
compensation is accounted for based on the market price of the underlying stock,
generally the average low bid price.





The
Company accounts for stock-based compensation issued to non-employees and
consultants in accordance with the provisions of SFAS 123 and the Emerging
Issues Task Force consensus in Issue No. 96-18 ("EITF 96-18"), "Accounting for
Equity Instruments that are Issued to Other Than Employees for Acquiring or in
Conjunction with Selling, Goods or Services". Common stock issued to
non-employees in exchange for services is accounted for based on the fair value
of the services received.




Fair
value of financial instruments





Statement
of financial accounting standard No. 107, Disclosures about fair value of
financial instruments, requires that the Company disclose estimated fair values
of financial instruments. The carrying amounts reported in the statements of
financial position for current assets and current liabilities qualifying as
financial instruments are a reasonable estimate of fair value.




Revenue
recognition





The
Company's revenue recognition policies are in compliance with Staff accounting
bulletin (SAB) 104. Revenue, including consulting income is recognized when
earned. Commission income is recognized as of the effective date of the policy.
Any adjustments to commissions are recognized in the year in which they
occur.


- 14
-
  KING
THOMASON GROUP, INC.
 Notes to
Financial Statements
 (continued)


Allowance
for doubtful accounts





In
determining the allowance to be maintained, management evaluates many factors
including industry and historical loss experience. The allowance for doubtful
accounts is maintained at an amount management deems adequate to cover estimated
losses.




Advertising





The
Company expenses advertising costs as incurred.




Income
Taxes





The
Company accounts for income taxes using the liability method as required by
Statement of Financial Accounting Standards ("FASB") No. 109, Accounting for
Income Taxes ("SFAS 109"). Under this method, deferred tax assets and
liabilities are determined based on differences between their financial
reporting and tax basis of assets and liabilities. The Company was not required
to provide for a provision for income taxes for the periods ended December 31,
2007 and 2006, as a result of net operating losses incurred during the periods.
As of December 31, 2007, the Company has available approximately $2,900,000 of
net operating losses ("NOL") available for income tax purposes that may be
carried forward to offset future taxable income, if any. These carryforwards
expire in various years through 2026.




Shares
issued to acquire goods and services from non-employees





The
Company accounts for the issuance of equity instruments to acquire goods and
services based on the fair value of the goods and services or the fair value of
the equity instrument at the time of issuance, whichever is more reliably
measurable.




Research
and development costs





Expenditures
for research and development are expensed as incurred. Such costs are required
to be expensed until the point that technological feasibility is established.
The period between achieving technological feasibility and the general
availability of such development is short. Consequently, costs otherwise
capitalizable after technological feasibility is achieved are generally expensed
because they are insignificant. The Company did not incur any research and
development cost during the years ended December 31, 2006 and 2005.




Reclassifications





Certain
items in the prior year financial statements have been reclassified for
comparative purposes to conform to the presentation in the current period’s
presentation. These reclassifications have no effect on the previously reported
income (loss).




Recently
Issued Accounting Pronouncements





In
February 2007, the FASS issued SFAS No. 159, "The Fair Value Option for
Financial Assets and Liabilities" ("SFAS No. 159"). SFAS No. 159 provides
companies with an option to report selected financial assets and liabilities at
fair value, and establishes presentation and disclosure requirements designed to
facilitate comparisons between companies that choose different measurement
attributes for similar types of assets and liabilities. The new guidance is
effective for fiscal years beginning after November 15, 2007. The Company is
currently evaluating the potential impact of the adoption of SFAS No. 159 on its
financial position and results of operations.





In
December 2006, the FASS approved FASS Staff Position (FSP) No. EITF 00-19-2,
"Accounting for Registration Payment Arrangements" ("FSP EITF 00-19-2"), which
specifies that the contingent obligation to make future payments or otherwise
transfer consideration under a registration payment arrangement, whether issued
as a separate agreement or included as a provision of a financial instrument or
other agreement, should be separately recognized and measured in accordance with
SFAS No. 5, "Accounting for Contingencies". FSP EITF 00-19-2 also requires
additional disclosure regarding the nature of any registration payment
arrangements, alternative settlement methods, the maximum potential amount of
consideration and the current carrying amount of the liability, if any. The
guidance in FSP EITF 00-19-2 amends FASB Statements No. 133, "Accounting for
Derivative Instruments and Hedging Activities", and No. 150, "Accounting for
Certain Financial Instruments with Characteristics of both Liabilities and
Equity", and FASS Interpretation No. 45, "Guarantor's Accounting and Disclosure
Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of
Others", to include scope exceptions for registration payment arrangements. The
adoption of this pronouncement did not have an impact on
the  company's financial position, results or operations or cash
flows.





In
September 2006, the FASB issued Statement of Financial Accounting Standard No.
157, "Fair Value Measurements." This statement defines fair value, establishes a
fair value hierarchy to be used in generally accepted accounting principles and
expands disclosures about fair value measurements. Although this statement does
not require any new fair value measurements, the application could change
current practice. The statement is effective for fiscal years beginning after
November 15, 2007. The Company is currently evaluating the impact of this
statement to its financial position and results of operations.


