UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549




FORM
10-Q




(Mark
one)




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




For
the quarterly period ended March 31,
2009




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




For
the transition period from __________ to __________




Commission File Number
0-12214




DALECO RESOURCES
CORPORATION


(Exact
name of registrant as specified in its charter)





Nevada
              (State
      or other jurisdiction of
              incorporation
      or organization)
            23-2860734
              (I.R.S.
      Employer
              Identification
      No.)





17
      Wilmont Mews, 5th
      Floor
              West Chester,
      Pennsylvania 19382
            (610)
      429-0181(Address
      of principal executive offices) (Zip Code)
            (Registrant’s
      telephone number
              including
      are code)




___________________________________________________________________________


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




Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.     Yes x    No
o




Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.  See the definitions of “large accelerated filer,”
“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act.




Large
      accelerated filer o
            Accelerated
      filer oNon-accelerated
      filer o
      (Do not check if 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 o    No
x




APPLICABLE
ONLY TO CORPORATE ISSUERS:




Indicate
the number of shares outstanding of each of the issuer’s classes of common
stock, as of the latest practicable date:




Number of
shares outstanding of the issuer's Common Stock as of April 30, 2009:
 43,081,346


Number of
shares outstanding of the issuer’s Series B Preferred Stock as of April 30,
2009:  145,000









DALECO
RESOURCES CORPORATION





TABLE
OF CONTENTS





PAGEPART
      I - FINANCIAL INFORMATIONITEM
      1.
            CONSOLIDATED
      FINANCIAL STATEMENTS
            
            3Consolidated
      Balance Sheets
            
            3Consolidated
      Statements of Operations
            
            5Consolidated
      Statements of Cash Flows
            
            6Notes
      to Consolidated Financial Statements
            
            7ITEM
      2.
            MANAGEMENT’S
      DISCUSSION AND ANALYSIS OF FINANCIALCONDITION
      AND RESULTS OF OPERATIONS
            
            12ITEM
      3.
            QUANTITATIVE
      AND QUALITATIVE DISCLOSURES ABOUTMARKET
      RISK
            
            16ITEM
      4.
            CONTROLS
      AND PROCEDURES
            
            16ITEM
      4T.
            CONTROLS
      AND PROCEDURES
            
            17PART
      II - OTHER INFORMATIONITEM
      1.
            LEGAL
      PROCEEDINGS
            
            18ITEM
      1A.
            RISK
      FACTORS
            
            18ITEM
      2.
            UNREGISTERED
      SALE OF EQUITY SECURITIES AND USE OF PROCEEDS
            
            18ITEM
      3.
            DEFAULTS
      UPON SENIOR SECURITIES
            
            18ITEM
      4.
            SUBMISSION
      OF MATTERS TO A VOTE OF SECURITY HOLDERS
            
            18ITEM
      5.
            OTHER
      INFORMATION
            
            19ITEM
      6.
            EXHIBITS
            
            19SIGNATURES
            
            20





2





PART
I – FINANCIAL INFORMATION
 
 Item
1. Consolidated Financial Statements.
 
 DALECO
RESOURCES CORPORATION
 CONSOLIDATED
BALANCE SHEETS





March
      31
              2009
            
            
            September
      30
              2008(Unaudited)ASSETSCurrent
      Assets:Cash
      and Equivalents
            
            $
            81,531
            
            
            $
            472,912Accounts
      Receivable
            
            
            250,764
            
            
            
            474,692Other
      Current Assets
            
            
            7,424
            
            
            
            7,424Total
      Current Assets
            
            
            339,719
            
            
            
            955,028Other
      Assets:Technology
      and Patent Rights
            
            
            6,594,500
            
            
            
            6,594,500Accumulated
      Amortization
            
            
            (4,910,890
            )
            
            
            (4,622,164
            )Net
      Technology and Patent Rights
            
            
            1,683,610
            
            
            
            1,972,336Securities
      Available for Future Sale
            
            
            253
            
            
            
            5,510Restricted
      Cash Deposits
            
            
            105,958
            
            
            
            105,825Prepaid
      Mineral Royalties – Long-term
            
            
            520,000
            
            
            
            490,000Interest
      Receivable
            
            
            141,428
            
            
            
            131,387Total
      Other Assets
            
            
            2,451,249
            
            
            
            2,705,058Property,
      Plant and Equipment:Oil
      and Gas Properties, at cost
            
            
            4,424,512
            
            
            
            4,424,512Accumulated
      Depreciation, Depletion and Amortization
            
            
            (3,716,495
            )
            
            
            (3,626,795
            )Net
      Oil and Gas Properties
            
            
            708,017
            
            
            
            797,717Mineral
      Properties, at cost
            
            
            12,609,100
            
            
            
            12,609,100Accumulated
      Depreciation, Depletion and Amortization
            
            
            (950,000
            )
            
            
            (950,000
            )Net
      Mineral Properties
            
            
            11,659,100
            
            
            
            11,659,100Equipment,
      Furniture and Fixtures, at cost
            
            
            79,902
            
            
            
            79,902Accumulated
      Depreciation
            
            
            (63,955
            )
            
            
            (60,271
            )Net
      Equipment, Furniture and Fixtures
            
            
            15,947
            
            
            
            19,631Total
      Net Property, Plant and Equipment
            
            
            12,383,064
            
            
            
            12,476,448TOTAL
      ASSETS
            
            $
            15,174,032
            
            
            $
            16,136,534




SEE ACCOMPANYING NOTES TO UNAUDITED
CONSOLIDATED FINANCIAL STATEMENTS.




