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**FORM      10-QSB**

**Commission      File Number 0-13111**

**ANALYTICAL      SURVEYS, INC.**

| **Colorado**                                                                                            |   | **84-0846389**                                                            |
|---------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------|
| (*State                  or other jurisdiction of**incorporation                  or organization*)     |   | (*IRS                  Employer**Identification                  Number*) |
|                                                                                                    |
| **8610                  N. NEW BRAUNFELS, SUITE 205****,                  SAN ANTONIO, TEXAS****78217** |
| (*Address                  of principal executive offices*)                                             |
|                                                                                                    |
| **(210)                  657-1500**                                                                     |
| (*Registrant’s                  telephone number, including area code*)                           |

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**TABLE      OF CONTENTS**

|                   |                                                                                           | PAGE   |
|------------------------|------------------------------------------------------------------------------------------------|--------|
| PART                1. | FINANCIAL                INFORMATION                                                           |   |
|                   |                                                                                           |   |
| Item                1. | Financial                Statements                                                            | 3      |
|                   |                                                                                           |   |
| Item                2. | Management’s                Discussion and Analysis or                Plan of Operations | 17     |
|                   |                                                                                           |   |
| Item                3. | Controls                and Procedures                                                         | 28     |
|                   |                                                                                           |   |
| PART                2. | OTHER                INFORMATION                                                               |   |
|                   |                                                                                           |   |
| Item                1. | Legal                Proceedings                                                               | 29     |
|                   |                                                                                           |   |
| Item                2. | Unregistered                Sales of Securities and Use of                Proceeds             | 29     |
|                   |                                                                                           |   |
| Item                3. | Defaults                Upon Senior Securities                                                 | 29     |
|                   |                                                                                           |   |
| Item                4. | Submissions                of Matters to a Vote of Security                Holders             | 29     |
|                   |                                                                                           |   |
| Item                5. | Other                Information                                                               | 29     |
|                   |                                                                                           |   |
| Item                6. | Exhibits                                                                                       |   |
|                   |                                                                                           |   |
| SIGNATURES             | 30                                                                                             |

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Table          of          Contents