- 15
-
  KING
THOMASON GROUP, INC.
 Notes to
Financial Statements
 (continued)





In
September 2006, the staff of the Securities and Exchange Commission issued SAB
No. 108 which provides interpretive guidance on how the effects of the carryover
or reversal of prior year misstatements should be considered in quantifying a
current year misstatement. SAS 108 becomes effective in fiscal 2007. The
adoption of this pronouncement is not expected to have an impact on the
Company's financial position, results of operation or cash flows.





In July
2006, the Financial Accounting Standards Board issued Interpretation No. 48,
"Accounting for Uncertainty in Income Taxes - an Interpretation of FASS
Statement No. 109" (the "Interpretation"). The Interpretation establishes for
all entities a minimum threshold for financial statement recognition of the
benefit of tax positions, and requires certain expanded disclosures. The
Interpretation is effective for fiscal years beginning after December 31, 2006,
and is to be applied to all open tax years as of the date of effectiveness. The
Company is in the process of evaluating the impact of the application of the
Interpretation to its financial statements.





In March
2006, the FASS issued SFAS 156 - "Accounting for Servicing of Financial Assets -
an amendment of FASS Statement No. 140" ("SFAS 156"). SFAS 156 is effective for
the first fiscal year beginning after September 15, 2006. SFAS 156 changes the
way entities account for servicing assets and obligations associated with
financial assets acquired or disposed of. The Company has not yet completed its
evaluation of the impact of adopting SFAS 156 on its results of operations or
financial position, but does not expect that the adoption of SFAS 156 will have
a material impact.





In
February 2006, the FASB issued SFAS No. 155 "Accounting for Certain Hybrid
Financial Instruments-an amendment of FASB Statements No. 133 and 140" ("FAS
155"). FAS 155 addresses the following: a) permits fair value re-measurement for
any hybrid financial instrument that contains an embedded derivative that
otherwise would require bifurcation; b) clarifies which interest-only strips and
principal-only strips are not subject to the requirements of Statement 133; c)
establishes a requirement to evaluate interests in securitized financial assets
to identify interests that are freestanding derivatives or that are hybrid
financial instruments that contain an embedded derivative requiring bifurcation;
d) clarifies that concentrations of credit risk in the form of subordination are
not embedded derivatives; and e) amends Statement 140 to eliminate the
prohibition on a qualifying special-purpose entity from holding a derivative
financial instrument that pertains to a beneficial interest other than another
derivative financial instrument. FAS 155 is effective for all financial
instruments acquired or issued after the beginning of an entity's first fiscal
year that begins after September 15, 2006. The Company has not yet completed its
evaluation of the impact of adopting SFAS 155 on its results of operations or
financial position, but does not expect that the adoption of SFAS 155 will have
a material impact.





Note
4 – Accounts Payable and Accrued Expenses





Accounts
payable and accrued expenses consisted of the following:




December
      31,2007
                
                
                2006Accounts
      Payable
                
                $
                33,450
                
                
                $
                53,070Accrued
      Expenses
                
                
                67,958
                
                
                
                78,084Accrued
      Expenses Recovery of Debt
                
                
                -
                
                
                
                825,003Accrued
      Taxes
                
                
                3,200
                
                
                
                12,000Total
      Accounts Payable & Accrued Expenses
                
                $
                104,608
                
                
                $
                968,157


Note
5 - Note Payable – Other





The
Company had a note payable to a vendor through its KTFS subsidiary in the amount
of $54,180. This note was eliminated as part of the spin-off of the Company’s
subsidiaries.





Note
6 - Notes Payable – Officers





The
company has two notes payable to officers amounting $6,047 and $3,543,
respectively. Both of them are due on demand, unsecured and bear interest rates
of 6% per year.





Note
7 – Stock Based Compensation Plan





In 2002
and 2003, the Company issued 725,253 options to three executive officers. The
options vested over a period of twelve months and have a term of five years.
Prior to January 1, 2006, the Company measured stock compensation expense using
the intrinsic value method of accounting in accordance with Accounting
Principles Board (APB) Opinion No. 25, “Accounting for Stock Issued to
Employees,” and related interpretations (APB No. 25). There were no stock
compensation expenses under intrinsic value method prior to January 1,
2006.





The
company adopted SFAS No. 123-R effective January 1, 2006 using the modified
prospective method. Under this transition method, stock compensation expense
includes compensation expense for all stock-based compensation awards granted on
or after January 1, 2006, based on the grant-date fair value estimated in
accordance with the provisions of SFAS No. 123-R.


