UNITED
STATES SECURITIES AND EXCHANGE COMMISSION


Washington,
D.C. 20549





FORM
10-Q





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


For the
quarterly period ended March 31, 2008








333-117114


--------------------------------------


Commission
File number





USA
SUPERIOR ENERGY HOLDINGS, INC.


-----------------------------------------------------------------


(Exact
name of registrant as specified in its charter)








NEVADA                                                                                   30-0220588


-------------------------                                                                            
----------------------


(State or
other  jurisdiction of
incorporation)                          (IRS
Employer Identification No.)














1726
Augusta Drive, Suite 105, Houston, Texas 77057


-------------------------------------------------------------------------


(Address
of principal executive offices) (Zip Code)





Registrant’s
telephone number, including area code: 832-251-3000


------------------





Securities
Registered pursuant to Section 12(b) of the Exchange Act:








Common Stock, $.001
par
value                                        Over The Counter Bulletin
Board


(Title of
Class)                                                      (Name
of exchange on which registered)







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





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


Large
accelerated filer
|_|                                                       Accelerated
filer |_|


Non-accelerated
filer |_|       (Do not check if a smaller
reporting company)


Smaller reporting company
|X|





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





Contrary
to the rules of the SEC, the Company's consolidated financial statements
included in this filing have not been reviewed by an independent public
accountant in accordance with professional standards for conducting such
reviews.











INDEX
TO FINANCIAL STATEMENTS




Consolidated
      Balance Sheets as of March 31, 2008 and December 31, 2007
      (unaudited)
            F-1Consolidated
      Statements of Operations for the three months ended March 31, 2008 and
      2007 (unaudited)
            F-2Consolidated
      Statement of Stockholders’ Equity for the three months ended March 31,
      2008 (unaudited)
            F-3Consolidated
      Statements of Cash Flows for three months ended March 31, 2008 and 2007
      (unaudited)
            F-4Notes
      to the Consolidated Financial Statements – March 31, 2008
      (unaudited)
            F-5






















USA
SUPERIOR ENERGY HOLDINGS, INC.


CONSOLIDATED
BALANCE SHEETS


As
of March 31, 2008 and December 31, 2007


(Unaudited)





ASSETS
            
            March
      31, 2007
            
            December
      31, 2007Current
      assetsCash
      and cash equivalents
            
            $
            41,625
            
            $
            256,943Restricted
      cash
            
            
            50,000
            
            
            50,000Accounts
      receivable
            
            
            2,500
            
            
            -Prepaid
      expenses
            
            
            1,092,519
            
            
            24,699Total
      current assets
            
            
            1,186,644
            
            
            331,642Oil
      and gas properties, including $348,086 of unproved properties, net of
      accumulated depletion, depreciation and amortization of $52,257 and
      $36,991, respectively – using full cost method of
    accounting
            
            
            1,553,023
            
            
            1,568,289Office
      equipment, net of depreciation of $14,839 and $9,391,
      respectively
            
            
            28,294
            
            
            34,372Other
      assets
            
            
            750
            
            
            750Total
      assets
            
            $
            2,768,711
            
            $
            1,935,053LIABILITIES
      AND STOCKHOLDERS’ EQUITYCurrent
      liabilitiesAccounts
      payable and accrued liabilities
            
            $
            352,895
            
            $
            326,730Convertible
      demand note, net of unamortized discount of $ 242,207 and $244,154,
      respectively
            
            
            36,936
            
            
            27,000Current
      portion of notes payable
            
            
            372,403
            
            
            347,762Advances
      payable – related party
            
            
            109,259
            
            
            114,259Total
      current liabilities
            
            
            871,493
            
            
            815,751Convertible
      debenture, net of unamortized discount of $248,084 and $257,316,
      respectively
            
            
            236,715
            
            
            215,947Notes
      payable
            
            
            363,957
            
            
            363,957Asset
      retirement obligations
            
            
            116,050
            
            
            115,520Total
      liabilities
            
            
            1,588,215
            
            
            1,511,175STOCKHOLDERS’
      EQUITYCommon
      shares, $0.001 par value, 150,000,000 shares authorized, 56,160,000 and
      55,760,000 shares issued and outstanding, respectively
            
            
            56,160
            
            
            55,760Additional
      paid-in capital
            
            
            9,364,470
            
            
            7,924,850Stock
      subscription receivable
            
            
            (130,000
            )
            
            -Accumulated
      deficit
            
            
            (8,110,134
            )
            
            (7,556,732
            )Total
      stockholders’ equity
            
            
            1,180,496
            
            
            423,878Total
      liabilities and stockholders’ equity
            
            $
            2,768,711
            
            $
            1,935,053





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











USA
SUPERIOR ENERGY HOLDINGS, INC.


CONSOLIDATED
STATEMENTS OF OPERATIONS


For
the three months ended March 31, 2008 and 2007


(Unaudited)








2008
            
            
            2007Revenue
            
            $
            115,563
            
            
            $
            15,443Operating
      expensesLease
      operating expenses
            
            
            89,495
            
            
            
            18,763General
      and administrative, including stock based compensation of $217,501 and
      $3,020,000, respectively
            
            
            516,505
            
            
            
            3,375,085Depreciation,
      depletion and amortization
            
            
            21,243
            
            
            
            1,069Total
      operating expenses
            
            
            627,243
            
            
            
            3,394,917Operating
      loss
            
            
            (511,680
            )
            
            
            (3,379,474
            )Other
      income (expense)Interest
      expense
            
            
            (41,722
            )
            
            
            -Total
      other expense
            
            
            (41,722
            )
            
            
            -Net
      loss
            
            
            (553,402
            )
            
            
            (3,379,474
            )Net
      loss per share:Basic
      and diluted
            
            $
            (0.01
            )
            
            $
            (0.09
            )Weighted
      average shares outstanding:Basic
      and diluted
            
            
            56,064,348
            
            
            
            35,666,630











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



















USA
SUPERIOR ENERGY HOLDINGS, INC.


CONSOLIDATED
STATEMENT OF STOCKHOLDERS’ EQUITY


For
the years three months ended March 31, 2008


(Unaudited)





Common
              Shares
            
            
            Par
              Amount
            
            Additional
              Paid-In
              Capital
            Stock
      Subscription Receivable
            
            Accumulated
              Deficit
            
            TotalBalance,
      December 31, 2007
            
            
            55,760,000
            
            
            $
            55,760
            
            $
            7,924,850
            $
            -
            
            $
            (7,556,732
            )
            $
            423,878Shares
      issued in exchange for subscription receivable
            
            
            400,000
            
            
            
            400
            
            
            299,600
            
            (130,000)
            
            
            -
            
            
            170,000Warrants
      issued for services
            
            
            -
            
            
            
            -
            
            
            550,020
            
            -
            
            
            -
            
            
            550,020Shares
      transferred by CEO for services
            
            
            -
            
            
            
            -
            
            
            590,000
            
            -
            
            
            -
            
            
            590,000Net
      loss
            
            
            -
            
            
            
            -
            
            
            -
            
            -
            
            
            (553,402
            )
            
            (553,402
            )Balance,
      March 31, 2008
            
            
            56,160,000
            
            
            $
            56,160
            
            $
            9,364,470
            $
            (130,000
            )
            $
            (8,110,134
            )
            $
            1,180,496










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

















USA
SUPERIOR ENERGY HOLDINGS, INC.


CONSOLIDATED
STATEMENTS OF CASH FLOWS


For
the three months ended March 31, 2008 and 2007


(Unaudited)





2008
            
            
            2007CASH
      FLOWS FROM OPERATING ACTIVITIESNet
      loss
            
            $
            (553,402
            )
            
            $
            (3,379,474
            )Adjustments
      to reconcile net loss to cash used by operating
activities:Depreciation,
      depletion and amortization
            
            
            21,243
            
            
            
            1,069Amortization
      of debt discount
            
            
            11,179
            
            
            
            -Stock
      based compensation
            
            
            217,501
            
            
            
            3,020,000Net
      change in operating assets and liabilities
            
            
            158,161
            
            
            
            (250,939
            )NET
      CASH USED BY OPERATING ACTIVITIES
            
            
            (145,318
            )
            
            
            (609,344
            )CASH
      FLOWS FROM INVESTING ACTIVITIESPurchase
      of property and equipment
            
            
            -
            
            
            
            (41,528
            )Investment
      in oil and gas properties
            
            
            -
            
            
            
            (400,000
            )CASH
      FLOWS USED IN INVESTING ACTIVITIES
            
            
            -
            
            
            
            (441,528
            )CASH
      FLOWS FROM FINANCING ACTIVITIESProceeds
      from issuance of short-term debt
            
            
            -
            
            
            
            25,000Proceeds
      from sale of units
            
            
            -
            
            
            
            1,000,000Capital
      contributions from shareholder
            
            
            -
            
            
            
            161,976Repayments
      of notes payable
            
            
            (70,000
            )
            
            
            -CASH
      FLOWS USED BY FINANCING ACTIVITIES
            
            
            (70,000
            )
            
            
            1,186,976NET
      INCREASE(DECREASE) IN CASH AND CASH EQUIVALENTS
            
            
            (215,318
            )
            
            
            136,104Cash
      and cash equivalents, beginning of period
            
            
            256,943
            
            
            
            297Cash
      and cash equivalents, end of period
            
            $
            41,625
            
            
            $
            136,401





2007
            
            
            
            2006Cash
      paid for:Interest
            
            $
            1,001
            
            
            $
            -Income
      taxes
            
            $
            -
            
            
            $
            -Supplemental
      Schedule of Non-cash Investing and Financing Activities:Purchase
      oil and gas properties through issuance of notes payable
            
            $
            750,097
            
            
            $
            -Recapitalization
            
            
            18,360
            
            
            
            -Asset
      retirement obligation incurred
            
            
            -
            
            
            
            88,066











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

















USA
SUPERIOR ENERGY HOLDINGS, INC.


NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


MARCH
31, 2008





NOTE
1 – ORGANIZATION AND BUSINESS OPERATIONS




Contrary
to the rules of the SEC, the Company's consolidated financial statements
included in this filing have not been reviewed by an independent public
accountant in accordance with professional standards for conducting such
reviews.





USA
Superior Energy Holdings, Inc. (the “Company” or “USA Superior”), a Nevada
corporation, was originally formed on November 12, 2003 as Comlink
Communications Company (“Comlink”).  In fiscal the fiscal year ended
2006, Comlink was essentially dormant with no operating business, having
discontinued all prior operations in the first quarter of 2006. Prior operations
consisted of an attempt to market two-way radio communication equipment over the
internet. The Company had no capital and no prospects to raise capital to carry
out the prior business plan.





The
current business of the Company is to develop, own and operate prospects and
energy projects in East and Southwest Texas.  The Company primarily
focuses on properties with a potential for enhanced secondary or tertiary
recovery using modern state-of-the-art workover and stimulation
techniques.





On
January 16, 2007, USA Superior and Comlink Communications Company (“Comlink”)
consummated a merger that was effected through a reverse merger in which the
shareholders of USA Superior agreed to receive 34,000,000 shares of common stock
of Comlink in exchange for 100% of the issued and outstanding shares of USA
Superior.  Concurrent with the merger, USA Superior’s executive
management and directors assumed control and responsibility for Comlink’s
activities and its strategic direction.   The merger effected a
change in control of Comlink and immediately following the merger, USA
Superior’s former stockholders held approximately 59% of Comlink’s issued and
outstanding common shares.  After the merger, Comlink’s name was
changed to USA Superior Energy Holdings, Inc., and the stock symbol was changed
to OTCBB: USSU.




For
Securities and Exchange Commission (“SEC”) reporting purposes, the merger
between USA Superior and Comlink was treated as a reverse merger with USA
Superior being the “accounting acquirer” and, accordingly, it assumed Comlink’s
reporting obligations with the SEC.  In accordance with SEC
requirements, the historical financial statements and related disclosures
presented herein for the period prior to the date of merger
(i.e.,   January 16, 2007) are those of USA
Superior.  The assets and liabilities of Comlink were recorded, as of
completion of the merger, at fair value, which is considered to approximate
historical cost, and added to those of USA Superior.





In
accordance with the terms of the merger agreement, each outstanding share of USA
Superior prior to the reverse merger was converted into 309.8 common shares in
USA Superior (post reverse merger) with a total of 30,980,000 common shares
issued to the former USA Superior stockholders. Of the 63,360,000 shares of
Comlink outstanding at the time of the merger, 45,000,000 shares were
cancelled concurrent with the closing of the merger.





In
conjunction with the merger, USA Superior issued 3,020,000 shares of common
stock.  In accordance with EITF 95-8, USA Superior determined
that these were shares issued for services and not additional transaction costs
due to the fact that Comlink’s cash balance was minimal prior to the
merger.  These shares had a market value of $3,020,000 on the date of
the reverse merger.  Of the total shares issued for services,
2,720,000 shares were issued to employees of USA Superior.  Immediately
following the merger, a total of 52,360,000 shares of common stock were issued
and outstanding.




Since its
inception, USA Superior has funded its oil and gas activities through a
combination of equity and debt securities and the contribution of funds and
services by its principal shareholders and
management.




NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES




Interim
Financial Statements





The
accompanying interim financial statements have been prepared based on accounting
principles generally accepted in the United States of America.  In the
opinion of management, all adjustments, consisting of normal recurring
adjustments, necessary for a fair presentation of financial position and the
results of operations for the interim periods presented have been reflected
herein. The results of operations for interim periods are not necessarily
indicative of the results to be expected for the full year.  Notes to
financial statements which would substantially duplicate disclosure contained in
the audit consolidated financial statements for the most recent fiscal year,
found in the Company’s Form 10-K, have been omitted.





Basis
of presentation




USA
Superior’s unaudited consolidated balance sheets as of March 31, 2008 and
December 31, 2008 and related consolidated statements of operations,
stockholders’ equity and cash flow for the three months ended March 31, 2008 and
2007 are presented in U.S. dollars and have been prepared in accordance with
accounting principles generally accepted in the United States of America
(“GAAP”) and the rules of the Securities and Exchange Commission.





Use
of estimates




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




Management
believes that it is reasonably possible the following material estimates
affecting the financial statements could significantly change in the coming
year:  (1) estimates of proved oil and gas reserves, and (2) forecast
forward price curves for natural gas and crude oil.   The oil and
gas industry in the United States has historically experienced substantial
commodity price volatility, and such volatility is expected to continue in the
future.   Commodity prices affect the level of reserves that are
considered commercially recoverable; significantly influence USA Superior’s
current and future expected cash flows; and impact the PV10 derivation of proved
reserves presented in USA Superior’s supplemental oil and gas reserve
disclosures made herein.




Principles
of consolidation




The
financial statements include the accounts of its 100% owned subsidiaries USA
Superior Energy, Inc. and Superior Energy, LLC and its 80% interest in the
subsidiary Skyrider Energy, LLC.




Revenue
and cost recognition




USA
Superior uses the sales method to account for sales of crude oil and natural
gas. Under this method, revenues are recognized based on actual volumes of oil
and gas sold to purchasers. The volumes sold may differ from the volumes to
which USA Superior is entitled based on our interest in the
properties.  These differences create imbalances which are recognized
as a liability only when the imbalance exceeds the estimate of remaining
reserves.  USA Superior had no imbalances as of March 31, 2008 and
December 31, 2007.  Costs associated with production are expensed in
the period incurred.




New
Accounting Pronouncements




USA
Superior does not expect the adoption of recently issued accounting
pronouncements to have a significant impact on their results of operations,
financial position or cash flows




NOTE
3 – GOING CONCERN




USA
Superior has raised limited financing and has incurred operating losses since
its inception in October 2005.  These factors raise substantial doubt
about USA Superior’s ability to continue as a going
concern.   USA Superior’s ability to achieve and maintain
profitability and positive cash flow is dependent on its ability to secure
sufficient financing to fund the acquisition, drilling and development of
profitable oil and gas properties.  Management is seeking financing
that it believes would allow USA Superior to establish and sustain commercial
production.   There are no assurances that USA Superior will be
able to obtain additional financing from investors or private lenders and, if
available, such financing may not be on commercial terms acceptable to USA
Superior or its stockholders. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.




NOTE
4 – NOTES PAYABLE AND CONVERTIBLE DEBENTURES





Notes
Payable – Bastrop and Caldwell County, Texas Leases





As a
portion of the consideration for the purchase of the Bastrop and Caldwell
County, Texas leases, USA Superior issued a $350,000 note payable to the
seller.  The note bears interest at 5% and requires monthly payments
of $15,000 plus interest.  As of December 31, 2007, USA Superior was
in default on the payments of the note.  On April 11, 2008, USA
Superior paid the lender $50,000 for attorney fees and a partial payment on the
note and entered into a Renewal and Extension Promissory Note which settled the
default.  Under the terms of the new note, USA Superior must make
monthly payments of $15,000 plus 8% interest beginning May 15,
2008.  All unpaid principal and interest is due October 15,
2008.  This note is secured by 500,000 shares of USA Superior’s common
stock which were pledged by the Company’s CEO and USA Superior’s interest in the
Bastrop County leases.





As
additional consideration for the purchase of the Bastrop County, Texas leases,
USA Superior agreed to assume the seller’s noninterest bearing liability to a
third party in the total amount of $440,000.  This note requires
payments of 25 percent of the net revenue from the production of the leases,
with minimum payments of $7,500 per month and $120,000 per year.  This
note was recorded at the present value of the future cash payments of
$400,097.  Management used an interest rate of 5% to discount this
rate, because it was the same as the rate on the note payable to the seller
described above.  USA Superior is currently in default on the note due
to the fact that all required payments have not been made on the
note.