**Part        I**

**Financial        Information**

**Item        1. Financial Statements**

**ANALYTICAL        SURVEYS, INC.**

**CONSOLIDATED        BALANCE SHEETS**

**(In        thousands**
**)**

| **Assets**                                                                                                                                                                              |   | **December                  31,****2006** |    | **September                  30,****2006** |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------|---------|--------------------------------------------|--------|
| Current                  assets:                                                                                                                                                        |   | (Unaudited)                               |    |                                       |   |
| Cash                  and cash equivalents                                                                                                                                              |   | $                                         | 1,284   |                                       | $      | 1,357 |   |
| Accounts                  receivable, net of allowance for doubtful accounts of $0 and $50                  at                  December 31 and September 30, 2006, respectively        |   |                                      | 147     |                                       |   | 1,322 |   |
| Revenue                  earned in excess of billings, net                                                                                                                              |   |                                      | — |                                       |   | 49 |   |
| Prepaid                  expenses and other                                                                                                                                             |   |                                      | 55      |                                       |   | 93 |   |
| Deferred                  financing costs                                                                                                                                               |   |                                      | 168     |                                       |   | 133 |   |
| Total                  current assets                                                                                                                                                   |   |                                      | 1,654   |                                       |   | 2,954 |   |
| Oil                  and natural gas properties and equipment; full cost method of                  accounting                                                                          |   |                                      | 2,319   |                                       |   | 2,019 |   |
| Equipment                  and leasehold improvements, at cost:                                                                                                                         |   |                                      |    |                                       |   |   |   |
| Equipment                                                                                                                                                                               |   |                                      | 335     |                                       |   | 570 |   |
| Furniture                  and fixtures                                                                                                                                                 |   |                                      | 48      |                                       |   | 98 |   |
| Leasehold                  improvements                                                                                                                                                 |   |                                      | 8       |                                       |   | 1 |   |
|                                                                                                                                                                                    |   |                                      | 391     |                                       |   | 669 |   |
| Less                  accumulated depreciation and amortization                                                                                                                         |   |                                      | (359    | )                                          |   | (605 | ) |
| Net                  equipment and leasehold improvements                                                                                                                               |   |                                      | 32      |                                       |   | 64 |   |
| Other                  assets                                                                                                                                                           |   |                                      | 150     |                                       |   | — |   |
| Total                  assets                                                                                                                                                           |   | $                                         | 4,155   |                                       | $      | 5,037 |   |
| **Liabilities                  and Stockholders’ Equity**                                                                                                                         |   |                                      |    |                                       |   |   |   |
| Current                  liabilities:                                                                                                                                                   |   |                                      |    |                                       |   |   |   |
| Senior                  secured convertible note, net of discount                                                                                                                       |   | $                                         | 1,400   |                                       | $      | 1,957 |   |
| Current                  portion of capital lease obligations                                                                                                                           |   |                                      | 16      |                                       |   | 16 |   |
| Billings                  in excess of revenue earned                                                                                                                                   |   |                                      | — |                                       |   | 99 |   |
| Accounts                  payable                                                                                                                                                       |   |                                      | 112     |                                       |   | 45 |   |
| Accrued                  liabilities                                                                                                                                                    |   |                                      | 74      |                                       |   | 239 |   |
| Accrued                  payroll and related benefits                                                                                                                                   |   |                                      | 96      |                                       |   | 132 |   |
| Total                  current liabilities                                                                                                                                              |   |                                      | 1,698   |                                       |   | 2,488 |   |
| Long-term                  debt:                                                                                                                                                        |   |                                      |    |                                       |   |   |   |
| Capital                  lease obligations, less current portion                                                                                                                        |   |                                      | 9       |                                       |   | 13 |   |
| Total                  long-term liabilities                                                                                                                                            |   |                                      | 9       |                                       |   | 13 |   |
| Total                  liabilities                                                                                                                                                      |   |                                      | 1,707   |                                       |   | 2,501 |   |
| Commitments                  and contingencies                                                                                                                                          |   |                                      |    |                                       |   |   |   |
| Stockholders’                  equity:                                                                                                                                            |   |                                      |    |                                       |   |   |   |
| Convertible                  preferred stock, no par value; authorized 2,500 shares; 280 issued                  and                  outstanding at December 31 and September 30, 2006 |   |                                      | 261     |                                       |   | 261 |   |
| Common                  stock, no par value; authorized 100,000 shares; 3,779 shares issued                  and                  outstanding at December 31 and September 30, 2006     |   |                                      | 36,590  |                                       |   | 36,341 |   |
| Accumulated                  deficit                                                                                                                                                    |   |                                      | (34,403 | )                                          |   | (34,066 | ) |
| Total                  stockholders’ equity                                                                                                                                       |   |                                      | 2,448   |                                       |   | 2,536 |   |
| Total                  liabilities and stockholders’ equity                                                                                                                       |   | $                                         | 4,155   |                                       | $      | 5,037 |   |

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**ANALYTICAL        SURVEYS, INC.**

**CONSOLIDATED        STATEMENTS OF OPERATIONS**

**(**
**In        thousands, except per share amounts)**

**(Unaudited**

|                                                          |   | **Three                      Months Ended** |    |
|---------------------------------------------------------------|--------|---------------------------------------------|---------|
|                                                          |   | **December                      31**        |    |
|                                                          |   | **2006**                                    |    | **2005** |   |
|                                                          |   |                                        |    |   |   |
| Revenues                                                      |   |                                        |    |   |   |
| GIS                      services                             |   | $                                           | 240     |   | $ | 1,360 |   |
| Oil                      and gas                              |   |                                        | 3       |   |   | — |   |
| Total                      revenues                           |   |                                        | 243     |   |   | 1,360 |   |
|                                                          |   |                                        |    |   |   |   |   |
| Costs                      and expenses:                      |   |                                        |    |   |   |   |   |
| Salaries,                      wages and benefits             |   |                                        | 221     |   |   | 781 |   |
| Subcontractor                      costs                      |   |                                        | — |   |   | 139 |   |
| Other                      general and administrative         |   |                                        | 186     |   |   | 452 |   |
| Depreciation,                      depletion and amortization |   |                                        | 5       |   |   | 21 |   |
| Total                      operating costs                    |   |                                        | 412     |   |   | 1,393 |   |
| Loss                      from operations                     |   |                                        | (169    | ) |   | (33 | ) |
| Other                      income (expense):                  |   |                                        |    |   |   |   |   |
| Interest                      expense, net                    |   |                                        | (99     | ) |   | (13 | ) |
| Gain                      (loss) on sale of assets            |   |                                        | (28     | ) |   | 3 |   |
| Other                      income (expense), net              |   |                                        | (36     | ) |   | — |   |
| Total                      other income (expense), net        |   |                                        | (163    | ) |   | (10 | ) |
| Loss                      before income taxes                 |   |                                        | (332    | ) |   | (43 | ) |
| Provision                      for income taxes               |   |                                        | — |   |   | — |   |
| Net                      loss                                 |   |                                        | (332    | ) |   | (43 | ) |