- 16
-
  KING
THOMASON GROUP, INC.
 Notes to
Financial Statements
 (continued)


Following
is a summary of the stock option activity:


Options
      Outstanding
                
                
                Weighted
      Average Exercise Price
                
                
                Aggregate
      Intrinsic ValueOutstanding
      December 31, 2005
                
                
                725,253
                
                
                $
                0.1800
                
                
                $
                -Granted
                
                
                -
                
                
                $
                -
                
                
                $
                -Forfeited
                
                
                -
                
                
                $
                -
                
                
                $
                -Exercised
                
                
                -
                
                
                $
                -
                
                
                $
                -Outstanding
      December 31, 2006
                
                
                725,253
                
                
                $
                0.1800
                
                
                $
                -Granted
                
                
                -
                
                
                $
                -
                
                
                $
                -Forfeited
                
                
                (200,000
                )
                
                $
                0.1500
                
                
                $
                -Exercised
                
                
                -
                
                
                $
                -
                
                
                $
                -Outstanding
      December 31, 2007
                
                
                525,253
                
                
                $
                0.1476
                
                
                $
                -




Following
is a summary of the status of options outstanding at December 31,
2007:




Exercise
                Price
              
              Number
      of
                Options
              
              Average
      Remaining Contractual Life Years
              
              Average
      Exercise Price$  0.15
              
              500,000
              
              0.75
              
              $                0.15$  0.10
              
              25,253
              
              0.92
              
              $                0.10


There
were no unvested stock options as of December 31, 2007.





During
the year ended December 31, 2007, there were no options granted by the
Company.





Note
8 – Discontinued Operations





The gain
on the disposal of assets relates to the divesture of the Company’s subsidiaries
in June 2007.  The subsidiaries had approximately $180,000 in
third-party accounts payable and notes as of the spin-off date that are included
in this gain. In addition, the subsidiaries had a year-to-date loss on
discontinued operations of $5,278 as of the spin-off effected at June 30,
2007.





Note
9 - Stockholders’ Deficit





In 2007,
the Company issued 5,000 shares of Preferred Stock for the elimination of debt
totaling $825,002 in a compromise and settlement agreement in relation to the
following events. On February 1, 2002 the Company entered into a consulting
agreement for 36-month period with a consultant to provide debt management,
collections, capital markets, financial and related advice. The Company paid
$75,000 pursuant to the consulting agreement in 2002 and accrued $825,002
through July 31, 2004. In August 25, 2004, the Company amended the consulting
agreement with the consultant. The amended agreement provides for the waiver of
all accrued consulting fees. This amount had been carried on the balance sheet
as part of accrued liabilities. The waiver of the accrued liabilities has been
reflected in the accompanying financial statements as "Extraordinary item - Gain
(loss) on extinguishment of debt" amounting to $825,002 for the year ended 2004.
The amended agreement also provides for payment of $30,000 payable by August 25,
2004 followed by payments equal to $5,000 per month beginning on October 1, 2004
and continuing each month through June 31, 2011, and issuance of 500,000 shares
of common stock of the Company to be issued no later than October 1, 2004. The
Company paid $30,000 to the consultant and issued 500,000 shares of common stock
of the Company valued at $130,000, as agreed under the amended agreement. As of
December 31, 2004, accrued consulting fees for this consultant amounts to
$15,000. The company stops paying the consultant from February 2005 and
cancelled the 500,000 shares issued to the consultant. According to the debt
restoration agreement, once the payment is past due, the debt that has been
forgiven will be restored immediately. Accordingly, the Company has incurred
"Extra ordinary item - Gain (loss) on extinguishment of debt" amounting to
$825,002 for the years ended 2005 and has recorded an amount due to consultant
amounting to $825,002.




- 17
-


KING
THOMASON GROUP, INC.
 Notes to
Financial Statements
 (continued)


In 2007,
the Company issued 5,500,000 shares of common stock to Officers and Directors of
the Company for services totaling $38,500.





In 2006,
the Company issued 2,100,000 shares of common stock for Consulting and Legal
Services totaling $29,400.





Note
10 – Unamortized Prepaid Expenses





The
Company has been amortizing prepaid funding expenses relating to a October 14,
2004 common stock purchase agreement with Fusion Capital Fund II, LLC.
Amortization expenses for prepaid funding expenses amounted to $37,540 and
$125,217 for the years ended December 31, 2007 and 2006,
respectively.





Note
11 - Earnings per Share





Earnings
per share for years ended December 31, 2007 and 2006 were determined by dividing
net income for the periods by the weighted average number of both basic and
diluted shares of common stock and common stock equivalents outstanding. Stocks
to be issued are regarded as common stock equivalents and are considered in
diluted earnings per share calculations.





Note
12 – Supplemental Disclosure of Cash Flows





The
Company prepares its statements of cash flows using the indirect method as
defined under the Financial Accounting Standard No. 95.





The
Company paid $0 for income tax and $0 for interest during the twelve month
period ended December 31, 2007.





During
2007, the Company issued 5,000 shares of Preferred Stock for debt totaling
$825,002.





The
Company paid $0 for income tax and $0 for interest during the twelve month
period ended December 31, 2006.





Note
13 – Commitments & Contingencies





Legal
Proceedings




Neither
our company nor any of our property is a party to, or the subject of, any
pending legal proceedings other than ordinary, routine litigation incidental to
our business.





Note
14 - Subsequent Events





Subsequent
to December 31, 2007, the Company issued 4,714,286 shares of common stock to
accredited investors and raised $15,000 in cash. In addition, the
Company issued 952,381 shares of common stock valued at $3,000 for
raising such capital.