NOTE
5 – STOCKHOLDERS’ EQUITY




Issuance
of Common Shares and Warrants




On March
1, 2008, as amended April 22, 2008, USA Superior entered into an agreement with
a third party for financial advisory services for the period from March 1, 2008
through February 28, 2010.  Under the terms of the contract USA
Superior will make monthly payments of $5,000 for a total of 23
months.  In addition, USA Superior has issued a warrant to purchase
1,000,000 shares of common stock for a period of five years at an exercise price
of $0.17 and USA Superior’s CEO will pay the third-party 1,250,000 shares of the
common stock owned by him.  The warrants were valued at $550,020 using
the Black-Scholes model with the following assumptions:





AssumptionExercise
      price
            $
      0.17Stock
      price on the issuance date
            $
      0.59Term
      (years)
            5Risk
      free interest rate
            2.50
      %Volatility
            130
      %





The stock
transferred by the CEO of USA Superior was valued at $590,000 based on its
trading price on the issuance date.  These amounts have been recorded
as a prepaid asset and are being amortized over the two year term of the
agreement.





Issuance
of Common Stock for Subscription Agreement




In
January 2008, USA Superior issued 400,000 shares of stock to an employee of the
company in exchange for a stock subscription receivable in the amount of
$130,000.  The shares were valued at $300,000 on the date of
issuances.  USA Superior recognized $170,000 of compensation expense
related to the difference in the market value of the shares and the cash to be
received from the employee.














PART
I- FINANCIAL INFORMATION





Item
1. Financial Statements





IMPORTANT
DISCLOSURE


Contrary
to the rules of the SEC, the Company's consolidated financial statements
included in this filing have not been reviewed by an independent public
accountant in accordance with professional standards for conducting such
reviews.











INDEX
TO FINANCIAL STATEMENTS




Consolidated
      Balance Sheets as of March 31, 2008 and December 31, 2007
      (unaudited)
            F-1Consolidated
      Statements of Operations for the three months ended March 31, 2008 and
      2007 (unaudited)
            F-2Consolidated
      Statement of Stockholders’ Equity for the three months ended March 31,
      2008 (unaudited)
            F-3Consolidated
      Statements of Cash Flows for three months ended March 31, 2008 and 2007
      (unaudited)
            F-4Notes
      to the Consolidated Financial Statements – March 31, 2008
      (unaudited)
            F-5



























USA
SUPERIOR ENERGY HOLDINGS, INC.


CONSOLIDATED
BALANCE SHEETS


As
of March 31, 2008 and December 31, 2007


(Unaudited)





ASSETS
            
            March
      31, 2007
            
            
            December
      31, 2007Current
      assetsCash
      and cash equivalents
            
            $
            41,625
            
            
            $
            256,943Restricted
      cash
            
            
            50,000
            
            
            
            50,000Accounts
      receivable
            
            
            2,500
            
            
            
            -Prepaid
      expenses
            
            
            1,092,519
            
            
            
            24,699Total
      current assets
            
            
            1,186,644
            
            
            
            331,642Oil
      and gas properties, including $348,086 of unproved properties, net of
      accumulated depletion, depreciation and amortization of $52,257 and
      $36,991, respectively – using full cost method of
    accounting
            
            
            1,553,023
            
            
            
            1,568,289Office
      equipment, net of depreciation of $14,839 and $9,391,
      respectively
            
            
            28,294
            
            
            
            34,372Other
      assets
            
            
            750
            
            
            
            750Total
      assets
            
            $
            2,768,711
            
            
            $
            1,935,053LIABILITIES
      AND STOCKHOLDERS’ EQUITYCurrent
      liabilitiesAccounts
      payable and accrued liabilities
            
            $
            352,895
            
            
            $
            326,730Convertible
      demand note, net of unamortized discount of $ 242,207 and $244,154,
      respectively
            
            
            36,936
            
            
            
            27,000Current
      portion of notes payable
            
            
            372,403
            
            
            
            347,762Advances
      payable – related party
            
            
            109,259
            
            
            
            114,259Total
      current liabilities
            
            
            871,493
            
            
            
            815,751Convertible
      debenture, net of unamortized discount of $248,084 and $257,316,
      respectively
            
            
            236,715
            
            
            
            215,947Notes
      payable
            
            
            363,957
            
            
            
            363,957Asset
      retirement obligations
            
            
            116,050
            
            
            
            115,520Total
      liabilities
            
            
            1,588,215
            
            
            
            1,511,175STOCKHOLDERS’
      EQUITYCommon
      shares, $0.001 par value, 150,000,000 shares authorized, 56,160,000 and
      55,760,000 shares issued and outstanding, respectively
            
            
            56,160
            
            
            
            55,760Additional
      paid-in capital
            
            
            9,364,470
            
            
            
            7,924,850Stock
      subscription receivable
            
            
            (130,000
            )
            
            
            -Accumulated
      deficit
            
            
            (8,110,134
            )
            
            
            (7,556,732
            )Total
      stockholders’ equity
            
            
            1,180,496
            
            
            
            423,878Total
      liabilities and stockholders’ equity
            
            $
            2,768,711
            
            
            $
            1,935,053





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











USA
SUPERIOR ENERGY HOLDINGS, INC.


CONSOLIDATED
STATEMENTS OF OPERATIONS


For
the three months ended March 31, 2008 and 2007


(Unaudited)








2008
            
            
            2007Revenue
            
            $
            115,563
            
            
            $
            15,443Operating
      expensesLease
      operating expenses
            
            
            89,495
            
            
            
            18,763General
      and administrative, including stock based compensation of $217,501 and
      $3,020,000, respectively
            
            
            516,505
            
            
            
            3,375,085Depreciation,
      depletion and amortization
            
            
            21,243
            
            
            
            1,069Total
      operating expenses
            
            
            627,243
            
            
            
            3,394,917Operating
      loss
            
            
            (511,680
            )
            
            
            (3,379,474
            )Other
      income (expense)Interest
      expense
            
            
            (41,722
            )
            
            
            -Total
      other expense
            
            
            (41,722
            )
            
            
            -Net
      loss
            
            
            (553,402
            )
            
            
            (3,379,474
            )Net
      loss per share:Basic
      and diluted
            
            $
            (0.01
            )
            
            $
            (0.09
            )Weighted
      average shares outstanding:Basic
      and diluted
            
            
            56,064,348
            
            
            
            35,666,630











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



















USA
SUPERIOR ENERGY HOLDINGS, INC.


CONSOLIDATED
STATEMENT OF STOCKHOLDERS’ EQUITY


For
the years three months ended March 31, 2008


(Unaudited)





Common
              Shares
            
            
            Par
              Amount
            
            
            Additional
              Paid-In
              Capital
            
            Stock
      Subscription Receivable
            
            
            Accumulated
              Deficit
            
            
            TotalBalance,
      December 31, 2007
            
            
            55,760,000
            
            
            $
            55,760
            
            
            $
            7,924,850
            
            $
            -
            
            
            $
            (7,556,732
            )
            
            $
            423,878Shares
      issued in exchange for subscription receivable
            
            
            400,000
            
            
            
            400
            
            
            
            299,600
            
            
            (130,000)
            
            
            
            -
            
            
            
            170,000Warrants
      issued for services
            
            
            -
            
            
            
            -
            
            
            
            550,020
            
            
            -
            
            
            
            -
            
            
            
            550,020Shares
      transferred by CEO for services
            
            
            -
            
            
            
            -
            
            
            
            590,000
            
            
            -
            
            
            
            -
            
            
            
            590,000Net
      loss
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            -
            
            
            
            (553,402
            )
            
            
            (553,402
            )Balance,
      March 31, 2008
            
            
            56,160,000
            
            
            $
            56,160
            
            
            $
            9,364,470
            
            $
            (130,000
            )
            
            $
            (8,110,134
            )
            
            $
            1,180,496










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

















USA
SUPERIOR ENERGY HOLDINGS, INC.


CONSOLIDATED
STATEMENTS OF CASH FLOWS


For
the three months ended March 31, 2008 and 2007


(Unaudited)





2008
            
            
            2007CASH
      FLOWS FROM OPERATING ACTIVITIESNet
      loss
            
            $
            (553,402
            )
            
            $
            (3,379,474
            )Adjustments
      to reconcile net loss to cash used by operating
activities:Depreciation,
      depletion and amortization
            
            
            21,243
            
            
            
            1,069Amortization
      of debt discount
            
            
            11,179
            
            
            
            -Stock
      based compensation
            
            
            217,501
            
            
            
            3,020,000Net
      change in operating assets and liabilities
            
            
            158,161
            
            
            
            (250,939
            )NET
      CASH USED BY OPERATING ACTIVITIES
            
            
            (145,318
            )
            
            
            (609,344
            )CASH
      FLOWS FROM INVESTING ACTIVITIESPurchase
      of property and equipment
            
            
            -
            
            
            
            (41,528
            )Investment
      in oil and gas properties
            
            
            -
            
            
            
            (400,000
            )CASH
      FLOWS USED IN INVESTING ACTIVITIES
            
            
            -
            
            
            
            (441,528
            )CASH
      FLOWS FROM FINANCING ACTIVITIESProceeds
      from issuance of short-term debt
            
            
            -
            
            
            
            25,000Proceeds
      from sale of units
            
            
            -
            
            
            
            1,000,000Capital
      contributions from shareholder
            
            
            -
            
            
            
            161,976Repayments
      of notes payable
            
            
            (70,000
            )
            
            
            -CASH
      FLOWS USED BY FINANCING ACTIVITIES
            
            
            (70,000
            )
            
            
            1,186,976NET
      INCREASE(DECREASE) IN CASH AND CASH EQUIVALENTS
            
            
            (215,318
            )
            
            
            136,104Cash
      and cash equivalents, beginning of period
            
            
            256,943
            
            
            
            297Cash
      and cash equivalents, end of period
            
            $
            41,625
            
            
            $
            136,401





2007
            
            
            
            2006Cash
      paid for:Interest
            
            $
            1,001
            
            
            $
            -Income
      taxes
            
            $
            -
            
            
            $
            -Supplemental
      Schedule of Non-cash Investing and Financing Activities:Purchase
      oil and gas properties through issuance of notes payable
            
            $
            750,097
            
            
            $
            -Recapitalization
            
            
            18,360
            
            
            
            -Asset
      retirement obligation incurred
            
            
            -
            
            
            
            88,066











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

















USA
SUPERIOR ENERGY HOLDINGS, INC.


NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


MARCH
31, 2008





NOTE
1 – ORGANIZATION AND BUSINESS OPERATIONS




Contrary
to the rules of the SEC, the Company's consolidated financial statements
included in this filing have not been reviewed by an independent public
accountant in accordance with professional standards for conducting such
reviews.





USA
Superior Energy Holdings, Inc. (the “Company” or “USA Superior”), a Nevada
corporation, was originally formed on November 12, 2003 as Comlink
Communications Company (“Comlink”).  In fiscal the fiscal year ended
2006, Comlink was essentially dormant with no operating business, having
discontinued all prior operations in the first quarter of 2006. Prior operations
consisted of an attempt to market two-way radio communication equipment over the
internet. The Company had no capital and no prospects to raise capital to carry
out the prior business plan.





The
current business of the Company is to develop, own and operate prospects and
energy projects in East and Southwest Texas.  The Company primarily
focuses on properties with a potential for enhanced secondary or tertiary
recovery using modern state-of-the-art workover and stimulation
techniques.





On
January 16, 2007, USA Superior and Comlink Communications Company (“Comlink”)
consummated a merger that was effected through a reverse merger in which the
shareholders of USA Superior agreed to receive 34,000,000 shares of common stock
of Comlink in exchange for 100% of the issued and outstanding shares of USA
Superior.  Concurrent with the merger, USA Superior’s executive
management and directors assumed control and responsibility for Comlink’s
activities and its strategic direction.   The merger effected a
change in control of Comlink and immediately following the merger, USA
Superior’s former stockholders held approximately 59% of Comlink’s issued and
outstanding common shares.  After the merger, Comlink’s name was
changed to USA Superior Energy Holdings, Inc., and the stock symbol was changed
to OTCBB: USSU.




For
Securities and Exchange Commission (“SEC”) reporting purposes, the merger
between USA Superior and Comlink was treated as a reverse merger with USA
Superior being the “accounting acquirer” and, accordingly, it assumed Comlink’s
reporting obligations with the SEC.  In accordance with SEC
requirements, the historical financial statements and related disclosures
presented herein for the period prior to the date of merger
(i.e.,   January 16, 2007) are those of USA
Superior.  The assets and liabilities of Comlink were recorded, as of
completion of the merger, at fair value, which is considered to approximate
historical cost, and added to those of USA Superior.





In
accordance with the terms of the merger agreement, each outstanding share of USA
Superior prior to the reverse merger was converted into 309.8 common shares in
USA Superior (post reverse merger) with a total of 30,980,000 common shares
issued to the former USA Superior stockholders. Of the 63,360,000 shares of
Comlink outstanding at the time of the merger, 45,000,000 shares were
cancelled concurrent with the closing of the merger.





In
conjunction with the merger, USA Superior issued 3,020,000 shares of common
stock.  In accordance with EITF 95-8, USA Superior determined
that these were shares issued for services and not additional transaction costs
due to the fact that Comlink’s cash balance was minimal prior to the
merger.  These shares had a market value of $3,020,000 on the date of
the reverse merger.  Of the total shares issued for services,
2,720,000 shares were issued to employees of USA Superior.  Immediately
following the merger, a total of 52,360,000 shares of common stock were issued
and outstanding.




Since its
inception, USA Superior has funded its oil and gas activities through a
combination of equity and debt securities and the contribution of funds and
services by its principal shareholders and
management.




NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES




Interim
Financial Statements





The
accompanying interim financial statements have been prepared based on accounting
principles generally accepted in the United States of America.  In the
opinion of management, all adjustments, consisting of normal recurring
adjustments, necessary for a fair presentation of financial position and the
results of operations for the interim periods presented have been reflected
herein. The results of operations for interim periods are not necessarily
indicative of the results to be expected for the full year.  Notes to
financial statements which would substantially duplicate disclosure contained in
the audit consolidated financial statements for the most recent fiscal year,
found in the Company’s Form 10-K, have been omitted.





Basis
of presentation




USA
Superior’s unaudited consolidated balance sheets as of March 31, 2008 and
December 31, 2008 and related consolidated statements of operations,
stockholders’ equity and cash flow for the three months ended March 31, 2008 and
2007 are presented in U.S. dollars and have been prepared in accordance with
accounting principles generally accepted in the United States of America
(“GAAP”) and the rules of the Securities and Exchange Commission.





Use of estimates




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




Management
believes that it is reasonably possible the following material estimates
affecting the financial statements could significantly change in the coming
year:  (1) estimates of proved oil and gas reserves, and (2) forecast
forward price curves for natural gas and crude oil.   The oil and
gas industry in the United States has historically experienced substantial
commodity price volatility, and such volatility is expected to continue in the
future.   Commodity prices affect the level of reserves that are
considered commercially recoverable; significantly influence USA Superior’s
current and future expected cash flows; and impact the PV10 derivation of proved
reserves presented in USA Superior’s supplemental oil and gas reserve
disclosures made herein.




Principles
of consolidation




The
financial statements include the accounts of its 100% owned subsidiaries USA
Superior Energy, Inc. and Superior Energy, LLC and its 80% interest in the
subsidiary Skyrider Energy, LLC.




Revenue
and cost recognition




USA
Superior uses the sales method to account for sales of crude oil and natural
gas. Under this method, revenues are recognized based on actual volumes of oil
and gas sold to purchasers. The volumes sold may differ from the volumes to
which USA Superior is entitled based on our interest in the
properties.  These differences create imbalances which are recognized
as a liability only when the imbalance exceeds the estimate of remaining
reserves.  USA Superior had no imbalances as of March 31, 2008 and
December 31, 2007.  Costs associated with production are expensed in
the period incurred.




New
Accounting Pronouncements




USA
Superior does not expect the adoption of recently issued accounting
pronouncements to have a significant impact on their results of operations,
financial position or cash flows




NOTE
3 – GOING CONCERN




USA
Superior has raised limited financing and has incurred operating losses since
its inception in October 2005.  These factors raise substantial doubt
about USA Superior’s ability to continue as a going
concern.   USA Superior’s ability to achieve and maintain
profitability and positive cash flow is dependent on its ability to secure
sufficient financing to fund the acquisition, drilling and development of
profitable oil and gas properties.  Management is seeking financing
that it believes would allow USA Superior to establish and sustain commercial
production.   There are no assurances that USA Superior will be
able to obtain additional financing from investors or private lenders and, if
available, such financing may not be on commercial terms acceptable to USA
Superior or its stockholders. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.




NOTE
4 – NOTES PAYABLE AND CONVERTIBLE DEBENTURES





Notes
Payable – Bastrop and Caldwell County, Texas Leases





As a
portion of the consideration for the purchase of the Bastrop and Caldwell
County, Texas leases, USA Superior issued a $350,000 note payable to the
seller.  The note bears interest at 5% and requires monthly payments
of $15,000 plus interest.  As of December 31, 2007, USA Superior was
in default on the payments of the note.  On April 11, 2008, USA
Superior paid the lender $50,000 for attorney fees and a partial payment on the
note and entered into a Renewal and Extension Promissory Note which settled the
default.  Under the terms of the new note, USA Superior must make
monthly payments of $15,000 plus 8% interest beginning May 15,
2008.  All unpaid principal and interest is due October 15,
2008.  This note is secured by 500,000 shares of USA Superior’s common
stock which were pledged by the Company’s CEO and USA Superior’s interest in the
Bastrop County leases.





As
additional consideration for the purchase of the Bastrop County, Texas leases,
USA Superior agreed to assume the seller’s noninterest bearing liability to a
third party in the total amount of $440,000.  This note requires
payments of 25 percent of the net revenue from the production of the leases,
with minimum payments of $7,500 per month and $120,000 per year.  This
note was recorded at the present value of the future cash payments of
$400,097.  Management used an interest rate of 5% to discount this
rate, because it was the same as the rate on the note payable to the seller
described above.  USA Superior is currently in default on the note due
to the fact that all required payments have not been made on the
note.




