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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

FORM 10-KSB

(Mark One)

[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended August 31,
2007

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934For the transition period from [ ] to [ ]

Commission file number 000-51306

SOUTHRIDGE ENTERPRISES
INC.(Name of small business issuer in its charter)

|                                                 |                                     
|------------------------------------------------ | ------------------------------------
|**Nevada**                                       | 98-0435537                          
|(State or other jurisdiction of incorporation or | (I.R.S. Employer Identification No.)
|organization)                                    |                                     
|                                                 |                                     
|3625N. Hall, Suite 900                           |                                     
|Dallas, Texas                                    | 75219-5106                          
|(Address of principal executive offices)         | (Zip Code)                          

Issuer's telephone number (888) 862-2192 Ext 3

|Securities registered pursuant to Section 12(b) of the Act: |                                          
|----------------------------------------------------------- | -----------------------------------------
|Title of each class                                         | Name of each exchange on which registered
|Nil                                                         | Nil                                      

Securities registered pursuant to Section 12(g) of the Act:

Common Shares, par value $0.001(Title of
class)

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

Yes[x] No [ ]

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

State issuer's revenues for its most recent fiscal year.
Nil

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

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State the aggregate market value of the voting and non-voting
common equity held by non-affiliates computed by reference to the price at which
the common equity was sold, or the average bid and asked prices of such common
equity, as of a specified date within 60 days. (See definition of affiliate in
Rule 12b-2 of the Exchange Act.)

Note: If determining whether a person is an affiliate will
involve an unreasonable effort and expense, the issuer may calculate the
aggregate market value of the common equity held by non-affiliates on the basis
of reasonable assumptions, if the assumptions are stated.

38,086,795 common shares @ $0.19(1)= $7,236,491(1) Average of bid
and ask closing prices on October 23, 2007.(60,505,000 common shares
outstanding. 22,418,205 held by affiliates(2) . 38,086,795 held by
non-affiliates)(2) see Item 11

(ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS)

Check whether the issuer has filed all documents and reports
required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by a court. Yes [ ] No [ ]

(APPLICABLE ONLY TO CORPORATE REGISTRANTS)

State the number of shares outstanding of each of the issuer's
classes of equity stock, as of the latest practicable date.

60,505,000 common shares issued and outstanding as of
December 12, 2007

DOCUMENTS INCORPORATED BY REFERENCE

If the following documents are incorporated by reference,
briefly describe them and identify the part of the Form 10-KSB (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).

Transitional Small Business Disclosure Format (Check one): Yes
[ ] No[x].

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PART I

Item 1. Description of Business.

This annual report 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. These statements relate to future events or our
future financial performance. In some cases, you can identify forward-looking statements by terminology such as may, should, expects, plans, anticipates, believes,
estimates, predicts, potential or continue or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and
other factors, including the risks in the section entitled Risk Factors, that may cause our or our industrys actual results, levels of activity, performance or achievements to be materially different from any future results, levels
of activity, performance or achievements expressed or implied by these forward-looking statements.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities
laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Our financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles.

In this annual report, unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to "common shares" refer to the common shares in our capital stock.

As used in this annual report, the terms "we", "us", "our" and "SORD" mean Southridge Enterprises Inc., or one of our subsidiaries, Southridge Ethanol Inc., or Southridge Environmental Inc., unless the context clearly requires otherwise.

Corporate Overview

The address of our principal executive office is 3625 N. Hall Street, Suite 900, Dallas, Texas, 75219-5106. Our telephone number is (888) 862-2192 ext. 4.

Our common stock is quoted on the OTC Bulletin Board under the symbol "SORD".

Corporate History

We were incorporated in the State of Nevada on May 4, 2004 with authorized capital of 100,000,000 shares of common stock with a par value of $0.001 and 100,000,000 shares of preferred stock with a par value of $0.001.

Effective October 3, 2006, we split our common shares on a 5 for 1 basis. As a result, our articles of incorporation were amended to increase our authorized common stock from 100,000,000 shares to 500,000,000 shares. The par value of our common
stock remained $0.001 per share. Our authorized preferred stock was also amended from 100,000,000 shares to 500,000,000 shares. Further, no shareholder approval was required or obtained pursuant to NRS 78.209. Prior to the stock split, there
were 10,335,000 shares of common stock outstanding. After the stock split there were 51,675,000 shares of common stock outstanding. The financial statements and notes have been changed to reflect the retroactive effect of the 5 to 1 forward stock
split. Our trading symbol was changed from SDGE to SORD in connection with the forward stock split.

From inception on May 4, 2004 to August 31, 2006, we were engaged in no significant operations other than organizational activities, acquiring and staking our properties, preparing the registrations of our securities and planning Phase 1 of the
exploration work on our Hilltop properties. Subsequent to our August 31, 2006 year end we diversified our business and on September 28, 2006 we formed a wholly owned subsidiary Southridge Environmental Inc., a Mississippi corporation, which acquired
an industrial plant facility located in Quitman

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County, Mississippi, for the purchase price of $375,000. The acquisition closed on October 5, 2006. This Quitman plant is situated on 37 acres located in the northwest region of the state, which is in the lower portion of the MidWest corn belt.
The facility has a 76,000 sq. ft industrial structure that will be converted to house equipment for ethanol production.

Effective September 13, 2006, we entered into an option to purchase agreement (the Agreement) with Boss Group of Companies Inc., to acquire an ethanol plant located in Saskatchewan, Canada. On September 28, 2006 we formed a wholly owned
subsidiary, Southridge Ethanol Inc., a Mississippi corporation, that is intended for the closing of this agreement. The closing of this acquisition is subject to the completion of our due diligence by December 11, 2006.

Effective September 29, 2006 we were granted a line of credit facility (LOC) of up to USD$10,000,000 by Uniform Ventures Ltd. The LOC, which includes an unregistered charge over the assets and undertaking of our company bears
interest at 8% per annum, payable quarterly, and expires on due September 29, 2011.

Effective October 31, 2006 we signed a letter of intent to acquire ethanol plant equipment from South Louisiana Ethanol, LLC. We did not close on the letter of intent as another company had claimed interest in the same equipment.

Based on a thorough review of the merits of our Hilltop claims we will not continue with any further exploration work. We are a development stage company that has diversified into the alternate energy sector and have not yet generated or realized
any revenues from our business operations.

Our Current Business

We are a renewable energy company with a mission to become an ethanol producer in the southeastern region of the United States. To date, we have not derived any income from any of our operations.

Our plan of operation is to focus in an area which offers abundant supplies of corn, superior transportation infrastructure and expedited permitting processes. Once the agreement with the Boss Group of Companies has finalized, our intention is to
transport and re-assemble the plant and equipment at our companys newly acquired production facility in Quitman County, Mississippi. We are acquiring and developing ethanol production facilities and anticipate a start-up of the first phase of
these operations in 2007. We are headquartered in Dallas, Texas. For more information, please visit our website: www.southridgeethanol.com

There is no assurance that we will complete the agreement with the Boss Group of Companies and even if we do, there is no assurance that we will be able to transport the plant and equipment to our acquired production facility in Quitman County,
Mississippi and re-assemble it. Even if we do complete this, there can be no assurance that we will successfully produce 10 million gallons per year (MMGY) of denatured ethanol. Please refer to the section entitled Risk Factors, of this
annual report on Form 10-KSB, for additional information about the risks of ethanol production.

Industry Overview

Overview of Ethanol Market

We believe that the ethanol industry produced approximately 4.0 billion gallons of ethanol in 2005, an increase of approximately 18% from the approximately 3.4 billion gallons of ethanol produced in 2004. Unlike gasoline and diesel, however, ethanol
cannot be shipped in pipelines because ethanol mixes easily with water already present in the pipelines. When mixed, water dilutes ethanol and creates significant quality control issues. Therefore, ethanol must be trucked from rail terminals to
regional fuel terminals, or blending racks. We believe approximately 95% of the ethanol produced in the United States is made in the Midwest from corn. According to the U.S. Department of Energy, ethanol is typically blended at 5.7% to 10% by volume
in the United States, but is also blended at up to 85% by volume for vehicles designed to operate on 85% ethanol. Compared to gasoline, ethanol is generally considered to be less expensive, cleaner burning and contains higher octane. We anticipate
that the increasing demand for transportation fuels coupled with limited opportunities for gasoline refinery expansions and the growing importance of reducing CO(2) emissions through the use of renewable fuels will generate additional growth in the
U.S.

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Currently, ethanol represents only up to 3% of the total annual gasoline supply in the United States. We believe that the ethanol industry has substantial room to grow to reach what we estimate is an achievable level of at least 10% of the total
annual gasoline supply in the United States.

Overview of Ethanol Production Process

The production of ethanol from starch or sugar-based feedstocks has been practiced for thousands of years. While the basic production steps remain the same, the process has been refined considerably in recent years, leading to a highly efficient
process that we believe now yields more energy in the ethanol and co-products than is required to make the products. The modern production of ethanol requires large amounts of corn, or other high-starch grains, and water as well as chemicals,
enzymes and yeast, and denaturants such as unleaded gasoline or liquid natural gas, in addition to natural gas and electricity.

In the dry milling process, corn or other high-starch grains are first ground into meal and then slurried with water to form a mash. Enzymes are then added to the mash to convert the starch into the simple sugar, dextrose. Ammonia is also added for
acidic (pH) control and as a nutrient for the yeast. The mash is processed through a high temperature cooking procedure, which reduces bacteria levels prior to fermentation. The mash is then cooled and transferred to fermenters, where yeast is added
and the conversion of sugar to ethanol and CO(2) begins.

After fermentation, the resulting product is transferred to distillation, where the ethanol is separated from the residual material. The ethanol is concentrated to 190 proof using conventional distillation methods and then is dehydrated to
approximately 200 proof, representing 100% alcohol levels, in a molecular sieve system. The resulting anhydrous ethanol is then blended with about 5% denaturant, which is usually gasoline, and is then ready for shipment to market.

The residual stillage is separated into a coarse grain portion and a liquid portion through a centrifugation process. The soluble liquid portion is concentrated to about 40% dissolved solids by an evaporation process. This intermediate state is
called condensed distillers solubles, or syrup. The coarse grain and syrup portions are then mixed to produce wet distillers grains, or WDG, or can be mixed and dried to produce dried distillers grains with solubles, or DDGS. Both WDG and DDGS
are high-protein animal feed products.

Overview of Distillers Grains Market

We believe that approximately 5.8 to 6.8 million tons of dried distillers grains are produced and sold every year in North America. Dairy cows and beef cattle are the primary consumers of distillers grains. According to Rincker and
Berger, in their 2003 article entitled OPTIMIZING THE USE OF DISTILLER GRAIN FOR DAIRY-BEEF PRODUCTION, a dairy cow can consume 12-15 lbs of WDG per day in a balanced diet. At this rate, the WDG output of an ethanol facility that
produces 25 million gallons of ethanol per year can feed approximately 75,000-95,000 dairy cows and an ethanol facility that produces 35 million gallons of ethanol per year can feed approximately 105,000-130,000 dairy cows.

Historically, the market price for distillers grains has been stable in comparison to the market price for ethanol. We believe that the market price of DDGS is determined by a number of factors, including the market value of corn, soybean meal
and other competitive protein ingredients, the performance or value of DDGS in a particular feed formulation and general market forces of supply and demand.