- 18
-





ITEM 9.
            CHANGES
      IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
      DISCLOSURE.





On April 8, 2008, Kabani & Company,
Inc. (Kabani) was dismissed by our board of directors as the independent auditor
of the Company. The decision to change accountants was approved by the Company’s
board of directors.





Kabani’s audit report on the
financial statements of the Company for the fiscal year ended December 31, 2005
contained no adverse opinion or disclaimer of opinion, nor was it qualified or
modified as to uncertainty, audit scope or accounting principles, except that
the audit report on the financial statements of the Company for the fiscal year
ended December 31, 2005 contained an uncertainty about the Company’s ability to
continue as a going concern. Kabani did not audit any financial statements after
the audit of the year ended December 31, 2005.





During the year ended December 31,
2006 and 2007, and through the interim period ended April 4, 2008, there were no
disagreements with Kabani on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedures, which
disagreements if not resolved to the satisfaction of the Kabani would have
caused them to make reference thereto in their reports on the financial
statements for such periods.





During the year ended December 31,
2006 and 2007, and through the interim period ended April 4, 2008, Kabani did
not advise the Company with respect to any of the matters described in
paragraphs (a)(1)(iv)(A) and (B) of Item 304 of Regulation S-B.





On February 18, 2008, Gruber &
Company, LLC of St. Louis, Missouri, was engaged as our principal accountant to
audit our financial statements





ITEM
9A(T).     DISCLOSURE CONTROLS AND PROCEDURES.





Evaluation of disclosure controls and
procedures.  The Company carried out an evaluation, under the
supervision and with the participation of the Company's management, including
the Company's Chief Executive Officer and Chief Financial Officer, of the
effectiveness of the design and operation of the Company's disclosure controls
and procedures as of the end of the period covered by this report. Based upon
that evaluation, the Chief Executive Officer and Chief Financial Officer
concluded that the Company's disclosure controls and procedures are effective
and provide reasonable assurances that the information the Company is required
to disclose in the reports it files or submits under the Securities Exchange Act
of 1934 is recorded, processed, summarized and reported within the time period
required by the Commission's rules and forms.  Further, the Company’s
officers concluded that its disclosure controls and procedures are also
effective to ensure that information required to be disclosed in the reports
that it files or submits under the Exchange Act is accumulated and communicated
to its management, including its chief executive officer and chief financial
officer, to allow timely decisions regarding required
disclosure.  There were no significant changes in the Company's
internal control over financial reporting during the period covered by this
report that have materially affected, or are reasonably likely to materially
affect our internal controls over financial reporting.





Internal control over financial
reporting.





Management’s annual report
on internal control over financial reporting.  The registrant’s
management recognizes its responsibility for establishing and maintaining
adequate internal control over financial reporting for the
registrant.  Currently, the registrant is operating as a caretaker
entity, keeping the corporation alive and in good standing with the
Commission.  All debit and credit transactions with the company’s bank
accounts are reviewed by the officers as well as all communications with the
company’s creditors.  The directors meet frequently – as often as
weekly – to discuss and review the financial status of the company and all
developments regarding its search for a reverse merger partner.  All
filings of reports with the Commission are reviewed before filing by all
directors.





Management assesses the company’s
control over financial reporting at the end of its most recent fiscal year to be
effective.  It detects no material weaknesses in the company’s
internal control over financial reporting.





This annual report does not include an
attestation report of the company’s registered public accounting firm regarding
internal control over financial reporting.  Management’s report was
not subject to attestation by the company’s registered public accounting firm
pursuant to temporary rules of the Securities and Exchange Commission that
permit the company to provide only management’s report in this annual
report.





There has been no change in our
internal control over financial reporting identified in connection with the
evaluation required by Commission rules that occurred during our last fiscal
quarter that has materially affected, or is reasonably likely to materially
affect, our internal control over financial reporting.





ITEM 9B.     OTHER INFORMATION





The registrant failed to report, during
the fourth quarter of the year covered by this report, in a Form 8-K the
information now disclosed above in “Item 9.  Changes in and
Disagreements With Accountants on Accounting and Financial
Disclosure.”





- 19
-






PART III





ITEM
      10.
            DIRECTORS,
      EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE; COMPLIANCE WITH SECTION 16(A)
      OF THE EXCHANGE ACT.





Directors, Executive
Officers and Significant Employees.





Set forth below are the names and terms
of office of each of the directors, executive officers and significant employees
of The KingThomason Group and a description of the business experience of
each.  The directors of the company are elected annually by the
shareholders.  The officers serve at the pleasure of the board of
directors.





The
KingThomason Group, Inc. (the Nevada holding company)





Person
            
            Office
            
            Office
      HeldSince
            
            Term
      of
              OfficeThomas
      King III, 40
            
            President,Chief
      Financial Officer and Director
            
            7-00
              7-00
              7-00
            
            12-08
              12-08
              12-08T.E.
      King Jr., 72
            
            Director
            
            1-06
            
            12-08





Thomas King III is the son of T.E. King
Jr.