NOTE
5 – STOCKHOLDERS’ EQUITY




Issuance
of Common Shares and Warrants




On March
1, 2008, as amended April 22, 2008, USA Superior entered into an agreement with
a third party for financial advisory services for the period from March 1, 2008
through February 28, 2010.  Under the terms of the contract USA
Superior will make monthly payments of $5,000 for a total of 23
months.  In addition, USA Superior has issued a warrant to purchase
1,000,000 shares of common stock for a period of five years at an exercise price
of $0.17 and USA Superior’s CEO will pay the third-party 1,250,000 shares of the
common stock owned by him.  The warrants were valued at $550,020 using
the Black-Scholes model with the following assumptions:





AssumptionExercise
      price
            $
      0.17Stock
      price on the issuance date
            $
      0.59Term
      (years)
            5Risk
      free interest rate
            2.50
      %Volatility
            130
      %





The stock
transferred by the CEO of USA Superior was valued at $590,000 based on its
trading price on the issuance date.  These amounts have been recorded
as a prepaid asset and are being amortized over the two year term of the
agreement.





Issuance
of Common Stock for Subscription Agreement




In
January 2008, USA Superior issued 400,000 shares of stock to an employee of the
company in exchange for a stock subscription receivable in the amount of
$130,000.  The shares were valued at $300,000 on the date of
issuances.  USA Superior recognized $170,000 of compensation expense
related to the difference in the market value of the shares and the cash to be
received from the employee.








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


The
following discussion will assist you in understanding our financial position,
liquidity, and results of operations. The information below should be
read in conjunction with the consolidated financial statements, and the
related notes to consolidated financial statements. Our discussion contains both
historical and forward-looking information. We assess the risks and
uncertainties about our business, long-term strategy, and financial condition
before we make any forward-looking statements, but we cannot guarantee that
our assessment is accurate or that our goals and projections can or will be met.
Statements concerning results of future exploration, exploitation,
development, and acquisition expenditures as well as expense and reserve levels
are forward-looking statements. We make assumptions about commodity prices,
drilling results, production costs, administrative expenses, and interest costs
that we believe are reasonable based on currently available
information.





Critical Estimates and Accounting
Policies





We
prepare our consolidated financial statements in this report using accounting
principles that are generally accepted in the United States (“GAAP”). GAAP
represents a comprehensive set of accounting and disclosure rules and
requirements. We must make judgments, estimates, and in certain
circumstances, choices between acceptable GAAP alternatives as we apply
these rules and requirements, which may affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amount of revenues and
expenses during the reporting period. Actual results could differ from
those estimates.





The most
critical estimate we use is the engineering estimate of proved oil and gas
reserves. This estimate affects the application of the full cost method of
accounting, the calculation of depreciation and depletion of oil and gas
properties and the estimate of the impairment of our oil and gas properties.
It also affects the estimated lives of our assets used to determine asset
retirement obligations.





Full Cost Method
Accounting





We use
the full cost method of accounting for oil and gas producing activities. Our
costs incurred in connection with the acquisition, exploration for and
development of petroleum and natural gas reserves are capitalized. Such costs
include lease acquisition, geological and geophysical activities, rentals on
non-producing leases, drilling, completing and equipping of oil and gas wells
and administrative costs directly attributable to those activities and asset
retirement costs.





Sales of Oil and Gas
Properties





Proceeds
from the sale of properties are applied against capitalized costs, without any
gain or loss being recognized, unless such a sale would significantly alter the
rate of depletion and depreciation.





Depreciation and Depletion of Oil and
Gas Properties





Depletion
of exploration and development costs and depreciation of production equipment is
provided using the unit-of-production method based upon estimated proven oil and
gas reserves. The costs of significant unevaluated properties are excluded from
costs subject to depletion. For depletion and depreciation purposes, relative
volumes of oil and gas production and reserves are converted at the equivalent
conversion based upon relative energy content.





Ceiling Test





In
applying the full cost method, we perform an annual ceiling test whereby the
carrying value of oil and gas properties and production equipment, net of
recorded future income taxes and the accumulated provision for site restoration
and abandonment costs, is compared annually to an estimate of future net cash
flow from the production of proven reserves. Costs related to undeveloped oil
and gas properties are excluded from the ceiling tests. Discounted net cash
flow, utilizing a 10% discount rate, is estimated using year end prices, less
estimated future general and administrative expenses, financing costs and income
taxes. Should this comparison indicate an excess carrying value, the excess is
charged against earnings. For the years ended December 31, 2007 and 2006, no
impairment of oil and gas properties was indicated.





Asset Retirement
Obligations





We record
a liability for legal obligations associated with the retirement of tangible
long-lived assets in the period in which they are incurred in
accordance with Statement of Financial Accounting Standards (“SFAS”) No.
143 “Accounting for Asset Retirement Obligations.” Under this method, when
liabilities for dismantlement and abandonment costs (ARO) are initially
recorded, the carrying amount of the related oil and natural gas properties are
increased. Accretion of the liability is recognized each period using the
interest method of allocation, and the capitalized cost is depleted over the
useful life of the related asset. Revisions to such estimates are recorded
as adjustments to the ARO, capitalized asset retirement costs and charges to
operations during the periods in which they become known. At the time the
abandonment cost is incurred, we will be required to recognize a gain or loss if
the actual costs do not equal the estimated costs included in
ARO.





Concentrations of Credit
Risk





We sold
all of our oil and natural gas production to two customers in
2007.





We
maintain our cash in bank deposit accounts which, at times, may exceed federally
insured limits. Accounts are guaranteed by the Federal Deposit Insurance
Corporation (“FDIC”) up to $100,000. At March 31, 2007 all of our cash deposits
were within FDIC insured limits. We have not experienced any losses in such
accounts.





Revenue
and Cost Recognition





We use
the sales method to account for sales of crude oil and natural gas. Under this
method, revenues are recognized based on actual volumes of oil and gas sold to
purchasers. The volumes sold may differ from the volumes to which we are
entitled based on our interest in the properties.  These differences
create imbalances which are recognized as a liability only when the imbalance
exceeds the estimate of remaining reserves.  We had no imbalances as
of December 31, 2007 and March 31, 2008.  Costs associated with
production are expensed in the period incurred.





Cash and cash
equivalents





Cash and
cash equivalents include cash in banks and liquid deposit with maturities of
three months or less.





Fair Value of Financial
Instruments





The
carrying value of cash and cash equivalents, accounts payable and accrued
expenses and other liabilities approximates fair value due to the short term
maturity of these instruments. The carrying value of the notes payable,
convertible notes and convertible debentures approximate their fair value as
December 31, 2007 and 2006.





Property and
Equipment





Property
and equipment are stated at cost. Depreciation is computed on a straight-line
basis over the estimated useful lives of three to five years.





Stock-based
compensation





On
January 1, 2006, we adopted SFAS No. 123(R), “Share-Based Payment”. SFAS 123(R)
replaced SFAS No. 123 and supersedes APB Opinion No. 25. SFAS 123(R)
requires all stock-based payments to employees, including grants of employee
stock options, to be recognized in the financial statements based on their
fair values.





Loss per share





Basic net
loss per common share is computed by dividing net loss by the weighted-average
number of common shares outstanding during the period. Diluted net loss per
common share is determined using the weighted-average number of common shares
outstanding during the period, adjusted for the dilutive effect of common stock
equivalents. In periods when losses are reported, the weighted-average number of
common shares outstanding excludes common stock equivalents, because their
inclusion would be anti-dilutive.





Standardized
measure of discounted future net cash flows





The
standardized measure of discounted future net cash flows relies on these
estimates of oil and gas reserves using commodity prices and costs
which existed at year-end. In our 2007 year-end reserve report, we used the
December 31, 2007 WTI Cushing spot price of $96.01 per Bbl and Henry Hub spot
natural gas price of $7.465 per MMbtu, adjusted by property for energy
content, quality, transportation fees, and regional price differentials. The
weighted average price over the lives of the properties was $88.45 per Bbl
for oil and $6.00 per Mcf for gas. While we believe that future operating costs
can be reasonably estimated, future prices are difficult to estimate since
market prices are influenced by events beyond our control. Future global
economic and political events will most likely result in significant
fluctuations in future oil prices, while future U.S. natural gas prices will
continue to be influenced by primarily domestic market factors, including supply
and demand, weather patterns and public policy.





Income taxes





Income
taxes are accounted for using the asset/liability method of income tax
allocation. Future income taxes are recognized for the future income tax
consequences attributable to differences between the carrying values of assets
and liabilities and their respective income tax bases. Future income tax assets
and liabilities are measured using income tax rates expected to apply to taxable
income in the years in which temporary differences are expected to be recovered
or settled. The effect on future income tax assets and liabilities of a change
in income tax rates is included in earnings in the period that such change in
income tax rates is enacted. Future income tax assets are recorded in the
financial statements if realization is considered more likely than
not.





Business
Strategy





USA
Superior Energy Holdings, Inc. (the “Company”) is focused on acquiring, owning,
operating and applying enhanced oil recovery (“EOR”) techniques to existing
shallow fields of oil and gas.  The Company performs complete workover
and stimulation services in these existing fields to restart or substantially
increase production. It utilizes state-of-the-art workover and shallow-well
drilling techniques in these fields including new and innovative technologies
under development by the Company.  These new technologies include
specialized shallow-well cased hole horizontal drilling (“CHHD”) and nitrogen
(“N2”) injection which will be utilized to increase production volumes and
reserve recoverability from the Company’s projects. Currently, the Company is
involved in developing, owning and operating energy projects and prospects in
East, Central and South Texas and currently has active projects and prospects in
Bastrop, Caldwell, Navarro and Zavalla counties. These fields are known as the
Bateman Project in Bastrop and Caldwell Counties (comprised of the Bateman Field
and part of the adjacent Dale McBride Field), the Benton Field in Navarro County
and the Del Monte Prospect in Zavalla County.