| Dividends                    on preferred stock                                       |   |   | (5      | )      |   | — |   |
|---------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|---------|--------|
| Net                    loss available to common stockholders                          |   | $      | (337    | )      | $      | (43     | )      |
|                                                                                  |   |   |    |   |   |    |   |
| Basic                    net loss per common share                                    |   | $      | (0.09   | )      | $      | (0.01   | )      |
| Preferred                    stock dividends                                          |   |   | — |   |   | — |   |
| Basic                    net loss per common share available to common shareholders   |   | $      | (0.09   | )      | $      | (0.01   | )      |
|                                                                                  |   |   |    |   |   |    |   |
| Diluted                    net loss per common share                                  |   | $      | (0.09   | )      | $      | (0.01   | )      |
| Preferred                    stock dividends                                          |   |   | — |   |   | — |   |
| Diluted                    net loss per common share available to common shareholders |   | $      | (0.09   | )      | $      | (0.01   | )      |
|                                                                                  |   |   |    |   |   |    |   |
| Weighted                    average common shares:                                    |   |   |    |   |   |    |   |
| Basic                                                                                 |   |   | 3,779   |   |   | 2,869   |   |
| Diluted                                                                               |   |   | 3,779   |   |   | 2,869   |   |

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**ANALYTICAL      SURVEYS, INC.**

**CONSOLIDATED      STATEMENT OF STOCKHOLDERS’ EQUITY**

**For      the Three Months Ended December 31, 2006**

**(In      thousands)**

**(Unaudited)**

|                                                                  |   | **Convertible****Preferred                  Stock**  | **Common                  Stock** |   | **Accumulated** |       |   | **Total                  Stockholders’** |       |
|-----------------------------------------------------------------------|--------|-----------------------------------------------------------|-----------------------------------|--------|-----------------|------------|--------|------------------------------------------------|------------|
|                                                                  |   |                                                      | **Shares**                        |   |            | **Amount** |   |                                           | **Shares** |   |   | **Amount** |   |   | **Deficit** |   |   | **Equity** |   |
| Balances                  at September 30, 2006                       |   |                                                      | 280                               |   | $               | 261        |   |                                           | 3,779      |   | $ | 36,341 |   | $ | (34,066 | ) | $ | 2,536 |   |
| Amortization                  of stock-based compensation             |   |                                                      | —                           |   |            | —    |   |                                           | —    |   |   | 2 |   |   | — |   |   | 2 |   |
| Registration                  costs for Class E Warrants              |   |                                                      | —                           |   |            | —    |   |                                           | —    |   |   | (25 | ) |   | — |   |   | (25 | ) |
| Warrants                  issued pursuant to Senior Convertible Notes |   |                                                      | —                           |   |            | —    |   |                                           | —    |   |   | 272 |   |   | — |   |   | 272 |   |
| Dividends                  on preferred stock                         |   |                                                      | —                           |   |            | —    |   |                                           | —    |   |   | — |   |   | (5 | ) |   | (5 | ) |
| Net                  loss                                             |   |                                                      | —                           |   |            | —    |   |                                           | —    |   |   | — |   |   | (332 | ) |   | (332 | ) |
| Balances                  at December 31, 2006                        |   |                                                      | 280                               |   | $               | 261        |   |                                           | 3,779      |   | $ | 36,590 |   | $ | (34,403 | ) | $ | 2,448 |   |