Our Strategy

Our primary goal is to become a producer and marketer of ethanol
  and other renewable fuels in the Eastern United States. Our business strategy
  to achieve this goal includes the following elements:

|1. | Completion of our Ethanol Production Facilities
|-- | -----------------------------------------------

We are currently developing our first ethanol production facility located in Quitman County, Mississippi to produce ethanol and its co-products, specifically, WDG and CO(2), for sale in the U.S. We believe that, following the completion of
construction of our planned facility, if it occurs, we will be a significant producer of ethanol in the

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Mid-West and that our proximity to the geographic market in
which we plan to sell our ethanol may provide us with competitive advantages
over other ethanol producers.

|2. | Make Strategic Acquisitions of Existing or Pending Ethanol Production
      Facilities
|-- | --------------------------------------------------------------------------------------

We plan to explore opportunities to make strategic acquisitions
of existing or pending ethanol production facilities. In circumstances where, in
our judgment, the acquisition of existing or pending ethanol production
facilities represents an opportunity to more quickly or successfully meet our
business goals, we intend to undertake to consummate these acquisitions.

|3. | Identify and Exploit New Renewable Fuels and Technologies
|-- | ---------------------------------------------------------

We plan to identify and exploit new renewable fuels and
technologies. We are currently examining new technologies enabling the
conversion of cellulose, which is generated predominantly from wood waste, paper
waste and agricultural waste, into ethanol and we are also researching
opportunities to produce bio-diesel to serve East Coast markets.

Employees

As of December 12, 2007, we had no employees other than our
directors and officers. On September 26, 2006, we appointed Alex Smid and Daniel
Jackson to our Board of Directors.

We also engage directors and contractors from time to time to
supply work on specific corporate business and development programs. See
executive compensation.

Consultants are retained on the basis of ability and
experience. Except as set forth above, there is no preliminary agreement or
understanding existing or under contemplation by us (or any person acting on our
behalf) concerning any aspect of our operations pursuant to which any person
would be hired, compensated or paid a finders fee.

Competition

We operate in the highly-competitive ethanol marketing industry
and plan to establish ethanol production facilities to begin producing our own
ethanol. The largest ethanol producer in the United States is
Archer-Daniels-Midland Company, or ADM, with wet and dry mill plants in the
Midwest and a total production capacity of about 1.2 billion gallons per year,
or about 30% of total United States ethanol production. According to the
Renewable Fuels Association's ETHANOL INDUSTRY OUTLOOK 2006, there are
approximately 95 ethanol plants currently operating with a combined annual
production capacity of approximately 4.0 billion gallons. In addition, 29
ethanol plants and 9 expansions were under construction with a combined annual
capacity of approximately 1.5 billion gallons. We believe that most of the
growth in ethanol production over the last ten years has been by farmer-owned
cooperatives that have commenced or expanded ethanol production as a strategy
for enhancing demand for corn and adding value through processing. We believe
that many smaller ethanol plants rely on marketing groups such as Ethanol
Products, Aventine Renewable Energy, Inc. and Renewable Products Marketing Group
to move their product to market. We believe that, because ethanol is a
commodity, many of the Midwest ethanol producers can target California, though
ethanol producers further west in states such as Nebraska and Kansas often enjoy
delivery cost advantages.

Compliance with Government Regulation

We are committed to complying and, to our knowledge, are in
compliance with all governmental and environmental regulations. We are subject
to extensive and frequently changing federal, state and local laws and
regulations relating to the protection of the environment. These laws, their
underlying regulatory requirements and the enforcement thereof, some of which
are described below, impact, or may impact, our existing and proposed business
operations by imposing:

| | 1 | restrictions on our proposed business operations and/or
        the need to install enhanced or additional controls;   
| | - | -----------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                        
| | 2 | the need to obtain and comply with permits and authorizations;                                                         
| |   |                                                                                                                        
| | 3 | liability for exceeding applicable permit limits or
        legal requirements, in certain cases for the remediation of

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| |   | contaminated soil and groundwater at our facilities,
        contiguous and adjacent properties and other properties owned and/or operated
        by third parties; and
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                         
| | 4 | specifications for the ethanol we market and plan
        to produce and market.                                                                                        

In addition, some of the governmental regulations to which we are subject are helpful to our proposed ethanol production business. The ethanol fuel industry is greatly dependent upon tax policies and environmental regulations that favor the use of
ethanol in motor fuel blends in North America. Some of the governmental regulations applicable to our proposed ethanol production business are briefly described below.

Federal Excise Tax Exemption

Ethanol blends have been either wholly or partially exempt from the federal excise tax, or FET, on gasoline since 1978. The exemption has ranged from $0.04 to $0.06 per gallon of gasoline during that 25-year period. Current law provides a
$0.051 per gallon exemption from the $0.183 per gallon FET on gasoline if the taxable product is blended in a mixture containing at least 10% ethanol. The FET exemption was revised and its expiration date was extended for the sixth time
since its inception as part of the Jumpstart Our Business Strength, or JOBS, Act enacted in October 2004. The new expiration date of the FET exemption is December 31, 2010. We believe that it is highly likely that this tax incentive will be extended
beyond 2010 if Congress deems it necessary for the continued growth and prosperity of the ethanol industry.

Clean Air Act Amendments of 1990

In November 1990, a comprehensive amendment to the Clean Air Act of 1977 established a series of requirements and restrictions for gasoline content designed to reduce air pollution in identified problem areas of the United States. The two principal
components affecting motor fuel content are the Oxygenated Fuels Program, which is administered by states under federal guidelines, and a federally supervised Reformulated Gasoline Program.

Reformulated Gasoline Program

The Clean Air Act Amendments of 1990 established special standards effective January 1, 1995 for the most polluted ozone non-attainment areas: Los Angeles Basin, Baltimore, Chicago Area, Houston Area, Milwaukee Area, New York-New Jersey, Hartford
Region, Philadelphia Area and San Diego, with provisions to add other areas in the future if conditions warrant. California's Central Valley was added in 2002.

The legislation requires a minimum of 2.0% oxygen by weight in reformulated gasoline as a means of reducing carbon monoxide pollution and replacing octane lost by reducing aromatics which are high octane portions of refined oil. The Reformulated
Gasoline Program also includes a provision that allows individual states to "opt into" the federal program by request of the governor, to adopt standards promulgated by California that are stricter than federal standards, or to offer alternative
programs designed to reduce ozone levels. Nearly all of the Northeast and middle Atlantic areas from Washington, D.C., to Boston not under the federal mandate have "opted into" the federal standards.

National Energy Legislation

A national Energy Bill was signed into law in August 2005 by President Bush. The Energy Bill substitutes the existing oxygenation program in the Reformulated Gasoline Program with a national "renewable fuels standard". The standard sets a minimum
amount of renewable fuels that must be used by fuel refiners. Beginning in 2006, the minimum amount of renewable fuels that must be used by fuel refiners is 4.0 billion gallons, which increases progressively to 7.5 billion gallons in 2012. See "Risk
Factors".

We are prepared to engage professionals, if necessary, to ensure regulatory compliance but in the near term expect our activities to require minimal regulatory oversight. If and /or when we begin production in the future it is reasonable to expect
expenditures on compliance to rise.

Intellectual Property

We own the trademark SR85.

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RISK FACTORS

Much of the information included in this annual report includes or is based upon estimates, projections or other forward-looking statements. Such forward-looking statements include any projections or estimates made by us and our
management in connection with our business operations. While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual
results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions, or other future performance suggested herein. We undertake no obligation to update forward-looking statements to reflect events or
circumstances occurring after the date of such statements.

Such estimates, projections or other forward-looking statements involve various risks and uncertainties as outlined below. We caution readers of this transitional annual report that important factors in some cases have affected and, in
the future, could materially affect actual results and cause actual results to differ materially from the results expressed in any such estimates, projections or other forward-looking statements. In evaluating us, our business and any
investment in our business, readers should carefully consider the following factors.

Risks Associated With Our Business

We have no operating history and as a result there is no assurance we can operate on a profitable basis.

We have no operating history and must be considered in the development stage. Our company's operations will be subject to all the risks inherent in the establishment of a development stage enterprise and the uncertainties arising from the absence of
a significant operating history. Potential investors should be aware of the difficulties normally encountered by development stage companies and the high rate of failure of such enterprises. We expect to incur losses for the foreseeable future and
at least until after the completion of our first ethanol production facility in Quitman County, Mississippi. We estimate that the earliest completion date of this facility and, as a result, our earliest date of ethanol production will not occur
until the second quarter of 2008. We expect to rely on cash from borrowings and financings to fund all of the cash requirements of our business. If our net losses continue, we will experience negative cash flow, which may hamper current operations
and may prevent us from expanding our business. We may be unable to attain, sustain or increase profitability on a quarterly or annual basis in the future. If we do not achieve, sustain or increase profitability our stock price may decline.

Governmental Regulations or the Repeal or Modification of Various Tax Incentives Favoring the use of Ethanol could reduce the demand for Ethanol

Our business is subject to extensive regulation by federal, state and local governmental agencies. We cannot predict in what manner or to what extent governmental regulations will harm our business or the ethanol production and marketing industry in
general. For example the energy bill signed into law by President Bush in August 2005 includes a national renewable fuels standard that requires refiners to blend a percentage of renewable fuels into gasoline.

The fuel ethanol business benefits significantly from tax incentive policies and environmental regulations that favor the use of ethanol in motor fuel blends in the United States. Currently, a gasoline marketer that sells gasoline without ethanol
must pay a federal tax of $0.18 per gallon compared to $0.13 per gallon for gasoline that is blended with 10% ethanol. Smaller credits are available for gasoline blended with lesser percentages of ethanol. The repeal or substantial
modification of the federal excise tax exemption for ethanol-blended gasoline or, to a lesser extent, other federal or state policies and regulations that encourage the use of ethanol could have a detrimental effect on the ethanol production and
marketing industry and materially and adversely affect any sales and profitability.

If we do not obtain additional financing, our business will fail and our investors could lose their investment.

We had a negative cash balance in the amount of $173 and a working capital deficit of $479,399 as of our year ended August 31, 2007. We currently do not generate revenues from our operations. Our business plan calls for substantial
investment and cost in connection with the acquisition and exploration of our properties. Any direct

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acquisition is subject to our ability to obtain the financing necessary for us to fund and carry out exploration programs on the properties. The requirements are substantial. We presently have approximately $9,000,000 remaining on a line of
credit facility granted by Uniform Ventures Ltd. Obtaining additional financing would be subject to a number of factors, including market prices for resources, investor acceptance of our properties, and investor sentiment. These factors may make the
timing, amount, terms or conditions of additional financing unavailable to us. The most likely source of future funds presently available to us is through the sale of equity capital and loans. Any new sales of share capital will result in dilution
to existing shareholders.

Violations of Environmental Regulations could subject us to severe penalties and materially and aversely affect potential sales.

The production and sale of ethanol is subject to regulation by agencies of the federal government, including, but not limited to, the EPA, as well as other agencies in each jurisdiction in which ethanol is produced, sold, stored or transported.
Environmental laws and regulations that affect our operations, and that are expected to affect our planned operations, are extensive and have become progressively more stringent. Applicable laws and regulations are subject to change, which could be
made retroactively. Violations of environmental laws and regulations or permit conditions can result in substantial penalties, injunctive orders compelling installation of additional controls, civil and criminal sanctions, permit revocations and/or
facility shutdowns. If significant unforeseen liabilities arise for corrective action or other compliance, our potential sales and profitability could be materially and adversely affected.

Our Failure to Manage our Growth effectively could Prevent us from achieving our Goals.

Our strategy envisions a period of rapid growth that may impose a significant burden on our administrative and operational resources. The growth of our business, and in particular, the completion of construction of our planned ethanol production
facilities, will require significant investments of capital and management's close attention. Our ability to effectively manage our growth will require us to substantially expand the capabilities of our administrative and operational resources and
to attract, train, manage and retain qualified management, technicians and other personnel. We may be unable to do so. In addition, our failure to successfully manage our growth could result in our potential sales not increasing commensurately with
our capital investments. If we are unable to successfully manage our growth, we may be unable to achieve our goals.

