UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

Form 10-K(Mark One)þANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended April 30, 2008TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from _________ to _________


Commission file number000-49870Big Cat Energy Corporation(Name of small business issuer in its charter)

Nevada
     61-1500382(State of Incorporation)
     (I.R.S. Employer Identification No.)


201 W. Lakeway, Ste. 1000Gillette, WY 82718(307) 685-3122



|Securities Registered Pursuant to Section 12(g) of the Act:Name of Each ExchangeTitle of Each Class                        on which Registered
|----------------------------------------------------------------------------------------------------------------------------------------------



|Common Stock, $.0001 par value                None
|--------------------------------------------------

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  ̈ Yes þNo

Indicate by check mark if the registrant is required to file reports pursuant to Section 13 or Section 15(d) of the Act  ̈ Yes þNo

Indicate by check mark whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 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. þYes  ̈ No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, 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-K or any amendment to this Form 10-K. þYes  ̈ No



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

Large accelerated filer  ̈
     Accelerated filer  ̈Non-accelerated filer  ̈
     Smaller reporting company þ(do not check if a smaller reporting company)


Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  ̈Yes þNo

State the aggregate market value of the voting and non-voting common equity held by non-affiliates: by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity , as of the last business day of the registrants most recently completed second fiscal quarter, $26,430,065

Indicate the number of shares outstanding of each of the issuers classes of common stock, as of the latest practicable date: 31,041,000 shares of common stock, $.0001 par value as of July 29, 2008

DOCUMENTS INCORPORATED BY REFERENCE

List hereunder the following documents if incorporated by reference and the Part of the form 10-K (e.g., Part I, Part II, etc.) into which the document is incorporated: (1) any annual report to security holders; (2) any proxy or information statement; and (3) any prospectus filed pursuant to Rule 424(b) or (c) of the Securities Act of 1933 (Securities Act). The listed documents should be clearly described for identification purposes (e.g., annual report to security holders for fiscal year ended December 24, 1980). None















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TABLE OF CONTENTSPagePART IItem 1.
     Description of Business
     4Item 2.
     Description of Property
     13Item 3.
     Legal Proceedings
     13Item 4.
     Submission of Matters to a Vote of Security Holders
     13PART IIItem 5.
     Market for Common Stock and Related Stockholder Matters
     14Item 7.
     Plan of Operations
     17Item 8.
     Financial Statements
     22Item 9.
     Changes in and Disagreements with Accountants on Accounting and FinancialDisclosure
     36Item 9A. Controls and Procedures
     36Item 9B. Other Information
     37PART IIIItem 10.
     Directors, Executive Officers, Promoters and Control Persons, compliance withsection 16(a) of the Exchange act
     37Item 11.
     Executive Compensation
     41Item 12. Security Ownership of Certain Beneficial Owners and Management
     46Item 13.
     Certain Relationships and Related Transactions
     48Item 14.
     Principal Accounting Fees and Services
     48PART IVItem 15.
     Exhibits
     50Signatures
     52














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PART I

ITEM 1.     BUSINESS.

Business

We are a Nevada corporation and own the exclusive rights to a technology known as the Aquifer Recharge Injection Device (ARID) which allows Coal Bed Methane (CBM) operators to re-inject water produced from productive coal seams. We have applied for the applicable patents for technology. The ARID tool uses the existing well bore to move water from the producing coal seam to a depleted aquifer of similar water quality. With the ARID tool and process in use, the production well will not require the discharge of any produced water, or the use of a separate re-injection well for any of the produced water. The produced water never leaves the well bore as it is redirected into different aquifer zones. These aquifers are identified from the geophysical logs for the well bore.

Principal Products and Business

The ARID is a method of water handling that permits an oil or gas well to also be an injection well by re-injecting water into a previously depleted aquifer of similar water quality. With the ARID tool and process in use, the production well will not require the discharge of any produced water, or the use of a separate re-injection well for any of the produced water. The produced water never leaves the well bore as it is redirected into different aquifers zones. These aquifers are easily identified from the geophysical logs. If our technology is adopted, we believe the use of the ARID in the coal bed methane industry will change water handling, and environmental impacts.

Regulatory Issues and Challenges

In order to produce the coal bed methane, water must be pumped from the well bore to the surface and then discharged. In order to discharge the water from a well to the land surface aNationalPollutionDischargeEliminationSystem permit (NPDES) is required from the StateDepartment ofEnvironmentalQuality (DEQ). The permit process takes approximately from 120 to 200 days for approval. If a company needs to impound the produced water as a condition of the NPDES permit, other permits may be needed as well, which will extend the time period of the permitting process. Currently, we estimate the total permitting time required to produce a Coal bed methane well is approximately 1.5 years.

The reason for the NPDES permit is to monitor pollutants entering into the receiving drainage system (watershed). Each drainage system has a regulated total mean daily load (TMDL) and/or other maximum constituent levels assigned to it. DEQ must monitor the discharged water entering the drainage system to prevent exceeding the regulated levels.

There have been many methods other than surface discharge used to deal with water issues faced by the coal bed methane industry, from impoundment to irrigation, atomization, and treatment. In the right situation each method is economically justifiable, yet each method has its limitations.



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Impoundment:Containment of produced water in water storage facilities, reservoirs, and ponds has been the preferred option for water management for several years. The shear size and number of these structures requires a large capital outlay. The success of this strategy relies on evaporation and infiltration. Infiltration becomes limited as the clays in the soil swell and as the reservoir or pond fills. Once the impoundment is full, wells need to be shut off or water rerouted until enough water has evaporated to allow additional reservoir capacity. Required permits and approvals include NPDES and related permits, groundwater investigations and installation of approved groundwater monitoring wells and programs and future reclamation to return the land to its original state. In some cases approval from the Army Corps of Engineers may also be required.

Irrigation:Irrigation involves the purchasing of irrigation equipment, i.e., side-roll, water cannon, center pivot or hand sets, and a soil study to determine effective treatment methods. This is an expensive water disposal option with a large capital outlay, but it works well on sandy soils. However, the majority of the Powder River Basin in Wyoming and Montana is overlain mostly by clay soils. Atomization utilizes a tall pipe topped by fine-particle spray nozzle for water dispersal. High evaporation rates are the goal of this method, but this means a higher concentration of salts will reach the ground, requiring more soil treatment. Currently, no NPDES permit is required for this method.

Treatment:Treatment and discharge of produced water is used primarily in areas close to a major drainage, like the Powder River in Wyoming and Montana. Currently the treatment and discharge in the Powder River Basin in Wyoming and Montana is generally as follows: (1) Winter discharges require an NPDES permit; (2) The DEQ currently will issue a direct discharge permit for only winter time discharge (8 months) and prohibit discharge during the irrigation season; (3) Water is treated to meet the approved standard; (4) If the water treatment facility is located away from the river, and the potential exists for the treated water to pick up salts while in transit, a pipeline must be laid to the river for direct discharge. The water treatment and discharge method is perhaps the most costly of all coal bed methane water disposal methods yet there are companies that determine that use of this method is the best way to produce their wells.

ARID-Our Process

Our ARID process uses the existing well bore to move water from the target coal seam to a depleted aquifer. This means the production well can also be the injection well. The produced water never leaves the well bore as it is redirected into perforations into different aquifer zones. These aquifers are identified from the geophysical logs the company runs to confirm the coal zones when the well is first drilled.

The hardware portion of the ARID process is a tool which is a device that is set above the pumping fluid level of the well and below the receiving aquifer. A water tight well head is placed at the top of the well to trap the water between the tool and the top of the well. Perforations are made into the casing adjacent to the receiving aquifer. A pump and water riser pipe are attached to the bottom of the tool. When the pump is operating, the water is pushed through the tool and takes the path of least resistance into the receiving aquifer through the perforations.



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The flow of gas through the ARID is quite simple. As the hydraulic head decreases, gas desorbs from the coal seam into a void between the bottom of the ARID and the top of the pumping fluid level. A gas bypass port on the ARID Tool allows the attachment of tubing to the top of the ARID. This port is open through the ARID to the gas which is trapped between the tool and the pumping fluid level. The pipe, full of gas, ascends up through the column of water and out through the water tight well head.

The ARID tool may be placed in an existing well or as a well is being drilled and completed by an operator.

Patents and Trademarks

Currently we own the following pending patent applications:

Fluid redistribution and fluid disposal in well bore environmentsUS Patent Application No. 11/399,793Filing Date: April 5, 2006Well Bore Fluid Redistribution and Fluid DisposalInternational Patent Application (PCT/US) No. 2006/012789Filing Date: April 5, 2006

We have not registered any trademarks with the United States Patent and Trademark office. We are currently in the process of applying for a trademark for the mark ARID.

Competition

We face competition for water handling through numerous sources depending on the method. Operators of wells can continue to create impoundments and enter into irrigation contracts. Operators can also use their own separate re-injection wells, or third party re-injection wells. With respect to ARID, we are not aware of any competitors within the industry that manufacture a similar product.

Governmental Regulation

There are no governmental regulations which affect the manufacture, development, lease, or sale of the ARID. However, as described above, the permitting process will affect the timing and the installation of the ARID tool.

Research and Development

We are developing another production tool for coal bed methane operations. This new product is a multi-completion tool and process, which upon successful development will allow operators of coal bed methane wells to produce multiple seams of coal from a single well bore. This multi-completion tool can be used in conjunction with the ARID.



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Insurance

Currently, we have in place workers compensation coverage on our directors, officers and employees; general liability insurance; liability insurance for our directors and officers; and offensive patent insurance for the patent pending on the ARID tool and process.

Employees; Identification of Certain Significant Employees

We are a development stage company and currently have two full time employees, along with our officers and directors. We intend to hire additional employees on an as needed basis.

Offices

Our principal executive office is located at 201 W. Lakeway, Suite 1000, Gillette, Wyoming 82718. Our telephone number is (307) 685-3122. The lease on this premise is on annual basis at the rate of $754 per month.

We also maintain an office in Parker, Colorado located a 12164 Elton Way. Our telephone number at that location is (303) 358-3840.

We believe that our current office and space and facilities are sufficient to meet our present needs, and we do not anticipate any difficulty securing alternative or additional space, as needed, on terms acceptable to us.

Subsidiary Corporation

On May 1, 2007 we formed a Nevada subsidiary corporation, Sterling Oil & Gas Company, Sterling. In return for 10,000,000 shares of Sterling Oil & Gas Company we transferred all of our oil and gas leasehold interests to Sterling Oil & Gas Company. On April 2, 2008 we spun off Sterling by distributing our 10,000,000 shares of Sterling Oil & Gas Company to our shareholders of record as of March 3, 2008 and ex-dividend as of March 27, 2008.

CAUTIONARY STATEMENT ABOUT FORWARD-LOOKING STATEMENTS

Some of the information in this annual report contains forward-looking statements. These statements express, or are based on, our expectations about future events. Forward-looking statements give our current expectations or forecasts of future events. Forward-looking statements generally can be identified by the use of forward looking terminology such as may, will, expect, intend, project, estimate, anticipate, believe, or continue or the negative thereof or similar terminology. They include statements regarding our:

financial position;business strategy;budgets;amount, nature and timing of capital expenditures;operating costs and other expenses;

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cash flow and anticipated liquidity;future operating results;drilling of wells;acquisition and development of oil and gas properties;timing and amount of future production of natural gas and oil;competition and regulation; andplans, objectives and expectations.

Although we believe the expectations and forecasts reflected in these and other forward-looking statements are reasonable, we can give no assurance they will prove to have been correct. They can be affected by inaccurate assumptions or by know or unknown risks and uncertainties. Factors that could cause actual results to differ materially from expected results are described under Risk Factors and include:

delays in obtaining permits;uncertainties in the availability of distribution facilities for our natural gas;general economic conditions;natural gas price volatility;the fluctuation in the demand for natural gas;uncertainties in the projection of future rates of production and timing ofdevelopment expenditures;operating hazards attendant to the natural gas business;climatic conditions;the risks associated with exploration;our ability to generate sufficient cash flow to operate;availability of capital;the strength and financial resources of our competitors;down-hole drilling and completion risks that are generally not recoverablefrom third parties or insurance;environmental risks;regulatory developments;potential mechanical failure or under performance;availability and cost of services, material and equipment;our ability to find and retain skilled personnel;the lack of liquidity of our common stock; andour ability to eliminate any material weakness in our internal controls overfinancial reporting.

Any of the factors listed above and other factors contained in this annual report could cause our actual results to differ materially from the results implied by these or any other forward-looking statements made by us or on our behalf. We cannot assure you that our future results will meet our expectations.

When you consider these forward-looking statements, you should keep in mind these risk factors and the other cautionary statements in this annual report. Our forward-looking statements speak only as of the date made.

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RISK FACTORS.

Due to the nature of our business and the present stage of exploration on our oil and gas prospects, the following risk factors apply to our operations:

We have incurred losses since our inception and may continue to incur losses in the future. Furthermore our auditors have included a qualification in their report which indicates substantial doubt on our ability to continue as a going concern.

To date our operations have not generated sufficient operating cash flows to provide working capital for our ongoing overhead, the funding of our marketing and sales activities surrounding the ARID tool, our continued research and development, lease acquisitions of oil and gas properties, and the exploration of our properties. Without adequate financing, we may not be able to successfully bring the ARID tool to market or develop oil and gas prospects that we have or acquire and we may not achieve profitability from operations in the near future or at all.

We have changed our business focus to technologies and equipment related to fluid redistribution for the oil and gas industry, however, we have just started our proposed business operations. Further, we have not generated any revenues in our new business lines. We are also examining the potential exploration of our oil and gas properties.