Going
Concern





The
report of our independent registered public accounting firm on the financial
statements for the year ended December 31, 2007, includes an explanatory
paragraph indicating substantial doubt as to our ability to continue as a going
concern. We incurred a net loss of $553,402 for the quarter ended March 31, 2008
and have a working capital deficit of $777,368 at March 31, 2008, excluding
prepaid expenses relating primarily to services paid for with common
stock.  We require significant additional funding to sustain our
operations and satisfy our contractual obligations for our planned oil and gas
exploration and development operations. Our ability to establish the Company as
a going concern is dependent upon our ability to obtain additional financing, in
order to fund our planned operations and ultimately, to achieve profitable
operations.





Liquidity
and Capital Resources





Our main
sources of liquidity and capital resources for the quarter ended March 31, 2008
were cash flows from operations and draw down of our cash balances. During the
quarter, we entered into a financing arrangement with our oil purchasing
customers which allows for immediate payment on barrels delivered. While this
may reduce the price we might otherwise receive for our production, we have been
able to accelerate cash flow from revenues to enhance or liquidity by receiving
cash upon the delivery of our barrels.





During
the quarter ended March 31, 2008, net cash flow used by operating activities
increased by $[541,000] to $[687,000], as compared to $[146,000] for our [2006
fiscal year], primarily because of our increased operating and general and
administrative expenses only partially offset by increased revenues received
during the year.  We expect our cash flow provided by operations to
continue to increase during 2008, mainly due to increased oil and natural
production resulting from our existing properties.  The Bastrop
and Caldwell County properties were acquired in 2007 and were shut in for a
portion of that year.  We expect to receive a full year of revenue
from these wells in 2008.





Excluding
the effects of significant unforeseen expenses or other income, our cash flow
from operations fluctuates primarily because of variations in oil and gas
production rates and in commodity prices. In addition, our oil and gas
production from either of our properties may be curtailed due
to weather-related factors beyond our control. In addition, maintenance
activities on, or damage to, major pipelines or processing facilities can also
cause us to shut-in production for undetermined lengths of
time.





Our
realized oil and gas prices vary significantly due to world political events,
supply and demand for products, product storage levels, and
weather patterns, among other factors. We sell 100% of our production at
spot market prices. Accordingly, product price volatility will affect our cash
flow from operations.





We
incurred capital expenditures totaling approximately $[442,000] during the
quarter ended March 31, 2008. The capital expenditures primarily related to
capitalizable costs associated with the Bateman Project.  We
anticipate making additional capital expenditures of approximately $4,000,000
over the next several years to drill additional wells on our existing
properties.  The remainder of our 2008 capital budget will be
funded from a combination of our cash flow from operations, our cash and cash
equivalents and the proceeds from offerings of debt and/or equity
securities.





The
required principal payments on our notes and debentures are as follows as of
December 31, 2007:





2008
            $     618,0002009
            $     237,0002010
            $     558,0002011
            $       37,000$   1,450,000








Changes
in our working capital accounts from 2007 to 2008 include an increase in
Accounts payable and accrued liabilities by $[169,000] to $[327,000] at March
31, 2008 due to the increase in operating activities.  Current notes
payable increased to $372,403 from a $347,762 at December 31, 2007 due to
accrual on our various borrowings.





On March
31, 2008, our current liabilities exceeded our current assets by $777,368,
excluding prepaid expenses relating primarily to services paid for with common
stock. While we expect to achieve positive cash flow from operations during
2008, we will require additional funding in order to complete our plans to
develop additional wells on existing properties.





Results
of Operations





Revenue





We
produced [3,854] barrels of oil and recognized revenue of $115,563 during the
quarter ended March 31, 2008, an increase of _____ barrels and $100,120 over
2007, primarily because we had a full quarter of production from the Bateman
Project which was acquired in late in the first quarter of 2007 and because we
realized significantly higher prices for our production.





Lease
operating expense and production taxes





Our
production costs totaled $89,495 during the quarter ended March 31, 2008, an
increase of $70,732 over 2007, primarily because we had a full quarter of
production from the Bateman Project which was acquired in late in the first
quarter of 2007.





Accretion
of asset retirement obligation





Accretion
expense for the quarter ended March 31, 2008 was $[8,000], as compared to
$[1,000] for same quarter in 2007. This reflects our acquisition of
the Bastrop and Caldwell County properties during the first quarter of
2007.





Depletion, depreciation and
amortization (DD&A)For our quarter ended March 31, 2008, we
recorded DD&A expense of $21,243, after having recorded only $1,069 of
DD&A expense during the first quarter of 2007. Virtually all of this
expense was attributable to depletion of our oil and gas properties, which
were acquired during the first quarter of 2007.





General
and administrative expense (G&A expense)





General
and administrative expense for the quarter ended March, 31 2008 decreased
$2,858,580 from the comparable 2007 period to $516,505. The largest portion of
the reduction came from a decrease in stock based compensation of
$[5,680,000] from the same period in 2007 which related to the reverse merger
and compensation of key employees and consultants.  The other major
component of general and administrative costs for the quarter ended March 31,
2008 included salaries of $[361,000].





Other
income (expense)





Other
income (expense) for the quarter ended March 31, 2008 was incurred interest
expense of $41,722 during the quarter.  We incurred no interest
expense during the same quarter in 2007 because the acquisition of the Bateman
project and related financing occurred at the end of the first quarter of
2007.





Net
loss





For the
quarter ended March 31, 2008, our net loss decreased to $553,402, compared to
our same quarter 2007 net loss of $3,379,474. The major components of the
first quarter 2008 loss were general and administrative expenses of $516,505
including stock based compensation of $[5,680,000].





New
Accounting Pronouncements





USA
Superior does not expect the adoption of recently issued accounting
pronouncements to have a significant impact on their results of operations,
financial position or cash flows







Item
3. Quantitative and Qualitative Disclosures About Market Risk





Item
4. Controls and Procedures





Disclosure Controls and
Procedures




Disclosure
controls and procedures (as defined in Rule 13a-15(e) under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)) are controls and other
procedures that are designed to ensure that the information that we are required
to disclose in the reports that we file or submit under the Exchange Act is
recorded, processed, summarized and reported within the time periods specified
in the SEC’s rules and forms, and that such information is accumulated and
communicated to our management, including our Chief Executive Officer and Chief
Financial Officer, as appropriate to allow timely decisions regarding required
disclosure.




In
connection with the preparation of this Annual Report on Form 10-K, our
management has evaluated the effectiveness of the design and operation of our
disclosure controls and procedures as of December 31, 2007. The disclosure
controls and procedures are not effective and during the second quarter of
fiscal 2008 management will be implementing effective disclosure controls and
procedures.





Management’s Report on
Internal Control Over Financial Reporting





Our
management, under the supervision and with the participation of our Chief
Executive Officer and Chief Financial Officer, is responsible for
establishing and maintaining adequate internal control over financial reporting
as such term is defined in Rules 13a-15(f) under the Exchange Act. Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with existing policies or procedures may deteriorate.





Under the
supervision and with the participation of our Chief Executive Officer and Chief
Financial Officer, during the second quarter of the current fiscal year, our
management will implement an assessment of our internal control over financial
reporting, based on the criteria established in Internal Control — Integrated
Framework, issued by the Committee of Sponsoring Organizations of the
Treadway Commission (“COSO”).  It is the opinion of our management
that our internal control over financial reporting is currently not
effective.








PART
II- OTHER INFORMATION








Item
1. Legal Proceedings





On March
6, 2007, the Company entered into an Agreement of Sale and Purchase with Orbis
Operating, LLC (“Orbis”), in which it agreed to purchase a substantial portion
of the property Orbis acquired under a previous R&S Sale Agreement. Part of
the purchase price included a Promissory Note in the amount of $350,000.00.
After alleged numerous defaults by the Company, Orbis filed suit on March 10,
2008 in United States District Court in Bastrop County, Texas (Cause No.
26,952). The parties then entered into negotiations and reached agreement
through a Loan Workout and Security Agreement on April 11, 2008. Orbis filed a
Rule 11 Agreement with the Bastrop County court whereby it shall dismiss the
suit with prejudice upon the full performance of USA Superior.





The terms
of the settlement included:


·
            The
      Company paying $50,000 cash, in which all was allocated towards Orbis’
      legal fees


·
            Principal
      Balance = $310,000


·
            The
      Company is to make monthly payments on the 15th
      day in the amount of $15,000 plus accrued interest, (6 payments for
      May-Oct)


·
            The
      Company is to make a final payment of entire Principal ($202,000) on
      October 15, 2008


·
            Once
      the Company fulfills obligation to plug the Gabriel wells it assumed (must
      be done by July 31, 2008), it will be given a $60,000 credit towards final
      Principal payment





Outside
of the Orbis settlement disclosures above, the Company knows of no material,
active or pending legal proceedings against the Company nor are we involved as a
plaintiff in any material proceeding or pending litigation. There are no
proceedings in which any directors, officers, or affiliates, or any registered
or beneficial shareholder, is an adverse party or has material interest adverse
to the Company’s interest.