The Market Price of Ethanol is Volatile and subject to significant fluctuations, which may cause our potential profitability to fluctuate significantly

The market price of ethanol is dependent on many factors, including on the price of gasoline, which is in turn dependent on the price of petroleum. Petroleum prices are highly volatile and difficult to forecast due to frequent changes in global
politics and the world economy. The distribution of petroleum throughout the world is affected by incidents in unstable political environments, such as Iraq, Iran, Kuwait, Saudi Arabia, the former U.S.S.R. and other countries and regions. The
industrialized world depends critically on oil from these areas, and any disruption or other reduction in oil supply can cause significant fluctuations in the prices of oil and gasoline. We cannot predict the future price of oil or gasoline and may
establish unprofitable prices for the sale of ethanol due to significant fluctuations in market prices. For example, the price of ethanol declined by approximately 25% from its 2004 average price per gallon in only five months from January 2005
through May 2005. In recent years, the prices of gasoline, petroleum and ethanol have all reached historically unprecedented high levels. If the prices of gasoline and petroleum decline, we believe that the demand for and price of ethanol may be
adversely affected. Fluctuations in the market price of ethanol may cause our profitability to fluctuate significantly.

We believe that the production of ethanol is expanding rapidly. We expect existing ethanol plants to expand by increasing production capacity and actual production. Increases in the demand for ethanol may not be commensurate with increasing supplies
of ethanol. Thus, increased production of ethanol may lead to lower ethanol prices. The increased production of ethanol could also have other adverse effects. For example, increased ethanol production could lead to increased supplies of co-products
from the production of ethanol, such as wet distillers grain, or WDG. Those increased supplies could lead to lower prices for those co-products. Also, the increased production of ethanol could result in increased demand for corn. This could
result in higher prices for corn and cause higher ethanol production costs. We cannot predict the future price of ethanol, WDG or corn. Any material decline in the

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price of ethanol or WDG, or any material increase in the price of corn, will adversely affect our sales and profitability.

The construction and operation of our planned Ethanol Production Facilities may be adversely affected by Environmental Regulations and Permit Requirements

The production of ethanol involves the emission of various airborne pollutants, including particulate matter, carbon monoxide, oxides of nitrogen and volatile organic compounds. We may be required to obtain various water-related permits, such as a
water discharge permit and a storm-water discharge permit, a water withdrawal permit and a public water supply permit. If for any reason we are unable to obtain any of the required permits, construction costs for our planned ethanol production
facilities are likely to increase; in addition, the facilities may not be fully constructed at all. It is also likely that operations at the facilities will be governed by the federal regulations of the Occupational Safety and Health Administration,
or OSHA, and other regulations. Compliance with OSHA and other regulations may be time-consuming and expensive and may delay or even prevent sales of ethanol.

The raw materials and energy necessary to produce Ethanol may be unavailable or may increase in price, adversely affecting our potential profitability.

The production of ethanol requires a significant amount of raw materials and energy, primarily corn, water, electricity and natural gas. In particular, we estimate that our Quitman County, Mississippi ethanol production facility will require a
significant amount of corn each year, and significant and uninterrupted supplies of water, electricity and natural gas. The prices of corn, electricity and natural gas have fluctuated significantly in the past and may fluctuate significantly in the
future. In addition, droughts, severe winter weather in the Midwest, where we expect to source corn, and other problems may cause delays or interruptions of various durations in the delivery of corn or reduce corn supplies and increase corn prices.
Local water, electricity and gas utilities may not be able to reliably supply the water, electricity and natural gas that our Quitman County, Mississippi facility will need or may not be able to supply such resources on acceptable terms. In
addition, if there is an interruption in the supply of water or energy for any reason, we may be required to halt ethanol production. We may not be able to successfully anticipate or mitigate fluctuations in the prices of raw materials and energy
through the implementation of hedging and contracting techniques. Higher raw materials and energy prices will generally cause lower profit margins and may even result in losses. Accordingly, our sales and profitability may be significantly and
adversely affected by the prices and supplies of raw materials and energy.

Our independent certified public accounting firm, in their Notes to the audited financial statements for the year ended August 31, 2007 states that there is a substantial doubt that we will be able to continue as a going concern.

Our independent certified public accounting firm, Robison, Hill & Co.., state in their notes to the audited financial statements for the year ended August 31, 2007, that we have experienced significant losses since inception. Failure to
arrange adequate financing on acceptable terms and to achieve profitability would have an adverse effect on our financial position, results of operations, cash flows and prospects, there is a substantial doubt that we will be able to continue as a
going concern.

Risks Associated with Our Common Stock

Trading on the OTC Bulletin Board may be volatile and sporadic, which could depress the market price of our common stock and make it difficult for our stockholders to resell their shares.

Our common stock is quoted on the OTC Bulletin Board service of the National Association of Securities Dealers. Trading in stock quoted on the OTC Bulletin Board is often thin and characterized by wide fluctuations in trading prices, due to many
factors that may have little to do with our operations or business prospects. This volatility could depress the market price of our common stock for reasons unrelated to operating performance. Moreover, the OTC Bulletin Board is not a stock
exchange, and trading of securities on the OTC Bulletin Board is often more sporadic than the trading of securities listed on a quotation system like NASDAQ or a stock exchange like Amex. Accordingly, shareholders may have difficulty reselling any
of the shares.

Our stock is a penny stock. Trading of our stock may be restricted by the SECs penny stock regulations and the NADSDs sales practice requirements, which may limit a stockholders ability to buy and sell our stock.

10

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Our stock is a penny stock. The Securities and Exchange Commission has adopted Rule 15g-9 which generally defines penny stock to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise
price of less than $5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers
and accredited investors. The term accredited investor refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding
$200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared
by the SEC which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the
broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customers account. The bid and offer quotations, and the broker-dealer and salesperson compensation
information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customers confirmation. In addition, the penny stock rules require that prior to
a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchasers written agreement to
the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the
ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of our common stock.

In addition to the penny stock rules promulgated by the Securities and Exchange Commission, the NASD has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for
believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customers
financial status, tax status, investment objectives and other information. Under interpretations of these rules, the NASD believes that there is a high probability that speculative low priced securities will not be suitable for at least some
customers. The NASD requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock.

Other Risks

Because some of our officers and directors are located in non-U.S. jurisdictions, you may have no effective recourse against the non U.S. officers and directors for misconduct and may not be able to enforce judgment and civil liabilities against
such parties.

Some of our directors and officers are nationals and/or residents of countries other than the United States, and all or a substantial portion of such persons assets are located outside the United States. As a result, it may be difficult for
investors to enforce within the United States any judgments obtained against our officers or directors, including judgments predicated upon the civil liability provisions of the securities laws of the United States or any state thereof.

Trends, Risks and Uncertainties

We have sought to identify what we believe to be the most significant risks to our business, but we cannot predict whether, or to what extent, any of such risks may be realized nor can we guarantee that we have identified all possible risks that
might arise. Investors should carefully consider all of such risk factors before making an investment decision with respect to our common stock.

Item 2. Description of Property.

Executive Offices

The Companys office is maintained at a cost of approximately $375 per month as of March 1, 2007. This is currently month-to-month. The Company believes that its office space and facilities are sufficient to meet its present

11

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needs and does not anticipate any difficulty securing
alternative or additional space, as needed, on terms acceptable to the
Company.

Properties

We have acquired an industrial plant facility located in
Quitman County, Mississippi, for the purchase price of $375,000, which closed on
October 5, 2006. This plant is situated on 37 acres located in the northwest
region of the state, which is in the lower portion of the Mid-West corn belt.
The facility has a 76,000 sq. ft industrial structure that we intend toe convert
by installing the equipment required for ethanol production. We are in the
process of sourcing such equipment.

The largest rail line by volume in the U.S. is located next to
the plant facility and this will provide us with immediate and direct access to
a superior transportation infrastructure. Access to this rail line will allow
the import of raw materials and the export of the resulting ethanol. Our plant
facility includes a 144,000 sq.ft. concrete rail loading dock on site, built
specifically for large scale operations. With this infrastructure, we have
access to 15 grain elevators and 5 oil refineries within the State of
Mississippi for delivery of raw material and distribution of finished products.
An additional logistical benefit of the facility is its proximity to the
Mississippi River, allowing for raw material and finished product to be shipped
by barge and delivered a short distance to and from the facility.

Item 3. Legal Proceedings.

We know of no material, active or pending legal proceedings
against our company, nor are we involved as a plaintiff in any material
proceeding or pending litigation. There are no proceedings in which any of our
directors, officers or affiliates, or any registered or beneficial shareholder,
is an adverse party or has a material interest adverse to our interest.

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

None.

PART II

Item 5. Market for Common Equity and Related Stockholder
Matters.

Effective October 3, 2006, we split our common shares on a 5
for 1 basis. As a result, our articles of incorporation were amended to increase
our authorized common stock from 100,000,000 shares to 500,000,000 shares. The
par value of our common stock remained $0.001 per share. Our authorized
preferred stock was also amended from 100,000,000 shares to 500,000,000 shares.
Further, no shareholder approval was required or obtained pursuant to NRS
78.209. Prior to the stock split, there were 10,335,000 shares of common stock
outstanding. After the stock split there were 51,675,000 shares of common stock
outstanding. The financial statements and notes have been changed to reflect the
retroactive effect of the 5 to 1 forward stock split . Our trading symbol was
changed from SDGE to SORD in connection with the forward stock split. As at
August 31, 2007 there were 53,005,000 shares of common stock outstanding.

The following table reflects the high and low bid information
for our common stock obtained from Yahoo! Finance and reflects inter-dealer
prices, without retail mark-up, markdown or commission, and may not necessarily
represent actual transactions.

The high and low bid prices of our common stock for the periods
indicated below are as follows:

National Association of Securities
      Dealers OTC Bulletin BoardQuarter
      Ended(1)
    High
    LowNovember 30,
      2006
    $0.96
    $0.96


12

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February 28,
      2007
    $0.18
    $0.18May 31, 2007
    $0.13
    $0.13August 31, 2007
    $0.13
    $0.13


(1)Our common stock received approval for quotation
on May 4, 2006. The first trade occurred October 5, 2006.

On October 23, 2007, the last closing price for the common
stock as reported by the quotation service operated by the OTC Bulletin Board
was $0.19.

As of December 12, 2007, there were 29 holders of record of our
common stock who held an aggregate of 60,505,000 common shares.

Our common shares are issued in registered form. Pacific Stock
Transfer Company, 500 E. Warm Springs Road, Suite 240 , Las Vegas, Nevada 89123
(Telephone: 702.361.3033; Facsimile: 702.433.1979) is the registrar and transfer
agent for our common shares.

Dividend Policy

We have not paid any cash dividends on our common stock and
have no present intention of paying any dividends on the shares of our common
stock. Our current policy is to retain earnings, if any, for use in our
operations and in the development of our business. Our future dividend policy
will be determined from time to time by our board of directors.

Recent Sales of Unregistered Securities

On April 12, 2007, the Company issued 1,330,000 shares of
restricted common stock for consulting services valued at $199,500. The shares
were valued at $.15 per share, which was the fair market value of the stock on
the date of the agreement.

On September 10, 2007, the Company entered into a Securities
Purchase Agreement with La Jolla Cove Investors, Inc. wherein La Jolla Cove
would agree to purchase a debenture in the amount of $150,000. In connection
with the debenture, share purchase warrants would be issued to purchase common
stock of the Company. Also, the agreement allows La Jolla Cove to purchase, at
the one year anniversary date of the debenture, or upon conversion of the
principal amount of the debenture into common stock, a second debenture in the
amount of $150,000 with a warrant to purchase up to 1,5000,000 shares of common
stock.

Equity Compensation Plan Information

An Employee/Consultant Stock Compensation Plan was implemented
in September 2007 and 7,500,000 shares of common stock were issued to compensate
consultants who provided services to the Company.

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

Overview

You should read the following discussion of our financial
condition and results of operations together with the consolidated audited
financial statements and the notes to consolidated audited financial statements
included elsewhere in this filing prepared in accordance with accounting
principles generally accepted in the United States. This discussion contains
forward-looking statements that reflect our plans, estimates and beliefs. Our
actual results could differ materially from those anticipated in these
forward-looking statements.