3


DALECO
RESOURCES CORPORATION
 CONSOLIDATED
BALANCE SHEETS


March
      31
              2009
            
            
            September
      30
              2008(Unaudited)LIABILITIES
      AND SHAREHOLDERS’ EQUITYCurrent
      Liabilities:Accounts
      Payable
            
            $
            1,805,455
            
            
            $
            2,175,950Federal
      and State Income Taxes Payable
            
            
            272,395
            
            
            
            264,795Note
      Payable - Related Party
            
            
            35,485
            
            
            
            45,485Premium
      Finance Note Payable
            
            
            13,550
            
            
            
            2,636EV&T
      Note
            
            
            567,213
            
            
            
            567,213Note
      Payable - First Regional Bank – Current Portion
            
            
            15,000
            
            
            
            99,970CAMI
      Notes
            
            
            514,881
            
            
            
            514,881Accrued
      Interest Expense
            
            
            661,399
            
            
            
            603,499Accrued
      Dividends Payable
            
            
            1,684,480
            
            
            
            1,626,004Accrued
      Expense Reimbursements
            
            
            19,051
            
            
            
            20,293Accrued
      Bonus Expense
            
            
            1,373,831
            
            
            
            1,373,831Accrued
      Salary Expense
            
            
            960,066
            
            
            
            986,698Total
      Current Liabilities
            
            
            7,922,806
            
            
            
            8,281,255Note
      Payable – First Regional Bank – Long-term Portion
            
            
            55,000
            
            
            
            --TOTAL
      LIABILITIES
            
            
            7,977,806
            
            
            
            8,281,255SHAREHOLDERS’
      EQUITY:Preferred
      Stock – 20,000,000 shares authorizedSeries
      A Preferred Stock (outstanding: none)
            
            
            --
            
            
            
            --Series
      B Preferred Stock – par value of $0.01 per share
              (outstanding:
      145,000 shares)
            
            
            1,450
            
            
            
            1,450Common
      Stock – 100,000,000 shares authorized – par
              value
      of $0.01 per share
              (outstanding:
      43,081,346 shares)
            
            
            430,813
            
            
            
            430,813Additional
      Paid in Capital
            
            
            45,163,337
            
            
            
            45,118,409Accumulated
      Deficit
            
            
            (37,817,927
            )
            
            
            (37,119,203
            )Subscriptions
      Receivable
            
            
            (576,000
            )
            
            
            (576,000
            )Accumulated
      Other Comprehensive Loss
            
            
            (5,447
            )
            
            
            (190
            )TOTAL
      SHAREHOLDERS’ EQUITY
            
            
            7,196,226
            
            
            
            7,855,279TOTAL
      LIABILITIES AND SHAREHOLDERS’ EQUITY
            
            $
            15,174,032
            
            
            $
            16,136,534




SEE
ACCOMPANYING NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS.





4


DALECO
RESOURCES CORPORATION
 CONSOLIDATED
STATEMENTS OF OPERATIONS
 (UNAUDITED)


Three
      Months Ended
              March 31
            
            
            Six
      Months Ended
              March 312009
            
            
            2008
            
            
            2009
            
            
            2008Revenues:Oil
      and Gas Sales
            
            $
            74,105
            
            
            $
            178,123
            
            
            $
            200,431
            
            
            $
            357,237Royalty
      Receipts
            
            
            3,900
            
            
            
            3,628
            
            
            
            8,100
            
            
            
            7,057Mineral
      Sales
            
            
            1,208
            
            
            
            1,008
            
            
            
            3,625
            
            
            
            2,163Well
      Management Revenue
            
            
            65,699
            
            
            
            66,232
            
            
            
            131,399
            
            
            
            124,047Total
      Operating Revenues
            
            
            144,912
            
            
            
            248,991
            
            
            
            343,555
            
            
            
            490,504Expenses:Lease
      Operating Expenses - Oil and Gas
            
            
            67,743
            
            
            
            38,539
            
            
            
            107,799
            
            
            
            91,446Exploration
      Expenses - Minerals
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            3,502Operating
      Expenses and Other Costs - Minerals
            
            
            18,113
            
            
            
            15,847
            
            
            
            37,372
            
            
            
            60,839Production
      and Severance Taxes – Oil and Gas
            
            
            4,604
            
            
            
            9,200
            
            
            
            12,274
            
            
            
            19,237Depreciation,
      Depletion and Amortization
            
            
            191,054
            
            
            
            240,156
            
            
            
            382,110
            
            
            
            480,311General
      and Administrative Expenses
            
            
            115,108
            
            
            
            208,230
            
            
            
            236,431
            
            
            
            428,071Legal
      and Professional Fees and Expenses
            
            
            45,523
            
            
            
            117,394
            
            
            
            101,479
            
            
            
            145,097Shareholder
      Information Expenses
            
            
            16,282
            
            
            
            18,456
            
            
            
            19,468
            
            
            
            19,786Amortization
      of Equity Placement Costs
            
            
            --
            
            
            
            2,829
            
            
            
            --
            
            
            
            5,658Total
      Expenses
            
            
            458,427
            
            
            
            650,651
            
            
            
            896,933
            
            
            
            1,253,947Other
      Income (Expense):Interest
      and Dividend Income
            
            
            8,214
            
            
            
            9,956
            
            
            
            15,701
            
            
            
            31,666Interest
      Expense
            
            
            (50,656
            )
            
            
            (45,487
            )
            
            
            (102,571
            )
            
            
            (84,544
            )Gain
      on Sale of Oil and Gas Properties
            
            
            --
            
            
            
            150,000
            
            
            
            --
            
            
            
            150,000Total
      Other Income (Expense), Net
            
            
            (42,442
            )
            
            
            114,469
            
            
            
            (86,870
            )
            
            
            97,122Loss
      Before Income Taxes
            
            
            (355,957
            )
            
            
            (287,191
            )
            
            
            (640,248
            )
            
            
            (666,321
            )Taxes
      based on Income
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --Net
      Loss
            
            
            (355,957
            )
            
            $
            (287,191
            )
            
            
            (640,248
            )
            
            
            (666,321
            )Preferred
      Stock Dividends
            
            
            (29,238
            )
            
            
            --
            
            
            
            (58,476
            )Net
      Loss Applicable to Common Shareholders
            
            $
            (385,195
            )
            
            $
            (287,191
            )
            
            $
            (698,724
            )
            
            $
            (666,321
            )Basic
      and Fully Diluted Net Loss per Share
            
            $
            (0.01
            )
            
            $
            (0.01
            )
            
            $
            (0.02
            )
            
            $
            (0.02
            )Weighted-average
      number of shares of Common Stock Outstanding
            
            
            43,081,346
            
            
            
            43,081,346
            
            
            
            43,081,346
            
            
            
            43,081,346




SEE
ACCOMPANYING NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS.