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Table          of Contents

**ANALYTICAL      SURVEYS, INC.**

**CONSOLIDATED      STATEMENTS OF CASH FLOWS**

**(In      thousands)**

**(Unaudited)**

|                                                                                                              |   | **Three                  Months Ended** |    |
|-------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------|---------|
|                                                                                                              |   | **December                  31,**       |    |
|                                                                                                              |   | **2006**                                |    | **2005** |   |
| Cash                  flows from operating activities:                                                            |   |                                    |    |   |   |
| Net                  loss                                                                                         |   | $                                       | (332    | ) | $ | (43 | ) |
| Adjustments                  to reconcile net loss to net cash provided by operating                  activities: |   |                                    |    |   |   |   |   |
| Depreciation,                  depletion and amortization                                                         |   |                                    | 5       |   |   | 21 |   |
| Amortization                  of stock-based compensation expenses                                                |   |                                    | 2       |   |   | — |   |
| Accretion                  of interest on convertible note                                                        |   |                                    | 65      |   |   | — |   |
| Amortization                  of deferred loan costs                                                              |   |                                    | 149     |   |   | — |   |
| Accretion                  of interest expense on preferred stock                                                 |   |                                    | — |   |   | 12 |   |
| Loss                  (gain) on sale of assets                                                                    |   |                                    | 28      |   |   | (3 | ) |
| Changes                  in operating assets and liabilities:                                                     |   |                                    |    |   |   |   |   |
| Accounts                  receivable                                                                              |   |                                    | 1,175   |   |   | 306 |   |
| Revenue                  earned in excess of billings, net                                                        |   |                                    | 49      |   |   | (95 | ) |
| Prepaid                  expenses and other                                                                       |   |                                    | 38      |   |   | 13 |   |
| Billings                  in excess of revenue earned                                                             |   |                                    | (99     | ) |   | (68 | ) |
| Accounts                  payable and accrued liabilities                                                         |   |                                    | (98     | ) |   | (171 | ) |
| Accrued                  payroll and related benefits                                                             |   |                                    | (36     | ) |   | (264 | ) |
| Net                  cash provided by (used in) operating activities                                              |   |                                    | 946     |   |   | (292 | ) |
| Cash                  flows from investing activities:                                                            |   |                                    |    |   |   |   |   |
| Purchase                  of equipment and leasehold improvements                                                 |   |                                    | (8      | ) |   | (6 | ) |
| Investment                  in oil and gas properties                                                             |   |                                    | (300    | ) |   | — |   |
| Investment                  in nonrefundable purchase option                                                      |   |                                    | (150    | ) |   | — |   |
| Cash                  proceeds from sale of assets                                                                |   |                                    | 7       |   |   | 4 |   |
| Net                  cash used in investing activities                                                            |   |                                    | (451    | ) |   | (2 | ) |
| Cash                  flows from financing activities:                                                            |   |                                    |    |   |   |   |   |
| Principal                  payments on capital lease obligations                                                  |   |                                    | (4      | ) |   | — |   |
| Dividends                  paid on preferred stock                                                                |   |                                    | (5      | ) |   | — |   |
| Principal                  payment on convertible note                                                            |   |                                    | (2,000  | ) |   | — |   |
| Issuance                  of convertible note, net of expenses                                                    |   |                                    | 1,466   |   |   | — |   |
| Fees                  associated with registration of warrants                                                    |   |                                    | (25     | ) |   | — |   |
| Net                  cash used in financing activities                                                            |   |                                    | (568    | ) |   | — |   |
| Net                  decrease in cash                                                                             |   |                                    | (73     | ) |   | (294 | ) |
| Cash                  and cash equivalents at beginning of period                                                 |   |                                    | 1,357   |   |   | 622 |   |
| Cash                  and cash equivalents at end of period                                                       |   | $                                       | 1,284   |   | $ | 328 |   |
| Supplemental                  disclosures of cash flow information:                                               |   |                                    |    |   |   |   |   |
| Cash                  paid for interest                                                                           |   | $                                       | 18      |   | $ | 1 |   |
| Non-cash                  financing activities:                                                                   |   |                                    |    |   |   |   |   |
| Accretion                  of interest on preferred stock                                                         |   |                                    | — |   |   | 12 |   |
| Accrual                  of dividends on preferred stock                                                          |   | $                                       | 5       |   | $ | — |   |
| Warrants                  issued related to convertible debt                                                      |   | $                                       | 272     |   | $ | — |   |

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**ANALYTICAL      SURVEYS, INC.**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**December      31, 2006**

**(Unaudited)**

**1.**
**Summary      of Significant Accounting Policies**

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Table          of Contents

*Accounting      for Stock Issued to Employees”*
*Accounting      for Stock-Based Compensation--Transition and Disclosure"*
*“Accounting      for Stock-Based Compensation”*