Plan of Operations

13

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We are a development stage company that has not yet generated or realized any revenues from our business operations.

We are a renewable energy company with a mission to become a significant ethanol producer in the southeastern region of the United States. To date, we have not derived any income from any of our operations.

Our plan of operation is to focus in an area which offers abundant supplies of corn, superior transportation infrastructure and expedited permitting processes. Once the agreement with the Boss Group of Companies has been finalized, it is our
intention to transport the plants equipment to our companys newly acquired production facility in Quitman County, Mississippi for reassembly. At full capacity, the successful acquisition of the plant and related equipment will enable us to
produce up to 10 million gallons per year (MMGY) of denatured ethanol. We are headquartered in Dallas, Texas.

There is no assurance that we will complete the agreements with the Boss Group of Companies and even if we do, there is no assurance that we will be able to transport the plant and equipment to our acquired production facility in Quitman County,
Mississippi and re-assemble it. Even if we do complete this, there can be no assurance that we will successfully produce 10 million gallons per year (MMGY) of denatured ethanol. Please refer to the section entitled Risk Factors, of this
annual report on Form 10-KSB, for additional information about the risks of ethanol production.

Off-Balance Sheet Arrangements

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

Financial Condition, Liquidity and Capital Resources

Our principal capital resources have been through the issuance of common stock, and on September 29, 2006 we executed a $10 million Line of Credit (LOC) with Uniform Ventures Ltd.

At August 31, 2007, we had working capital deficiency of $479,399, compared to working capital of $17,596 as at August 31, 2006.

At August 31, 2007, our total current assets were $375,000, compared to total current assets of $7,548 as at August 31, 2006.

At August 31, 2007, our total current liabilities were $479,399, compared to total current liabilities of $25,144 as at August 31, 2006.

For the year ended August 31, 2007, we posted losses of $1,038,820 compared to $28,414 as at August 31, 2006 and to $1,149,129 since incorporation. The principal components of the loss for the year ended August 31, 2007 were general and
administrative expenses, including legal and accounting and consulting expenses.

Operating expenses for the year ended August 31, 2007 were $977,804 compared to $28,414 as at August 31, 2006.

Interest expenses for the year ended August 31, 2007 were $61,016 compared to $0 as at August 31, 2006.

At August 31, 2007, we had cash on hand of $0 compared to $7,548 as at August 31, 2006.

Cash Requirements

We will require additional funds to implement our growth strategy in ethanol production operations. These funds may be raised through equity financing, debt financing, or other sources, which may result in further dilution in the equity ownership of
our shares. As at September 29, 2006 we executed a $10million Line of Credit with Uniform

14

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Ventures Ltd.. There is still no assurance that we will be able to maintain operations at a level sufficient for an investor to obtain a return on his investment in our common stock. Further, we may continue to be unprofitable.

Going Concern

Due to our being an development stage company and not having generated revenues, in their Notes to our financial statements for the year ended August 31, 2007, our independent auditors included an explanatory paragraph regarding concerns about our
ability to continue as a going concern.

We have historically incurred losses, and through August 31, 2007 have incurred losses of $1,149,129 from our inception. Because of these historical losses, we will require additional working capital to develop our business operations. We intend
to raise additional working capital through drawing down our LOC, private placements, public offerings, and/or bank financing.

The continuation of our business is dependent upon obtaining further financing and achieving a break even or profitable level of operations. The issuance of additional equity securities by us could result in a significant dilution in the equity
interests of our current or future stockholders. Using our LOC, assuming this remains available to us, will increase our liabilities and future cash commitments.

There are no assurances that we will be able to either (1) achieve a level of revenues adequate to generate sufficient cash flow from operations; or (2) obtain additional financing through either private placements, public offerings and/or bank
financing necessary to support our working capital requirements. To the extent that funds generated from operations and any private placements, public offerings and/or bank financing are insufficient, we will have to raise additional working
capital. No assurance can be given that additional financing will be available, or if available, will be on terms acceptable to us. If adequate working capital is not available we may not increase our operations.

These conditions raise substantial doubt about our ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and
classification of liabilities that might be necessary should we be unable to continue as a going concern.

APPLICATION OF CRITICAL ACCOUNTING POLICIES

Our financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles in the United States. Preparing financial statements requires management to make estimates and assumptions that affect the
reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by managements application of accounting policies. We believe that understanding the basis and nature of the estimates and assumptions
involved with the following aspects of our financial statements is critical to an understanding of our financials.

In preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent
assets and liabilities at the date of the financial statements and revenues and expenses during the reported period. Actual results could differ from those estimates.

General and Administration Expenses

General and Administration expenses are written off to operations when incurred.

Translation of Foreign Currency

The functional currency and the reporting currency is the United States Dollar. Monetary assets and liabilities are translated at the current rate of exchange. The weighted average exchange rate for the period is used to translate revenue, expenses,
and gains or losses from the functional currency to the reporting currency.

15

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The gain or loss on translation is reported as a separate component of stockholders' equity and is not recognized in net income. Gains or losses on re-measurement are recognized in current net income. Gains or losses from foreign currency
transactions are recognized in current net income.

Fixed assets are measured at historical exchange rates that existed at the time of the transaction. Depreciation is measured at historical exchange rates that existed at the time the underlying fixed asset was acquired. Capital accounts are
translated at their historical exchange rates when the capital stock is issued.

The effect of exchange rate changes on cash balances is reported in the statement of cash flows as a separate part of the reconciliation of change in cash and cash equivalents during the year.

Recently Issued Accounting Standards

In September 2006, the FASB issued SFAS No. 157, "Accounting for Fair Value Measurements." SFAS No. 157 defines fair value, and establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosure about
fair value measurements. SFAS No. 157 is effective for the Company for financial statements issued subsequent to November 15, 2007. The Company does not expect the new standard to have any material impact on the financial position and results of
operations.

In September 2006, the staff of the Securities and Exchange Commission issued Staff Accounting Bulletin No. 108 (SAB 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. SAB 108 becomes effective in fiscal 2007. Management is evaluating the financial impact of this pronouncement.

In October 2005, the FASB issued FSP FAS 123(R)-2, Practical Accommodation to the Application of Grant Date as Defied in FASB Statement No. 123(R), which provides clarification of the concept of mutual understanding between employer and
employee with respect to the grant date of a share-based payment award. This FSP provides that a mutual understanding of the key terms and conditions of an award shall be presumed to exist on the date the award is approved by management if the
recipient does not have the ability to negotiate the key terms and conditions of the award and those key terms and conditions will be communicated to the individual recipient within a relatively short time period after the date of approval. This
guidance was applicable upon the initial adoption of SFAS 123(R). The adoption of this pronouncement did not have an impact on the Companys financial position, results of operations, or cash flows.

In February 2007, the FASB issued SFAS no, 159, The Fair Value Option for Financial Assets and Financial Liabilities (SFAS 159). SFAS 159 provides companies with an option to report selected financials assets and liabilities
at fair value.  The objective of SFAS 159 is to reduce both complexity in accounting for financial instruments and the volatility in earnings caused by measuring related assets and liabilities differently. Generally accepted accounting principles
have required different measurement attributes for different assets and liabilities that can create artificial volatility in earnings. The FASB has indicated it believes that SFAS 159 helps to mitigate this type of accounting-induced volatility by
enabling companies to report related assets and liabilities at fair value, which would likely reduce the need for companies to comply with detailed rules for hedge accounting. SFAS 159 also establishes presentation and disclosure requirements
designed to facilitate comparisons between companies that choose different measurement attributes for similar types of assets and liabilities.  SFAS 159 does not eliminate disclosure requirements included in other accounting standards, including
requirements for disclosures about fair value measurements included in SFAS 157 and SFA No. 107, Disclosures about Fair Value of Financial Instruments. SFAS 159 is effective for the Company as of the beginning of fiscal year 2009. The
adoption of this pronouncement is not expected to have an impact on the Companys financial position, results of operations or cash flows.

APPLICATION OF CRITICAL ACCOUNTING POLICIES

Our financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles in the United States. Preparing financial statements requires management to make estimates and assumptions that affect the
reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by management's application of accounting policies. We believe that understanding the

16

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basis and nature of the estimates and assumptions involved with the following aspects of our financial statements is critical to an understanding of our financials.

Item 7. Financial Statements.

Our financial statements are stated in United States dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles.

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TABLE OF CONTENTS

|                                                                         | Page
|------------------------------------------------------------------------ | ----
|                                                                         |     
|Report of Independent Registered
      Public Accountants                | F-1 
|                                                                         |     
|Consolidated Balance Sheets                                              |     
|August 31, 2007 and 2006                                                 | F-2 
|                                                                         |     
|Consolidated Statements of Operations                                    |     
|For the Years
      Ended August 31, 2007 and 2006                       |     
|And for the Period from May
      4, 2004 (inception) to August 31, 2007 | F-3 
|                                                                         |     
|Consolidated Statement of Stockholders
      Equity                     |     
|For the Period
      from May 4, 2004 (inception) to August 31, 2007     | F-4 
|                                                                         |     
|Consolidated Statements
      of Cash Flows                              |     
|For the Years Ended August
      31, 2007 and 2006                       |     
|And for the
      Period from May 4, 2004 (inception) to August 31, 2007 | F-5 
|                                                                         |     
|Notes to the Consolidated
      Financial Statements                     | F-6 

18

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS

To the Board of Directors and Shareholders ofSouthridge
Enterprises, Inc.(A Development Stage Company)

We have audited the accompanying
consolidated balance sheets of Southridge Enterprises, Inc. (a development stage
company) as of August 31, 2007, the related consolidated statements of
operations and cash flows for the year ended August 31, 2007 and for the period
from May 4, 2004 (inception) to August 31, 2007, and the related consolidated
statement of stockholders equity for the period from May 4, 2004 (inception) to
August 31, 2007. 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 audits in
accordance with the standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. The Company is not required to have, nor were we engaged
to perform, an audit of its internal control over financial reporting. 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 also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.

In our opinion, the financial
statements referred to above present fairly, in all material respects, the
consolidated financial position of Southridge Enterprises, Inc. (a development
stage company) as of August 31, 2007, and the results of its operations and its
cash flows for the year ended August 31, 2007, and for the period from May 4,
2004 (inception) to August 31, 2007, in conformity with accounting principles
generally accepted in the United States of America.