5


DALECO
RESOURCES CORPORATION
 CONSOLIDATED
STATEMENTS OF CASH FLOWS
 FOR
THE SIX MONTHS ENDED MARCH 31, 2009 AND 2008
 (UNAUDITED)


2009
            
            
            2008Cash
      Flows From Operating Activities:Net
      Loss
            
            $
            (640,248
            )
            
            $
            (666,321
            )Adjustments
      to Reconcile Net Loss to Net Cash Provided by
              (Used
      in) Operating Activities:Depreciation,
      Depletion and Amortization
            
            
            382,110
            
            
            
            480,311Amortization
      of Discount on Note Payable
            
            
            --
            
            
            
            4,680Amortization
      of Equity Placement Costs
            
            
            --
            
            
            
            5,658Stock-Based
      Compensation Expense
            
            
            44,928
            
            
            
            129,603Gain
      on Sale of Oil and Gas Properties
            
            
            --
            
            
            
            (150,000
            )Changes
      in Operating Assets and Liabilities:Receivables
            
            
            213,887
            
            
            
            40,146Other
      Current Assets
            
            
            --
            
            
            
            (254
            )Pre-paid
      Mineral Royalties
            
            
            (30,000
            )
            
            
            --Restricted
      Cash Deposits
            
            
            (133
            )
            
            
            (1,384
            )Accounts
      Payable
            
            
            (370,495
            )
            
            
            (130,246
            )Accrued
      Interest Expense
            
            
            57,900
            
            
            
            57,083Other
      Accrued Expenses
            
            
            (20,274
            )
            
            
            15,636Net
      Cash Used in Operating Activities
            
            
            (362,325
            )
            
            
            (195,380
            )Cash
      Flows From Investing Activities:Purchases
      of Fixed Assets
            
            
            --
            
            
            
            --Net
      Cash Used in Investing Activities
            
            
            --
            
            
            
            --Cash
      Flows From Financing Activities:Proceeds
      from Borrowings
            
            
            21,860
            
            
            
            87,817Payments
      on Notes and Debt
            
            
            (50,916
            )
            
            
            --Net
      Cash Provided By (Used In) Financing Activities
            
            
            (29,056
            )
            
            
            87,817Net
      Change in Cash and Equivalents
            
            
            (391,381
            )
            
            
            (107,563
            )Cash
      and Equivalents at Beginning of Year
            
            
            472,912
            
            
            
            224,267Cash
      and Equivalents at End of Period
            
            $
            81,531
            
            
            $
            116,704Supplemental
      Information:Income
      Taxes Paid
            
            $
            --
            
            
            $
            --Interest
      Paid
            
            $
            44,671
            
            
            $
            22,619Supplemental
      Disclosure of Non-cash Transactions:Receivable
      from Sale of Oil and Gas Properties
            
            $
            --
            
            
            $
            150,000Discount
      on Note Payable Resulting from Issuance of Warrants to Purchase Common
      Stock
            
            $
            --
            
            
            $
            18,720Preferred
      Dividends Not Paid
            
            $
            58,476
            
            
            $
            --




SEE
ACCOMPANYING NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS.




6


DALECO
RESOURCES CORPORATION
 NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 AS
OF MARCH 31, 2009


1.
Continued Operations and Going Concern





The unaudited consolidated financial
statements have been prepared on the basis of a going concern which contemplates
that the Company will be able to realize assets and discharge liabilities in the
normal course of business. Accordingly, they do not give effect to adjustments
that would be necessary should the Company be required to liquidate its assets.
The Company incurred a net loss of $640,248 for the six months ended March 31,
2009. The ability of the Company to meet its total liabilities of $7,977,806 and
to continue as a going concern is dependent upon the availability of future
funding, achieving profitability within its mineral segment and ongoing
profitability within its oil and gas operations. If the Company is unable to
continue as a going concern, there is uncertainty relative to full
recoverability of its assets including the $20 million acquisition of Clean Age
Minerals, Inc. in September 2000.





The Company will continue to seek out
and entertain project specific funding commitments and other capital funding
alternatives if and as they become available.





As of March 31, 2009, the Company and
certain of its subsidiaries were in default of certain debt obligations and
certain employment agreements. The holders of these instruments are working with
the Company to achieve the ultimate extinguishment of the
obligations.




2.
Summary of Significant Accounting Policies





Basis
of Presentation





The
unaudited consolidated financial statements included herein have been prepared
in accordance with accounting principles generally accepted in the United States
for interim financial information and with the instructions to Form 10-Q
and Article 8 and Rule 10-01 of Regulation S-X.  They do not
include all information and notes required by generally accepted accounting
principles for complete financial statements. However, except as disclosed
herein, there has been no material changes in the information disclosed in the
notes to the consolidated financial statements included in the Company’s annual
report on Form 10-KSB of Daleco Resources Corporation for the year ended
September 30, 2008. In the opinion of management, all adjustments (including
normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three months ended March 31, 2009, are
not necessarily indicative of the results that may be expected for any other
interim period or the entire year. For further information, these unaudited
consolidated financial statements and the related notes should be read in
conjunction with the Company’s audited consolidated financial statements for the
year ended September 30, 2008, included in the Company’s annual report on Form
10-KSB (“2008 Annual Report”).





Unless
otherwise noted, references to “year” pertain to the Company’s fiscal year,
which begins on October 1 and ends on September 30; for example, 2009 refers to
fiscal 2009, which is the period from October 1, 2008 to September 30,
2009.





Certain
reclassifications have been made to prior period financial statements to conform
to the current period presentation.




7


DALECO
RESOURCES CORPORATION
 NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 AS
OF MARCH 31, 2009


Significant
Accounting Policies





There
were no changes to the Company’s Significant Accounting Policies from those
disclosed in our 2008 Annual Report.





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 as of 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.