Based upon current plans, we expect to incur operating losses in future periods because we will be incurring expenses and not generating revenues. We cannot guarantee that we will be successful in generating revenues in the future.

We are a development stage enterprise as we have minimal revenues from our planned operations. We lack an operating history and have losses that we expect to continue into the future. There is no assurance our future operations will result in profitable revenues. If we cannot generate sufficient revenues to operate profitably, we will cease operations and you will lose your investment.

We were incorporated on June 19, 1997 and while we operated as a mineral exploration corporation, we did not generate revenues. Therefore, we have no operating history upon which an evaluation of our future success or failure can be made. Our net loss since inception is $7,295,240, which includes $4,200,000 of non cash stock compensation expense. Our ability to achieve and maintain profitability and positive cash flow is dependent upon:

|* | our ability to attract customers who will use our services, and lease or purchase our equipment;            
|- | ------------------------------------------------------------------------------------------------------------
| 
|* | our ability to generate revenues through the sales of our services, and leasing or selling of our equipment;
| 
|* | our ability to locate oil and gas;                                                                          
| 
|* | our ability to generate revenue from the sale of oil and gas;                                               
| 
|* | our ability to reduce exploration costs;                                                                    
| 

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If we do not attract customers, we will not make a profit which ultimately will result in a cessation of operations.

We have no customers. We have identified potential customers but we cannot guarantee we will ever have any customers. Even if we obtain customers, there is no guarantee that we will generate a profit. If we cannot generate a profit, we will have to raise additional capital, which may dilute current shareholders, or suspend or cease operations.

Because our officers and directors do not have prior experience in the marketing of products or services, we may have to hire individuals or suspend or cease operations.

Because our officers and directors do not have prior experience in the marketing of products or services, we may have to hire additional experienced personnel to assist us with our operations. If we need the additional experienced personnel and we do not hire them, we could fail in our plan of operations and have to suspend operations or cease operations.

Because our officers and directors have no experience with respect to our managerial and organizational structure, there may not be effective disclosure and accounting controls to comply with applicable laws and regulations which could result in fines, penalties and assessments against us.

Our officers and directors have no previous experience with public companies. They are, however, now responsible for our managerial and organizational structure which will include preparation of disclosure and accounting controls under the Sarbanes Oxley Act of 2002. Our officers are responsible for the administration of the controls.

We may incur significant costs in implementing and responding to these requirements. In particular, the rules governing the standards that must be met for management to assess its internal controls over financial reporting under Section 404 are complex, and require significant documentation, testing and possible remediation.

We may have difficulty managing growth in our business.

Because of our small size, growth in accordance with our business plans, if achieved, will place a significant strain on our financial, technical, operational and management resources. As we expand our activities and increase and increase the number of projects we are evaluating or in which we participate, there will be additional demands on our financial, technical and management resources. The failure to continue to upgrade our technical, administrative, operating and financial control systems or the occurrence of unexpected expansion difficulties, including the recruitment and retention of experienced managers, geoscientists and engineers, could have a material adverse effect on our ability to timely execute our business plan.



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Our success depends on our key management personnel, the loss of any of whom could disrupt our business.

The success of our operations and activities is dependent to a significant extent on the efforts and abilities of our management. The loss of services of our key managers could have a material adverse effect on our business. We have not obtained key man insurance for any of our management.

We may not be able to find adequate financing to continue our operations.

We have relied primarily on the sale of equity capital to fund working capital, the development of the ARID tool and process. Failure to generate operating cash flows or to obtain additional financing could result in substantial delay in providing ARID tools to our customers.

We will require significant additional capital to fund our future activities and to service any future indebtedness. In particular, we face uncertainties relating to our ability to generate sufficient cash flows from operations to fund the level of capital expenditures required for development of additional tools and meeting operational cash needs during the pilot project phase.

The volatility of natural gas and oil markets could have a material adverse effect on our business.

The markets for these commodities are very volatile and even relatively modest drops in prices can affect our financial results and impede our growth. Prices for natural gas and oil may fluctuate widely in response to a variety of additional factors that are beyond our control, such as:

changes in global supply and demand for natural gas and oil;commodity processing, gathering and transportation availability;domestic and global political and economic conditions;the ability of members of the Organization of Petroleum Exporting Countries to agree toand maintain oil price and production controls;weather conditions, including hurricanes;technological advances affecting energy consumption;domestic and foreign governmental regulations; andthe price and availability of alternative fuels.

Lower natural gas and oil prices may have an adverse impact on our operations because the economics of producing CBM may cause our customers to exit the industry.

We have not insured and cannot fully insure against all risks related to operations, which could result in substantial claims for which we are underinsured or uninsured.

We have not and cannot fully insure against all risks and have not attempted to insure fully against risks where coverage is prohibitively expensive.

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Losses and liabilities arising from uninsured and underinsured events, which could arise from even one catastrophic accident, could materially and adversely affect our business.

Risks Associated With Our Securities:

Because the SEC imposes additional sales practice requirements on brokers who deal in our shares that are penny stocks, some brokers may be unwilling to trade them. This means that you may have difficulty reselling your shares and this may cause the price of the shares to decline.

Our shares would be classified as penny stocks and are covered by Section 15(g) of the Securities Exchange Act of 1934 and the rules promulgated there under which impose additional sales practice requirements on brokers/dealers who sell our securities in the aftermarket. For sales of our securities, the broker/dealer must make a special suitability determination and receive from you a written agreement prior to making a sale for you. Because of the imposition of the foregoing additional sales practices, it is possible that brokers will not want to make a market in our shares. This could prevent you from reselling your shares and may cause the price of the shares to decline.

FINRA sales practice requirements may limit a stockholders ability to buy and sell our stock.

FINRA 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, FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may have the effect of reducing the level of trading activity and liquidity of our common stock. Further, many brokers charge higher transactional fees for penny stock transactions. As a result, fewer broker-dealers may be willing to make a market in our common stock, reducing a stockholder's ability to resell shares of our common stock.

Because there is a limited public trading market for our common stock, you may not be able to resell your stock.

There is currently a limited public trading market for our common stock on the OTC Bulletin Board operated by FINRA under the symbol BCTE. Therefore there you may have difficulty reselling your shares.





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We have not paid cash dividends on our common stock and do not anticipate paying any dividends on our common stock in the foreseeable future.

We have not previously paid dividends on our common stock and we do not anticipate doing so in the foreseeable future. Payment of future cash dividends, if any, will be at the discretion of our board of directors and will depend on our financial condition, results of operations, contractual restrictions, capital requirements, business prospects and other factors that our board of directors considers relevant. Accordingly, investors may only see a return on their investment if the value of our securities appreciates.

ITEM 2.     DESCRIPTION OF PROPERTY.

We currently own fifteen (15) ARID tools which are installed or will be installed at various locations. We also own various computer and office equipment.

We previously leased approximately 75,600 undeveloped net mineral acres in the Powder River Basin of Montana. Approximately 60,300 acres are leased from the State of Montana, and approximately 15,300 acres are leased from various entities and individual landowners.

We previously leased approximately 2,030 undeveloped net mineral acres in the Powder River Basin of Wyoming, Approximately 410 acres are leased from the State of Wyoming, and approximately, 1,620 acres are leased from various entities and individual land owners.

All of the above leases were transferred to our subsidiary corporation, Sterling Oil & Gas Company, effective May 1, 2007. The Company spun off Sterling Oil & Gas effective April 2, 2008 with the distribution of the Companys shares of Sterling common stock, see Item 1-Business, Subsidiary Corporation.

Our principal executive office is located at 201 W. Lakeway, Suite 1000, Gillette, Wyoming 82718. Our telephone number is (307) 685-3122. The lease is on an annual basis at the rate of $754 per month and expires. We believe that the space at this location will meet our needs for the foreseeable future.

We also maintain an office in Parker, Colorado, located at 12164 Elton Way. Our telephone number at that location is (303) 358-3840. We believe that the space at this location will meet our needs for the foreseeable future.

ITEM 3.     LEGAL PROCEEDINGS

The Company is not presently a party to any legal proceedings.

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

During our fiscal year ended April 30, 2008 and 2007, there were no matters submitted to a vote of the Company's stockholders.



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PART II

ITEM 5.     MARKET FOR COMMON STOCK AND RELATED STOCKHOLDERMATTERS.

Our shares are traded on the OTC Bulletin Board operated by FINRA under the symbol BCTE. Our common stock began trading on the OTC Bulletin Board on May 6, 2004.

The following table shows the high and low bid price for our common shares for the quarters indicated.

HIGH ($)
     
     LOW ($)200802/01/08  04/30/08
     $
     1.18
     $
     0.4311/01/07  01/31/08
     $
     1.85
     $
     0.83200708/01/07  10/31/07
     $
     1.83
     $
     0.7505/01/07  07/31/07
     $
     3.08
     $
     1.1502/01/07  04/30/07
     $
     4.40
     $
     2.3311/01/06  01/31/07
     $
     3.02
     $
     1.01200608/01/06  10/31/06
     $
     1.50
     $
     1.5005/01/06  07/31/06
     $
     2.50
     $
     1.0102/01/06  04/30/06
     $
     3.00
     $
     1.5011/01/05 - 01/31/06
     $
     2.00
     $
     1.50200508/01/05 - 10/31/05
     $
     2.00
     $
     1.8005/01/05 - 07/31/05
     $
     1.80
     $
     1.2602/01/05 - 04/30/05
     $
     1.75
     $
     1.2611/01/04 - 01/31/05
     $
     1.75
     $
     1.26


The quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions.

Holders

As of July 29, 2008 we have 31,041,000 shares issued and outstanding. We estimate that we have approximately one hundred forty four (144) shareholders, excluding those shares held in street name.



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Dividend Policy

We have never paid cash dividends on our capital stock. We currently intend to retain any profits we earn to finance the growth and development of our business. We do not anticipate paying any cash dividends in the foreseeable future.

Equity Compensation Plan Information

The following table provides a summary of the number of options granted under our compensation plans, the weighted average exercise price and the number of options remaining available for issuance all as at April 30, 2008.

Number of securitiesNumber of securities
     Weighted-Average
     remaining availableto be issued upon
     exercise price of
     for future issuanceexercise of
     outstanding options,
     under equityoutstanding option
     warrants and rights
     compensation plansEquity compensation plans
     N/A
     N/A
     N/Aapproved by security holdersEquity compensation plans notapproved by security holders [1]
     3,160,000
     $0.56
     1,840,000


[1]     Referring to our 2007 Nonqualified Stock Option Plan. Please see the 2007 Nonqualified Stock Option Plan section below.

2007 Nonqualified Stock Option Plan

On March 15, 2007, our board of directors adopted the 2007 Nonqualified Stock Option Plan (the 2007 Plan) for our directors, officers, employees, and outside consultants and advisors. Under the plan, directors, officers, employees, and outside consultants and advisors may receive awards of nonqualified stock options. The purpose of the plan is to provide directors, officers, employees, and outside consultants and advisors with an incentive to make positive contributions to our company, and to attract and retain individuals of exceptional talent. The aggregate number of shares of common stock that may be granted by our company under the 2007 Plan will not exceed a maximum of 5,000,000 shares of common stock during the period of the plan. The 2007 Plan shall terminate upon the earlier of March 15, 2017, or the issuance of all shares of common stock granted under the plan. Our board of directors will determine the option prices per share when the stock option is granted to an individual.

During the year ended April 30, 2007, we granted options to acquire up to 1,550,000 shares of common stock to our officers and directors. Each option entitles the holder to acquire one share of common stock at an exercise price of $0.50 per share, which was below fair market value. The exercise of these options is limited for two years after the date of the grant, and expire five years from the date of the grant.



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During the year ended April 30, 2008, we granted options to acquire up to 1,860,000 shares of common stock to our officers, directors and employees. 305,000 options were granted at below fair market value at $0.50 (255,000 shares) and $0.75 (50,000 shares), while the remaining 1,555,000 were granted at market price on the date of the grant. These options expire five years from the date of the grant. During the year ended April 30, 2008, options to purchase 250,000 were forfeited.

Recent Sales of Unregistered Securities

On July 20, 2006, we completed a private placement of securities and raised gross proceeds of $2,032,500. The net proceeds received by us were $2,021,342. We sold a total of 4,065,000 shares of common stock to fifty-five (55) investors at a price of $0.50 per share. We issued the foregoing 4,065,000 shares of common stock as restricted securities pursuant to the exemptions from registration contained in Regulation S of the Securities Act of 1933 and section 4(2) of the Securities Act of 1933. Shares sold pursuant to Regulation S were sold to non U.S. persons outside the United States of America. Shares sold pursuant to section 4(2) of the Securities Act of 1933 were sold to persons who receive the same information that can be found in a Form SB-2 registration statement and were deemed sophisticated investors in that they understood our business and were able to read and understand financial statements.

In January of 2007, we completed a private placement of securities and raised gross proceeds of $1,509,000. The net proceeds received by us were $1,498,406. We sold a total of 2,012,000 shares of common stock to thirty-nine (39) investors at a price of $0.75 per share. We issued the foregoing 2,012,000 shares of common stock as restricted securities pursuant to the exemptions from registration contained in Regulation S of the Securities Act of 1933 and section 4(2) of the Securities Act of 1933. Shares sold pursuant to Regulation S were sold to non U.S. persons outside the United States of America. Shares sold pursuant to section 4(2) of the Securities Act of 1933 were sold to persons who receive the same information that can be found in a Form SB-2 registration statement and were deemed sophisticated investors in that they understood our business and were able to read and understand financial statements.