*Share      Based Payment*

|                                      |   | **Number                of Options****(thousands)** |    | **Weighted                Average****Exercise                Price** |   |
|-------------------------------------------|--------|-----------------------------------------------------|---------|----------------------------------------------------------------------|--------|
|                                      |   |                                                |    |                                                                 |   |
| Balance,                October 1, 2006   |   |                                                | 521     |                                                                 | $      | 1.46 |   |
| Granted                                   |   |                                                | — |                                                                 |   | — |   |
| Exercised                                 |   |                                                | — |                                                                 |   | — |   |
| Forfeited                                 |   |                                                | (31     | )                                                                    |   | 5.73 |   |
| Balance,                December 31, 2006 |   |                                                | 490     |                                                                 | $      | 1.19 |   |

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Table          of Contents

| **Range                of****Exercise****Price** |   | **Number****Outstanding****at****December                31,****2006** |    | **Weighted****Average****Exercise****Price** |   | **Weighted****Average****Remaining****Contractual****Life                (years)** |   | **Number****Exercisable****at                December 31,****2006** |   | **Weighted****Average****Exercise****Price** |   |
|--------------------------------------------------|--------|------------------------------------------------------------------------|---------|----------------------------------------------|--------|------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------|--------|----------------------------------------------|--------|
| $0.00                - 1.00                      |   |                                                                   | 225,000 |                                         | $      | 0.69                                                                               |   |                                                                | 9.7    |                                         |   | 225,000 |   | $ | 0.69 |   |
| 1.01                - 2.00                       |   |                                                                   | 195,000 |                                         |   | 1.32                                                                               |   |                                                                | 8.7    |                                         |   | 187,500 |   |   | 1.31 |   |
| 2.01                - 3.00                       |   |                                                                   | 70,000  |                                         |   | 2.35                                                                               |   |                                                                | 8.1    |                                         |   | 52,500 |   |   | 2.35 |   |
| 3.01                - 20.00                      |   |                                                                   | 200     |                                         |   | 20.00                                                                              |   |                                                                | 0.1    |                                         |   | 200 |   |   | 20.00 |   |
| 20.01                - 500.00                    |   |                                                                   | 25      |                                         |   | 45.90                                                                              |   |                                                                | 0.2    |                                         |   | 25 |   |   | 45.90 |   |
| $                0.00 - 500.00                   |   |                                                                   | 490,225 |                                         | $      | 1.19                                                                               |   |                                                                | 9.1    |                                         |   | 465,225 |   | $ | 1.14 |   |

|                                                 |   | **Non-Vested****Shares** |    | **Fair                Value** |   |
|------------------------------------------------------|--------|--------------------------|---------|-------------------------------|--------|
| Non-exercisable                at September 30, 2006 |   |                     | 37,500  |                          | $      | 1.94 |   |
| Granted                                              |   |                     | — |                          |   | — |   |
| Became                exercisable                    |   |                     | 8,750   |                          |   | 1.34 |   |
| Forfeited                                            |   |                     | (3,750  | )                             |   | 2.30 |   |
| Non-exercisable                at December 31, 2006  |   |                     | 25,000  |                          | $      | 2.09 |   |

|                                   |   | **Three                Months Ended****December                31, 2005** |                   |
|----------------------------------------|--------|---------------------------------------------------------------------------|------------------------|
| Dividend                yield          |   |                                                                      | 0                      | % |
| Anticipated                volatility  |   |                                                                      | 92                     | % |
| Risk-free                interest rate |   |                                                                      | 4.0                    | % |
| Expected                lives          |   |                                                                      | 2                years |   |

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Table          of Contents

|                                                                                                   |   | **Three                  Months Ended**   |    |
|--------------------------------------------------------------------------------------------------------|--------|-------------------------------------------|---------|
|                                                                                                   |   | **December                  31, 2005**    |    |
|                                                                                                   |   | **(in                  thousands except** |    |
|                                                                                                   |   | **per                  share earnings)**  |    |
| Net                  loss available to common shareholders as reported                                 |   | $                                         | (43     | ) |
| Add:                  Stock-based employee compensation included in reported net                  loss |   |                                      | — |   |
| Less:                  Pro forma option expense                                                        |   |                                      | (6      | ) |
| Pro                  forma net loss                                                                    |   | $                                         | (49     | ) |
|                                                                                                   |   |                                      |    |   |
| Basic                  net loss per share, as reported                                                 |   | $                                         | (0.01   | ) |
| Less:                  Pro forma option expense                                                        |   |                                      | (0.01   | ) |
| Pro                  forma basic net loss per share                                                    |   | $                                         | (0.02   | ) |
|                                                                                                   |   |                                      |    |   |
| Diluted                  net loss per share, as reported                                               |   | $                                         | (0.01   | ) |
| Less:                  Pro forma option expense                                                        |   |                                      | (0.01   | ) |
| Pro                  forma diluted net loss per share                                                  |   | $                                         | (0.02   | ) |