RECENTLY
ADOPTED ACCOUNTING STANDARDS





In
September 2006, the FASB issued SFAS No. 157, “Fair Value
Measurements” (“SFAS 157”). SFAS 157 defines fair value, establishes a framework
for measuring fair value in generally accepted accounting principles and expands
disclosures about fair value measurements. The Company adopted SFAS 157 as of
October 1, 2008 and noted no material impact on the Company’s financial position
or results of operations as a result of the adoption.





In
February 2007, the Financial Accounting Standards Board (“FASB”) issued
Statement of Financial Accounting Standards (“SFAS”) No. 159, “The Fair
Value Option for Financial Assets and Financial Liabilities” (“SFAS 159”). SFAS
159 permits entities to choose to measure many financial instruments and certain
other items at fair value in order to mitigate volatility in reported earnings
caused by measuring related assets and liabilities differently without having to
apply complex hedge accounting provisions. The Company adopted SFAS 159 as of
October 1, 2008 and noted no material impact on its financial position or
results of operations as a result of the adoption.




RECENTLY
ISSUED ACCOUNTING STANDARDS





In April 2009, the FASB issued FSP FAS
107-1 and Accounting Principles Board (APB) 28-1, Interim Disclosures about Fair
Value of Financial Instruments.  The FSP amends SFAS No. 107
“Disclosures about Fair Value of Financial Instruments” to require an entity to
provide disclosures about fair value of financial instruments in interim
financial information. This FSP is to be applied prospectively and is effective
for interim and annual periods ending after June 15, 2009 with early adoption
permitted for periods ending after March 15, 2009. The Company will include the
required disclosures in its quarter ending June 30, 2009 report.





In April 2009, the FASB issued FSP FAS
141(R)-1, Accounting for Assets Acquired and Liabilities Assumed in a Business
Combination That Arise from Contingencies. This FSP requires that assets
acquired and liabilities assumed in a business combination that arise from
contingencies be recognized at fair value if fair value can be reasonably
estimated. If fair value cannot be reasonably estimated, the asset or liability
would generally be recognized in accordance with SFAS No. 5, “Accounting for
Contingencies” and FASB Interpretation No. 14, “Reasonable Estimation of the
Amount of a Loss”. Further, the FASB removed the subsequent accounting guidance
for assets and liabilities arising from contingencies from SFAS No. 141(R). The
requirements of this FSP carry forward without significant revision the guidance
on contingencies of SFAS No. 141, “Business Combinations”, which was superseded
by SFAS No. 141(R). The FSP also eliminates the requirement to disclose an
estimate of the range of possible outcomes of recognized contingencies at the
acquisition date. For unrecognized contingencies, the FASB requires that
entities include only the disclosures required by SFAS No. 5. This FSP shall be
effective for assets or liabilities arising from contingencies in business
combinations for which the acquisition date is on or after the beginning of the
first annual reporting period beginning on or after December 15,
2008.




8


DALECO
RESOURCES CORPORATION
 NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 AS
OF MARCH 31, 2009


In
December 2007, the Financial Accounting Standards Board (“FASB”) issued
SFAS No. 141R, “Business Combinations” (“SFAS 141R”). SFAS 141R revises the
principles and requirements for how the acquirer recognizes and measures in its
financial statements the identifiable assets acquired, the liabilities assumed,
any non-controlling interest in the acquiree, and the goodwill acquired in a
business combination or gain from a bargain purchase. SFAS 141R also revises the
principles and requirements for how the acquirer determines what information to
disclose to enable users of the financial statements to evaluate the nature and
financial effects of the business combination. This pronouncement is effective
as of the beginning of our 2010 fiscal year. The Company is currently evaluating
the impact, if any, that SFAS 141R will have on its financial position or
results of operations.





Also in
December 2007, the FASB issued SFAS No. 160, “Non-controlling Interest
in Consolidated Financial Statements — an amendment of ARB No. 51” (“SFAS
160”). SFAS 160 amends ARB No. 51 to establish accounting and reporting
standards for the non-controlling interest in a subsidiary and for the
deconsolidation of a subsidiary. This pronouncement is effective as of the
beginning of the Company’s 2010 fiscal year. The company is currently evaluating
the impact, if any, that SFAS 160 will have on its financial position or results
of operations.





In March
2008, the FASB issued SFAS No. 161, "Disclosures about Derivative Instruments
and Hedging Activities" ("SFAS No. 161"). SFAS 161 requires companies with
derivative instruments to disclose information that should enable
financial-statement users to understand how and why a company uses derivative
instruments, how derivative instruments and related hedged items are accounted
for under FASB Statement No. 133 "Accounting for Derivative Instruments and
Hedging Activities" and how derivative instruments and related hedged items
affect a company's financial position, financial performance and cash flows.
SFAS 161 is effective for financial statements issued for fiscal years and
interim periods beginning after November 15, 2008. The adoption of this
statement is not expected to have a material effect on the Company's future
financial position or results of operations.





In May
2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted
Accounting Principles (“SFAS 162”). SFAS 162 identifies a consistent framework,
or hierarchy, for selecting accounting principles to be used in preparing
financial statements that are presented in conformity with U.S. generally
accepted accounting principles for nongovernmental entities (the “Hierarchy”).
The Hierarchy within SFAS 162 is consistent with that previously defined in the
AICPA Statement on Auditing Standards No. 69, “The Meaning of Present Fairly in
Conformity With Generally Accepted Accounting Principles” (“SAS 69”). SFAS 162
is effective 60 days following the United States Securities and Exchange
Commission’s (the “SEC”) approval of the Public Company Accounting Oversight
Board amendments to AU Section 411, “The Meaning of Present Fairly in Conformity
With Generally Accepted Accounting Principles”. The adoption of SFAS 162 will
not have a material effect on the Consolidated Financial Statements because the
Company has utilized the guidance within SAS 69.