In October of 2007, we completed a private placement of securities and raised gross proceeds of $500,000. We sold a total of 500,000 shares of common stock to one (1) investors at a price of $1.00 per share. We issued the foregoing 500,000 shares of common stock as restricted securities pursuant to the exemptions from registration contained in Regulation S of the Securities Act of 1933 and section 4(2) of the Securities Act of 1933. Shares sold pursuant to Regulation S were sold to non U.S. persons outside the United States of America. Shares sold pursuant to section 4(2) of the Securities Act of 1933 were sold to persons who receive the same information that can be found in a Form SB-2 registration statement and were deemed sophisticated investors in that they understood our business and were able to read and understand financial statements.

In April of 2008, we completed a private placement of securities and raised gross proceeds of $500,000. We sold a total of 1,000,000 units to six (6) investors, each unit consisting of one (1) share of common stock at $.50 per share and one (1) warrant for one (1) share of common stock at $.75 per share. We issued the foregoing 1,000,000 shares of common stock as restricted securities pursuant to the exemptions from registration contained in Regulation S of the Securities Act of 1933 and section



16

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4(2) of the Securities Act of 1933. Shares sold pursuant to Regulation S were sold to non U.S. persons outside the United States of America. Shares sold pursuant to section 4(2) of the Securities Act of 1933 were sold to persons who receive the same information that can be found in a Form SB-2 registration statement and were deemed sophisticated investors in that they understood our business and were able to read and understand financial statements.

Section 15(g) of the Securities Exchange Act of 1934

Our companys shares are covered by Section 15(g) of the Securities Exchange Act of 1934, as amended that imposes additional sales practice requirements on broker/dealers who sell such securities to persons other than established customers and accredited investors (generally institutions with assets in excess of $5,000,000 or individuals with net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouses). For transactions covered by the Rule, the broker/dealer must make a special suitability determination for the purchase and have received the purchasers written agreement to the transaction prior to the sale. Consequently, the Rule may affect the ability of broker/dealers to sell our securities and also may affect your ability to sell your shares in the secondary market.

Section 15(g) also imposes additional sales practice requirements on broker/dealers who sell penny securities. These rules require a one page summary of certain essential items. The items include the risk of investing in penny stocks in both public offerings and secondary marketing; terms important to in understanding of the function of the penny stock market, such as bid and offer quotes, a dealers spread and broker/dealer compensation; the broker/dealer compensation, the broker/dealers duties to its customers, including the disclosures required by any other penny stock disclosure rules; the customers rights and remedies in causes of fraud in penny stock transactions; and, the NASDs toll free telephone number and the central number of the North American Administrators Association, for information on the disciplinary history of broker/dealers and their associated persons.

ITEM 7.     MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

This section of this Form 10-K includes a number of forward- looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like: believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements, which apply only as of the date of this report. These forward-looking states are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or our predictions.

Plan of operation

We are a development stage company and have realized minimal revenues from our current business operations.



17

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During the current fiscal year we raised $1,000,000 in two private placements. As of April 30, 2008 we have $1,072,969 of working capital compared to $1,156,126 as of April 30, 2007, and it is uncertain as to whether this amount will be sufficient to fund operations for the next year. Therefore, we may seek additional sources of capital for the coming year, which we are not assured of raising.

The plan of operation discussed below in this annual report for the twelve months ended April 30, 2008, reflects the operations of our current business which is to lease the ARID tool and process to oil and gas companies.

We have are in the process of completing field tests of the ARID tool and process, and we are continuing to refine the ARID to improve the field use of the ARID tool and process. Currently, we have six ARID tools operating in CBM (coal bed method) gas well bores in the Powder River Basin of Wyoming and have leased another 9 to be installed in the summer of 2008. During the 3rdquarter ended January 31, 2007 we added an employee to process and submit permits for the ARID tool and process. In January 2008, we added a Director of Sales to assist in the leasing of ARID tools.

We are developing another production tool for coal bed methane operations. This new product is a multi-completion tool and process, which upon successful development is expected to allow operators of coal bed methane wells to produce multiple seams of coal from a single well bore. This multi-completion tool can be used in conjunction with the ARID. We are also developing smaller ARID tool, 5.5, for use in smaller bore gas wells. The R&D cost associated with these projects will be minimal.

We are evaluating use of the ARID tool in the mining industry. We have received numerous inquiries regarding adapting the ARID for handling water in the mining industry. We are in the initial stages of evaluation of this opportunity.

We have completed our application for the trademark ARID with the United States Patent and Trademark Office. In approximately six months we should receive an examination report from the United States Patent and Trademark Office regarding the trademark application.

Our specific goal for the next twelve months is to establish and complete 3-4 pilot projects in the powder River Basin of Wyoming during the summer of 2008, with these pilots generating ARID tool leases in the fall of 2008 and early 2009. We are also evaluating potential pilot projects for Colorado.

Limited Operating History; Need for Additional Capital

The report from the companys independent registered public accounting firm which accompanies our audited financial statements as of April 30, 2008 states that our company has no established revenues and has incurred net losses since inception. In the view of our auditors, these factors raised substantial doubt about our ability to continue as a going concern.

There is no historical financial information about our current operations upon which to base an evaluation of our performance. We are in development stage operations and have generated minimal revenues from current operations. Our key to remaining in business is selling or leasing the ARID to customers. We cannot guarantee we will be successful in our business operations. Our business is subject

18

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to risks inherent in the establishment of a new business enterprise, including limited capital resources, the possibility that there is a lack of a sales market for our products, and possible cost overruns due to price and cost increases in services and products.

If we cannot generate sufficient revenues to continue operations, or find additional capital, we will suspend or cease operations. We have no assurance that future financing will be available on acceptable terms. If financing is not available on satisfactory terms, we may be unable to continue, develop or expand our operations. Equity financing could result in additional dilution to existing shareholders.

Results of operations

For the year ended April 30, 2008 compared to the year ended April 30, 2007

We reported a net loss before discontinued operation for the year ended April 30, 2008 of $3,861,113 and a net loss of $4,378,294 for the year ended April 30, 2008 compared with a net loss of $2,639,221 for the same period in 2007. The net loss before discontinued operations contains a $2,360,000 non-cash charge related to the issuance of stock options to management compared to $1,840,000 for the same period in 2007. It also contain a $433,000 non cash charge for the valuation loss on Sterling Oil and Gas subsidiary, which was spun off in April 2008.

We recorded personnel costs of $3,120,358 during the year ended April 30, 2008, as compared to $2,345,225 during the same period in 2007, which included stock based compensation charge of $2,360,000 for the year ended April 30, 2008, compared with 1,840,000 for the same period in 2007.

We incurred professional fees of $179,067 during the year ended April 30, 2008, as compared to $118,040 during the same period 2007. The increase in professional fees was due to an increase accounting and legal fees related to the spin off of our subsidiary, Sterling Oil & Gas Company, in April of 2008.

Our other general and administrative costs were $211,900 during the year ended April 30, 2008, as compared to $211,406 during the same period in 2007. The major components of other general and administrative costs are insurance and marketing expenses in both years.

The Company recorded $517,181 for discontinued operations for the year ended April 30, 2008, relating to the spin off of Sterling Oil & Gas Company. This amount reflects the Sterling loss from May 1, 2007 through March 31, 2008 of $775,768, which includes a non cash charge of $571,000 for impairment expense, offset by a minority interest of $258,587.

Liquidity and Capital Resources

Cash used in operating activities was $1,187,188 for the fiscal year ended April 30, 2008, and $830,888 for the fiscal year ended April 30, 2007. In the fiscal year ended April 30, 2008 cash used in operations was principally our net loss less our non-cash compensation expense of $2,360,000. For the fiscal year ended April 30, 2007 cash used in operations was principally from our net loss less non-cash compensation expense of $1,840,000.

19

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Cash flows used in investing activities were $111,329 for the fiscal year ended April 30, 2008, and $2,932,098 cash flow used in investing activities for fiscal year ended April 30, 2006. In the fiscal year ended April 30, 2007 we invested in $1,103,382 of short term investments and we expended cash of $1,794,231 on unevaluated and undeveloped oil and gas properties.

Cash flows from financing activities were $1,250,569 for the fiscal year ended April 30, 2008, and $3,490,712 for the fiscal year ended April 30, 2007. For the fiscal years ended April 30, 2008 and 2007, cash from financing was principally from the private placements of our stock.

In April 2008, we completed a private placement of securities and raised gross proceeds of $500,000. We sold a total of 1,000,000 units to six (6) investors, each unit consisting of one (1) share of restricted common stock at $.50 per share and one (1) warrant for one (1) share of restricted common stock at $.75 per share.

In October 2007, we completed a private placement of securities and raised gross proceeds of $500,000. We sold a total of 500,000 restricted shares of common stock to one (1) investor at a price of $1.00 per share.

In January 2007, the Company sold 2,012,000 restricted shares of its common stock for proceeds of $1,509,000, or $0.75 per share.

From May through July 2006, the Company sold 4,065,000 restricted shares of its common stock for proceeds of $2,032,500, or $0.50 per share.

The Company issued the foregoing shares of common stock as restricted securities pursuant to the exemptions from registration contained in Regulation S of the Securities Act of 1933 and section 4(2) of the Securities Act of 1933. Shares sold pursuant to Regulation S were sold to non U.S. persons outside the United States of America. Shares sold pursuant to section 4(2) of the Securities Act of 1933 were sold to persons who receive the same information that can be found in a Form SB-2 registration statement and were deemed sophisticated investors in that they understood our business and were able to read and understand financial statements. Following the above sales, the Companys common stock increased to 31,041,000 shares issued and outstanding.

Critical Accounting Policies

Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

Risks and Uncertainties Historically, oil and gas prices have experienced significant fluctuations and have been particularly volatile in recent years. Price fluctuations can result from variations in weather, levels of regional or national production and demand, availability of transportation capacity to other regions of the country and various other factors. Increases or decreases in prices received could have a significant impact on future results.

20

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Revenue Recognition-The Company leases its ARID tool and process to its customers. Revenue is recognized equally over the term of lease. When the lease is executed the company records deferred revenue Other Current Liability for those amounts paid for lease commitments for the next 12 months and a Long Term Obligation for those amounts in excess of 12 months. At April 30, 2008, the Company has recorded $50,000 as Other Current Liabilities for deferred revenue and $0 for Long Term Obligations

Recent Accounting Pronouncements

In September 2006, the FASB issued SFAS No. 157,Fair Value Measurements(SFAS 157). SFAS 157 defines fair value, establishes a framework and gives guidance regarding the methods used for measuring fair value, and expands disclosures about fair value measurements. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. We are currently evaluating the impact of adopting SFAS 157 on our financial statements.

In February 2007, the FASB issued SFAS No. 159,The Fair Value Option for Financial Assets and Financial Liabilities(SFAS 159). SFAS 159 provides the option to report certain financial assets and liabilities at fair value, with the intent to mitigate volatility in financial reporting that can occur when related assets and liabilities are recorded on different bases. SFAS 159 also amends SFAS No. 115,Accounting for Certain Investments in Debt and Equity Securities, by providing the option to record unrealized gains and losses on held-for-sale and held-to-maturity securities currently. The implementation of FAS 159 is not expected to have a material impact on our results of operations or financial position.

In December 2007, the FASB issued SFAS 141 (revised 2007),Business Combinations("SFAS 141(R)"), which establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any non-controlling interest in an acquiree, including the recognition and measurement of goodwill acquired in a business combination. SFAS 141(R) is effective for our fiscal year commencing May 1, 2009. Earlier adoption is prohibited. We are currently evaluating the impact of adopting SFAS 141(R) on our results of operations and financial condition.

In December 2007, the FASB issued SFAS No. 160,Noncontrolling Interests in Consolidated Financial Statements - an amendment of ARB No. 51. SFAS 160 amends ARB 51 to establish accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a noncontrolling interest in a subsidiary, which is sometimes referred to as minority interest, is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. Among other requirements, this statement requires consolidated net income to be reported at amounts that include the amounts attributable to both the parent and the noncontrolling interest. It also requires disclosure, on the face of the consolidated income statement, of the amounts of consolidated net income attributable to the parent and to the non-controlling interest. SFAS 160 is effective for our fiscal year commencing May 1, 2009, including interim periods within that fiscal year. Earlier adoption is prohibited. We are currently evaluating the impact of adopting SFAS 160 on our results of operations and financial condition.



21

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In March 2008, the FASB issues SFAS no. 161,Disclosures about Derivative Instruments and Hedging Activities-an amendment of FASB Statement No. 133. This Statement changes the disclosure requirements for derivative instruments and hedging activities. Entities are required to provide enhanced disclosures about (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under Statement 133 and its related interpretations, and (c) how derivative instruments and related hedged items affect an entitys financial position, financial performance, and cash flows. The implementation of SFAS 161 is not expected to have a material impact on our results of operations or financial position.

Off Balance Sheet Arrangements

We have no off balance sheet arrangements, other than minor operating lease agreements.

ITEM 8     FINANCIAL STATEMENTS.

PageREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
     F-1Balance Sheets
     F-2Statements of Operations
     F-3Statements of Changes in Stockholders' Deficit
     F-4Statements of Cash Flows
     F-5Notes to the financial statements
     F-6
















22

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



To the Board of DirectorsBig Cat Energy CorporationGillette, Wyoming

We have audited the balance sheet of Big Cat Energy Corporation as of April 30, 2008 and 2007 and the related consolidated statements of operations, shareholders equity and cash flows for the years then ended. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Big Cat Energy Corporation as of April 30, 2008 and 2007 and the results of its operations and its cash flows for the years then ended, in conformity with U.S. generally accepted accounting principles.