Business Experience:





Thomas “Tim” King.Mr. King
received a bachelor-of-science degree in business administration in 1990 at the
University of Southern California.  From July 1990 until January 1992
he was a representative of Amplicon Financial, Inc. of Santa Ana, California, a
company that leased high-tech hardware and software systems.  From
January 1992 until July 1992 he was a representative of his father’s investment
banking company, King & Associates of Los Angeles.  From July 1992
until September 1993 he was a foreign exchange department manager of Tokyo
International Investments, Ltd. of San Francisco, California.  From
September 1993 until April 1996 he was a co-founder, director and vice president
of G-5 Global Investments of San Francisco, California, a private hedge fund
active in the currency markets.  From April 1996 until May 1998 he was
a district manager of SunAmerica Securities, Inc. of Concord, California, a
securities market financial consulting firm.  In May 1998 he
co-founded KingThomason, Inc. of San Ramon, California and has served as a
director and its president since its inception.  Mr. King devotes 100
percent of his time to the business of KingThomason.





T.E. King Jr.  Mr.
King received a bachelor of arts degree in finance in 1958 from Northwestern
University and attended the J.L. Kellogg Graduate School of Management in
1958-1959.  He was employed during 1959-1960 as a floor specialist
trainee by Cruttenden & Co., a Midwest Stock Exchange firm, in Chicago,
Illinois and in 1960-1961 as an investment analyst for Cruttenden Podesta in
Chicago.  He was employed during the period 1961-1963 in San
Francisco, California, first as vice president of research and corporate finance
for Walter C. Gorey & Co. and then as the senior vice president of research
for Henry F. Swift & Co.  From 1963 to 1966 he was employed in
Chicago by Dempsey Tegeler & Co. as vice president of investment research
for its Midwest region and as a position over-the-counter
trader.  From 1966 to 1967 he was employed in San Francisco as the Bay
area director of research for a New York-headquartered national brokerage
firm.  From 1967 to 1974 he was the executive vice president and
member of the board of directors of Financial Relations Board, Inc. in Chicago,
Illinois and Los Angeles, California.  From 1974 until the present he
has served as the president of King & Assoc. in Los Angeles,
California.  King & Assoc. is a full-service financial
community/shareholder relations/corporate finance consulting firm for public
companies.





Neither of the Kings holds any
directorships in any company with a class of securities registered under the
Exchange Act or subject to the reporting requirements of section 15(d) of such
Act or any company registered as an investment company under the Investment
Company Act of 1940.





- 20
-


Involvement in certain legal
proceedings.  During the past five years, neither of the Kings
has been involved in any of the following events:





·
            A
      petition under the Federal bankruptcy law or any state insolvency law was
      filed by or against, or a receiver, fiscal agent or similar officer was
      appointed by a court for the business or property of such person, or any
      partnership in which he was a general partner at or within two years
      before the time of such filing, or any corporation or business association
      of which he was an executive officer at or within two years before the
      time of such filing;





·
            Such
      person was convicted in a criminal proceeding or is a named subject of a
      pending criminal proceeding (excluding traffic violations and other minor
      offenses);





·
            Such
      person was the subject of any order, judgment, or decree, not subsequently
      reversed, suspended or vacated, of any court of competent jurisdiction,
      permanently or temporarily enjoining him from, or otherwise limiting, the
      following activities:





·
            Acting
      as a futures commission merchant, introducing broker, commodity trading
      advisor, commodity pool operator, floor broker, leverage transaction
      merchant, any other person regulated by the Commodity Futures Trading
      Commission, or an associated person of any of the foregoing, or as an
      investment adviser, underwriter, broker or dealer in securities, or as an
      affiliated person, director or employee of any investment company, bank,
      savings and loan association or insurance company, or engaging in or
      continuing any conduct or practice in connection with such
      activity;





·
            Engaging
      in any type of business practice;
or





·
            Engaging
      in any activity in connection with the purchase or sale of any security or
      commodity or in connection with any violation of Federal or State
      securities laws or Federal commodities
laws;





·
            Such
      person was the subject of any order, judgment or decree, not subsequently
      reversed, suspended or vacated, of any Federal or State authority barring,
      suspending or otherwise limiting for more than 60 days the right of such
      person to engage in any activity described in paragraph (f)(3)(i) of this
      section, or to be associated with persons engaged in any such activity;
      or





·
            Such
      person was found by a court of competent jurisdiction in a civil action or
      by the Commission to have violated any Federal or State securities law,
      and the judgment in such civil action or finding by the Commission has not
      been subsequently reversed, suspended, or
  vacated.





·
            Such
      person was found by a court of competent jurisdiction in a civil action or
      by the Commodity Futures Trading Commission to have violated any Federal
      commodities law, and the judgment in such civil action or finding by the
      Commodity Future Trading Commission has not been subsequently reversed,
      suspended or vacated.