In
June 2008, the Financial Accounting Standards Board (“FASB”) issued a FASB
Staff Position (“FSP”) on the FASB’s Emerging Issues Task Force (“EITF”) Issue
No. 03-06-1, “Determining Whether Instruments Granted in Share-Based
Payment Transactions Are Participating Securities,” (“FSP EITF 03-06-1”). This
FSP addresses whether instruments granted in share-based payment transactions
are participating securities prior to vesting and, therefore, need to be
included in the earnings allocation in computing earnings per share (“EPS”)
under the two-class method described in SFAS No. 128, “Earnings Per Share.” It
affects entities that accrue or pay non-forfeitable cash dividends on
share-based payment awards during the awards’ service period. FSP EITF 03-06-1
is effective for fiscal years beginning after December 15, 2008, and
interim periods within those fiscal years and will require a retrospective
adjustment to all prior period EPS. The Company is currently evaluating the
impact this FSP will have on its calculation and presentation of
EPS.




9


DALECO
RESOURCES CORPORATION
 NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 AS
OF MARCH 31, 2009


3.
Capital Stock





Common
Stock





No shares
of Common Stock were issued during the six months ended March 31,
2009.





Series
B Preferred Stock





No shares
of Series B Preferred Stock were issued or converted to Common Stock during the
quarter ended March 31, 2009.




Options
and Warrants to Purchase Common Stock




Number
      of Options and Warrants
            
            
            Weighted
      Average Price per ShareOptions
      and Warrants Outstanding at September 30, 2008
            
            
            4,260,641
            
            
            $
            0.57Options
      Expired (1)
            
            
            (200,000
            )
            
            $
            0.43Options
      and Warrants Outstanding at March 31, 2009
            
            
            4,060,641
            
            
            $
            0.58





(1)
            In
      December 2008, an option for the purchase of 200,000 shares held by a
      former Director of the Company
expired.





Summarized
information relating to the stock options to purchase Common Stock outstanding
as of March 31, 2009, is as follows:




Exercise
              Price
      per Share
            
            Number
      of
              Shares
      Underlying
              Options
      Unexercised
            
            Weighted
      Average Exercise
              Price
              Per
      Share
            
            Weighted
      Average Remaining Life
              (Years)
            
            Number
      of
              Shares
              Underlying
              Options
      Exercisable
            
            Weighted
      Average Exercise
              Price
      Per
              Share$0.28-$0.85
            
            2,675,000
            
            $0.57
            
            1.17
            
            2,525,000
            
            $0.58




Stock-Based
Compensation





During
the six months ended March 31, 2009, options to purchase 200,000 shares of
Common Stock expired unexercised. There are options to purchase 2,675,000 shares
of Common Stock outstanding as of March 31, 2009, of which 2,450,000 are held by
current officers, Directors and employees of the Company
(“Insiders”).  The exercise prices for the options held by Insiders
range from $0.28 per share to $0.85 per share.




10


DALECO
RESOURCES CORPORATION
 NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 AS
OF MARCH 31, 2009


In
accordance with the provisions of SFAS 123(R), “Share-Based Payment”, the
Company has recorded stock-based compensation expense of $44,928 and $129,603
for the six months ended March 31, 2009 and 2008, respectively, which is
included in General and Administrative Expenses. No tax benefit has been
recognized.  The stock-based compensation expense is based on the fair
value at the grant date. The fair value of the options was estimated using the
Black-Scholes option-pricing model with the following assumptions: risk free
interest rates between 3.14% and 4.72%; expected life of three to seven years;
and expected volatility between 56% and 184%.





Net
Income (Loss) Per Share





Net
income (loss) per share is computed in accordance with SFAS No. 128, "Earnings
per Share". Basic net income (loss) per share is calculated by dividing the net
income (loss) attributable to common shareholders by the weighted average number
of shares outstanding during the period. Fully diluted earnings per share
reflect the potential dilution of securities that could share in earnings of an
entity. In a loss year, dilutive common equivalent shares are excluded from the
loss per share calculation as the effect would be anti-dilutive.





Options
and warrants to purchase shares of Common Stock were outstanding during the
periods but have not been included in the computation of diluted earnings per
share because such options and warrants would have an anti-dilutive effect on
net loss per share. No other adjustments were made for purposes of per share
calculations.





Payment
of Accrued Dividends





There was
no cash dividend payment in respect to the Series A or B Preferred Stocks during
the six months ended March 31, 2009 and 2008.





5.
            Notes
      Payable





During
November 2008, the Company made a principal payment of $25,000 on the $100,000
loan from First Regional Bank and entered into a new note for $75,000 with the
bank of which the maturity date is November 18, 2013 and the interest rate is
5.05%. The new note requires monthly payments of principal of $1,250 and
interest.




6.
                Property
      and Equipment
  The
Company periodically reviews the carrying value of its property and equipment
for impairment as required under SFAS No. 144 “Accounting for the Impairment or
Disposal of Long-Lived Assets”. Based on its assessment, considering that the
Company’s mineral business is still under the exploration stage, management
believes that no impairment of its property and equipment is necessary during
this quarter ended March 31, 2009.




11




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





Forward
Looking Statements





This
Quarterly Report on Form 10-Q contains forward-looking statements, within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended.





The
following discussion is intended to inform existing and potential security
holders generally of some of the risks and uncertainties that can affect the
Company and to take advantage of the “safe harbor” protection for
forward-looking statements afforded under Federal securities
laws.  From time to time, management or persons acting on the
Company’s behalf make forward-looking statements to inform existing and
potential security holders about the Company.  Forward-looking
statements are generally accompanied by words such as “estimate,” “project,”
“predict,” “believe,” “expect,” “anticipate,” “plan” or other words that convey
the uncertainty of future events or outcomes.





Except
for statements of historical or present facts, all other statements contained in
this report are forward-looking statements.  The forward-looking
statements may appear in a number of places and include statements with respect
to, among other things,  business objectives and strategic plans;
operating strategies; acquisition strategies; drilling of wells; oil and gas
reserve estimates (including estimates of future net revenues associated with
such reserves and the present value of such future net revenues); estimates of
future production of oil, natural gas and minerals; expected results or benefits
associated with recent acquisitions; marketing of oil, gas and minerals;
expected future revenues and earnings, and results of operations; future
capital, development and exploration expenditures; expectations regarding cash
flow and future borrowings sufficient to fund ongoing operations and debt
service, capital expenditures and working capital requirements; nonpayment of
dividends; expectations regarding competition; impact of the adoption of new
accounting standards and the Company’s financial and accounting systems; and
effectiveness of the Company’s control over financial reporting.