The accompanying consolidated
financial statements have been prepared assuming that the Company will continue
as a going concern. As discussed in Note 1 to the consolidated financial
statements, the Company has suffered recurring losses from operations and has a
net capital deficiency that raise substantial doubt about its ability to
continue as a going concern. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.

|                     | /s/ Robison, Hill & Co.     
|-------------------- | ----------------------------
|                     | Certified Public Accountants
|Salt Lake City, Utah |                             
|December 7, 2007     |                             

F-1

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SOUTHRIDGE ENTERPRISES, INC.
  (A Development Stage Company)
  Consolidated Balance Sheets
  (Expressed in US Dollars)

|                                                                     |   | August 31, |  
|-------------------------------------------------------------------- | - | ---------- | -
|                                                                     |   | 2007       |  
|ASSETS                                                               |   |            |  
|Current Assets                                                       |   |            |  
|Cash and cash equivalents                                            | $ | -          |  
|                                                                     |   |            |  
|Land                                                                 |   | 375,000    |  
|                                                                     |   |            |  
|Total Assets                                                         | $ | 375,000    |  
|                                                                     |   |            |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                 |   |            |  
|Current Liabilities                                                  |   |            |  
|Account Payable                                                      | $ | 178,448    |  
|Checks in excess of cash                                             |   | 173        |  
|Demand loans  related party                                         |   | 239,762    |  
|Interest Payable                                                     |   | 61,016     |  
|Total current liabilities                                            |   | 479,399    |  
|                                                                     |   |            |  
|Line of Credit                                                       |   | 752,517    |  
|                                                                     |   |            |  
|Total Liabilities                                                    |   | 1,231,916  |  
|                                                                     |   |            |  
|Stockholders Equity                                                 |   |            |  
|Preferred stock, $0.001 par value, authorized
      500,000,000      |   |            |  
|shares, -0- issued                                                   |   |            |  
|Common stock, $0.001 par value, authorized 500,000,000               |   |            |  
|shares, 53,005,000
      issued and outstanding at August 31,        |   |            |  
|2007, and 51,675,000 issued and
      outstanding at August 31, 2006 |   | 53,005     |  
|Additional paid-in Capital                                           |   | 239,208    |  
|Deficit accumulated during development stage                         |   | (1,149,129 | )
|Total stockholders
      equity (deficiency)                        |   | (856,916   | )
|                                                                     |   |            |  
|Total Liabilities
      and Stockholders Equity                     | $ | 375,000    |  

See accompanying notes are an integral part of these financial
  statements

F-2

---

SOUTHRIDGE ENTERPRISES, INC.
  (A Development Stage Company)
  Consolidated Statements of Operations
  (Expressed in US Dollars)

|                           |   |                     |   |   |              |   |   | Accumulated |  
|-------------------------- | - | ------------------- | - | - | ------------ | - | - | ----------- | -
|                           |   |                     |   |   |              |   |   | Since       |  
|                           |   |                     |   |   |              |   |   | 4-May-04    |  
|                           |   | For the Years Ended |   |   | Inception of |  
|                           |   | August 31,          |   |   | Development  |  
|                           |   | 2007                |   |   | 2006         |   |   | Stage       |  
|                           |   |                     |   |   |              |   |   |             |  
|Revenues                   | $ | -                   |   | $ | -            |   | $ | -           |  
|                           |   |                     |   |   |              |   |   |             |  
|Expenses                   |   |                     |   |   |              |   |   |             |  
|Consulting fees            |   | 650,300             |   |   | -            |   |   | 650,300     |  
|General and Administrative |   | 249,723             |   |   | 27,914       |   |   | 351,732     |  
|Investor Relations         |   | 77,781              |   |   | -            |   |   | 77,781      |  
|Mineral Property costs     |   | -                   |   |   | 500          |   |   | 8,300       |  
|                           |   |                     |   |   |              |   |   |             |  
|Total Expenses             |   | 977,804             |   |   | 28,414       |   |   | 1,088,113   |  
|                           |   |                     |   |   |              |   |   |             |  
|Other Income (Expense)     |   |                     |   |   |              |   |   |             |  
|Interest Expense           |   | (61,016             | ) |   | -            |   |   | (61,016     | )
|                           |   |                     |   |   |              |   |   |             |  
|Net Income (Loss)          | $ | (1,038,820          | ) | $ | (28,414      | ) | $ | (1,149,129  | )
|                           |   |                     |   |   |              |   |   |             |  
|Weighted Average Shares    |   | 52,192,425          |   |   | 51,675,000   |   |   |             |  
|                           |   |                     |   |   |              |   |   |             |  
|Loss Per Common Share      | $ | (0.02               | ) | $ | -            |   |   |             |  

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

F-3

---

SOUTHRIDGE ENTERPRISES, INC.
  (A Development Stage Company)
  Statement of Stockholders Equity
  (Expressed in US Dollars)

|                                                   |  |              |  |   |           |  |   |             |   |   | Deficit      |   |   |               |  
|-------------------------------------------------- |  | ------------ |  | - | --------- |  | - | ----------- | - | - | ------------ | - | - | ------------- | -
|                                                   |  |              |  |   |           |  |   |             |   |   | Accumulated  |   |   |               |  
|                                                   |  |              |  |   |           |  |   |             |   |   | From         |   |   |               |  
|                                                   |  |              |  |   |           |  |   | Paid In     |   |   | 4-May-04     |   |   | Total         |  
|                                                   |  |              |  |   |           |  |   | Capital In  |   |   | Inception of |   |   | Stockholders' |  
|                                                   |  | Common Stock |  |   | Excess of |  |   | Development |   |   | Equity       |  
|                                                   |  | Shares       |  |   | Amount    |  |   | Par Value   |   |   | Stage        |   |   | (Deficiency)  |  
|Balance at May 4, 2004 (inception)                 |  | -            |  | $ | -         |  | $ | -           |   | $ | -            |   | $ | -             |  
|Common stock issued for cash                       |  |              |  |   |           |  |   |             |   |   |              |   |   |               |  
|($0.01 per share)                                  |  | 30,000,000   |  |   | 30,000    |  |   | (24,000     | ) |   | -            |   |   | 6,000         |  
|($0.02 per share)                                  |  | 21,675,000   |  |   | 21,675    |  |   | 65,038      |   |   | -            |   |   | 86,713        |  
|                                                   |  |              |  |   |           |  |   |             |   |   |              |   |   |               |  
|Net loss - May 4, 2004 to August 31, 2004          |  | -            |  |   | -         |  |   | -           |   |   | (36,870      | ) |   | (36,870       | )
|                                                   |  |              |  |   |           |  |   |             |   |   |              |   |   |               |  
|Balance at August 31, 2004                         |  | 51,675,000   |  |   | 51,675    |  |   | 41,038      |   |   | (36,870      | ) |   | 55,843        |  
|                                                   |  |              |  |   |           |  |   |             |   |   |              |   |   |               |  
|Net loss                                           |  | -            |  |   | -         |  |   | -           |   |   | (45,025      | ) |   | (45,025       | )
|                                                   |  |              |  |   |           |  |   |             |   |   |              |   |   |               |  
|Balance at August 31, 2005                         |  | 51,675,000   |  |   | 51,675    |  |   | 41,038      |   |   | (81,895      | ) |   | 10,818        |  
|                                                   |  |              |  |   |           |  |   |             |   |   |              |   |   |               |  
|Net loss                                           |  | -            |  |   | -         |  |   | -           |   |   | (28,414      | ) |   | (28,414       | )
|                                                   |  |              |  |   |           |  |   |             |   |   |              |   |   |               |  
|Balance at August 31, 2006                         |  | 51,675,000   |  |   | 51,675    |  |   | 41,038      |   |   | (110,309     | ) |   | (17,596       | )
|Stock issued for consulting services at $.15/share |  | 1,330,000    |  |   | 1,330     |  |   | 198,170     |   |   | -            |   |   | 199,500       |  
|                                                   |  |              |  |   |           |  |   |             |   |   |              |   |   |               |  
|Net loss                                           |  | -            |  |   | -         |  |   | -           |   |   | (1,038,820   | ) |   | (1,038,820    | )
|                                                   |  |              |  |   |           |  |   |             |   |   |              |   |   |               |  
|Balance at August 31, 2007                         |  | 53,005,000   |  | $ | 53,005    |  | $ | 239,208     |   | $ | (1,149,129   | ) | $ | (856,916      | )

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

F-4

---

SOUTHRIDGE ENTERPRISES, INC.
  (A Development Stage Company)
  Consolidated Statements of Cash Flows
  (Expressed in US Dollars)

|                                                           |   |                     |   |   |              |   |   | Deficit     |  
|---------------------------------------------------------- | - | ------------------- | - | - | ------------ | - | - | ----------- | -
|                                                           |   |                     |   |   |              |   |   | Accumulated |  
|                                                           |   |                     |   |   |              |   |   | Since       |  
|                                                           |   |                     |   |   |              |   |   | 4-May-04    |  
|                                                           |   | For the Years Ended |   |   | Inception of |  
|                                                           |   | August 31,          |   |   | Development  |  
|                                                           |   | 2007                |   |   | 2006         |   |   | Stage       |  
|CASH FLOWS FROM OPERATING ACTIVITIES:                      |   |                     |   |   |              |   |   |             |  
|Net Loss                                                   | $ | (1,038,820          | ) | $ | (28,414      | ) | $ | (1,149,129  | )
|Adjustments to reconcile net loss to net cash used in      |   |                     |   |   |              |   |   |             |  
|operating activities:                                      |   |                     |   |   |              |   |   |             |  
|Stock issued for consulting
      expenses                 |   | 199,500             |   |   | -            |   |   | 199,500     |  
|Change in non-cash working capital items:                  |   |                     |   |   |              |   |   |             |  
|Increase (decrease) in accounts
      payable              |   | 153,304             |   |   | (976         | ) |   | 178,448     |  
|Increase
      (decrease) in interest payable              |   | 61,016              |   |   | -            |   |   | 61,016      |  
|Net cash used in operating activities                      |   | (625,000            | ) |   | (29,390      | ) |   | (710,165    | )
|                                                           |   |                     |   |   |              |   |   |             |  
|CASH FLOWS FROM INVESTING ACTIVITES:                       |   |                     |   |   |              |   |   |             |  
|Purchase of property                                       |   | (375,000            | ) |   | -            |   |   | (375,000    | )
|Net cash used in investing activities                      |   | (375,000            | ) |   | -            |   |   | (375,000    | )
|                                                           |   |                     |   |   |              |   |   |             |  
|CASH FLOWS FROM FINANCING ACTIVITIES:                      |   |                     |   |   |              |   |   |             |  
|Issuance of common stock                                   |   | -                   |   |   | -            |   |   | 92,713      |  
|Bank overdraft                                             |   | 173                 |   |   | -            |   |   | 173         |  
|Loans from related parties                                 |   | 239,762             |   |   | -            |   |   | 239,762     |  
|Payments to Line of Credit                                 |   | (60,200             | ) |   | -            |   |   | (60,200     | )
|Proceeds from Line of Credit                               |   | 812,717             |   |   | -            |   |   | 812,717     |  
|Net cash provided by financing activities                  |   | 992,452             |   |   | -            |   |   | 1,085,165   |  
|                                                           |   |                     |   |   |              |   |   |             |  
|Net increase (Decrease) in Cash and Cash Equivalents       |   | (7,548              | ) |   | (29,390      | ) |   | -           |  
|Cash and Cash Equivalents at the Beginning
      of Period |   | 7,548               |   |   | 36,938       |   |   | -           |  
|Cash and Cash Equivalents at the End of the Period         | $ | -                   |   | $ | 7,548        |   | $ | -           |  
|                                                           |   |                     |   |   |              |   |   |             |  
|SUPPLEMENTAL CASH FLOW INFORMATION:                        |   |                     |   |   |              |   |   |             |  
|Interest                                                   | $ | -                   |   | $ | -            |   | $ | -           |  
|Income Taxes                                               | $ | -                   |   | $ | -            |   | $ | -           |  

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

F-5

---

SOUTHRIDGE ENTERPRISES, INC.(A Development Stage
Company)Notes to Consolidated Financial
Statements(Expressed in US Dollars)

|1. | Organization and Continuance of
  Operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | This summary of accounting policies for Southridge
      Enterprises Inc. is presented to assist in understanding the Company's
      consolidated financial statements. The accounting policies conform to
      generally accepted accounting principles and have been consistently
      applied in the preparation of the consolidated financial
  statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Southridge Enterprises Inc. (the Company) was
      incorporated in the State of Nevada on May 4, 2004. The Company was
      originally organized to explore mineral properties in British Columbia,
      Canada. The Companys fiscal year end is August 31. The Company conducted
      its exploration activities in British Columbia through Southridge
      Exploration Inc., a wholly-owned British Columbia corporation incorporated
      on July 19, 2004). Based on a review of the mineralization data of its
      claims, the Company abandoned these mineral property claims.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | These consolidated financial statements are presented on
      the basis that the Company is a going concern, which contemplates the
      realization of assets and satisfaction of liabilities in the normal course
      of business over a reasonable length of time. As of August 31, 2007, the
      Company had a negative cash balance of $173, working capital deficiency of
      ($479,399), stockholders deficiency of $856,916, and accumulated net
      losses of $1,149,129 since inception. The consolidated financial
      statements do not include any adjustments relating to the recoverability
      and classification of recorded asset amounts or the amounts and
      classification of liabilities that might be necessary should the Company
      be unable to continue as a going concern. Its continuation as a going
      concern is dependent upon its ability to generate sufficient cash flow to
      meet its obligations on a timely basis, to obtain additional financing or
      refinancing as may be required, to develop a commercially viable ethanol
      production facility, and ultimately to establish profitable
    operations.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Managements plans for the continuation of the Company as
      a going concern include financing the Companys operations through
      issuance of its common stock. If the Company is unable to complete its
      financing requirements or achieve revenue as projected, it will then
      modify its expenditures and plan of operations to coincide with the actual
      financing completed and actual operating revenues. There are no
      assurances, however, with respect to the future success of these
    plans.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Unless otherwise indicated, amounts provided in these
      notes to the consolidated financial statements pertain to continuing
      operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | The Company is not currently earning any
  revenues.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Basis of Presentation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | The accompanying consolidated balance sheets and related
      statements of operations, cash flows, and stockholders equity
      (deficiency) include all adjustments, consisting of normal recurring
      items, necessary for their fair presentation in conformity with accounting
      principles generally accepted in the United States of America (U.S. GAAP).
      Preparing financial statements requires management to make estimates and
      assumptions that affect the reported amounts of assets, liabilities,
      revenue and expenses. Actual results and outcomes may differ from
      managements estimates and assumptions.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