| **2.  ** | **Earnings                Per Share** |
|--------------------|---------------------------------------|

|                                                     |   | **Three                Months Ended**   |     |
|----------------------------------------------------------|--------|-----------------------------------------|----------|
|                                                     |   | **December                31,**         |     |
|                                                     |   |                                    | **2006** |   |   | **2005** |   |
|                                                          |   | **(in                thousands except** |
|                                                          |   | **per                share earnings)**  |
| **Basic**                                                |   |                                    |
| Net                loss available to common shareholders |   | $                                       | (337     | ) | $ | (43 | ) |
| Weighted                average shares                   |   |                                    | 3,779    |   |   | 2,869 |   |
| Net                loss per share                        |   | $                                       | (0.09    | ) | $ | (0.01 | ) |
| Preferred                stock dividends                 |   |                                    | —  |   |   | — |   |
| Net                loss per share available to           |   |                                    |     |   |   |   |   |
| common                shareholders                       |   | $                                       | (0.09    | ) | $ | (0.01 | ) |
| **Diluted**                                              |   |                                    |     |   |   |   |   |
| Net                loss available to common shareholders |   | $                                       | (337     | ) | $ | (43 | ) |
| Weighted                average shares                   |   |                                    | 3,779    |   |   | 2,869 |   |
| Net                loss per share                        |   | $                                       | (0.09    | ) | $ | (0.01 | ) |
| Preferred                stock dividends                 |   |                                    | —  |   |   | — |   |
| Net                loss per share available to           |   |                                    |     |   |   |   |   |
| common                shareholders                       |   | $                                       | (0.09    | ) | $ | (0.01 | ) |

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| **3.  ** | **Impact                of Accounting                Pronouncements** |
|--------------------|-----------------------------------------------------------------------|

*Disclosures      about Oil and Gas Producing Activities”,*

| a.   | proved                oil and gas reserve quantities; |
|----------------|-------------------------------------------------------|

| b.   | capitalized                costs relating to oil and gas producing activities; |
|----------------|--------------------------------------------------------------------------------|

| c.   | costs                incurred in oil and gas property acquisition, exploration, and development                activities; |
|----------------|----------------------------------------------------------------------------------------------------------------------------|

| d.   | results                of operations for oil and gas producing activities;                and |
|----------------|-----------------------------------------------------------------------------------------------|

| e.   | a                standardized measure of discounted future net cash flows relating                to                proved oil and gas reserve                quantities. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **4.  ** | **Oil                and Natural Gas Properties and                Equipment** |
|--------------------|--------------------------------------------------------------------------------|

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| **5.  ** | **Accrued                Payroll and Related                Benefits** |
|--------------------|------------------------------------------------------------------------|

|                                                     |   |   | **December                31,**** ****2006** |   |   | **September                30,****2006** |   |
|-----------------------------------------------------|--------|--------|---------------------------------------------------|--------|--------|------------------------------------------|--------|
| Accrued                payroll                      |   | $      | 66                                                |   | $      | 81                                       |   |
| Accrued                health benefits              |   |   | 4                                                 |   |   | 15                                       |   |
| Accrued                vacation                     |   |   | 26                                                |   |   | 36                                       |   |
| Accrued                payroll and related benefits |   | $      | 96                                                |   | $      | 132                                      |   |

| **6.  ** | **Debt** |
|--------------------|----------|

| **Long-Term                Debt**                                |   |   | **December                31,****2006** |   |   | **September                30,****2006** |   |
|------------------------------------------------------------------|--------|--------|-----------------------------------------|--------|--------|------------------------------------------|--------|
| Senior                secured convertible notes, net of discount |   | $      | 1,400                                   |   | $      | 1,957                                    |   |
| Capital                lease obligations                         |   |   | 25                                      |   |   | 29                                       |   |
|                                                             |   |   | 1,425                                   |   |   | 1,986                                    |   |
| Less                current portion                              |   |   | (1,416                                  | )      |   | (1,973                                   | )      |
|                                                             |   | $      | 9                                       |   | $      | 13                                       |   |

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| **7.  ** | **Convertible****Preferred Stock**  |
|--------------------|------------------------------------------|