These
statements by their very nature are subject to certain risks, uncertainties and
assumptions and will be influenced by various factors.  Should any of
the assumptions underlying a forward-looking statement prove incorrect, actual
results could vary substantially.





Various
risk factors could cause actual results to differ materially from those
expressed in forward-looking statements, including, without limitation, the
following:





·
            volatility
      of the market price for both crude oil and natural
  gas;




·
            volatility
      of the market price for the Company’s
minerals;




·
            market
      capacity and demand for the Company’s
minerals;




·
            the
      timing, effects and success of the Company’s acquisitions, exploration and
      development activities;




·
            the
      timing, quantity and marketability of
  production;




·
            effectiveness
      of management’s strategies and
decisions;




·
            competition;




·
            changes
      in the legal and/or regulatory environment and/or changes in accounting
      standards;




·
            policies
      and practices or related interpretations by auditors and/or regulatory
      agencies;




·
            climatic
      conditions; and




·
            unanticipated
      problems, issues or events.




12




Many, if
not all, of these factors are beyond the Company’s control and are impossible to
predict.  These factors are not intended to represent an exhaustive
list of the general or specific facts or factors that may affect the
Company.





All
forward-looking statements speak only as of the date made.  All
subsequent forward-looking statements are expressly qualified in their entirety
by the cautionary statements above.  Except as may be required by law,
the Company undertakes no obligation to update any forward-looking statement to
reflect events or circumstances after the date on which the forward-looking
statement is made or to reflect the occurrence (or non-occurrence) of
anticipated or unanticipated events or circumstances.





Results of
Operations:





For
the three and six months ended March 31, 2009 and 2008:





Three Months Ended
              March 31
            
            
            Six Months Ended
              March 312009
            
            
            2008
            
            
            2009
            
            
            2008Revenues
            
            $
            144,912
            
            
            $
            248,991
            
            
            $
            343,555
            
            
            $
            490,504Net
      Loss
            
            $
            (355,957
            )
            
            $
            (287,191
            )
            
            $
            (640,248
            )
            
            $
            (666,321
            )Oil
      and Gas Production and Cost Information:Production:Oil
      (Bbl)
            
            
            791
            
            
            
            634
            
            
            
            1,809
            
            
            
            1,506Gas
      (Mcf)
            
            
            9,141
            
            
            
            13,509
            
            
            
            18,167
            
            
            
            25,885Average
      Price:Oil
      (per Bbl)
            
            $
            40.18
            
            
            $
            93.52
            
            
            $
            50.17
            
            
            $
            91.04Gas
      (per Mcf)
            
            $
            4.63
            
            
            $
            8.80
            
            
            $
            6.04
            
            
            $
            8.50Lease
      Operating Expense and Production Tax per Mcfe
            
            $
            5.21
            
            
            $
            2.76
            
            
            $
            4.14
            
            
            $
            3.17







Bbl   =
One barrel of oil or condensate


Mcf   =
One thousand cubic feet


Mcfe =
One thousand cubic feet gas equivalent





The
decrease in gas production experienced during the three and six months ended
March 31, 2009 is primarily a result of wells being “off-line” for repair,
declines in the producing gas-oil ratio from certain producing wells operated by
the Company in Texas and curtailments resulting from third party maintenance of
natural gas pipelines and processing facilities servicing these properties. The
increase in Lease Operating Expenses and Production Tax per Mcfe is primarily
the result of the base well/lease operating costs being applied to the reduced
production volumes for the three and six months ended March 3 1, 2009. The
reduction in oil and gas operating revenues during the three and six months
ended March 31, 2009 is the result of the decline in production volumes and the
significant declines in the price received by the Company for the crude oil and
natural gas sold during period as compared to prior year’s three and six month
period.




13




Minerals
Operations





The
Company is an Exploration Stage company in respect to its mineral
holdings.





Minerals
Exploration Expenses





Minerals
exploration expenses were $3,502 for the six months ended March 31, 2008. The
Company did not incur minerals exploration expenses during the first two
quarters of fiscal 2009. These expenses were primarily for costs associated with
the exploration and quantification of mineral resources and mineral
reserves.





Minerals
Operating Expenses and Other Costs





Minerals
operating expenses and other costs totaled $18,113 and $37,372 for the three and
six months ended March 31, 2009, respectively, and $15,847 and $60,839 for the
comparable periods of fiscal year 2008.  The decrease is primarily
attributable to certain lease payments related to the calcium carbonate and
zeolite properties during the prior fiscal periods.





Depreciation,
Depletion and Amortization: Oil and Gas





Depreciation,
depletion and amortization (“DD&A”) totaled $46,691 and $93,384 for the
three and six months ended March 31, 2009, respectively, and $43,950 and $87,900
for the comparable periods of fiscal year 2008.





Depreciation,
Depletion and Amortization: Minerals





Depreciation,
depletion and amortization totaled $144,363 and $288,726 for the three and six
months ended March 31, 2009, respectively, and $194,563 and $389,126 for the
comparable periods of fiscal year 2008. Such amounts include amortization of
Technology and Patent Rights of $144,363 and $288,726 in the three and six month
periods of each fiscal year, respectively.





General
and Administrative Expenses





These
expenses totaled $115,108 and $236,431 for the three and six months ended March
31, 2009, respectively, and $208,230 and $428,071 for the comparable periods of
fiscal year 2008.  The Company recorded stock-based compensation
expense of $22,464 and $44,928 for the three and six months ended March 31,
2009, respectively, and $67,496 and $129,603 for the comparable periods of
fiscal year 2008. See Note 3 of the Notes to Unaudited Consolidated Financial
Statements included in this interim report. General and administrative expenses
also decreased as a result of the Company’s decreased staff.