F-6

---

SOUTHRIDGE ENTERPRISES, INC.(A Development Stage
Company)Notes to Consolidated Financial
Statements(Expressed in US Dollars)

|**2.** | Summary of Significant Accounting
  Policies
|------ | --------------------------------------------
|       |                                             
|       | **a)**                                      
|       |                                             
|       |                                             
|       |                                             
|       |                                             
|       |                                             
|       | **(b)**                                     
|       |                                             
|       |                                             
|       |                                             
|       | (c)                                         
|       |                                             
|       |                                             
|       |                                             
|       | **(d)**                                     
|       |                                             
|       |                                             
|       |                                             
|       | **(e)**                                     
|       |                                             
|       |                                             
|       |                                             
|       | **(f)**                                     
|       |                                             
|       |                                             

F-7

---

SOUTHRIDGE ENTERPRISES, INC.(A Development Stage
Company)Notes to Consolidated Financial
Statements(Expressed in US Dollars)

|2. | Summary of Significant Accounting Policies(continued)
|-- | -----------------------------------------------------
|   |                                                      
|   | (g)                                                  
|   |                                                      
|   |                                                      
|   |                                                      
|   | (h)                                                  
|   |                                                      
|   |                                                      
|   |                                                      
|   | **(i)**                                              
|   |                                                      
|   |                                                      
|   |                                                      
|   | **(j)**                                              
|   |                                                      
|   |                                                      

F-8

---

SOUTHRIDGE ENTERPRISES, INC.(A Development Stage
Company)Notes to Consolidated Financial
Statements(Expressed in US Dollars)

|2. | Summary of Significant Accounting Policies(continued)
|-- | -----------------------------------------------------
|   |                                                      
|   | (k)                                                  
|   |                                                      
|   |                                                      
|   |                                                      
|   | (l)                                                  
|   |                                                      
|   |                                                      
|   |                                                      
|   | (m)                                                  
|   |                                                      
|   |                                                      
|   |                                                      
|   | (n)                                                  
|   |                                                      
|   |                                                      
|   |                                                      
|   | (o)                                                  
|   |                                                      
|   |                                                      

F-9

---

SOUTHRIDGE ENTERPRISES, INC.(A Development Stage
Company)Notes to Consolidated Financial
Statements(Expressed in US Dollars)

|2. | Summary of Significant Accounting Policies(continued)
      In September 2006, the staff of the Securities and Exchange
        Commission issued Staff Accounting Bulletin No. 108 (SAB 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. SAB 108 becomes effective in fiscal 2007.
        Management is evaluating the financial impact of this pronouncement.
      In October 2005, the FASB issued FSP FAS 123(R)-2, Practical
        Accommodation to the Application of Grant Date as Defied in FASB Statement
        No. 123(R), which provides clarification of the concept of mutual
        understanding between employer and employee with respect to the grant
        date of a share-based payment award. This FSP provides that a mutual understanding
        of the key terms and conditions of an award shall be presumed to exist
        on the date the award is approved by management if the recipient does
        not have the ability to negotiate the key terms and conditions of the
        award and those key terms and conditions will be communicated to the individual
        recipient within a relatively short time period after the date of approval.
        This guidance was applicable upon the initial adoption of SFAS 123(R).
        The adoption of this pronouncement did not have an impact on the Companys
        financial position, results of operations, or cash flows.
      In February 2007, the FASB issued SFAS no, 159, The
        Fair Value Option for Financial Assets and Financial Liabilities
        (SFAS 159). SFAS 159 provides companies with an option to
        report selected financials assets and liabilities at fair value. The objective
        of SFAS 159 is to reduce both complexity in accounting for financial instruments
        and the volatility in earnings caused by measuring related assets and
        liabilities differently. Generally accepted accounting principles have
        required different measurement attributes for different assets and liabilities
        that can create artificial volatility in earnings. The FASB has indicated
        it believes that SFAS 159 helps to mitigate this type of accounting-induced
        volatility by enabling companies to report related assets and liabilities
        at fair value, which would likely reduce the need for companies to comply
        with detailed rules for hedge accounting. SFAS 159 also establishes presentation
        and disclosure requirements designed to facilitate comparisons between
        companies that choose different measurement attributes for similar types
        of assets and liabilities. SFAS 159 does not eliminate disclosure requirements
        included in other accounting standards, including requirements for disclosures
        about fair value measurements included in SFAS 157 and SFA No. 107, Disclosures
        about Fair Value of Financial Instruments. SFAS 159 is effective
        for the Company as of the beginning of fiscal year 2009. The adoption
        of this pronouncement is not expected to have an impact on the Companys
        financial position, results of operations or cash flows.
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|3. | Development Stage Company/Going Concern
      The Company has not begun principal operations and as is
        common with a development stage company, the Company has had recurring
        losses during its development stage. Continuation of the Company as a
        going concern is dependent upon obtaining the additional working capital
        necessary to be successful in its planned activity, and the management
        of the Company has developed a strategy, which it believes will accomplish
        this objective through additional equity funding and long term financing,
        which will enable the Company to operate for the coming year.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

F-10

---

SOUTHRIDGE ENTERPRISES, INC.(A Development Stage
Company)Notes to Consolidated Financial
Statements(Expressed in US Dollars)

|4. | Common Stock                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | On October 3, 2006, the Company split its common shares
      on the basis of 5 for 1. As a result, its articles of incorporation were
      amended to increase its authorized common stock from 100,000,000 shares to
      500,000,000 shares. The par value of the Companys common stock remained
      $0.001 per share. The Companys authorized preferred stock was also
      amended from 100,000,000 shares to 500,000,000 shares. Prior to the stock
      split, there were 10,335,000 shares of common stock outstanding. After the
      stock split there were 51,675,000 shares of common stock outstanding. The
      record date for the split was September 21, 2006 and became effective
      October 3, 2006. All references to common stock, common shares
      outstanding, average number of common shares outstanding and per share
      amounts in these Financial Statements and Notes to Financial Statements
      prior to the effective date of the forward stock splits have been restated
      to reflect the 5 to 1 common stock splits on a retroactive basis. The
      Companys trading symbol was changed from SDGE to SORD in connection
      with the forward stock split.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | On April 12, 2007, the Company issued 1,330,000 shares of
      restricted common stock for consulting services valued at $199,500. The
      shares were valued at $.15 per share, which was the fair market value of
      the stock on the date of the agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|5. | Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | The provision for income taxes differs from the result
      which would be obtained by applying the statutory income tax rate of 34%
      (2006  34%) to income before income taxes. The difference results from
      the following items:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

| |                                             |   | For the Year Ended |    
| | ------------------------------------------- | - | ------------------ | ---
| |                                             |   | August 31,         |    
| |                                             |   | 2007               |    
| | Computed expected (benefit of) income taxes | $ | (353,199           | ) $
| | Increase in valuation allowance             |   | 353,199            |    
| |                                             | $ | - $                |    

Significant components of the Companys
deferred income tax assets are as follows:

| |                              |   | August 31, |   |   | August 31, |  
| | ---------------------------- | - | ---------- | - | - | ---------- | -
| |                              |   | 2007       |   |   | 2006       |  
| | Operating loss carry forward | $ | 1,140,829  |   | $ | 102,009    |  
| | Mineral property expenses    |   | 8,300      |   |   | 8,300      |  
| |                              |   | 1,149,129  |   |   | 110,309    |  
| | Statutory rates              |   | 34%        |   |   | 34%        |  
| | Deferred income tax asset    |   | 390,704    |   |   | 37,505     |  
| | Valuation allowance          |   | (390,704   | ) |   | (37,505    | )
| |                              | $ | --         |   | $ | --         |  

The Company has incurred operating
losses and approximately $102,009, which, if unutilized, will expire through to
2026. Subject to certain restrictions, the Company has mineral property and
exploration expenditures of $8,300 available to reduce future taxable income.
Future tax benefits, which may arise as a result of these losses, have not been
recognized in these financial statements, and have been offset by a valuation
allowance.

F-11

---

SOUTHRIDGE ENTERPRISES, INC.(A Development Stage
Company)Notes to Consolidated Financial
Statements(Expressed in US Dollars)

|5. | Income Taxes (Continued)                                                                                                                          
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                   
|   | The following table lists the fiscal year in which the
      loss was incurred and the expiration date of the operating loss carry
      forwards:

| |                                                     |   | Amount    |  |  | Expiration Date | 
| | --------------------------------------------------- | - | --------- |  |  | --------------- | 
| | 2024                                                | $ | 29,070    |  |  | 2024            | 
| | 2025                                                |   | 45,025    |  |  | 2025            | 
| | 2026                                                |   | 27,914    |  |  | 2026            | 
| | 2027                                                |   | 1,038,820 |  |  | 2027            | 
| | Total income tax operating loss carry
      forward | $ | 1,140,829 |  |  |                 | 

|6. | Land                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | On September 28, 2006 the Company formed a wholly owned
      subsidiary Southridge Environmental Inc., incorporated in the state of
      Mississippi, which acquired land located in Quitman County, Mississippi,
      for the purchase price of $375,000, that closed on October 5, 2006. The
      Land is situated on 37 acres located in the northwest region of the state,
      which is in the lower portion of the Mid-West corn belt. The industrial
      plant facility plant on the land is a warehouse with no value. This
      warehouse facility is a 76,000 sq. ft industrial structure that will be
      converted to house equipment for ethanol production.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|7. | Commitments and Contractual Obligations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | The Companys office is maintained at a cost of
      approximately $375 per month as of March 1, 2007. This is currently
      month-to-month. The Company believes that its office space and facilities
      are sufficient to meet its present needs and does not anticipate any
      difficulty securing alternative or additional space, as needed, on terms
      acceptable to the Company.                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | On October 27, 2006 as announced on December 19, 2006 the
      Company signed a soft offer Letter of Intent to purchase ethanol from PLS
      Sopucoes Ltda. Under the terms of the agreement being discussed
      approximately 50,000,000 gallons of ethanol can be purchased for resale in
      the U.S., based on a contractual commitment of 4.5 million gallons per
      month at $1.44 USD per gallon.                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|8. | Option Agreement Deposit                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | On September 13, 2006 the Company entered into an option
      to purchase agreement (the Agreement) with Boss Group of Companies Inc.,
      to acquire an ethanol plant in Saskatchewan, Canada for the sum of
      $632,500. On September 28, 2006 the Company formed a wholly owned
      subsidiary Southridge Ethanol Inc., incorporated in the state of
      Mississippi, that is intended for the closing of this agreement with the
      purchase subject to due diligence by December 11, 2006. A $20,000 non
      refundable option deposit was made and was expensed as no definitive
      purchase agreement could be reached.                                 