Codeof Ethics.  We have adopted a
Code of Ethics that applies to our principal executive officer, principal
financial officer, principal accounting officer or controller, or persons
performing similar functions.  A copy of the Code of Ethics is filed
as an exhibit to Form 8-K Current Report for February 14, 2005 (Exhibit 14
incorporated herein by reference).  We undertake to provide to any
person without charge, upon request, a copy of such code of
ethics.  Such a request may be made by writing to the company at its
address at 21702 Evalyn Avenue, Torrance, CA 90277.





Corporate
Governance.





Security holder
recommendations of candidates for the board of directors.  Any
shareholder may recommend candidates for the board of directors by writing to
the president of our company the name or names of candidates, their home and
business addresses and telephone numbers, their ages, and their business
experience during at least the last five years.  The recommendation
must be received by the company by April 20 of any year or, alternatively, at
least 60 days before any announced shareholder annual meeting.





Audit
committee.  We have no standing audit committee.  Our
directors perform the functions of an audit committee.  Our limited
operations make unnecessary a standing audit committee, particularly in view of
the fact that we have only two directors at present.  Neither of our
directors is an audit committee financial expert, but the directors have access
to consultants that can provide such expertise when such is needed.





Compliance With Section
16(a) of the Exchange Act.





Our securities are not registered with
the Securities and Exchange Commission under Section 12(b) or 12(g) of the
Exchange Act.  Accordingly, our officers, directors and beneficial
owners of 10 percent or more of any class of stock are not subject to Section
16(a) of the Exchange Act.





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-






ITEM 11.     EXECUTIVE
COMPENSATION.





The following information concerns the
compensation of the named executive officers for each of the last two completed
fiscal years:





SUMMARY
COMPENSATION TABLE





Name
      and Principal Position
            
            Year
            
            Salary
            
            Bonus
            
            Stock
      Awards(1)
            
            TotalT.E.
      King III, CEO
            
            2007
            
            $0
            
            $0
            
            $15,000
            
            $15,0002006
            
            $0
            
            $0
            
            $
      0
            
            $0





(1)
            This
      compensation was for Mr. King’s services as a director.  It is
      repeated in the table under “Compensation of
  Directors.”





The following information concerns
unexercised stock options, stock that has not vested, and equity incentive plan
awards for each named officer outstanding at the end of the last fiscal
year:





OUTSTANDING
EQUITY AWARDS AT FISCAL YEAR-END





Option
      AwardsName
            
            Number
      ofSecuritiesUnderlyingUnexercisedOptions
      (#)Exercisable
            
            
            Number
      ofSecuritiesUnderlyingUnexercisedOptions
      (#)Unexercisable
            
            
            EquityIncentivePlanAwards:Number
      ofSecuritiesUnderlyingUnexercisedUnearnedOptions
      (#)
            
            
            Option
              Exercise
              Price
              ($)
            
            
            Option
              Expiration
              DateT.E.
      King III
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0





Compensation of Directors





The directors of KingThomason Group and
its subsidiaries received the following compensation in 2007 for their services
as directors.





DIRECTOR
COMPENSATION





Name
            
            FeesEarned
              or
      Paidin
      Cash
              ($)
            
            Stock
              Awards
              ($)
            
            Option
              Awards
              ($)
            
            Non-EquityIncentive
              PlanCompensation
      ($)
            
            NonqualifiedDeferredCompensationEarnings
              ($)
            
            All
      OtherCompensation
              ($)
            
            Total
              ($)Thomas
      King III
            
            0
            
            $15,000(1)
            
            0
            
            0
            
            0
            
            0
            
            $15,000T.E.
      King Jr.
            
            0
            
            $11,250(2)
            
            0
            
            0
            
            0
            
            0
            
            $11,250





(1)
            This
      same compensation is also disclosed for this person in the table under
      “Executive Compensation – Summary Compensation Table.”  At the
      end of 2007, this director had outstanding 2,000,000 shares of common
      stock earlier awarded him as director
  compensation.





(2)
            At
      the end of 2007, this director had outstanding 1,500,000 shares of common
      stock earlier awarded him as director
  compensation.





Our standard for determining the dollar
amount of stock awards is based upon the amount of service each director
performs for the company.





Compensation
Committee.  We do not have a compensation
committee.  We have only two directors, and one of these, Thomas King
III, is the only full-time employee of the company.  These two
directors deliberate concerning the ability of the company to pay compensation
to any officer or director and the type and amount of such
compensation.  During the last fiscal year, the directors were Thomas
King III and T.E. King Jr., and each participated in the deliberations
concerning executive officer compensation.  Thomas King III and T.E.
King Jr. are son and father, respectively.





Related
Transactions.  During the last two fiscal years and the period
since the end of the last fiscal year, there have been no transactions, or any
currently proposed transaction, in which the company was or is to be a
participant with a related person, such as either of the two Kings, where the
transaction exceeds $120,000 and the related person had or will have a direct or
indirect material interest.





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-


EquityCompensation Plans.





We have no equity compensation
plans.