Legal
and Professional Fees and Expenses





These
expenses totaled $45,523 and $101,479 for the three and six months ended March
31, 2009, respectively, and $117,394 and $145,097 for the comparable periods of
fiscal year 2008.  The decrease is primarily attributed to decreased
professional fees related to auditing services. During the six months ended
March 31, 2008, the Company’s professional fees were reduced by $42,000 which
the Company received in respect to fees charged by a prior auditor engaged by
the Company in fiscal 2004 while such auditor was not registered with the
PCAOB.





Interest
Expense





Interest
expense totaled $50,656 and $102,571 for the three and six months ended March
31, 2009, respectively, and $45,487 and $84,544 for the comparable periods of
fiscal year 2008.   This increase is primarily attributable to
default interest rates associated with certain debt as the Company has defaulted
on certain required payments.




14





Liquidity
and Capital Resources





The
Company’s cash flow used in operating activities was $362,325 and $195,380 for
the six months ended March 31, 2009 and 2008, respectively. Funds have been and
are being deployed in efforts to enhance the commercial viability of the
Company’s existing resource assets, to identify potential expansion
opportunities and to retire obligations associated with the Company’s assets.
The Company’s net cash at March 31, 2009 was $81,531.





Liquidity
is a measure of a company’s ability to access cash.  The Company has
historically addressed its long-term liquidity requirements through the issuance
of equity securities and borrowings or debt financing for certain
activities.





At
present, the Company does not have a credit facility or other line of credit
upon which it may draw. As operating activities increase, the Company will
evaluate the need for such a credit facility.   For desired
acquisitions or project enhancements, the Company must seek project specific
financing.  None of the Company’s properties is
encumbered.





The
prices the Company receives for its oil and gas and the level of production have
a significant impact on the Company’s cash flows.  The Company is
unable to predict with any degree of certainty the prices the Company will
receive for its future oil and gas production and the success of the Company’s
exploration, exploitation and production activities.  Increases in the
sales of the Company’s minerals, which to date have not been mined in
substantial commercial quantities, will also affect cash flow.





In an
effort to address liquidity shortfalls, the Company has instituted cost
containment procedures including staff decreases, sold certain of its oil and
gas properties, and is evaluating the sale of additional oil and gas
properties. It may take months and possibly longer to sell these properties
at a suitable price. The market is affected by many factors, such as general
economic conditions, availability of financing, interest rates and other
factors, including supply and demand that are beyond our control. We cannot
predict whether we will be able to sell a property for the price or on the terms
acceptable to us or whether any price or other terms offered by a prospective
purchaser would be acceptable to us. We cannot predict the length of time needed
to find a willing purchaser and to close the sale of any property.





During
December 2007, Sonata Investment Company, Ltd. loaned the Company $75,000 which
the Company used to satisfy certain delinquent vendor payables (see Note 5 of
the Notes to Unaudited Consolidated Financial Statements included in this
interim report). This note was repaid in May 2008 with a portion of the proceeds
from the sale of the Pennsylvania properties (see below).





In March
2008, the Company entered into an agreement to sell its interests in certain
operated gas wells and related gas gathering system in West Virginia with cash
consideration to the Company of $150,000 of which $100,000 was received in April
2008. In May 2008, the Company sold its interests in certain oil and gas
properties (primarily undeveloped acreage) in Pennsylvania for
$250,000.





Commercialization
of Existing Assets





The
Company is continuing to pursue plans to commercialize its calcium carbonate,
kaolin and zeolite projects which are critical for the Company to achieve
profitability and establishing the Company as a market innovator in industrial
minerals. Those plans have progressed from the data acquisition and analysis
phase into ongoing mineral processing and facility design phase. The Company and
its current partner and potential other partners are actively investigating
various commercial applications for its mineral based products.




15





The
efforts of the Company and Tecumseh Professional Associates LLC to develop the
Sierra Kaolin deposit are progressing. The venture’s efforts to commercialize
the Sierra Kaolin deposit have focused on an initial target area encompassing
approximately 32 acres out of the project’s 2,740 acres. The test minerals
extracted from the target area have been processed into product formulations
determined by independent consultants to be suitable for coatings, fillers and
pigments for use within the paint and paper manufacturing industries. The
analysis results of the processed minerals with respect to its physical
properties such as but not limited to, brightness, color, opacity, oil
absorption have indicated that commercially viable products can be produced from
the deposit’s extracted minerals.





The
venture, with the assistance of its consultants, has begun technical
presentations of the product formulations to entities active on both the demand
and supply sides of the coatings, fillers and pigments sectors of the paint and
paper industries. Preliminary feedback from these initial presentations has been
encouraging and has lead to follow-up discussions and submission of product
samples for prospective application testing. The final results of these
inquiries and testing are expected over the next several months. Tecumseh, as
the project’s manager, is proceeding with its efforts to prepare the mineral
deposit site for production. These efforts include the submittal of the required
regulatory filings and follow-up meetings with the representatives of the
various regulatory agencies responsible for the issuance of the extraction
permit for the project. Work continues on product identification and process
flow sheet design and is expected to be completed in the next few
months.





The
Company continues to focus on establishing business and/or financial
relationships that will provide the necessary capital to effectively exploit its
calcium carbonate and zeolite mineral resource holdings.  With respect
to the Company’s zeolite deposit, certain initial small scale tests have
progressed to the point where larger scalable pilot tests of commercial
applications are to be initiated.





Off-balance
Sheet Arrangements





The
Company has no “off-balance sheet arrangements” and does not expect to enter
into any such arrangements in the foreseeable future.





Item
3. Quantitative and Qualitative Disclosures About Market
Risk.





None





Item
4. Controls and Procedures.





(a) Evaluation of Disclosure Controls
and Procedures. As of the end of the period covered by this Quarterly
Report on Form 10-Q, our Chief Executive Officer/Chief Financial Officer
evaluated, with the participation of management, the effectiveness of our
disclosure controls and procedures (as defined in Rules 13a-15(e) and
15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)). Based upon this evaluation, our Chief Executive Officer/Chief Financial
Officer has concluded that our disclosure controls and procedures were effective
as of March 31, 2009 to ensure that information required to be disclosed in the
reports that we file or submit under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the Securities and
Exchange Commission’s rules and forms.