We have also audited the combination in the statements of operations, cash flows, and shareholders equity of the amounts as presented for the years ending April 30, 2008 and 2007 with the amounts for the corresponding statements for the period from inception (June 19, 1997) through April 30, 2006. In our opinion the amounts have been properly combined for the period from inception (June 19, 1997) through April 30, 2008.

We were not engaged to examine managements assertion about the effectiveness of Big Cat Energy Corporations internal control over financial reporting as of April 30, 2008 included in the accompanying managements annual report on internal control over financial reporting and, accordingly, we do not express an opinion thereon.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has limited revenue and has incurred substantial losses from operations and is in the development stage. These factors raise substantial doubt about the Companys ability to continue as a going concern. Managements plans with regard to these matters are described in Note 2. The financial statements do not include any adjustments that might result from the outcome of these uncertainties.



HEIN& ASSOCIATES LLPDenver, ColoradoJuly 28, 2008

F-1



23

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BIG CAT ENERGY CORPORATION(A Development Stage Company)BALANCE SHEETSAPRIL 30

APRIL 30,2008
     
     
     
     2007ASSETSCURRENT ASSETS:Cash and cash equivalents
     $
     4,796
     
     
     $
     52,744Short term investments
     
     1,065,981
     
     
     
     1,103,382Accounts receivable-other
     
     3,000
     
     
     
     Inventory
     
     27,662
     
     
     
     6,934Prepaid expenses and other current assets
     
     23,597
     
     
     
     754Total current assets
     
     1,125,036
     
     
     
     1,163,814PROPERTY, PLANT AND EQUIPMENT,at costOil and gas properties (full cost method):Evaluated properties
     
     
     
     
     
     Unevaluated properties
     
     
     
     
     
     1,794,231Furniture and equipment, net of accumulated depreciation
     
     8,745
     
     
     
     9,698Total
     
     8,745
     
     
     
     1,803,929OTHER ASSETS
     
     62,141
     
     
     
     48,227TOTAL ASSETS
     $
     1,195,922
     
     
     $
     3,015,970LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIES:Accounts payable and accrued liabilities
     $
     52,067
     
     
     $
     9,771STOCKHOLDERS EQUITY:Common stock - $.0001 par value; 100,000,000 shares authorized;31,041,000 shares and 29,540,000 issued and outstanding, respectively
     
     3,104
     
     
     
     2,954Additional paid-in capital
     
     8,435,991
     
     
     
     5,920,191Deficit incurred during the development stage
     
     (7,295,240
     )
     
     
     (2,916,946
     )Total stockholders equity
     
     1,143,855
     
     
     
     3,006,199TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
     $
     1,195,922
     
     
     $
     3,015,970






F-2

See accompanying notes to financial statement.24

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BIG CAT ENERGY CORPORATION(A Development Stage Company)

STATEMENT OF OPERATIONSFOR THE YEARS ENDED APRIL 30, 2008 AND 2007 ANDFOR THE PERIOD FROM INCEPTION (JUNE 19, 1997) TO APRIL 30, 2008

CUMULATIVEFROM INCEPTIONFOR THE
     
     
     
     FOR THE
     
     
     
     (JUNE 19, 1997)YEAR ENDED
     
     
     
     YEAR ENDED
     
     
     
     TO APRIL 30,APRIL 30, 2008
     
     
     
     APRIL 30, 2007
     
     
     
     2008REVENUES
     $
     40,000
     
     
     $
     
     
     
     $
     40,000EXPENSES:Personnel cost (including stock-basedcompensation of $2,360,000 and $1,840,000,respectively)
     
     3,120,358
     
     
     
     2,345,225
     
     
     
     5,540,078Professional fees
     
     179,067
     
     
     
     118,040
     
     
     
     434,487Depreciation, depletion and amortization
     
     2,012
     
     
     
     550
     
     
     
     2,562Other operating supplies
     
     2,490
     
     
     
     
     
     
     
     2,490Other general and administrative
     
     211,900
     
     
     
     211,406
     
     
     
     489,156OPERATING LOSS
     
     (3,475,827
     )
     
     
     (2,675,221
     )
     
     
     (6,428,773
     )OTHER INCOME (EXPENSE):Interest income
     
     47,714
     
     
     
     36,000
     
     
     
     83,714Loss on valuation of Sterling private placement
     
     (433,000
     )
     
     
     
     
     
     
     (433,000
     )(385,286
     )
     
     
     36,000
     
     
     
     (349,286
     )LOSS BEFORE DISCONTINUED OPERATIONS
     
     (3,861,113
     )
     
     
     (2,639,221
     )
     
     
     (6,778,059
     )LOSS ON DISCONTINUED OPERATIONS OFSTERLING OIL AND GAS(net of minorityinterest of $258,587)
     
     (517,181
     )
     
     
     
     
     
     
     (517,181
     )NET LOSS
     $
     (4,378,294
     )
     
     $
     (2,639,221
     )
     
     $
     (7,295,240
     )Net loss per share before discontinued operations
     $
     (.13
     )
     
     $
     (.10
     )Net loss per share  discontinued operations
     $
     (.02
     )
     
     $
     Net loss per share
     $
     (.15
     )
     
     $
     (.10
     )Weighed average number of common sharesoutstanding  basic and diluted
     
     30,071,055
     
     
     
     27,426,418




F-3

See accompanying notes to financial statement.25

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BIG CAT ENERGY CORPORATION(A Development Stage Company)

STATEMENT OF CHANGES IN SHAREHOLDERS EQUITYFOR THE YEARS ENDED APRIL 30, 2008 AND 2007AND FOR THE PERIOD FROM INCEPTION (JUNE 19, 1997) TO APRIL 30, 2008



DEFICITINCURREDCOMMONSTOCK
     
     
     
     ADDITIONAL
     
     
     
     DURINGPAR VALUE
     
     
     
     PAID-IN
     
     
     
     DEVELOPMENTSHARES
     
     
     $ .0001
     
     
     
     CAPITAL
     
     
     
     STAGE
     
     
     
     TOTALBalance, at Inception (June 19, 1997)Stock issued for services upon inceptionat June 19, 1997 issued at par
     500,000
     
     
     $
     50
     
     
     $
     
     
     
     $
     
     
     
     $
     50Common stock cancelled March 2002
     (500,000
     )
     
     
     (50
     )
     
     
     
     
     
     
     
     
     
     
     (50
     )Sale of common stock at $0.10 pershare, April 2002
     1,114,000
     
     
     
     111
     
     
     
     111,289
     
     
     
     
     
     
     
     111,400Contributed services (January 2000through April 2003)
     
     
     
     
     
     
     
     
     10,425
     
     
     
     
     
     
     
     10,425Cumulative net loss
     
     
     
     
     
     
     
     
     
     
     
     
     (132,543
     )
     
     
     (132,543
     )Balance, May 1, 2005
     1,114,000
     
     
     
     111
     
     
     
     121,714
     
     
     
     (132,543
     )
     
     
     (10,718
     )Sale of common stock March throughApril 2006 at $0.05 per share
     7,400,000
     
     
     
     740
     
     
     
     369,260
     
     
     
     
     
     
     
     370,000Sale of common stock at March 2006 at$0.01 per share
     2,500,000
     
     
     
     250
     
     
     
     24,750
     
     
     
     
     
     
     
     25,000Common stock issued in exchange forassets (Note 6)
     12,450,000
     
     
     
     1,245
     
     
     
     22,745
     
     
     
     
     
     
     
     23,990Net loss
     
     
     
     
     
     
     
     
     
     
     
     
     (145,182
     )
     
     
     (145,182
     )Balance, April 2006
     23,464,000
     
     
     
     2,346
     
     
     
     538,469
     
     
     
     (277,725
     )
     
     
     263,090Sale of common stock (May throughJune 2006) at $0.50 per share
     4,065,000
     
     
     
     407
     
     
     
     2,032,093
     
     
     
     
     
     
     
     2,032,500Sale of common stock (January 2007)at $0.75 per share
     2,012,000
     
     
     
     201
     
     
     
     1,508,799
     
     
     
     
     
     
     
     1,509,000Offering costs
     
     
     
     
     
     
     
     
     (21,752
     )
     
     
     
     
     
     
     (21,752
     )Contributed capital
     
     
     
     
     
     
     
     
     22,582
     
     
     
     
     
     
     
     22,582Stock-based compensation
     
     
     
     
     
     
     
     
     1,840,000
     
     
     
     
     
     
     
     1,840,000Net loss
     
     
     
     
     
     
     
     
     
     
     
     
     (2,639,221
     )
     
     
     (2,639,221
     )Balance, April 30, 2007
     29,541,000
     
     
     
     2,954
     
     
     
     5,920,191
     
     
     
     (2,916,946
     )
     
     
     3,006,199Sale of common stock (October 2007)at $1.00 per share
     500,000
     
     
     
     50
     
     
     
     499,950
     
     
     
     
     
     
     
     500,000Sale of units (April 2008) at $0.50 perunit
     1,000,000
     
     
     
     100
     
     
     
     499,900
     
     
     
     
     
     
     
     500,000Spin off Sterling subsidiary
     
     
     
     
     
     
     
     
     (844,050
     )
     
     
     
     
     
     
     (844,050
     )Stock-based compensation
     
     
     
     
     
     
     
     
     2,360,000
     
     
     
     
     
     
     
     2,360,000Net loss
     
     
     
     
     
     
     
     
     
     
     
     
     (4,378,294
     )
     
     
     (4,378,294
     )Balance, April 30, 2008
     31,041,000
     
     
     $
     3,104
     
     
     $
     8,435,991
     
     
     $
     (7,295,240
     )
     
     $
     1,143,855


F-4

See accompanying notes to financial statement.26

---

BIG CAT ENERGY CORPORATION(A Development Stage Company)

STATEMENT OF CASH FLOWSFOR THE YEARS ENDED APRIL 30, 2008 AND 2007AND FOR THE PERIOD FROM INCEPTION (JUNE 19, 1997) TO APRIL 30, 2008

CUMULATIVEFROMINCEPTION(JUNE19, 1997)TO2008
     
     
     
     2007
     
     
     
     APRIL30, 2008CASHFLOWS FROMOPERATINGACTIVITIES:Net loss
     $
     (4,378,294
     )
     
     $
     (2,639,221
     )
     
     $
     (7,295,240
     )Adjustments to reconcile net loss to net cash provided byoperating activities:Depletion, depreciation and amortization
     
     2,012
     
     
     
     550
     
     
     
     2,562Stock based compensation
     
     2,360,000
     
     
     
     1,840,000
     
     
     
     4,200,000Contributed services and other
     
     
     
     
     
     
     
     
     
     10,425Cash flow from discontinued operations
     
     833,369
     
     
     
     
     
     
     
     833,369Changes in operating assets and liabilities:Inventory
     
     (20,728
     )
     
     
     (6,934
     )
     
     
     (27,662
     )Accounts receivable-other
     
     (3,000
     )
     
     
     
     
     
     
     (3,000
     )Prepaid and other
     
     (22,843
     )
     
     
     (754
     )
     
     
     (23,598
     )Payables
     
     42,296
     
     
     
     (24,529
     )
     
     
     52,067Net cash used in operating activities
     
     (1,187,188
     )
     
     
     (830,888
     )
     
     
     (2,251,077
     )CASHFLOWS FROMINVESTINGACTIVITIES:Purchase of unproved oil and gas properties
     
     
     
     --
     
     (1,794,231
     )
     
     
     (1,794,231
     )Purchase of equipment
     
     (1,059
     )
     
     
     (10,248
     )
     
     
     (11,307
     )Investment in Marketable securities-purchases
     
     (982,617
     )
     
     
     (2,083,418
     )
     
     
     (3,066,035
     )Investment in Marketable securities-sales
     
     1,020,018
     
     
     
     980,036
     
     
     
     2,000,054Other assets
     
     (13,914
     )
     
     
     (24,237
     )
     
     
     (38,151
     )Cash flow from discontinued operations
     
     (133,757
     )
     
     
     
     
     
     
     (133,757
     )Net cash provided by (used in) investing activities
     
     (111,329
     )
     
     
     (2,932,098
     )
     
     
     (3,043,427
     )CASHFLOWS FROMFINANCINGACTIVITIES:Proceeds from sale of common stock
     
     1,000,000
     
     
     
     3,541,501
     
     
     
     5,047,901Cash paid for offering costs
     
     
     
     
     
     (21,753
     )
     
     
     (21,752
     )Proceeds from related party advances
     
     
     
     
     
     
     
     
     
     51,618Repayment of related party advances
     
     
     
     
     
     (29,036
     )
     
     
     (29,036
     )Cash flow provided by discontinued operations
     
     250,569
     
     
     
     
     
     
     
     250,569Net cash provided by financing activities
     
     1,250,569
     
     
     
     3,490,712
     
     
     
     5,299,300NETINCREASE(DECREASE)INCASH ANDCASH
     
     (47,948
     )
     
     
     (272,274
     )
     
     
     4,796CASH ANDEQUIVALENTS, at beginning of period
     
     52,744
     
     
     
     325,018
     
     
     
     CASH ANDEQUIVALENTS, at end of period
     
     4,796
     
     
     $
     52,744
     
     
     $
     4,796NON-CASHTRANSACTION:Spin off of Sterling subsidiary
     $
     1,794,231
     
     
     $
     
     
     
     $
     1,794,231Forgiveness of debt by related party, accounted for ascapital contributed
     $
     
     
     
     $
     22,582
     
     
     $
     22,582Stock issued to related party for ARID technology
     $
     
     
     
     $
     
     
     