** **

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| **8.  ** | **Segment                Information** |
|--------------------|----------------------------------------|

|                                                       |   | **GIS****Services** |    | **Energy****Division** |   | **Non-****Segment** |   | **Total** |    |
|------------------------------------------------------------|--------|---------------------|---------|------------------------|--------|---------------------|--------|-----------|---------|
| **Quarter                  ending December 31, 2006**      |   |                |    |                   |   |                |   |      |    |   |   |   |   |
| Operations                                                 |   |                |    |                   |   |                |   |      |    |   |   |   |   |
| Revenues                                                   |   | $                   | 240     |                   | $      | 3                   |   | $         | — |   | $ | 243 |   |
| Loss                  from operations                      |   |                | (19     | )                      |   | (150                | )      |      | — |   |   | (169 | ) |
| Interest                  expense, net                     |   |                | — |                   |   | —             |   |      | (99     | ) |   | (99 | ) |
| Other                                                      |   |                | — |                   |   | —             |   |      | (64     | ) |   | (64 | ) |
| Net                  loss                                  |   |                |    |                   |   |                |   |      |    |   | $ | (332 | ) |
| Assets                                                     |   |                |    |                   |   |                |   |      |    |   |   |   |   |
| Segment                  assets                            |   | $                   | 151     |                   | $      | 2,319               |   | $         | — |   | $ | 2,470 |   |
| Non-segment                  assets                        |   |                | — |                   |   | —             |   |      | 1,685   |   |   | 1,685 |   |
| Consolidated                  assets                       |   |                |    |                   |   |                |   |      |    |   | $ | 4,155 |   |
| Capital                  expenditures                      |   | $                   | — |                   | $      | 300                 |   | $         | 8       |   | $ | 308 |   |
| Depreciation,                  depletion, and amortization |   | $                   | 4       |                   | $      | —             |   | $         | 1       |   | $ | 5 |   |

| **9.  ** | **Litigation                and Other Contingencies** |
|--------------------|-------------------------------------------------------|

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| **10.  ** | **Concentration                of Credit Risk** |
|---------------------|-------------------------------------------------|

| **11.  ** | **Subsequent                Events** |
|---------------------|--------------------------------------|

**Item      2. Management’s Discussion And Analysis Or Plan Of      Operations**

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**Overview**

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**Critical      Accounting Policies**

**Revenue      Recognition. **

**Oil      and Gas Properties. **

**Valuation      of Accounts Receivable. **

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**Litigation.      **
*Accounting      for Contingencies*

**Income      Taxes. **

**Results      of Operations **

|                                                     |   | **Three                Months Ended** |    |
|----------------------------------------------------------|--------|---------------------------------------|---------|
|                                                     |   | **December                31,**       |    |
|                                                     |   | **2006**                              |    | **2005** |   |
| **PERCENTAGE                OF REVENUES**:               |   |                                  |    |   |   |   |   |
| Revenues                                                 |   |                                  | 100.0   | % |   | 100.0 | % |
| Costs                and expenses                        |   |                                  |    |   |   |   |   |
| Salaries,                wages and related benefits      |   |                                  | 90.9    |   |   | 57.5 |   |
| Subcontractor                costs                       |   |                                  | — |   |   | 10.2 |   |
| Other                general and administrative          |   |                                  | 76.5    |   |   | 33.3 |   |
| Depreciation,                depletion and amortization  |   |                                  | 2.1     |   |   | 1.5 |   |
|                                                     |   |                                  |    |   |   |   |   |
| Loss                from operations                      |   |                                  | (69.5   | ) |   | (2.5 | ) |
|                                                     |   |                                  |    |   |   |   |   |
| Other                expense, net                        |   |                                  | (67.1   | ) |   | (0.7 | ) |
|                                                     |   |                                  |    |   |   |   |   |
| Loss                before income taxes                  |   |                                  | (136.6  | ) |   | (3.2 | ) |
| Provision                for income taxes                |   |                                  | — |   |   | — |   |
| Net                loss                                  |   |                                  | (136.6  | ) |   | (3.2 | ) |
| Dividends                on preferred stock              |   |                                  | (2.1    | ) |   | — |   |
| Net                loss available to common shareholders |   |                                  | (138.7  | )% |   | (3.2 | )% |

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**Three      Months Ended December 31, 2006 and 2005**

**Revenues**

**Salaries,      Wages and Benefits.**

**Subcontractor      Costs.**

**Other      General and Administrative. **

**Depreciation,      Depletion and Amortization. **

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**Interest      Expense, Net.**