On March 31, 2009, the Company had
three employees.  All day-to-day financial matters are overseen by the
interim Chief Executive Officer/President/Chief Financial Officer with oversight
by the Board of Directors.  All contracting by the Company, for other
than everyday items, is done with the approval the entire Board of
Directors.





In light of the size of the Company,
its limited cash flow and the transparency of its actions, the Company has
instituted a limited number of formal controls and procedures in addition to
those required under the Sarbanes Oxley Act of 2002 related to the composition
of its Board of Directors and the establishment of various Board Committees.
These policies include an Employee Manual outlining procedures relating but not
limited to employee dispute resolution and issues related to “controlled
substances” and policies in handling the recordation and transfer of funds. Any
problem which cannot be resolved internally or which an employee does not desire
to discuss with a superior may be discussed with counsel or an independent
member of the Board of Directors.




16


The Chief Financial Officer/Chief
Executive Officer, with the assistance of the Audit Committee, established,
consistent with the provisions of Rule 13a-15(f) and Rule 15d-15(f) of the '34
Act, a procedure and check list for the filing of all information and reports
required by the Securities and Exchange Act of 1934, as amended and the
Sarbanes-Oxley Act ("SOX"). Since the Company employs only three people, as of
the filing date, the responsibility for reporting and filing reports falls on
the shoulders of the Company's Chief Executive Officer/President/Chief Financial
Officer In addition to the mandatory filing requirements established by the
Securities and Exchange Commission, OTC:BB (the exchange on which the
Registrant's stock is traded) and SOX, the Registrant has taken the position
that any transaction that could impact the value of the Company or the Company's
stock by five percent or greater requires disclosure.   All press
releases are published by the Company only after submittal to the Board of
Directors and counsel for review, comment and approval.





The Company's internal controls over
financial reporting and record maintenance have been developed by the Company as
approved by the Board of Directors.  These procedures are for the
detailed and accurate recordation of all transactions in which the Company is
involved and the disposition of assets. They provide reasonable assurance that
the transactions recorded permit the accurate preparation of financial
statements in accordance with generally accepted accounting principals and that
receipt and expenditures of the Company are being made only in accordance with
authorization of management.  The controls provide reasonable
assurances regarding the prevention and timely detection of unauthorized use of
Company assets and acquisition or disposition of the Company's assets that could
have a material effect on the Company's financial statements.





(b) Changes in Internal Control Over
Financial Reporting. No changes were made to our internal control over
financial reporting (as such term is defined in Rules 13a-15(f) and
15d-15(f) of the Exchange Act) during our most recent fiscal quarter that have
materially affected, or are reasonably likely to materially affect, our internal
control over financial reporting.





Code
of Ethics





The Board of Directors of the Company
has adopted a Code of Ethics (see Exhibit 14.1to the Company’s Annual
Report on Form 10-KSB for the fiscal year ended September 30, 2007)for
all of the Company's employees, officers and Directors.  Each officer
and Director of the Company annually affirms that he has read the Company’s Code
of Ethics and agrees to be bound thereby.




Item
4T. Controls and Procedures.





See
Item 4  above.
  17





PART
II. OTHER INFORMATION





Item
1. Legal Proceedings.





None





Item
1A. Risk Factors.





Not
required for smaller reporting companies.





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





None





Item
3. Defaults Upon Senior Securities.





None





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





On April
8, 2009, the Company held its Annual Meeting of Shareholders.  The
following matters were voted upon at such meeting:





a.
            Election
      of Directors for a term expiring in
2009:





Name of Nominee
            
            For
            
            
            WithheldDov
      Amir
            
            
            30,523,648
            
            
            
            --Lord
      Gilbert [John}
            
            
            29,725,992
            
            
            
            --David
      A. Grady
            
            
            30,291,471
            
            
            
            --Carl
      A. Haessler
            
            
            30,624,742
            
            
            
            200,000Robert
      E. Martin
            
            
            31,564,549
            
            
            
            --Charles
      T. Maxwell
            
            
            30,578,046
            
            
            
            --Gary
      J. Novinskie
            
            
            30,449,922
            
            
            
            --




b.
            Proposal
      to Ratify the Selection of Vasquez & Company, LLP, as the Company’s
      Independent Registered Public Accounting Firm for the fiscal year ending
      September 30, 2009:





For
            
            
            Against
            
            
            Abstain31,456,464
            
            
            
            1,093,264
            
            
            
            --





18




Item
      5. Other Information.





The Company's Common Stock is traded on
the Over the Counter Market, Bulletin Board ("OTC:BB") symbol
“DLOV.”





Item
      6. Exhibits.





Exhibit
      Number
              
              Description
              
              Located
      at10.22
              
              Second
      Amendment to Loan Agreement dated December 31, 2003
              
              Filed
      Herewith31.1
              
              Certification
      of CEO under Section 302 of the Sarbanes-Oxley Act of 2002
              
              Filed
      Herewith31.2
              
              Certification
      of CFO under Section 302 of the Sarbanes-Oxley Act of 2002
              
              Filed
      Herewith32.1
              
              Certification
      of CEO under Section 906 of the Sarbanes-Oxley Act of 2002
              
              Filed
      Herewith32.2
              
              Certification
      of CFO under Section 906 of the Sarbanes-Oxley Act of 2002
              
              Filed
      Herewith


The Registrant incorporates by
reference its Exhibit List as attached to its Form 10-KSB for the fiscal year
ended September 30, 2008.




19




SIGNATURES





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




DALECO
      RESOURCES CORPORATIONDated:  May
      19, 2009
            
            /s/ Gary J.
      NovinskieGary
      J. Novinskie
              Interim
      Chief Executive Officer, President, Chief
              Financial
      Officer and Director (Principal Executive Officer
              and
      Principal Financial Officer)Dated:  May
      19, 2009
            
            /s/Richard W.
      BlackstoneRichard
      W. Blackstone
              Principal
      Accounting Officer




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