     $
     23,990


F-5

See accompanying notes to financial statement.27

---

|1. | ORGANIZATION AND NATURE OF OPERATIONS:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   | Big Cat Energy Corporation (Big Cat or the Company), a Nevada corporation, owns the exclusive right to a patented technology known as Aquifer Recharge Injection Device (ARID) which allows Coal Bed Methane (CBM) operators to re-inject water produced from productive coal seams. The ARID tool uses the existing well bore to move water from the producing coal seam to depleted aquifers of similar water quality. With the ARID tool and process in use, the production well will not require the discharge of any produced water, or the use of a separate re-injection well for any of the produced water. The produced water never leaves the well bore as it is redirected into different aquifer zones. These aquifers are identified from the geophysical logs.                                                                                                                                                                                                       
|  
|   | On May 1, 2007, the Company formed a subsidiary, Sterling Oil & Gas Company (Sterling). Big Cat transferred its unevaluated oil and gas properties, consisting of various mineral leases and related costs, in return for 10 million shares of Sterling restricted common stock, as discussed in the next paragraph. For the year ended April 30, 2008, the Company recorded a non cash charge of $433,000 to reflect a valuation loss in Sterling resulting from a private placement at below market value. The Company reclassified as discontinued operations the operating losses of Sterling, which totaled $517,181 for the year ended April 30, 2008. Discontinued operations reflects the Sterling loss from May 1, 2007 through March 31, 2008 of $775,768, which includes a non cash charge of $571,000 for impairment expense related to unevaluated properties initially purchased by the Company and contributed to Sterling, offset by a minority interest of $258,587.
|  
|   | Due to the risk associated with Sterling, the offering price of its private placement was below book value of Sterling. As a result of the Sterling private placement, the company recorded a non cash loss for the prorated portion of the book value of the Unevaluated Properties that was less than the Minority Interest that was invested. The loss recorded was $433,000 and was recorded in the year ended April 30, 2008 as other expense by the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|  
|   | The Company is in the development stage in accordance with Statement of Financial Accounting Standards (SFAS) No. 7. The Company has been in the development stage since inception and has yet to enter revenue-producing operations to date. Activities since inception have primarily involved organization and development of the Company and more recently, its arid initiative.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|  
|2. | LIQUIDITY:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|  
|   | Going Concern As of April 30, 2008, the Company had working capital of $1,072,969 and stockholders equity of $1,143,855. We have realized minimal revenues and have incurred significant losses from operations and used significant cash flow to fund operations for the fiscal years presented. Historically, Big Cat has relied upon outside investor funds to maintain its operations and develop its business. Big Cats plan for continuation anticipates continued funding from investors. This funding would be used for operations, for working capital, as well as business expansion during the upcoming fiscal year. The Company can provide no assurance that additional investor funds will be available on terms acceptable to the Company. These conditions raise substantial doubt about Big Cats ability to continue operations as a going concern                                                                                                                
|  
|   | Big Cats ability to continue as a going concern is dependent upon raising capital through debt or equity                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|  



F-6

28

---

|   | financing and ultimately by increasing revenue and achieving profitable operations. The Company can offer no assurance that they will be successful in our efforts to raise additional proceeds or achieve profitable operations. The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities in the normal course of business.                                                                                                                                                                                                                                                                                                                                                                                                             
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|3. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|  
|   | Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.                                                                                                                                                                                                                                                                                                                                               
|  
|   | Cash and Cash EquivalentsCash and cash equivalents include cash on hand, amounts held in banks and highly liquid investments purchased with an original maturity of three months or less. The Company may have cash in banks in excess of federally insured amounts.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|  
|   | Short-Term InvestmentsThe Company has purchased unsecured commercial paper (floating rate demand notes) of Ford Motor Credit Company, which is classified as trading securities. These securities are stated at fair value based on interest rates that approximate market rates and the short term maturity of the notes. The income earned on these investments is included in interest income in the accompanying financial statements.                                                                                                                                                                                                                                                                                                                                                                                                       
|  
|   | Concentrations of Credit Risk The Companys cash equivalents and short-term investments are exposed to concentrations of credit risk. The Company manages and controls this risk by investing these funds with major financial institutions.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|  
|   | Inventory Inventory consists of pipe and tubular goods for the Companys ARID systems, and is stated at the lower of cost or market using the average cost valuation method.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|  
|   | Furniture and Equipment Furniture and equipment is stated at cost. Depreciation is provided on furniture, fixtures and equipment using the straight-line method over an estimated service life of three to seven years.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|  
|   | The cost of normal maintenance and repairs is charged to operating expenses as incurred. Material expenditures which increase the life of an asset are capitalized and depreciated over the estimated remaining useful life of the asset.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|  
|   | Oil and Gas Properties The Company follows the full cost method of accounting whereby all costs related to the acquisition and development of oil and gas properties are capitalized into a single cost center (full cost pool). Such costs include lease acquisition costs, geological and geophysical expenses, overhead directly related to exploration and development activities and costs of drilling both productive and non-productive wells. Proceeds from property sales are generally credited to the full cost pool without gain or loss recognition unless such a sale would significantly alter the relationship between capitalized costs and the proved reserves attributable to these costs. A significant alteration would typically involve a sale of 25% or more of the proved reserves related to a single full cost pool.
|  





F-7

29

---

Depletion of exploration and development costs and depreciation of production equipment is computed using the units of production method based upon estimated proved oil and gas reserves. The costs of unevaluated properties are withheld from the depletion base until such time as they are either developed or abandoned. The unevaluated properties are reviewed quarterly for impairment. Total well costs are transferred to the depletable pool even when multiple targeted zones have not been fully evaluated. For depletion and depreciation purposes, relative volumes of oil and gas production and reserves are converted at the energy equivalent rate of six thousand cubic feet of natural gas to one barrel of crude oil.

Under the full cost method of accounting, capitalized oil and gas property costs less accumulated depletion and net of deferred income taxes (full cost pool) may not exceed an amount equal to the present value, discounted at 10%, of estimated future net revenues from proved oil and gas reserves less the future cash outflows associated with the asset retirement obligations that have been accrued in the balance sheet plus the cost, or estimated fair value, if lower of unproved properties and the costs of any properties not being amortized, if any. Should the full cost pool exceed this ceiling, an impairment is recognized. The present value of estimated future net revenues is computed by applying current oil and gas prices to estimated future production of proved oil and gas reserves as of period end, less estimated future expenditures to be incurred in developing and producing the proved reserves assuming the continuation of existing economic conditions. However, subsequent commodity price increases may be utilized to calculate the ceiling value.

Off Balance Sheet Arrangements From time-to-time, we enter into off-balance sheet arrangements and transactions that can give rise to off-balance sheet obligations. As of April 30, 2007, the off-balance sheet arrangements and transactions that we have entered into include operating lease agreements. The Company does not believe that these arrangements are reasonably likely to materially affect its liquidity or availability of, or requirements for, capital resources.

Income Taxes The Company accounts for income taxes under the provisions of SAFS No. 109,Accounting for Income Taxes. SFAS No. 109 requires recognition of deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax liabilities and assets are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.

Risks and Uncertainties Historically, oil and gas prices have experienced significant fluctuations and have been particularly volatile in recent years. Price fluctuations can result from variations in weather, levels of regional or national production and demand, availability of transportation capacity to other regions of the country and various other factors. Increases or decreases in prices received could have a significant impact on future results.

Fair Value of Financial Instruments The Companys financial instruments consist of cash and cash equivalents, investments, accounts receivable and accounts payable. The fair market value of these financial instruments approximates or is equal to the book value.

Stock-Based Compensation The Company accounts for stock-based compensation arrangements in accordance with Statement of Financial Accounting Standards (SFAS No. 123 revised),Accounting for Share-Based Compensation, which permits entities to recognize as expense over the vesting period, the fair value of all stock-based awards on the date of grant. The Company recorded expense of stock-based compensation during the year ended April 30, 2008, totaling $2,360,000, As of April 30, 2007, the Company recorded expense of stock-based compensation during the year ended April 30, 2007, totaling $1,840,000, as the Company granted employee stock options during the fourth quarter this amount was expensed in the fourth quarter.

F-8

30

---

Research and Development Expenditures Costs related to the research, design, and development of products are charged to research and development expenses as incurred. As of April 30, 2007 and 2006, no material research and development expenses were recorded.

Net Loss Per Share Basic net loss per share is computed using the weighted average number of common shares outstanding during the period. Contingently issuable shares are included in the computation of basic net income (loss) per share when the related conditions are satisfied. Diluted net income (loss) per share is computed using the weighted average number of common shares and potentially dilutive securities outstanding during the period. Potentially dilutive securities consist of contingently issuable shares, the incremental common shares issuable upon conversion of preferred stock or convertible debt (using the if converted method) and shares issuable upon the exercise of stock options and warrants (using the treasury stock method). Potentially dilutive securities are excluded from the computation if their effect is anti-dilutive.

As of April 30, 2008 the Company had 31,041,000 shares of common stock outstanding and options to purchase 3,160,000 shares issued that would be potentially dilutive. At April 30, 2007, the Company had 29,541,000 shares of common stock outstanding and options to purchase 1,550,000 shares issued that would be potentially dilutive. The options outstanding were excluded from the calculation of diluted earnings per share as their effect would have been anti dilutive.

Other Comprehensive Income The Company does not have any other items of other comprehensive income for the years ended April 30, 2008 and 2007. Therefore, total comprehensive income (loss) is the same as net income (loss) for these periods.

Revenue Recognition-The Company leases its ARID tool and process to its customers. Revenue is recognized equally over the term of lease. When the lease is executed the company records deferred revenue Other Current Liability for those amounts paid for lease commitments for the next 12 months and a Long Term Obligation for those amounts in excess of 12 months. At April 30, 2008, the Company has recorded $50,000 as Other Current Liabilities for deferred revenue and $0 for Long Term Obligations

Reclassifications Certain reclassifications have been made to prior years amounts to conform to the classifications used in the current year. Such reclassifications had no effect on the Companys net loss in any of the periods presented.

Recently Issued Accounting Standards

In September 2006, the FASB issued SFAS No. 157,Fair Value Measurements(SFAS 157). SFAS 157 defines fair value, establishes a framework and gives guidance regarding the methods used for measuring fair value, and expands disclosures about fair value measurements. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. We are currently evaluating the impact of adopting SFAS 157 on our financial statements.

In February 2007, the FASB issued SFAS No. 159,The Fair Value Option for Financial Assets and Financial Liabilities(SFAS 159). SFAS 159 provides the option to report certain financial assets and liabilities at fair value, with the intent to mitigate volatility in financial reporting that can occur when related assets and liabilities are recorded on different bases. SFAS 159 also amends SFAS No. 115,Accounting for Certain Investments in Debt and Equity Securities, by providing the option to record unrealized gains and losses on held-for-sale and held-to-maturity securities currently. The implementation of FAS 159 is not expected to have a material impact on our results of operations or financial position.

F-9

31

---

|   | In December 2007, the FASB issued SFAS 141 (revised 2007),Business Combinations("SFAS 141(R)"), which establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in an acquiree, including the recognition and measurement of goodwill acquired in a business combination. SFAS 141(R) is effective for our fiscal year commencing May 1, 2009. Earlier adoption is prohibited. We are currently evaluating the impact of adopting SFAS 141(R) on our results of operations and financial condition.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   | In December 2007, the FASB issued SFAS No. 160,Noncontrolling Interests in Consolidated Financial Statements - an amendment of ARB No. 51. SFAS 160 amends ARB 51 to establish accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a noncontrolling interest in a subsidiary, which is sometimes referred to as minority interest, is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. Among other requirements, this statement requires consolidated net income to be reported at amounts that include the amounts attributable to both the parent and the noncontrolling interest. It also requires disclosure, on the face of the consolidated income statement, of the amounts of consolidated net income attributable to the parent and to the noncontrolling interest. SFAS 160 is effective for our fiscal year commencing May 1, 2009, including interim periods within that fiscal year. Earlier adoption is prohibited. We are currently evaluating the impact of adopting SFAS 160 on our results of operations and financial condition.
|  
|   | In March 2008, the FASB issues SFAS no. 161,Disclosures about Derivative Instruments and Hedging Activities-an amendment of FASB Statement No. 133. This Statement changes the disclosure requirements for derivative instruments and hedging activities. Entities are required to provide enhanced disclosures about (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under Statement 133 and its related interpretations, and (c) how derivative instruments and related hedged items affect an entitys financial position, financial performance, and cash flows. The implementation of SFAS 161 is not expected to have a material impact on our results of operations or financial position.                                                                                                                                                                                                                                                                                                                                                                                                                                           
|  
|4. | OIL AND GAS PROPERTY ACQUISITIONS:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|  
|   | Costs directly associated with the acquisition, exploration and development of unevaluated properties are excluded from the full cost amortization pool, until they are evaluated. The Company acquired various unproven oil and gas leases in Montana and Wyoming during the year ended April 30, 2007. All oil and gas leases were transferred to the Companys new subsidiary, Sterling, subsequent to April 30, 2007. In April 2008, the Company spun off its Sterling subsidiary which included these oil and gas leases. See Note 1. ORGANIZATION AND NATURE OF OPERATIONS.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|5. | RELATED PARTIES TRANSACTIONS:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|  
|   | From April 2007 through December 2007, the officers of the company provided management services to it then subsidiary, Sterling Oil & Gas Company. The Company did not record any income from Sterling for these services.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|  
|   | During the fiscal year ended April 30, 2007, Raymond Murphy a director provided office space to the Company at a rate of $1,200 per month. The Company paid Mr. Murphy $13,200 in rent during the fiscal year. We discontinued renting this office space on April 1, 2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|  