**Other      Income (Expense).**

**Income      Taxes**

**Net      Loss. **

**Liquidity      and Capital Resources**

**Table      of Contractual Obligations.**

|                                                |   | **Fiscal                Year Ending September 30,** |     |
|-----------------------------------------------------|--------|-----------------------------------------------------|----------|
|                                                |   |                                                | **2007** |   |   | **2008** |  |   | **2009** |   |   | **2010** |   |   | **2011** |   |   | **Thereafter** |   |   | **Total** |   |
| Operating                leases                     |   | $                                                   | 35       |   | $ | 47 |   | $ | 49 |   | $ | 46 |   | $ | 47 |   | $ | 12 |   | $ | 236 |   |
| Capital                lease obligations            |   |                                                | 17       |   |   | 14 |   |   | — |   |   | — |   |   | — |   |   | — |   |   | 31 |   |
| Senior                secured convertible notes     |   |                                                | 179      |   |   | 1,686 |   |   | — |   |   | — |   |   | — |   |   | — |   |   | 1,865 |   |
| Interest                payments on preferred stock |   |                                                | 15       |   |   | 12 |   |   | — |   |   | — |   |   | — |   |   | — |   |   | 27 |   |
| Total                                               |   | $                                                   | 246      |   | $ | 1,759 |   | $ | 49 |   | $ | 46 |   | $ | 47 |   | $ | 12 |   | $ | 2,159 |   |

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| **Long-Term                Debt**                                |   | **December                31,**** ****2006** |   | **September                30, ****2006** |   |
|------------------------------------------------------------------|--------|---------------------------------------------------|--------|------------------------------------------------|--------|
| Senior                secured convertible notes, net of discount |   | $                                                 | 1,400  |                                           | $      | 1,957 |   |
| Other                debt and capital lease obligations          |   |                                              | 25     |                                           |   | 29 |   |
|                                                             |   |                                              | 1,425  |                                           |   | 1,986 |   |
| Less                current portion                              |   |                                              | (1,416 | )                                              |   | (1,973 | ) |
|                                                             |   | $                                                 | 9      |                                           | $      | 13 |   |

| i.   | "Accounts                receivable" is created when an amount becomes due from a customer,                which                typically occurs when an event specified in the contract triggers                a                billing. |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ii.   | "Revenues                in excess of billings" occur when we performed under a contract even                though a billing event was not triggered. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| iii.   | "Billings                in excess of revenues" occur when we received an advance or deposit                against work yet to be performed.  |
|------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                                              |   |   |      | **Conversion                  Price** |   | **Common                  Shares Issuable** |   |
|-------------------------------------------------------------------|--------|--------|-----------|---------------------------------------|--------|---------------------------------------------|--------|
| Series                  A Convertible Preferred Stock             |   |   | 280,000   |                                  | $      | 1.27                                        |   |   | 220,472 |   |
| Class                  A Warrants                                 |   |   | 381,890   |                                  |   | 1.34                                        |   |   | 381,890 |   |
| Class                  B Warrants                                 |   |   | 381,890   |                                  |   | 1.49                                        |   |   | 381,890 |   |
| Class                  E Warrants                                 |   |   | 752,072   |                                  |   | 1.186                                       |   |   | 752,072 |   |
| Warrants                  issued in November 2006                 |   |   | 2,564,079 |                                  |   | 0.58                                        |   |   | 2,564,029 |   |
| Senior                  secured convertible note                  |   | $      | 1,650,000 |                                  |   | 0.695                                       |   |   | 2,374,101 |   |
| Total                  shares issuable and weighted average price |   |   |      |                                  | $      | 0.80                                        |   |   | 6,674,454 |   |

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**Item      3. Controls and Procedures**

***(a)      Evaluation of disclosure controls and procedures***

***(b)      Changes in internal control over financial reporting.***

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**Part      II**

**Other      Information**

**Item      1. Legal Proceedings**

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

**Item      3. Defaults Upon Senior Securities.**

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

**Item      5. Other Information.**

**Item      6. Exhibits.**

**Exhibits:      **

| 31.1   | Section                302 Certification of Chief Executive                Officer |
|------------------|------------------------------------------------------------------------------------|

| 31.2   | Section                302 Certification of Principal Financial                Officer |
|------------------|----------------------------------------------------------------------------------------|

| 32.1   | Section                906 Certification of Principal Executive                Officer |
|------------------|----------------------------------------------------------------------------------------|

Section      906 Certification of Principal Financial      Officer

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**SIGNATURES**