F-12

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SOUTHRIDGE ENTERPRISES, INC.(A Development Stage
Company)Notes to Consolidated Financial
Statements(Expressed in US Dollars)

|9. | Related Party Loans                                                                                                                                                        
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                            
|   | During the year ended August 31, 2007, the Company
      received short term loans from a related party. The following table shows
      the amount due at August 31, 2007:

| | Short term
      loan               |   | August 31, 2007 | 
| | ----------------------------------- | - | --------------- | 
| | Non interest bearing and unsecured  |   |                 | 
| | Alex Smid                           | $ | 239,762         | 
| | 0757140 BC Ltd.
      (Glen Harder) |   | -               | 
| | Total                               | $ | 239,762         | 

Related party short term loans are non
interest bearing, unsecured and due on demand. Since there is no stated interest
rate for the loans, interest was imputed at 8% per annum. Accrued interest on
these loans at August 31, 2007 was $7,544.

|10.     | Line of Credit                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|        | On September 29, 2006 the Company also entered into an 8%
      per annum, Line Of Credit (LOC) due September 29, 2011 with Uniform
      Ventures Ltd. (the Lender) for up to $10,000,000. The unpaid principal
      of LOC bears simple interest at the rate of eight percent (8%) per annum.
      Interest is calculated based on principal balance as may be adjusted from
      time to time to reflect additional advances made. Interest on the unpaid
      balance shall accrue monthly but shall be paid quarterly. The LOC is
      secured by an unregistered charge over all current and future assets owned
      by the Company. As of August 31, 2007, $752,517 was owed plus $53,472 in
      accrued interest payable. Additionally, at its discretion the Company may
      issue treasury stock to the Lender in lieu of payment                                                   
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|**11.** | Uncertain Tax Positions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|        | Effective January 1, 2007, the Company adopted the
      provisions of FASB Interpretation No. 48, Accounting for Uncertainty in
      Income Taxes  an interpretation of FASB Statement No. 109 (FIN 48).
      FIN 48 prescribes a recognition threshold and a measurement attribute for
      the financial statement recognition and measurement of tax positions taken
      or expected to be taken in a tax return. For those benefits to be
      recognized, a tax position must be more-likely-than-not to be sustained
      upon examination by taxing authorities. The adoption of the provisions of
      FIN 48 did not have a material impact on the companys condensed
      consolidated financial position and results of operations. At January 1,
      2007, the company had no liability for unrecognized tax benefits and no
      accrual for the payment of related interest.
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|        | Interest costs related to unrecognized tax benefits are
      classified as Interest expense, net in the accompanying consolidated
      statements of operations. Penalties, if any, would be recognized as a
      component of Selling, general and administrative expenses. The Company
      recognized $0 of interest expense related to unrecognized tax benefits for
      the nine months ended September 30, 2007. In many cases the companys
      uncertain tax positions are related to tax years that remain subject to
      examination by relevant tax authorities. With few exceptions, the company
      is generally no longer subject to U.S. federal, state, local or non-U.S.
      income tax examinations by tax authorities for years before 2003. The
      following describes the open tax years, by major tax jurisdiction, as of
      January 1, 2007:                  

| | United States (a) | 2003  Present
| | ----------------- | --------------

(a) Includes federal as well as state
or similar local jurisdictions, as applicable.

F-13

---

SOUTHRIDGE ENTERPRISES, INC.(A Development Stage
Company)Notes to Consolidated Financial
Statements(Expressed in US Dollars)

|12. | Subsequent Events                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | In September 2007, the Company entered into a Securities
      Purchase Agreement with La Jolla Cove Investors, Inc., wherein La Jolla
      Cove has agreed to purchase a debenture in the amount of $150,000. In
      connection with the debenture, the Company also agreed to issue share
      purchase warrants to purchase common stock of the Company. The agreement
      also allows La Jolla Cove to purchase, at the one year anniversary date of
      the debenture, or upon conversion of the principal amount of the debenture
      into common stock, a second debenture in the amount of $150,000 with a
      warrant to purchase up to 1,500,000 shares of the Companys common stock.
      The debenture will carry an interest rate of 5% per annum and the interest
      will be payable monthly.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | An Employee/Consultant Stock Compensation Plan was
      implemented in September 2007 and 7,500,000 shares of common stock were
      issued to compensate consultants who provided services to the
    Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

F-14

---

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

On February 22, 2007, we decided to engage new auditors as our
independent accountants to audit our financial statements. Our Board of
Directors approved the change of accountants to Robison, Hill & Co., an
independent registered firm of Certified Public Accountants. Accordingly, we
dismissed Telford Sadovnick, P.L.L.C., on February 22, 2007.

Item 8A. Disclosure Controls and Procedures

As required by Rule 13a-15 under the Exchange Act, we have
carried out an evaluation of the effectiveness of the design and operation of
our company's disclosure controls and procedures as of the end of the period
covered by this annual report, being August 31, 2007. This evaluation was
carried out under the supervision and with the participation of our company's
management, including our company's president and principal accounting officer.
Based upon that evaluation, our company's president and principal accounting
officer concluded that our company's disclosure controls and procedures are
effective as at the end of the period covered by this report. There have been no
changes in our company's internal controls or in other factors, which could
significantly affect internal controls subsequent to the date we carried out our
evaluation.

Disclosure controls and procedures are controls and other
procedures that are designed to ensure that information required to be disclosed
in our company's reports filed or submitted 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. Disclosure controls and
procedures include, without limitation, controls and procedures designed to
ensure that information required to be disclosed in our company's reports filed
under the Exchange Act is accumulated and communicated to management, including
our company's president and chief executive officer as appropriate, to allow
timely decisions regarding required disclosure.

PART III

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

Directors and Executive Officers, Promoters and Control
Persons

As at December 12, 2007, our directors and executive officers,
their ages, positions held, and duration of such, are as follows:

Name
    Position Held with our Company
    Age
    Date First Elected or AppointedAlex Smid
    President and Director
    39
    September 26, 2006Daniel Jackson
    Director
    44
    September 26, 2006


Business Experience

The following is a brief account of the education and business
experience of each director and executive officer during at least the past five
years, indicating each person's principal occupation during the period, and the
name and principal business of the organization by which he was employed.

18

---

Alex Smid, President and Director

Mr. Smid was appointed President and a director on September
26, 2006.

Mr. Smid is a Business Development and Marketing Professional
with over 15 years of knowledge and experience in a variety of business sectors.
Mr. Smid has specialized in the development of companies from initial capital
financing and planning at start-up to operations and sales. He has successfully
managed building teams of professionals to create strong corporate and
operational infrastructures. Most recently, Mr. Smid has been consulting in the
oil and gas sector, which has led to his interest and exposure to alternative
energy. Mr. Smids has applied his expertise in research and due diligence to
analyze alternative energy markets and operations. In addition to his background
as an independent consultant, Mr. Smids experience extends to serving as an
officer and director for various international companies. Several recent
positions held by Mr. Smid include President and Director of Sparta Enterprises
Inc. from 1999 to 2002 and Director of Radiant Energy Inc. from 2003 to 2006

Daniel Jackson, Director

Mr. Jackson was appointed a director on September 26, 2006.

Mr. Jackson has been active as an energy professional for over
fifteen years: as an oil company international energy efficiency consultant, and
for the last five years as a renewable energy consultant, specializing in
biofuel systems. Additionally, Mr. Jackson is a passionate advocate for
renewable energy. Mr. Jackson is also a member of the Hustin Energy Advisory
Council and a former member of the Cleanbio Venture Network Advisory Board. Mr.
Jackson received a Bachelor of Science in Mechanical Engineering from the
University of Texas.

From inception on May 4, 2004 until September 26, 2006, Vernon
Samaroo was our sole director and officer of the Company. Mr. Samaroo resigned
from his position as Director effective Jan. 8, 2007, to pursue other
interests.

Committees of the Board

Audit Committee

Our entire board of directors serves as our Audit
Committee.

Nominating Committee

Our entire board of directors serves as our Nominating
Committee which oversees the process by which individuals may be nominated to
our board of directors.

The current size of our board of directors does not facilitate
the establishment of a separate committee. We hope to establish a separate
Nominating Committee consisting of independent directors, if the number of our
directors is expanded.

Compensation Committee

We do not have a compensation committee.

Family Relationships

There are no family relationships between any director or
executive officer.

Involvement in Certain Legal Proceedings

None of our directors, executive officers, promoters or control
persons have been involved in any of the following events during the past five
years:

19

---

1. any bankruptcy petition filed by or
against any business of which such person was a general partner or executive
officer either at the time of the bankruptcy or within two years prior to that
time;

2. any conviction in a criminal
proceeding or being subject to a pending criminal proceeding (excluding traffic
violations and other minor offences);

3. being subject to any order,
judgment, or decree, not subsequently reversed, suspended or vacated, of any
court of competent jurisdiction, permanently or temporarily enjoining, barring,
suspending or otherwise limiting his involvement in any type of business,
securities or banking activities; or

4. being found by a court of competent
jurisdiction (in a civil action), the Commission or the Commodity Futures
Trading Commission to have violated a federal or state securities or commodities
law, and the judgment has not been reversed, suspended, or vacated.

Code of Ethics

We adopted a Code of Ethics applicable to our Chief Executive
Officer, Chief Financial Officer, Corporate Controller and certain other finance
executives, which is a "code of ethics" as defined by applicable rules of the
SEC. Our Code of Ethics was attached as an exhibit to the Annual Report on Form
10-KSB for the year ended August 31, 2005. If we make any amendments to our Code
of Ethics other than technical, administrative, or other non-substantive
amendments, or grant any waivers, including implicit waivers, from a provision
of our Code of Ethics to our chief executive officer, chief financial officer,
or certain other finance executives, we will disclose the nature of the
amendment or waiver, its effective date and to whom it applies in a Current
Report on Form 8-K filed with the SEC.

Audit Committee Financial Expert

Our board of directors has determined that we do not have a
board member that qualifies as an audit financial expert as define din Item
401(c) of Regulation S-B, nor do we have a board member that qualifies as
independent as the term is defined in Item 7(d)(3)(iv)(B) of Schedule 14A
under the Securities Exchange Act of 1934, as amended, and as defined by Rule
4200(a)(14) of the NASD Rules.We believe that of our board of directors is
capable of analyzing and evaluating our financial statements and understanding
internal controls and procedures for financial reporting. The board of directors
of our company does not believe that it is necessary to have an audit committee
because our company believes that the functions of an audit committee can be
adequately performed by our board of directors. In addition, we believe that
retaining an independent director who would qualify as an audit committee
financial expert would be overly costly and burdensome and is not warranted in
our circumstances given the early stages of our development and the fact that we
have not generated any revenues from operations to date.

Section 16(a) Beneficial Ownership Compliance

Section 16(a) of the Securities Exchange Act requires our
executive officers and directors, and persons who own more than 10% of our
common stock, to file reports regarding ownership of, and transactions in, our
securities with the Securities and Exchange Commission and to provide us with
copies of those filings. Based solely on our review of the copies of such forms
received by us, or written representations from certain reporting persons, we
believe that during fiscal year ended August 31, 2006, all filing requirements
applicable to its officers, directors and greater than ten percent beneficial
owners were complied with.

Item 10. Executive Compensation.

The following table provides certain summary information
concerning the compensation earned by our President and each of our three other
most highly compensated executive officers whose aggregate salary and bonus for
the fiscal year ended August 31, 2007 was in excess of $100,000 (the Named
Executive Officers).