F-10

32

---

|6. | SHAREHOLDERS EQUITY:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   | Private Offerings                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|  
|   | In April 2008, we completed a private placement of securities and raised gross proceeds of $500,000. We sold a total of 1,000,000 units to six (6) investors, each unit consisting of one (1) share of restricted common stock at $.50 per share and one (1) warrant for one (1) share of restricted common stock at $.75 per share.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|  
|   | In October 2007, we completed a private placement of securities and raised gross proceeds of $500,000. We sold a total of 500,000 restricted shares of common stock to one (1) investor at a price of $1.00 per share.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|  
|   | In January 2007, the Company sold 2,012,000 restricted shares of its common stock for proceeds of $1,509,000, or $0.75 per share.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|  
|   | From May through July 2006, the Company sold 4,065,000 restricted shares of its common stock for proceeds of $2,032,500, or $0.50 per share.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|  
|   | The Company issued the foregoing shares of common stock as restricted securities pursuant to the exemptions from registration contained in Regulation S of the Securities Act of 1933 and section 4(2) of the Securities Act of 1933. Shares sold pursuant to Regulation S were sold to non U.S. persons outside the United States of America. Shares sold pursuant to section 4(2) of the Securities Act of 1933 were sold to persons who receive the same information that can be found in a Form SB-2 registration statement and were deemed sophisticated investors in that they understood our business and were able to read and understand financial statements. Following the above sales, the Companys common stock increased to 31,041,000 shares issued and outstanding.                                                                                                                                                                                                                                     
|  
|7. | STOCK OPTION PLAN:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|  
|   | The Company has adopted the 2007 Nonqualified Stock Option Plan (the Plan), as amended. The Company has reserved 5,000,000 shares of common stock for the plan. On April 27, 2007 options to purchase 1,550,000 shares were granted to directors and officers of the Company at $.50 per share, which was below the fair market value on that date. The 2007 options have a term of five years and have limits on exercising over a three-year term. During Fiscal Year 2008, the Company granted options to purchase 1,860,000 shares to directors, officers, and key employees of the Company. Of the 1,860,000 options granted, 255,000 options were granted at $.50 per share, which was below the fair market value of the date of grant. The remaining options were granted at the market price on the date of grant, April 30, 2008. The options granted in Fiscal Year 2008 vested immediately (10,000 options) or through April 30, 2009. 250,000 options were forfeited during the year ended April 30, 2008.
|  
|   | The Company uses the Black-Scholes option-pricing model to estimate the fair value of the options at the grant and vesting date. The fair values of options granted and vested were calculated using the following weighted-average assumptions:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|  







F-11

33

---

Year ended
     Year endedApril 30, 2008
     April 30, 2007Expected dividend yield
     
     Expected price volatility
     140%-193%
     140%Risk free interest rate
     3.03%-4.22%
     4.59%Expected term of options (in years)
     5 years
     5 years


A summary of option activity under the Plan and changes during the years then ended is presented below:

WeightedWeighted
     
     AverageAverage
     
     Remaining
     
     AggregateNumber
     
     
     Exercise
     
     Contractual
     
     Intrinsicof Shares
     
     
     Price
     
     Term
     
     ValueOptions outstanding  May 1, 2006
     
     
     $
     
     
     
     $
     Granted during period
     1,550,000
     
     
     .50
     
     
     
     Exercised during period
     
     
     
     
     
     
     
     Forfeited during period
     
     
     
     
     
     
     
     Expired during period
     
     
     
     
     
     
     
     Options outstanding April 30,2007
     1,550,000
     
     
     .50
     
     5
     $
     3,934,172Granted during period
     1,860,000
     
     
     .62Exercised during periodForfeited during period
     (250,000
     )
     
     .50Expired during period
     
     
     
     
     
     
     
     Options outstanding April 30,2008
     3,160,000
     
     
     .56
     
     4.54
     $
     5,214,990Exercisable at April 30, 2008
     1,798,333
     
     $
     .58
     
     4.61
     $
     2,004,198


|   | The weighted average grant date intrinsic value of options granted during the years ended April 30, 2008 and 2007 was $0.62 and $3.03 per share respectively. The weighted average remaining contractual term is five years for all options outstanding.                                                                                                                                                                                                                                                                                                                                        
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   | As of April 30, 2008, and 2007 the options are fully vested, however, the agreement only allows for a certain number of options to be exercised each year through April 30, 2009. Due to the limitations on exercising the options, and the fact that they would expire if the employee resigns or is terminated for cause, the Company has treated the option as if they vest over a two-year period. The Company expects to recognize approximately $1,500,000 in stock compensation expense ratably through April 30, 2009. There have been no options exercised under the terms of the Plan.
|  
|8. | INCOME TAXES:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|  
|   | The Company has not filed its federal income tax returns for 1997 through 2002. Upon filing of the returns adjustments may be required to the components of the deferred tax assets and liabilities. However, no tax expense will be recorded as a result of a full valuation allowance.                                                                                                                                                                                                                                                                                                        
|  

Deferred tax assets (liabilities) are comprised of the following:

F-12

34

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April 302008
     
     
     
     2007Deferred tax assets:Stock-based compensation
     $
     1,470,000
     
     
     $
     675,000Net operating loss and credit carryforwards
     
     1,080,000
     
     
     
     393,000Total deferred tax assets
     
     2,550,000
     
     
     
     1,068,000Valuation allowance
     
     (2,550,000
     )
     
     
     (1,068,000
     )$
     
     
     
     $
     


A reconciliation of our effective tax rate to the federal statutory tax rate of 35% is as follows:

April 302008
     
     
     
     2007Expected benefit at federal statutory rate
     
     (35
     %)
     
     
     (35
     %)State taxes net of federal benefit
     
     
     
     
     
     (1.69
     %)Permanent differences
     
     .02
     %
     
     
     .05
     %Change in rate
     
     (1.69
     %)
     
     
     (1.50
     %)Change in valuation allowance
     
     36.67
     %
     
     
     38.14
     %
     
     
     
     


The federal net operating loss (NOL) carryforward of approximately $3,086,000 as of April 30, 2008 expires on various dates through 2028. Internal Revenue Code Section 382 places a limitation on the amount of taxable income which can be offset by NOL carryforwards after a change in control (generally greater than 50% change in ownership) of a loss corporation. Generally, after a change in control, a loss corporation cannot deduct NOL carryforwards in excess of the Section 382 limitation. Due to these change in ownership provisions, utilization of NOL carryforwards may be subject to an annual limitation regarding their utilization against taxable income in future periods. We have not performed a Section 382 analysis. However, if performed, Section 382 may be found to limit potential future utilization of our NOL carryforwards.

We have established a full valuation allowance against the deferred tax assets because, based on the weight of available evidence including our continued operating losses, it is more likely than not that all of the deferred tax assets will not be realized. Because of the full valuation allowance, no income tax expense or benefit is reflected on the statement of operations.











F-13

35

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

We have had no disputes or disagreements with our accountants on accounting and financial disclosure. Our Certified Public Accountants are Hein & Associates LLP.

On August 1, 2007 we dismissed Michael J. Larsen, PC, as our independent registered firm accounting firm effective as of that date.

On August 1, 2007 we engaged Hein & Associates LLP, an independent registered firm of Certified Public Accountants, as our principal independent accountant with the approval of our board of directors.

On December 1, 2006, Cordovano and Honeck LLP resigned as our independent registered accounting firm effective as of that date. On December 1, 2006, our board of directors accepted the resignation of Cordovano and Honeck LLP.

On December 1, 2006 we engaged Michael J. Larsen, PC, an independent registered firm of Certified Public Accountants, as our principal independent accountant with the approval of our board of directors.

ITEM 9A(T).   CONTROLS AND PROCEDURES.

Management is responsible for establishing and maintaining adequate internal control over financial reporting for the small business issuer. The Company's Chief Executive Officer and Chief Financial Officer have concluded, based on an evaluation required by paragraph (b) of Section 240.13a -15 or 240.15d -15 of the Rules of the Securities Exchange Act of 1934, conducted as of the end of the period covered by this Annual Report on Form 10-K and using COSO Internal Control-Integrated Framework, that the Company's disclosure controls and procedures (as defined in Exchange Act Rules 13a  15(e) or 240.15d -15(e)) were not effective. For purposes of this Item, the termdisclosure controls and proceduresmeans controls and other procedures of the Company that are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act (15 U.S.C. 78aet seq.) is recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Act is accumulated and communicated to the issuer's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. This annual report does not include an attestation report of the Company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the company's registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management's report in this annual report.





36

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There have been no changes, except as noted in the next paragraph, in the Companys internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Section 240.13a -15 or 240.15d -15 of the Rules of the Securities Exchange Act of 1934, that occurred during the Companys last fiscal quarter (the Companys fourth fiscal quarter in the case of an annual report) that have materially affected, or is reasonably likely to materially affect, the Companys internal control over financial reporting.

The Company has a material weakness in its internal control over financial reporting in that it does not have a sufficient complement of personnel with appropriate training and experience to evaluate highly complex and/or unusual transactions under generally accepted accounting principles and Securities and Exchange Commissions accounting interpretations. The Company is evaluating potential solutions to correct this material weakness.

ITEM 9B.     OTHER INFORMATION.None

PART III

ITEM 10.      DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.

Each of our directors serves until his or her successor is elected and qualified. Each of our officers is elected by the board of directors to a term of one (1) year and serves until his or her successor is duly elected and qualified, or until he or she is removed from office. The board of directors has no nominating, auditing or compensation committees.

The name, age and position of our directors and officers is set forth below:

Name
     Age
     Position HeldTimothy G. Barritt
     58
     President, Principal Executive Officer, and DirectorRichard G. Stockdale
     63
     Vice President and DirectorRaymond P. Murphy
     49
     Chief Operations Officer and DirectorCharles W. Peck
     50
     DirectorGeorge L. Hampton, III
     53
     DirectorRichard G. Stifel
     61
     Secretary, Treasurer, Principal Financial Officer, and PrincipalAccounting Officer, appointed October 1, 2007Robert Goodale
     45
     Secretary, Treasurer, Principal Financial Officer, and PrincipalAccounting Officer, resigned September 30, 2007


Our directors serve until our next annual meeting of the stockholders or until he or she resigns if earlier. The Board of Directors appoints the officers and their terms of office are at the discretion of the Board of Directors.



37

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Timothy G. Barritt has been our president, chief executive officer, and director since January 20, 2006. On February 17, 2006, Richard G. Stockdale was appointed to the Board of Directors, and was also appointed treasurer and principal financial officer. On June 21, 2006, Mr. Stockdale resigned as treasurer and principal financial officer. On August 30, 2006, Mr. Stockdale was appointed vice president. Mr. Stockdale continues to retain his position as a director. On February 17, 2006, Raymond P. Murphy was appointed to the Board of Directors, and was also appointed secretary. On June 21, 2006, Mr. Murphy resigned as secretary. On August 30, 2006, Mr. Murphy was appointed chief operations officer. Mr. Murphy continues to retain his position as a director. On June 21, 2006, Robert Goodale was appointed secretary, treasurer, and principal financial officer. On September 30, 2007, Mr. Goodale resigned secretary, treasurer and principal financial officer. On October 1, 2007, Richard G. Stifel was appointed secretary, treasurer and principal financial officer. The persons named above are expected to hold his or her offices/positions until the next annual meeting of our stockholders.

Timothy G. Barritt - President, Principal Executive Officer, and Director

On January 20, 2006, Timothy Barritt was appointed to our board of directors. Mr. Barritt was also appointed president and principal executive officer. On May 7, 2007, Mr. Barritt was appointed to the board of directors of our subsidiary corporation, Sterling Oil & Gas Company. Mr. Barritt was also appointed president and principal executive officer of Sterling Oil & Gas Company. Since 1996 Mr. Barritt has owned and operated TYVO, LLC which operates three portable drilling rigs in the coal bed methane industry as well as in the water industry. Since July 2005, Mr. Barritt has been a partner in TDR Group, LLC a Wyoming Limited Liability corporation which sold its assets in the transaction described above.

Richard G. Stockdale  Vice President, and Director

Since February 17, 2006, Mr. Stockdale has been treasurer, principal financial officer, principal accounting officer and a member of the board of directors. Mr. Stockdale, on June 21, 2006, resigned as our treasurer and principal financial officer. On August 30, 2006, Mr. Stockdale was appointed Vice President. Mr. Stockdale continues to retain his position as a director. On May 7, 2007, Mr. Stockdale was appointed to the board of directors of our subsidiary corporation, Sterling Oil & Gas Company. Mr. Stockdale was also appointed treasurer of Sterling Oil & Gas Company. Since November 2002, Mr. Stockdale has owned and operated Stockdale Consulting, LLC, which is engaged in the business of hydro-geologic investigations, water well design, drilling supervision, well development techniques, pump testing, water analysis, compilation of data, and publishing reports. From January 2001 to March 2003, Mr. Stockdale was the Deputy Wyoming State Engineer. Since July, 2005, Mr. Stockdale has been a partner in TDR Group, LLC a Wyoming Limited Liability corporation which sold its assets in the transaction described above.

Raymond P. Murphy  Chief Operations Officer, and Director

Since February 17, 2006, Mr. Murphy has been secretary and a member of the board of directors. Mr. Murphy, on June 21, 2006, resigned as our secretary. On August 30, 2006, Mr. Murphy was appointed chief operations officer. Mr. Murphy continues to retain his position as a director. On May 7, 2007, Mr. Murphy was appointed to the board of directors of our subsidiary corporation, Sterling Oil & Gas Company. Mr. Stockdale was also appointed vice president of Sterling Oil & Gas Company. Since January 2003, Mr. Murphy has been an independent consulting oil and gas geologist in Phoenix Arizona.