ITEM 12.     SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS





The following table shows information
as of March 31, 2008 with respect to each beneficial owner of more than five
percent of each class of voting stock of KingThomason Group, and to each of the
officers and directors of KingThomason Group individually and as a
group:





No. of Shares
            
            
            % of ClassT.E.
      King III
              21702
      Evalyn Ave
              Torrance,
      CA 90277
            
            
            7,793,464
            
            
            
            23.6
            %T.E.
      King Jr.
              520
      The Village Dr. #208
              Redondo
      Beach,CA,90277
            
            
            1,837,500
            
            
            
            5.6
            %Officers
      and Directors as a Group (2 persons)
            
            
            9,630,964
            
            
            
            29.2
            %





ITEM
      13.
            CERTAIN
      RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR
      INDEPENDENCE





See “Related Transactions” above
regarding the absence or presence of material transactions between the company
and related persons.





Neither of our directors is
“independent” as that term is defined in any national securities exchange or in
an inter-dealer quotation system that requires that a majority of the board
members be independent.  Our definition of “independence” is whether a
director is a principal executive officer or is the beneficial owner of more
than five percent of our outstanding common stock.





ITEM
14.      PRINCIPAL ACCOUNTING FEES AND
SERVICES.





Audit Fees.  Our
principal independent accountant billed us, for each of the last two fiscal
years, the following aggregate fees for its professional services rendered for
the audit of our annual financial statements and review of financial statements
included in our Form 10-QSB reports or other services normally provided in
connection with statutory and regulatory filings or engagements for those two
fiscal years:




Fiscal
      Year ended December 31, 2007
                
                $
                10,000Fiscal
      Year ended December 31, 2006
                
                $
                10,000


Audit-Related Fees. Our
principal independent accountant billed us, for each of the last two fiscal
years, the following aggregate fees for assurance and related services
reasonably related to the performance of the audit or review of our financial
statements and not reported above under “Audit Fees”:




Fiscal
      Year ended December 31, 2007
                
                $
                -0-Fiscal
      Year ended December 31, 2006
                
                $
                -0-




Tax
Fees. Our principal independent accountant billed us, for each of the
last two fiscal years, the following aggregate fees for professional services
rendered for tax compliance, tax advice and tax planning:




Fiscal
      Year ended December 31, 2007
              
              $
              -0-Fiscal
      Year ended December 31, 2006
              
              $
              -0-


All Other Fees. Our principal
independent accountant billed us, for each of the last two fiscal years, the
following aggregate fees for products and services provided by it, other than
the services reported in the above three categories:


Fiscal
      Year ended December 31, 2007
                
                $
                -0-Fiscal
      Year ended December 31, 2006
                
                $
                -0-




Pre-Approval of Audit and Non-Audit
Services. The Audit Committee charter requires that the committee
pre-approve all audit, review and attest services and non-audit services before
such services are engaged.  None of the fees described above were
pre-approved before the services were performed.




- 23
-







ITEM
      15.
            EXHIBITS.





The followingexhibits are filed, by incorporation by reference, as
part of this Form 10-K:


3.1
              
              Articles
      of Incorporation of The KingThomason Group, Inc.*3.1.1
              
              Certificate
      of Amendment to Articles of Incorporation pursuant to NRS 78.385 and
      78.390 (increasing the authorized capital and designating Series A
      Convertible, Voting Preferred Stock).*+3.2
              
              Bylaws
      of The KingThomason Group, Inc.*10.4
              
              Payor
      Agreement between KingThomason, Inc., a California corporation, and
      California Foundation for Medical Care.*10.5
              
              Executive
      General Agent Agreement between KingThomason Insurance Company, Inc. and
      Jefferson Pilot Life Insurance Company.*10.7
              
              2001
      Stock Option Plan adopted by The KingThomason Group,
  Inc.**10.8
              
              Strategic
      Marketing Agreement of January 1, 2004, between KingThomason Credit Card
      Services, Inc. and Debt Alliance Services, LLC.***10.9
              
              Common
      Stock Purchase Agreement between registrant and Fusion Capital Fund II,
      LLC dated October 14, 2005.+10.10
              
              Registration
      Rights Agreement between registrant and Fusion Capital Fund II, LLC dated
      October 14, 2005.+14
              
              Code
      of Ethics for the Chief Executive Officer and Senior Financial
      Officers.++16
              
              Letter
      on Change in Certifying Accountant.20.1
              
              Audit
      Committee Charter.++20.2
              
              Compensation
      Committee Charter.++20.3
              
              Governance
      and Nominating Committee Charter.++20.4
              
              Corporate
      Governance Principles.++31.1
              
              Certification
      of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted
      pursuant to Section 302 of the Sarbanes-Oxley Act of
  2002.31.2
              
              Certification
      of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted
      pursuant to Section 302 of the Sarbanes-Oxley Act of
  2002.32.1
              
              Certification
      of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted
      pursuant to Section 906 of the Sarbanes-Oxley Act of
  2002.32.2
              
              Certification
      of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted
      pursuant to Section 906 of the Sarbanes-Oxley Act of
  2002.99.1
              
              Registrant’s
      press release dated October 18,
2005.+


*
            Previously
      filed with Amendment No. 1 on Form S-4 to Form SB-2, Commission File
      #333-60980, EDGAR Accession #0001060830-01-500046 on May 22, 2001;
      incorporated herein.