20

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|             |      |        |       |        |        |                | Change in     |           |      
|------------ | ---- | ------ | ----- | ------ | ------ | -------------- | ------------- | --------- | -----
|             |      |        |       |        |        |                | Pension Value |           |      
|             |      |        |       |        |        |                | and           |           |      
|             |      |        |       |        |        |                | Nonqualified  |           |      
|             |      |        |       |        |        | Non-Equity     | Deferred      | All Other |      
|Name and     |      |        |       | Stock  | Option | Incentive Plan | Compensation  | Compens-  |      
|Principal    |      | Salary | Bonus | Awards | Awards | Compensation   | Earnings      | ation     | Total
|Position     | Year | ($)    | ($)   | ($)    | ($)    | ($)            | ($)           | ($)       | ($)  
|Alex Smid(1) | 2007 | $Nil   | $Nil  | $Nil   | $Nil   | $Nil           | $Nil          | $135,000  | $Nil 
|President &  | 2006 | $Nil   | $Nil  | $Nil   | $Nil   | $Nil           | $Nil          | $Nil      | N/A  
|Director     |      |        |       |        |        |                |               |           |      
|Vernon       | 2007 | $Nil   | $Nil  | $Nil   | $Nil   | $Nil           | $Nil          | $Nil      | $Nil 
|Samaroo(2)   | 2006 | $Nil   | $Nil  | $Nil   | $Nil   | $Nil           | $Nil          | $Nil      | $Nil 
|Former       |      |        |       |        |        |                |               |           |      
|Director     |      |        |       |        |        |                |               |           |      
|Daniel       | 2007 | $Nil   | $Nil  | $Nil   | $Nil   | $Nil           | $Nil          | $Nil      | $Nil 
|Jackson(3)   | 2006 | $Nil   | $Nil  | $Nil   | $Nil   | $Nil           | $Nil          | $Nil      | $Nil 
|Director     |      |        |       |        |        |                |               |           |      

| | (1) | Mr. Smid was appointed as a director and officer on
      September 26, 2006.                                                                                           
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (2) | Mr. Samaroo was appointed as President and director on
      May 4, 2004 and resigned as an officer on September 26, 2006 and resigned
      as a director Jan. 9, 2007.
| | (3) | Mr. Daniel Jackson was appointed as a director on
      September 26, 2006.                                                                                             

Stock Options and Stock Appreciation Rights

From the date of inception and up to August 31, 2007, we did
not grant any stock options or stock appreciation rights to any of our directors
or officers and there were no stock options or stock appreciation rights
outstanding on August 31, 2007.

Compensation of Directors

We reimburse our directors for expenses incurred in connection
with attending board meetings. We have not paid any director's fees or other
cash compensation for services rendered as a director since our inception to
August 31, 2007.

We have no formal plan for compensating our directors for their
service in their capacity as directors, although such directors are expected in
the future to receive stock options to purchase common shares as awarded by our
board of directors or (as to future stock options) a compensation committee
which may be established. Directors are entitled to reimbursement for reasonable
travel and other out-of-pocket expenses incurred in connection with attendance
at meetings of our board of directors. Our board of directors may award special
remuneration to any director undertaking any special services on our behalf
other than services ordinarily required of a director. No director received
and/or accrued any compensation for their services as a director, including
committee participation and/or special assignments.

Employment Contracts and Termination of Employment and
Change in Control Arrangements

Effective November 1, 2006, we entered into a renewable
management contract with Alex Smid whereby Mr. Smid has agreed to provide
management services to the Company up to and including October 31, 2007. Under
the agreement, Mr. Smid is paid $15,000 per month.

Mr. Glen D. Harder has been retained as a consultant under a
consulting contract dated November 1, 2006 and is paid $15,000 per month. This
contract was cancelled in January 2007.

21

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Item 11. Security Ownership of Certain Beneficial Owners and
Management.

As of the date of the filing of this report there were
60,505,000 shares of our common stock outstanding. The following table sets
forth certain information known to us with respect to the beneficial ownership
of our common stock as of that date by (i) each of our directors, (ii) each of
our executive officers, and (iii) all of our directors and executive officers as
a group. Except as set forth in the table below, there is no person known to us
who beneficially owns more than 5% of our common stock. The number of shares
beneficially owned is determined under rules of the SEC and the information is
not necessarily indicative of beneficial ownership for any other purpose. Under
such rules, beneficial ownership includes any shares as to which the individual
has the sole or shared voting power or investment power and any shares which the
individual has the right to acquire within 60 days of August 31, 2007 through
the exercise of any stock option or other right. Unless otherwise noted, we
believe that each person has sole investment and voting power (or shares such
powers with his or her spouse) with respect to the shares set forth in the
following table:

Name and Address of Beneficial Owner Directors
      and Executive Officers
    Amount and Nature of Beneficial Ownership
    Percent of Class(1)Alex Smid 3625 N. Hall, Suite 900 Dallas, Texas
      U.S.A.
    22,418,205
    37.05%Daniel Jackson 3625 N. Hall, Suite 900 Dallas,
      Texas U.S.A.
    Nil
    NilDirectors and Officers as a group (2
      persons)
    22,418,205
    37.05%


* less than 1%

|(1) | Based on 60,505,000 shares of common stock issued and
      outstanding as of December 12, 2007. Except as otherwise indicated, we
      believe that the beneficial owners of the common stock listed above, based
      on information furnished by such owners, have sole investment and voting
      power with respect to such shares, subject to community property laws
      where applicable. Beneficial ownership is determined in accordance with
      the rules of the Securities and Exchange Commission and generally includes
      voting or investment power with respect to securities. Shares of common
      stock subject to options or warrants currently exercisable or exercisable
      within 60 days are deemed outstanding for the purposes of computing the
      percentage ownership of the person holding such options or warrants, but
      are not deemed outstanding for the purposes of computing the percentage
      ownership of any other person.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|(2) | The named parties have dispositive and voting power over
      these shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

Changes in Control

We are unaware of any contract or other arrangement the
operation of which may at a subsequent date result in a change of control of our
company.

Item 12. Certain Relationships and Related
Transactions.

Except as otherwise indicated below, we have not been a party
to any transaction, proposed transaction, or series of transactions in which the
amount involved exceeds $60,000, and in which, to our knowledge, any of our
directors,

22

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officers, five percent beneficial security holder, or any
member of the immediate family of the foregoing persons has had or will have a
direct or indirect material interest.

During the year ended August 31, 2007, the Company received
short term loans from a related party. The following table shows the amount due
at August 31, 2007:

|Short term
      loan              |   | August 31, 2007 | 
|---------------------------------- | - | --------------- | 
|Non interest bearing and unsecured |   |                 | 
|Alex Smid                          | $ | 239,762         | 
|                                   |   |                 | 
|Total                              | $ | 239,762         | 

Related party short term loans are non interest bearing,
unsecured and due on demand. Since there is no stated interest rate for the
loans, interest was imputed at 8% per annum. Accrued interest on these loans at
August 31, 2007 was $7,544.

Item 13. Exhibits

Exhibits required by Item 601 of Regulation S-B

|Exhibit Number | Description                                                                                                                                                                                   
|-------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|               |                                                                                                                                                                                               
|(3)            | (i) Articles of
      Incorporation; and (ii) Bylaws                                                                                                                                          
|               |                                                                                                                                                                                               
|3.1            | Articles of Incorporation
      (incorporated by reference from our Form SB-2 Registration Statement,
      filed on October 13, 2004, as amended).                                           
|               |                                                                                                                                                                                               
|3.2            | Bylaws (incorporated by
      reference from our Form SB-2 Registration Statement, filed on October 13,
      2004, as amended).                                                              
|               |                                                                                                                                                                                               
|(4)            | Form of Share
      Certificate                                                                                                                                                               
|               |                                                                                                                                                                                               
|4.1            | Form of Share Certificate
      (incorporated by reference from our Form SB-2 Registration Statement,
      filed on October 13, 2004, as amended).                                           
|               |                                                                                                                                                                                               
|(10)           | Material Contracts                                                                                                                                                                            
|               |                                                                                                                                                                                               
|10.1           | Work Statement filed March 18,
      2005. (incorporated by reference from our Form SB-2 Registration
      Statement, filed on October 13, 2004, as amended).                                
|               |                                                                                                                                                                                               
|10.2           | Option to Purchase Agreement 
      Boss Group of Companies (incorporated by reference from our Current Report
      on Form 8-K, filed on October 11, 2006).                                
|               |                                                                                                                                                                                               
|10.3           | Line of Credit with Uniform
      Ventures Ltd. (incorporated by reference from our Current Report on Form
      8-K, filed on October 11, 2006).                                             
|               |                                                                                                                                                                                               
|10.4           | Purchase agreement for
      industrial plant facility in Quitman County, Mississippi
      (incorporated  by reference from our Current Report on Form 8-K,
      filed on October 11, 2006).
|              
|(14)           |                                                                                                                                                                                               
|               |                                                                                                                                                                                               
|14.1           | Code of Ethics (Filed with the
      SEC as an exhibit to our Annual Report on Form 10-KSB filed on December 2,
      2005).                                                                  
|               |                                                                                                                                                                                               
|(21)           |                                                                                                                                                                                               
|               |                                                                                                                                                                                               
|21.1           | Southridge Ethanol Inc. (a
      Mississippi corporation).                                                                                                                                    
|               | Southridge Environmental Inc. (a Mississippi
      corporation).                                                                                                                              

23

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|(31)  | 302 Certification                                                             
|----- | ------------------------------------------------------------------------------
|      |                                                                               
|31.1* | Section
      302 Certification under Sarbanes-Oxley Act of 2002 of Alex Smid.
|      |                                                                               
|(32)  | 906 Certification                                                             
|      |                                                                               
|32.1* | Section
      906 Certification under Sarbanes-Oxley Act of 2002 of Alex Smid.

*Filed herewith

Item 14. Principal Accountant Fees and Services

The following table sets forth the fees billed to the Company
for professional services rendered by the Company's principal accountant, for
the year ended August 31, 2007 and August 31, 2006:

|Services           | 2007   | 2006  
|------------------ | ------ | ------
|Audit fees         | 23,800 | 15,000
|Audit related fees | Nil    | Nil   
|Tax fees           | Nil    | Nil   
|All other fees     | 13,630 | 16,824
|                   |        |       
|Total fees         | 37,430 | 31,824

Audit Fees. Consist of fees billed for professional
services rendered for the audits of our financial statements, reviews of our
interim consolidated financial statements included in quarterly reports,
services performed in connection with filings with the Securities & Exchange
Commission and related comfort letters and other services that are normally
provided by Principal Accountants.

Tax Fees. Consist of fees billed for professional
services for tax compliance, tax advice and tax planning. These services include
assistance regarding federal, state and local tax compliance and consultation in
connection with various transactions and acquisitions.

We do not use our Principal Accounts for financial information
system design and implementation. These services, which include designing or
implementing a system that aggregates source data underlying the financial
statements or generates information that is significant to our financial
statements, are provided internally or by other service providers. We do not
engage our Principal Accountant to provide compliance outsourcing services.

Effective May 6, 2003, the Securities and Exchange Commission
adopted rules that require that before Principal Accountants are engaged by us
to render any auditing or permitted non-audit related service, the engagement
be:

- approved by our audit committee (which consists of our entire board of
  directors); or
- entered into pursuant to pre-approval policies and procedures established
  by the board of directors, provided the policies and procedures are detailed
  as to the particular service, the board of directors is informed of each
  service, and such policies and procedures do not include delegation of the
  board of directors' responsibilities to management.

The board of directors pre-approves all services provided by
our independent auditors. All of the above services and fees were reviewed and
approved by the board of directors either before or after the respective
services were rendered.

The board of directors has considered the nature and amount of
fees billed by our Principal Accountants and believes that the provision of
services for activities unrelated to the audit is compatible with maintaining
our Principal Accountants independence.

24

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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.

SOUTHRIDGE ENTERPRISES INC.

By: /s/ Alex Smid
  Alex SmidPresident and
Director(Principal Executive Officer, Principal FinancialOfficer and
Principal Accounting Officer)

Date: December 17, 2007

Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on behalf of
the registrant and in the capacities and on the dates indicated.

By: /s/ Alex Smid
  Alex SmidPresident and
Director(Principal Executive Officer, Principal FinancialOfficer and
Principal Accounting Officer)

Date: December 17, 2007

By: /s/ Daniel Jackson
  Daniel
JacksonDirector

Date: December 17, 2007

25

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