38

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Since July 2005, Mr. Murphy has been a partner in TDR Group, LLC a Wyoming Limited Liability corporation which sold its assets in the transaction described above. From December 1999 to November 2002, Mr. Murphy was a regulatory specialist/geo-hydrologist for Williams Production RMT Company, Gillette, Wyoming responsible for permitting, reporting and compliance of byproduct water from coal bed methane operations. Mr. Murphy holds a Bachelor of Science degree in geology and biology from Chadron State College, Chardon, Nebraska.

Charles W. Peck - Director

Since September 1, 2006, Mr. Peck has been a member of the board of directors. In 1986 Mr. Peck was a founding partner of Bruce Martens & Associates, a Denver, Colorado based oil and gas exploration company. In 1988 the partners of Bruce Martens & Associates formed American Oil & Gas, with Mr. Peck as vice president. American Oil & Gas drilled its first coal bed methane well in Campbell County, Wyoming in 1989, and subsequently that gas play became Americans focus for the next ten years. Mr. Peck was involved in all aspects of the gas play for American, Mr. Pecks duties included drilling, production techniques, and overall management of the gas play for American. From 1989 to 1998, American drilled approximately 200 Wyodak coal bed methane wells, the production from these wells proved up the Wyoming Powder River Basin coal bed methane play. Mr. Peck is a registered Wyoming Professional Geologist and a member of the Society of Petroleum Engineers. Mr. Peck received a bachelor of sciences degree in geology from Clemson University in 1979 and a masters degree in geology from the Colorado School of Mines in 1982.

George L. Hampton, III - Director

Since September 1, 2006, Mr. Hampton has been a member of the board of directors. From August 2004 to present, Mr. Hampton has been a director of Torrent Energy Corporation, a coal bed methane exploration company with properties in the Pacific Northwest. From 1994 to 1997, and from 2000 to present, Mr. Hampton has been a partner of GeoTrends-Hampton International, LLC, a coal bed methane exploration company based out of the Pacific Northwest. From 1998 to May 2005, Mr. Hampton was a member and geological consultant for Hampton, Waechter & Associates, LLC, a Denver, Colorado based geological company. Since June 1986, Mr. Hampton has been president and chief geological consultant for Hampton & Associates, Inc. a Denver, Colorado based coal bed methane exploration company. From April 1998 to April 1999, Mr. Hampton was project manager and senior geologist for Pennaco Energy Corporation, a Denver, Colorado based coal bed methane exploration company. From 1996 to 1997, Mr. Hampton was chief geologist for Thermal Energy Corporation, a Tulsa, Oklahoma based coal bed methane exploration company. From 1995 to 2001, Mr. Hampton was a founding partner and technical manager of Cairn Point Publishing, Inc., a Denver, Colorado based publishing company that published the International Coal Seam Gas Directory (1996) and the International Coal Seam Gas report (1997). Mr. Hampton has written and co-written a half-dozen articles on coal bed methane exploration and has provided testimony before several sate oil and gas commissions. Mr. Hampton received a bachelor of sciences degree in geology from Brigham Young University in 1977 and a masters degree in geology from Brigham Young University in 1979.





39

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Richard G. Stifel Secretary, Treasurer, Principal Financial Officer, and Principal Accounting Officer. Appointed October 1, 2007

Mr. Stifel was appointed as Chief Financial officer of the Company in October, 2007. From February 2007 until September 2007, he was President and CFO of RGS Resources, LLC of Denver, Colorado. He was also President of RGS from June, 2001 until December 2004. From January 2005 until February 2007, he was the Market Leader and consultant for the Siegfried Group of Wilmington, Delaware. From April 1995 until June 2001, he was CFO for MSI Technologies of Denver, Colorado. From December 1990 until April 1995, he was CFO and Secretary of Horizon Resources Corp., a publicly held company of Golden, Colorado. From June 1988 until December 1990, he was the Western Region Finance Officer for the Alert Centre, Denver, Colorado. He obtained his BSBA from Colorado State University in 1969.

Audit Committee Financial Expert

We do not have an audit committee financial expert. We do not have an audit committee financial expert because we believe the cost related to retaining a financial expert at this time is prohibitive. Further, because we are only beginning our business operations, at the present time, we believe the services of a financial expert are not warranted.

Audit Committee and Charter

We do not have a separately-designated audit committee of the board. As a result, our entire board of directors constitutes our audit committee.

Code of Ethics

We have adopted a corporate code of ethics. We believe our code of ethics is reasonably designed to deter wrongdoing and promote honest and ethical conduct; provide full, fair, accurate, timely and understandable disclosure in public reports; comply with applicable laws; ensure prompt internal reporting of code violations; and provide accountability for adherence to the code.

Disclosure Committee and Charter

We do not have a disclosure committee or disclosure committee charter.

Section 16(a) of the Securities Exchange Act of 1934

Section 16(a) of the Securities Exchange Act of 1934 requires our directors, executive officers and persons who own more than 10% of our common stock to file reports of ownership and changes in ownership of our common stock with the Securities and Exchange Commission. Directors, executive officers and persons who own more than 10% of our common stock are required by Securities and Exchange Commission regulations to furnish to us copies of all section 16(a) forms they file. Our officers and directors have filed all reports required by section 16(a) of the Securities Exchange Act of 1934.



40

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ITEM 11.     EXECUTIVE COMPENSATION

The following table sets forth information with respect to compensation paid by us to our officers and directors during the three most recent fiscal years. Our fiscal year end is April 30. This information includes the dollar value of base salaries, bonus awards and number of stock options granted, and certain other compensation, if any.

Summary Compensation TableLong Term CompensationAnnual Compensation
     Awards
     
     Payouts(a)
     (b)
     (c)
     (d)
     (e)
     (f)
     (g)
     (h)
     (i)OtherAnnual
     Restricted
     SecuritiesCompen
     Stock
     Underlying
     LTIP
     All OtherName and Principal
     Fiscal
     Salary
     Bonus
     sation
     Award(s)
     Options /
     Payouts
     CompensPosition [1]
     Year
     ($)
     ($)
     ($)
     ($)
     SARs (#)
     ($)
     ation ($)[10]Timothy Barritt
     2008
     125,000
     0
     0
     0
     300,000  [6]
     0
     1,733President & CEO
     2007
     88,333
     0
     0
     0
     300,000  [1]
     0
     02006
     14,167
     0
     0
     0
     0
     0
     0Raymond Murphy
     2008
     125,000
     0
     0
     0
     300,000  [7]
     0
     1,170COO
     2007
     88,333
     0
     0
     0
     300,000  [2]
     0
     02006
     14,167
     0
     0
     0
     0
     0
     0Richard Stockdale
     2008
     125,000 0
     0
     0
     300,000  [8]
     0
     470Vice President
     2007
     88,333
     0
     0
     0
     300,000  [3]
     0
     02006
     14,167Richard G. Stifel
     2008
     62,500
     
     
     
     250,000  [9]
     
     1,957Secretary &
     2007
     0
     
     
     
     250,000  [5]TreasurerRobert Goodale
     2008
     62,500
     0
     0
     0
     
     0
     0Secretary &
     2007
     70,625
     0
     0
     0
     250,000  [4]
     0
     0Treasurer
     2006
     0
     0
     0
     0
     0
     0
     0(Resigned-2007)


[1]     We granted to Mr. Barritt stock options to purchase 300,000 shares of our common stock on April 27, 2007 as compensation for services as our president, chief executive officer, and director. These options are exercisable at a price of $0.50 per share until April 27, 2012. The exercise of these options is limited to 100,000 shares per year for the years ended April 27, 2008 and April 27, 2009. After April 27, 2009 there are no restrictions on the exercise of the options.

[2]     We granted to Mr. Murphy stock options to purchase 300,000 shares of our common stock on April 27, 2007 as compensation for services as our chief operating officer, and director. These options are exercisable at a price of $0.50 per share until April 27, 2012. The exercise of these options is limited to 100,000 shares for the year ended April 27, 2008, and 200,000 shares for the year ended April 27, 2009. After April 27, 2009 there are no restrictions on the exercise of the options.



41

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[3]     We granted to Mr. Stockdale stock options to purchase 300,000 shares of our common stock on April 27, 2007 as compensation for services as a director. These options are exercisable at a price of $0.50 per share until April 27, 2012. The exercise of these options is limited to 100,000 shares for the year ended April 27, 2008, and 200,000 shares for the year ended April 27, 2009. After April 27, 2009 there are no restrictions on the exercise of the options.

[4]     We granted to Mr. Goodale stock options to purchase 250,000 shares of our common stock on April 27, 2007 as compensation for services as our chief operating officer, and director. These options are exercisable at a price of $0.50 per share until April 27, 2012. The exercise of these options is limited to 100,000 shares for the year ended April 27, 2008, and 200,000 shares for the year ended April 27, 2009. After April 27, 2009 there are no restrictions on the exercise of the options. After April 27, 2009 there are no restrictions on the exercise of the options. Mr. Goodale resigned effective September 30, 2007; his stock options were cancelled effective that date.

[5]     We granted Mr. Stifel stock options to purchase 250,000 shares of our common stock on September 27, 2008 as part of his compensation package for becoming our Secretary and Treasurer. These options are exercisable at a price of $0.50 per share until April 27, 2012. The exercise of these options is limited to 100,000 shares for the year ended April 27, 2008, and 50,000 shares for the year ended April 27, 2009. After April 27, 2009 there are no restrictions on the exercise of the options. After April 27, 2009 there are no restrictions on the exercise of the options.

[6]     We granted to Mr. Barritt stock options to purchase 300,000 shares of our common stock on April 30, 2008 as compensation for services as our president, chief executive officer, and director. These options are exercisable at a price of $0.62 per share until April 30, 2013. The exercise of these options is limited to 150,000 shares for the year ended April 30, 2009. After April 30, 2009 there are no restrictions on the exercise of the options.

[7]     We granted to Mr. Murphy stock options to purchase 300,000 shares of our common stock on April 30, 2008 as compensation for services as our chief operating officer and director. These options are exercisable at a price of $0.62 per share until April 30, 2013. The exercise of these options is limited to 150,000 shares for the year ended April 30, 2009. After April 30, 2009 there are no restrictions on the exercise of the options.

[8]     We granted to Mr. Stockdale stock options to purchase 300,000 shares of our common stock on April 30, 2008 as compensation for services as our vice president and director. These options are exercisable at a price of $0.62 per share until April 30, 2013. The exercise of these options is limited to 150,000 shares for the year ended April 30, 2009. After April 30, 2009 there are no restrictions on the exercise of the options.

[9]     We granted to Mr. Stifel stock options to purchase 250,000 shares of our common stock on April 30, 2008 as compensation for services as our secretary and treasurer. These options are exercisable at a price of $0.62 per share until April 30, 2013. The exercise of these options is limited to 125,000 shares for the year ended April 30, 2009. After April 30, 2009 there are no restrictions on the exercise of the options.



42

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[10]     The company pays for the officers health insurance, disability insurance, dental insurance and life insurance as part of their compensation package.

All compensation received by the officers has been disclosed.

Option/SAR Grants in the Last Fiscal YearNumber of
     % of TotalSecurities
     Options/SARSUnderlying
     Granted to
     ExerciseName and Principal
     Options/SARS
     Employees in
     Price
     ExpirationPosition
     Granted
     Fiscal Year [1]
     ($/Share
     DateTimothy BarrittPresident & Director
     300,000  [2]
     19.36%
     $0.62
     April 30, 2013Raymond MurphyCOO & Director
     300,000  [3]
     19.36%
     $0.62
     April 30, 2013Richard StockdaleVice President &
     300,000  [4]
     19.35%
     $0.62
     April 30, 2013DirectorCharles PeckDirector
     200,000  [5]
     12.90%
     $0.62
     April 30, 2013George L. Hampton, IIIDirector
     200,000  [6]
     12.90%
     $0.62
     April 30, 2013Richard StifelSecretary & Treasurer
     250,000  [7]
     16.13%
     $0.62
     April 30, 2013


[1]     The total number of options outstanding at April 30, 2008 was 3,160,000 which is arrived at by calculating the total number of new options awarded to officers and directors during the fiscal year ended April 30, 2008.

[2]     Mr. Barritt was granted options to purchase 300,000 shares of our common stock as compensation for services as our president, chief executive officer, and director in 2008. None of these options have been exercised.

[3]     Mr. Murphy was granted options to purchase 300,000 shares of our common stock as compensation for services as our chief operating officer, and director in 2008. None of these options have been exercised.

[4]     Mr. Stockdale was granted options to purchase 300,000 shares of our common stock as compensation for services as our vice president, and director in 2008. None of these options have been exercised.

[5]     Mr. Peck was granted options to purchase 200,000 shares of our common stock as an incentive for acting as a director of our company. None of these options have been exercised.

[6]     Mr. Hampton was granted options to purchase 200,000 shares of our common stock as an incentive for acting as a director of our company. None of these options have been exercised.



43

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[7]     Mr. Stifel was granted options to purchase 250,000 shares of our common stock as compensation for services as our secretary, treasurer, and chief financial officer in 2008. None of these options have been exercised.