**
            Previously
      filed with Form 10-QSB 09-30-01, Commission File #333-60880, EDGAR
      Accession #0001060830-01-500136 on November 13, 2001; incorporated
      herein.





***
            Previously
      filed with Form 10-KSB 12-31-02, Commission File #333-60880, EDGAR
      Accession #0001060830-03-000065 on March 31, 2004; incorporated
      herein.





+
            Previously
      filed with Form 8-K 10-14-04, Commission File #333-60880, EDGAR Accession
      #0001060830-04-000344 on October 20, 2005; incorporated
      herein.





*+
            Previously
      filed with Form 8-K 11-16-04, Commission File #333-60880, EDGAR Accession
      #0001060830-04-000405 on December 01, 2005; incorporated
      herein.





++
            Previously
      filed with Form 8-K 02-14-05, Commission File #333-60880, EDGAR Accession
      #0001060830-05-000090 on February 24, 2005; incorporated
      herein.








- 24
-




SIGNATURES







In
accordance with Section 13 or 15(d) of the Exchange Act, the Registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.







Date:  April
16,
2008                                                                                     The
KingThomason Group, Inc.








/s/ Thomas E. King III


T.E. King III, President





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.








/s/ Thomas E. King
III


Date:
April 16, 2008


T.E. King III, President, Chief
Financial Officer and
Director








/s/ T.E. King
Jr.


Date:  April
16, 2008


T.E. King Jr., Director








- 25
-


The
KingThomason Group, Inc.


Commission
File No.  333-60880





EXHIBIT
INDEX





Form
10-K


For
the Fiscal Year Ended 12-31-07





The
following exhibits are filed, by incorporation by reference, as part of this
Form 10-K:




3.1
              
              Articles
      of Incorporation of The KingThomason Group, Inc.*3.1.1
              
              Certificate
      of Amendment to Articles of Incorporation pursuant to NRS 78.385 and
      78.390 (increasing the authorized capital and designating Series A
      Convertible, Voting Preferred Stock).*+3.2
              
              Bylaws
      of The KingThomason Group, Inc.*10.4
              
              Payor
      Agreement between KingThomason, Inc., a California corporation, and
      California Foundation for Medical Care.*10.5
              
              Executive
      General Agent Agreement between KingThomason Insurance Company, Inc. and
      Jefferson Pilot Life Insurance Company.*10.7
              
              2001
      Stock Option Plan adopted by The KingThomason Group,
  Inc.**10.8
              
              Strategic
      Marketing Agreement of January 1, 2004, between KingThomason Credit Card
      Services, Inc. and Debt Alliance Services, LLC.***10.9
              
              Common
      Stock Purchase Agreement between registrant and Fusion Capital Fund II,
      LLC dated October 14, 2005.+10.10
              
              Registration
      Rights Agreement between registrant and Fusion Capital Fund II, LLC dated
      October 14, 2005.+14
              
              Code
      of Ethics for the Chief Executive Officer and Senior Financial
      Officers.++16
              
              Letter
      on Change in Certifying Accountant.20.1
              
              Audit
      Committee Charter.++20.2
              
              Compensation
      Committee Charter.++20.3
              
              Governance
      and Nominating Committee Charter.++20.4
              
              Corporate
      Governance Principles.++31.1
              
              Certification
      of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted
      pursuant to Section 302 of the Sarbanes-Oxley Act of
  2002.31.2
              
              Certification
      of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted
      pursuant to Section 302 of the Sarbanes-Oxley Act of
  2002.32.1
              
              Certification
      of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted
      pursuant to Section 906 of the Sarbanes-Oxley Act of
  2002.32.2
              
              Certification
      of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted
      pursuant to Section 906 of the Sarbanes-Oxley Act of
  2002.99.1
              
              Registrant’s
      press release dated October 18,
2005.+


*
            Previously
      filed with Amendment No. 1 on Form S-4 to Form SB-2, Commission File
      #333-60980, EDGAR Accession #0001060830-01-500046 on May 22, 2001;
      incorporated herein.





**
            Previously
      filed with Form 10-QSB 09-30-01, Commission File #333-60880, EDGAR
      Accession #0001060830-01-500136 on November 13, 2001; incorporated
      herein.





***
            Previously
      filed with Form 10-KSB 12-31-02, Commission File #333-60880, EDGAR
      Accession #0001060830-03-000065 on March 31, 2004; incorporated
      herein.





+
            Previously
      filed with Form 8-K 10-14-02, Commission File #333-60880, EDGAR Accession
      #0001060830-04-000344 on October 20, 2005; incorporated
      herein.





*+
            Previously
      filed with Form 8-K 11-16-04, Commission File #333-60880, EDGAR Accession
      #0001060830-04-000405 on December 01, 2005; incorporated
      herein.





++
            Previously
      filed with Form 8-K 02-14-05, Commission File #333-60880, EDGAR Accession
      #0001060830-05-000090 on February 24, 2005; incorporated
      herein.




- 26
-