Aggregated Option/SAR Exercises in Last Fiscal Year and FY-End Option/SAR Values

Number ofSecurities
     
     Value ofUnderlying
     
     UnexercisedUnexercised
     
     In-the MoneyOptions/SARs at
     
     Options/SARs atFY-End (#)
     
     FY-End ($)Shares Acquired
     
     Exercisable/
     
     Exercisable/Name
     on Exercise (#)
     Value Realized ($)
     Unexercisable
     
     Unexercisable(a)
     (b)
     (c)
     (d)
     
     (e)Timothy Barritt
     
     
     350,000
     [1]
     506,000
     [1]Chief Executive Officer
     
     
     250,000
     [2]
     253,000
     [2]Richard Stifel
     
     
     312,500
     [1]
     114,375
     [1]Chief Financial Officer
     
     
     187,500
     [2]
     38,125
     [2]Raymond Murphy
     
     
     350,000
     [1]
     506,000
     [1]Chief Operations Officer
     
     
     250,000
     [2]
     253,000
     [2]Richard Stockdale
     
     
     350,000
     [1]
     506,000
     [1]Vice-President
     
     
     250,000
     [2]
     253,000
     [2]


|[1] | Exercisable options  
|--- | ---------------------
|   
|[2] | Unexercisable options
|   

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

Equity
     EquityIncentive
     IncentiveEquity
     
     
     
     
     Plan
     PlanIncentive
     
     
     
     
     Awards:
     Awards:Plan
     
     
     Number
     
     Number of
     Market orAwards:
     
     
     of Shares
     Market
     Unearned
     Payout ValueNumber of
     Number of
     Number of
     
     
     or Units
     Value of
     shares,
     of UnearnedSecurities
     Securities
     Securities
     
     
     of Stock
     Shares or
     Units or
     Shares, UnitsUnderlying
     Underlying
     Underlying
     
     
     That
     Units of
     Other
     or OtherUnexercised
     Unexercised
     Unexercised
     Option
     Option
     Have Not
     StockThat
     Rights That
     Rights ThatOptions (#)
     Options (#)
     Unearned
     Exercise
     Expiration
     Vested
     Have Not
     Have Not
     Have NotName
     Exercisable
     Unexercisable
     Options (#)
     Price
     Date
     (#)
     Vested ($)
     Vested(#)
     Vested ($)(a)
     (b)
     (c)
     (d)
     (e)
     (f)
     (g)
     (h)
     (i)
     (j)Timothy Barritt
     200,000
     100,000
     
     0.50
     4/27/2012150,000
     150,000
     
     0.62
     4/30/2013PrincipalExecutiveOfficer




44

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Richard Stifel
     187,500
     62,500
     
     0.50
     4/27/2012125,000
     125,000
     
     0.62
     4/30/2013PrincipalFinancialOfficerRaymond
     200,000
     100,000
     
     0.50
     4/27/2012Murphy
     150,000
     150,000
     
     0.62
     4/30/2013ChiefOperationsOfficerRichard
     200,000
     100,000
     
     0.50
     4/27/2012Stockdale
     150,000
     150,000
     
     0.62
     4/30/2013Vice-President


During the fiscal year ended April 30, 2008, no stock options were exercised by our executive officers or directors.

Long-Term Incentive Plan Awards

We do not have any long-term incentive plans.

Compensation of Directors

The following table sets forth information with respect to compensation paid by us to our directors during the last completed fiscal year. Our fiscal year end is April 30. This information includes the dollar value of base salaries, bonus awards and number of stock options granted, and certain other compensation, if any.

Director Compensation TableLong Term CompensationAnnual Compensation
     Awards
     
     Payouts(a)
     (b)
     (c)
     (d)
     (e)
     (f)
     (g)
     (h)OtherAnnual
     Restricted SecuritiesFees
     
     Compen
     Stock
     Underlying
     LTIP
     All OtherName and Principal
     Earned Bonus
     sation
     Award(s)
     Options /
     Payouts
     CompensPosition [1]
     ($)
     ($)
     ($)
     ($)
     SARs (#)
     ($)
     ation ($)Timothy Barritt
     0
     0
     0
     0
     0
     0
     00Raymond Murphy
     0
     0
     0
     0
     
     0
     0Richard Stockdale
     0
     0
     0
     0
     0
     0
     0Charles W. Peck
     20,000
     0
     0
     0
     200,000  [1]
     0
     00George L. Hampton, III
     20,000
     0
     0
     0
     200,000  [2]
     0
     0




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[1]     We granted to Mr. Peck stock options to purchase 200,000 shares of our common stock on April 30, 2008 as an incentive for acting as a director of our company. These options are exercisable at a price of $0.62 per share until April 27, 2013. The exercise of these options is limited to 100,000 shares for the year ended April 27, 2009. After April 30, 2009 there are no restrictions on the exercise of the options.

[2]     We granted to Mr. Hampton stock options to purchase 200,000 shares of our common stock on April 30, 2008 as an incentive for acting as a director of our company. These options are exercisable at a price of $0.62 per share until April 27, 2013. The exercise of these options is limited to 100,000 shares for the year ended April 27, 2009. After April 30, 2009 there are no restrictions on the exercise of the options.

Directors are also 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.

All compensation received by our directors has been disclosed.

Indemnification

Under our Articles of Incorporation and Bylaws of the corporation, we may indemnify an officer or director who is made a party to any proceeding, including a law suit, because of his position, if he acted in good faith and in a manner he reasonably believed to be in our best interest. We may advance expenses incurred in defending a proceeding. To the extent that the officer or director is successful on the merits in a proceeding as to which he is to be indemnified, we must indemnify him against all expenses incurred, including attorney's fees. With respect to a derivative action, indemnity may be made only for expenses actually and reasonably incurred in defending the proceeding, and if the officer or director is judged liable, only by a court order. The indemnification is intended to be to the fullest extent permitted by the laws of the State of Nevada.

Regarding indemnification for liabilities arising under the Securities Act of 1933, which may be permitted to directors or officers under Nevada law, we are informed that, in the opinion of the Securities and Exchange Commission, indemnification is against public policy, as expressed in the Act and is, therefore, unenforceable.

ITEM 12.     SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS ANDMANAGEMENT.

The following table sets forth, as of the date of this prospectus, the total number of shares owned beneficially by each of our directors, officers and key employees, individually and as a group, and the present owners of 5% or more of our total outstanding shares. The stockholders listed below have direct ownership of his/her shares and possess sole voting and dispositive power with respect to the shares.







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Name and Address of
     Title of
     Amount and Nature of
     Percentage ofBeneficial Owner
     Class
     Beneficial Ownership [1]
     Ownership [2]Timothy Barritt
     common stock
     3,350,000  [3]
     10.15%201 W. Lakeway, Suite 1000Gillette, WY 82718Raymond Murphy
     common stock
     3,350,000  [4]
     10.15%201 W. Lakeway, Suite 1000Gillette, WY 82718Richard Stockdale
     common stock
     3,350,000  [5]
     10.15%201 W. Lakeway, Suite 1000Gillette, WY 82718Charles Peck
     common stock
     300,000  [6]
     0 91%P.O. Box 310Three Forks, MT 59752George L. Hampton, III
     common stock
     320,000  [7]
     0.97%6600 Wauconda DriveLarkspur, CO 80118Richard G. Stifel
     Common stock
     342,500  [8]
     1.04%201 W. Lakeway, Ste 1000Gillette, WY 82718All officers and directors as
     
     11,012,500
     33.37%a group (6 Individuals)Michael Schaefer
     common stock
     2,000,000
     6.06%25 Burger LaneBuffalo, WY 82834KD Tsirigotis
     common stock
     2,000,000
     6.06%Prosimni, T.T. #218Argolidos 21200Greece


[1]     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 convertible, or exercisable or convertible within 60 days of July 29, 2008 are deemed outstanding for computing the percentage of the person holding such option or warrant but are not deemed outstanding for computing the percentage of any other person.

[2]     Percentage based on 31,041,000 shares of common stock outstanding on July 29, 2008 plus additional shares for options above.

[3]     Includes 350,000 options currently exercisable.

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|[4] | Includes 350,000 options currently exercisable.
|--- | -----------------------------------------------
|   
|[5] | Includes 350,000 options currently exercisable.
|   
|[6] | Includes 300,000 options currently exercisable.
|   
|[7] | Includes 300,000 options currently exercisable.
|   
|[8] | Includes 312,500 options currently exercisable.
|   

ITEM 13.     CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

During the fiscal year ended April 30, 2007, Raymond Murphy a director and officer of the Company provided office space to the Company at a rate of $1,200 per month. The Company paid Mr. Murphy $13,200 in rent during the fiscal year ended April 30, 2007. We discontinued renting this office space on April 1, 2007.

From April 2007 through December 2007, the officers of the company provided management services to it then subsidiary, Sterling Oil & Gas Company. The Company did not record any income from Sterling for these services.

ITEM 14.     PRINCIPAL ACCOUNTING FEES AND SERVICES

(1) Audit Fees

The aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for our audit of annual financial statements and review of financial statements included in our Form 10-QSBs or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years was:

2008
     $
     55,585.00
     Hein & Associates LLP, Certified Public Accountants2007
     $
     25,000.00
     Hein & Associates LLP, Certified Public Accountants2008
     $
     0.00
     Michael J. Larsen, PC, Certified Public Accountant2007
     $
     0.00
     Michael J. Larsen, PC, Certified Public Accountants2008
     $
     0.00
     Cordovano & Honeck LLP, Certified Public Accountants2007
     $
     0.00
     Cordovano & Honeck LLP, Certified Public Accountants


(2) Audit-Related Fees

The aggregate fees billed in each of the last two fiscal years for assurance and related services by the principal accountants that are reasonably related to the performance of the audit or review of our financial statements and are not reported in the preceding paragraph:



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2008
     $
     0.00
     Hein & Associates LLP, Certified Public Accountants2007
     $
     0.00
     Hein & Associates LLP, Certified Public Accountants2008
     $
     0.00
     Michael J. Larsen, PC ,Certified Public Accountant2007
     $
     3,880.00
     Michael J. Larsen, PC, Certified Public Accountants2008
     $
     0.00
     Cordovano & Honeck LLP, Certified Public Accountants2007
     $
     2,747.50
     Cordovano & Honeck LLP, Certified Public Accountants


(3) Tax Fees

The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning was:

2008
     $
     0.00
     Hein & Associates LLP, Certified Public Accountants2007
     $
     0.00
     Hein & Associates LLP, Certified Public Accountants2008
     $
     0.00
     Michael J. Larsen, PC, Certified Public Accountant2007
     $
     0.00
     Michael J. Larsen, PC, Certified Public Accountant2008
     $
     0.00
     Cordovano & Honeck LLP, Certified Public Accountants2007
     $
     0.00
     Cordovano & Honeck LLP, Certified Public Accountants


(4) All Other Fees

The aggregate fees billed in each of the last two fiscal years for the products and services provided by the principal accountant, other than the services reported in paragraphs (1), (2), and (3) was:

2008
     $
     0.00
     Hein & Associates LLP, Certified Public Accountants2007
     $
     0.00
     Hein & Associates LLP, Certified Public Accountants2008
     $
     0.00
     Michael J. Larsen, PC, Certified Public Accountant2007
     $
     0.00
     Michael J. Larsen, PC, Certified Public Accountant2008
     $
     0.00
     Cordovano & Honeck LLP, Certified Public Accountants2007
     $
     0.00
     Cordovano & Honeck LLP, Certified Public Accountants




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(5) Our audit committees pre-approval policies and procedures described in paragraph (c)(7)(i) of Rule 2-01 of Regulation S-X were that the audit committee pre-approve all accounting related activities prior to the performance of any services by any accountant or auditor.

(6) The percentage of hours expended on the principal accountants engagement to audit our financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountants full time, permanent employees was 0%.

PART IV

ITEM 15.     EXHIBITS.

(1) Financial Statements

Report of Independent Registered Public Accounting Firm

Balance Sheet as of April 30, 2008 and 2007

Statements of Operations for the years ended April 30, 2008 and 2007 and for the period from inception (June 19, 1997) to April 30, 2008.

Statement of Cash Flows for the years ended April 30, 2008 and 2007 and for the period from inception (June 19, 1997) to April 30, 2008.

Statements of Changes in Shareholders Equity

Notes to Financial Statements

The following Exhibits are incorporated herein by reference from our Form 10-SB Registration Statement filed with the Securities and Exchange Commission, SEC file #0-49870 filed on June 17, 2002. Such exhibits are incorporated herein by reference pursuant to Rule 12b-32:

Exhibit No.
     Document Description3.1
     Articles of Incorporation.3.2
     Bylaws.4.1
     Specimen Stock Certificate.








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The following exhibits are filed with this Form 10-K:

Exhibit No.
     Document Description31.1
     Certification of Principal Executive Officer pursuant to Rule 13a-14 and Rule 15d-14(a), promulgated under the Securities and Exchange Act of 1934, as amended.31.2
     Certification of Principal Financial Officer pursuant to Rule 13a-14 and Rule 15d-14(a), promulgated under the Securities and Exchange Act of 1934, as amended.32.1
     Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 ofthe Sarbanes-Oxley Act of 2002 (Chief Executive Officer).32.2
     Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 ofthe Sarbanes-Oxley Act of 2002 (Chief Financial Officer).
































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SIGNATURES

In accordance with Section 13 or 15(d) of the Securities and Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on this 28th day of July, 2008.

BIG CAT ENERGY CORPORATIONBY:TIMOTHY BARRITTTimothy Barritt, President and PrincipalExecutive OfficerBY:RICHARD G. STIFELRichard G. Stifel, Principal Accounting Officerand Principal Financial Officer

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

Signature
     Title
     DateTIMOTHY BARRITT
     President, Principal Executive Officer,
     July 28, 2008Timothy Barritt
     and a member of the Board of DirectorsRAYMOND MURPHY
     Chief Operations Officer, and
     July 28, 2008Raymond Murphy
     a member of the Board of DirectorsRICHARD G. STOCKDALE
     Vice President, and a member of the
     July 28, 2008Richard G. Stockdale
     Board of DirectorsCHARLES W. PECK
     Director
     July 28, 2008Charles W. PeckGEORGE L. HAMPTON, III
     Director
     July 28, 2008George L. Hampton, III








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