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





Item
3. Defaults Upon Senior Securities





Cheatham Note?





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





NONE





Item
5. Other Information





Item
6. Exhibits




Contrary
to the rules of the SEC, the Company's consolidated financial statements
included in this filing have not been reviewed by an independent public
accountant in accordance with professional standards for conducting such
reviews.











INDEX
TO FINANCIAL STATEMENTS




Consolidated
      Balance Sheets as of March 31, 2008 and December 31, 2007
      (unaudited)
            F-1Consolidated
      Statements of Operations for the three months ended March 31, 2008 and
      2007 (unaudited)
            F-2Consolidated
      Statement of Stockholders’ Equity for the three months ended March 31,
      2008 (unaudited)
            F-3Consolidated
      Statements of Cash Flows for three months ended March 31, 2008 and 2007
      (unaudited)
            F-4Notes
      to the Consolidated Financial Statements – March 31, 2008
      (unaudited)
            F-5






















USA
SUPERIOR ENERGY HOLDINGS, INC.


CONSOLIDATED
BALANCE SHEETS


As
of March 31, 2008 and December 31, 2007


(Unaudited)





ASSETS
            
            March
      31, 2007
            
            
            December
      31, 2007Current
      assetsCash
      and cash equivalents
            
            $
            41,625
            
            
            $
            256,943Restricted
      cash
            
            
            50,000
            
            
            
            50,000Accounts
      receivable
            
            
            2,500
            
            
            
            -Prepaid
      expenses
            
            
            1,092,519
            
            
            
            24,699Total
      current assets
            
            
            1,186,644
            
            
            
            331,642Oil
      and gas properties, including $348,086 of unproved properties, net of
      accumulated depletion, depreciation and amortization of $52,257 and
      $36,991, respectively – using full cost method of
    accounting
            
            
            1,553,023
            
            
            
            1,568,289Office
      equipment, net of depreciation of $14,839 and $9,391,
      respectively
            
            
            28,294
            
            
            
            34,372Other
      assets
            
            
            750
            
            
            
            750Total
      assets
            
            $
            2,768,711
            
            
            $
            1,935,053LIABILITIES
      AND STOCKHOLDERS’ EQUITYCurrent
      liabilitiesAccounts
      payable and accrued liabilities
            
            $
            352,895
            
            
            $
            326,730Convertible
      demand note, net of unamortized discount of $ 242,207 and $244,154,
      respectively
            
            
            36,936
            
            
            
            27,000Current
      portion of notes payable
            
            
            372,403
            
            
            
            347,762Advances
      payable – related party
            
            
            109,259
            
            
            
            114,259Total
      current liabilities
            
            
            871,493
            
            
            
            815,751Convertible
      debenture, net of unamortized discount of $248,084 and $257,316,
      respectively
            
            
            236,715
            
            
            
            215,947Notes
      payable
            
            
            363,957
            
            
            
            363,957Asset
      retirement obligations
            
            
            116,050
            
            
            
            115,520Total
      liabilities
            
            
            1,588,215
            
            
            
            1,511,175STOCKHOLDERS’
      EQUITYCommon
      shares, $0.001 par value, 150,000,000 shares authorized, 56,160,000 and
      55,760,000 shares issued and outstanding, respectively
            
            
            56,160
            
            
            
            55,760Additional
      paid-in capital
            
            
            9,364,470
            
            
            
            7,924,850Stock
      subscription receivable
            
            
            (130,000
            )
            
            
            -Accumulated
      deficit
            
            
            (8,110,134
            )
            
            
            (7,556,732
            )Total
      stockholders’ equity
            
            
            1,180,496
            
            
            
            423,878Total
      liabilities and stockholders’ equity
            
            $
            2,768,711
            
            
            $
            1,935,053





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











USA
SUPERIOR ENERGY HOLDINGS, INC.


CONSOLIDATED
STATEMENTS OF OPERATIONS


For
the three months ended March 31, 2008 and 2007


(Unaudited)








2008
            
            
            2007Revenue
            
            $
            115,563
            
            
            $
            15,443Operating
      expensesLease
      operating expenses
            
            
            89,495
            
            
            
            18,763General
      and administrative, including stock based compensation of $217,501 and
      $3,020,000, respectively
            
            
            516,505
            
            
            
            3,375,085Depreciation,
      depletion and amortization
            
            
            21,243
            
            
            
            1,069Total
      operating expenses
            
            
            627,243
            
            
            
            3,394,917Operating
      loss
            
            
            (511,680
            )
            
            
            (3,379,474
            )Other
      income (expense)Interest
      expense
            
            
            (41,722
            )
            
            
            -Total
      other expense
            
            
            (41,722
            )
            
            
            -Net
      loss
            
            
            (553,402
            )
            
            
            (3,379,474
            )Net
      loss per share:Basic
      and diluted
            
            $
            (0.01
            )
            
            $
            (0.09
            )Weighted
      average shares outstanding:Basic
      and diluted
            
            
            56,064,348
            
            
            
            35,666,630











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



















USA
SUPERIOR ENERGY HOLDINGS, INC.


CONSOLIDATED
STATEMENT OF STOCKHOLDERS’ EQUITY


For
the years three months ended March 31, 2008


(Unaudited)





Common
              Shares
            
            
            Par
              Amount
            
            
            Additional
              Paid-In
              Capital
            
            Stock
      Subscription Receivable
            
            
            Accumulated
              Deficit
            
            
            TotalBalance,
      December 31, 2007
            
            
            55,760,000
            
            
            $
            55,760
            
            
            $
            7,924,850
            
            $
            -
            
            
            $
            (7,556,732
            )
            
            $
            423,878Shares
      issued in exchange for subscription receivable
            
            
            400,000
            
            
            
            400
            
            
            
            299,600
            
            
            (130,000)
            
            
            
            -
            
            
            
            170,000Warrants
      issued for services
            
            
            -
            
            
            
            -
            
            
            
            550,020
            
            
            -
            
            
            
            -
            
            
            
            550,020Shares
      transferred by CEO for services
            
            
            -
            
            
            
            -
            
            
            
            590,000
            
            
            -
            
            
            
            -
            
            
            
            590,000Net
      loss
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            -
            
            
            
            (553,402
            )
            
            
            (553,402
            )Balance,
      March 31, 2008
            
            
            56,160,000
            
            
            $
            56,160
            
            
            $
            9,364,470
            
            $
            (130,000
            )
            
            $
            (8,110,134
            )
            
            $
            1,180,496










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

















USA
SUPERIOR ENERGY HOLDINGS, INC.


CONSOLIDATED
STATEMENTS OF CASH FLOWS


For
the three months ended March 31, 2008 and 2007


(Unaudited)





2008
            
            
            2007CASH
      FLOWS FROM OPERATING ACTIVITIESNet
      loss
            
            $
            (553,402
            )
            
            $
            (3,379,474
            )Adjustments
      to reconcile net loss to cash used by operating
activities:Depreciation,
      depletion and amortization
            
            
            21,243
            
            
            
            1,069Amortization
      of debt discount
            
            
            11,179
            
            
            
            -Stock
      based compensation
            
            
            217,501
            
            
            
            3,020,000Net
      change in operating assets and liabilities
            
            
            158,161
            
            
            
            (250,939
            )NET
      CASH USED BY OPERATING ACTIVITIES
            
            
            (145,318
            )
            
            
            (609,344
            )CASH
      FLOWS FROM INVESTING ACTIVITIESPurchase
      of property and equipment
            
            
            -
            
            
            
            (41,528
            )Investment
      in oil and gas properties
            
            
            -
            
            
            
            (400,000
            )CASH
      FLOWS USED IN INVESTING ACTIVITIES
            
            
            -
            
            
            
            (441,528
            )CASH
      FLOWS FROM FINANCING ACTIVITIESProceeds
      from issuance of short-term debt
            
            
            -
            
            
            
            25,000Proceeds
      from sale of units
            
            
            -
            
            
            
            1,000,000Capital
      contributions from shareholder
            
            
            -
            
            
            
            161,976Repayments
      of notes payable
            
            
            (70,000
            )
            
            
            -CASH
      FLOWS USED BY FINANCING ACTIVITIES
            
            
            (70,000
            )
            
            
            1,186,976NET
      INCREASE(DECREASE) IN CASH AND CASH EQUIVALENTS
            
            
            (215,318
            )
            
            
            136,104Cash
      and cash equivalents, beginning of period
            
            
            256,943
            
            
            
            297Cash
      and cash equivalents, end of period
            
            $
            41,625
            
            
            $
            136,401





2007
            
            
            
            2006Cash
      paid for:Interest
            
            $
            1,001
            
            
            $
            -Income
      taxes
            
            $
            -
            
            
            $
            -Supplemental
      Schedule of Non-cash Investing and Financing Activities:Purchase
      oil and gas properties through issuance of notes payable
            
            $
            750,097
            
            
            $
            -Recapitalization
            
            
            18,360
            
            
            
            -Asset
      retirement obligation incurred
            
            
            -
            
            
            
            88,066











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

















USA
SUPERIOR ENERGY HOLDINGS, INC.


NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


MARCH
31, 2008





NOTE
1 – ORGANIZATION AND BUSINESS OPERATIONS




Contrary
to the rules of the SEC, the Company's consolidated financial statements
included in this filing have not been reviewed by an independent public
accountant in accordance with professional standards for conducting such
reviews.





USA
Superior Energy Holdings, Inc. (the “Company” or “USA Superior”), a Nevada
corporation, was originally formed on November 12, 2003 as Comlink
Communications Company (“Comlink”).  In fiscal the fiscal year ended
2006, Comlink was essentially dormant with no operating business, having
discontinued all prior operations in the first quarter of 2006. Prior operations
consisted of an attempt to market two-way radio communication equipment over the
internet. The Company had no capital and no prospects to raise capital to carry
out the prior business plan.





The
current business of the Company is to develop, own and operate prospects and
energy projects in East and Southwest Texas.  The Company primarily
focuses on properties with a potential for enhanced secondary or tertiary
recovery using modern state-of-the-art workover and stimulation
techniques.





On
January 16, 2007, USA Superior and Comlink Communications Company (“Comlink”)
consummated a merger that was effected through a reverse merger in which the
shareholders of USA Superior agreed to receive 34,000,000 shares of common stock
of Comlink in exchange for 100% of the issued and outstanding shares of USA
Superior.  Concurrent with the merger, USA Superior’s executive
management and directors assumed control and responsibility for Comlink’s
activities and its strategic direction.   The merger effected a
change in control of Comlink and immediately following the merger, USA
Superior’s former stockholders held approximately 59% of Comlink’s issued and
outstanding common shares.  After the merger, Comlink’s name was
changed to USA Superior Energy Holdings, Inc., and the stock symbol was changed
to OTCBB: USSU.




For
Securities and Exchange Commission (“SEC”) reporting purposes, the merger
between USA Superior and Comlink was treated as a reverse merger with USA
Superior being the “accounting acquirer” and, accordingly, it assumed Comlink’s
reporting obligations with the SEC.  In accordance with SEC
requirements, the historical financial statements and related disclosures
presented herein for the period prior to the date of merger
(i.e.,   January 16, 2007) are those of USA
Superior.  The assets and liabilities of Comlink were recorded, as of
completion of the merger, at fair value, which is considered to approximate
historical cost, and added to those of USA Superior.





In
accordance with the terms of the merger agreement, each outstanding share of USA
Superior prior to the reverse merger was converted into 309.8 common shares in
USA Superior (post reverse merger) with a total of 30,980,000 common shares
issued to the former USA Superior stockholders. Of the 63,360,000 shares of
Comlink outstanding at the time of the merger, 45,000,000 shares were
cancelled concurrent with the closing of the merger.





In
conjunction with the merger, USA Superior issued 3,020,000 shares of common
stock.  In accordance with EITF 95-8, USA Superior determined
that these were shares issued for services and not additional transaction costs
due to the fact that Comlink’s cash balance was minimal prior to the
merger.  These shares had a market value of $3,020,000 on the date of
the reverse merger.  Of the total shares issued for services,
2,720,000 shares were issued to employees of USA Superior.  Immediately
following the merger, a total of 52,360,000 shares of common stock were issued
and outstanding.




Since its
inception, USA Superior has funded its oil and gas activities through a
combination of equity and debt securities and the contribution of funds and
services by its principal shareholders and
management.




NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES




Interim
Financial Statements





The
accompanying interim financial statements have been prepared based on accounting
principles generally accepted in the United States of America.  In the
opinion of management, all adjustments, consisting of normal recurring
adjustments, necessary for a fair presentation of financial position and the
results of operations for the interim periods presented have been reflected
herein. The results of operations for interim periods are not necessarily
indicative of the results to be expected for the full year.  Notes to
financial statements which would substantially duplicate disclosure contained in
the audit consolidated financial statements for the most recent fiscal year,
found in the Company’s Form 10-K, have been omitted.





Basis
of presentation




USA
Superior’s unaudited consolidated balance sheets as of March 31, 2008 and
December 31, 2008 and related consolidated statements of operations,
stockholders’ equity and cash flow for the three months ended March 31, 2008 and
2007 are presented in U.S. dollars and have been prepared in accordance with
accounting principles generally accepted in the United States of America
(“GAAP”) and the rules of the Securities and Exchange Commission.





Use
of estimates




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




Management
believes that it is reasonably possible the following material estimates
affecting the financial statements could significantly change in the coming
year:  (1) estimates of proved oil and gas reserves, and (2) forecast
forward price curves for natural gas and crude oil.   The oil and
gas industry in the United States has historically experienced substantial
commodity price volatility, and such volatility is expected to continue in the
future.   Commodity prices affect the level of reserves that are
considered commercially recoverable; significantly influence USA Superior’s
current and future expected cash flows; and impact the PV10 derivation of proved
reserves presented in USA Superior’s supplemental oil and gas reserve
disclosures made herein.




Principles
of consolidation




The
financial statements include the accounts of its 100% owned subsidiaries USA
Superior Energy, Inc. and Superior Energy, LLC and its 80% interest in the
subsidiary Skyrider Energy, LLC.




Revenue
and cost recognition




USA
Superior uses the sales method to account for sales of crude oil and natural
gas. Under this method, revenues are recognized based on actual volumes of oil
and gas sold to purchasers. The volumes sold may differ from the volumes to
which USA Superior is entitled based on our interest in the
properties.  These differences create imbalances which are recognized
as a liability only when the imbalance exceeds the estimate of remaining
reserves.  USA Superior had no imbalances as of March 31, 2008 and
December 31, 2007.  Costs associated with production are expensed in
the period incurred.




New
Accounting Pronouncements




USA
Superior does not expect the adoption of recently issued accounting
pronouncements to have a significant impact on their results of operations,
financial position or cash flows




NOTE
3 – GOING CONCERN




USA
Superior has raised limited financing and has incurred operating losses since
its inception in October 2005.  These factors raise substantial doubt
about USA Superior’s ability to continue as a going
concern.   USA Superior’s ability to achieve and maintain
profitability and positive cash flow is dependent on its ability to secure
sufficient financing to fund the acquisition, drilling and development of
profitable oil and gas properties.  Management is seeking financing
that it believes would allow USA Superior to establish and sustain commercial
production.   There are no assurances that USA Superior will be
able to obtain additional financing from investors or private lenders and, if
available, such financing may not be on commercial terms acceptable to USA
Superior or its stockholders. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.




NOTE
4 – NOTES PAYABLE AND CONVERTIBLE DEBENTURES





Notes
Payable – Bastrop and Caldwell County, Texas Leases





As a
portion of the consideration for the purchase of the Bastrop and Caldwell
County, Texas leases, USA Superior issued a $350,000 note payable to the
seller.  The note bears interest at 5% and requires monthly payments
of $15,000 plus interest.  As of December 31, 2007, USA Superior was
in default on the payments of the note.  On April 11, 2008, USA
Superior paid the lender $50,000 for attorney fees and a partial payment on the
note and entered into a Renewal and Extension Promissory Note which settled the
default.  Under the terms of the new note, USA Superior must make
monthly payments of $15,000 plus 8% interest beginning May 15,
2008.  All unpaid principal and interest is due October 15,
2008.  This note is secured by 500,000 shares of USA Superior’s common
stock which were pledged by the Company’s CEO and USA Superior’s interest in the
Bastrop County leases.





As
additional consideration for the purchase of the Bastrop County, Texas leases,
USA Superior agreed to assume the seller’s noninterest bearing liability to a
third party in the total amount of $440,000.  This note requires
payments of 25 percent of the net revenue from the production of the leases,
with minimum payments of $7,500 per month and $120,000 per year.  This
note was recorded at the present value of the future cash payments of
$400,097.  Management used an interest rate of 5% to discount this
rate, because it was the same as the rate on the note payable to the seller
described above.  USA Superior is currently in default on the note due
to the fact that all required payments have not been made on the
note.




NOTE
5 – STOCKHOLDERS’ EQUITY




Issuance
of Common Shares and Warrants




On March
1, 2008, as amended April 22, 2008, USA Superior entered into an agreement with
a third party for financial advisory services for the period from March 1, 2008
through February 28, 2010.  Under the terms of the contract USA
Superior will make monthly payments of $5,000 for a total of 23
months.  In addition, USA Superior has issued a warrant to purchase
1,000,000 shares of common stock for a period of five years at an exercise price
of $0.17 and USA Superior’s CEO will pay the third-party 1,250,000 shares of the
common stock owned by him.  The warrants were valued at $550,020 using
the Black-Scholes model with the following assumptions:





AssumptionExercise
      price
            $
      0.17Stock
      price on the issuance date
            $
      0.59Term
      (years)
            5Risk
      free interest rate
            2.50
      %Volatility
            130
      %





The stock
transferred by the CEO of USA Superior was valued at $590,000 based on its
trading price on the issuance date.  These amounts have been recorded
as a prepaid asset and are being amortized over the two year term of the
agreement.





Issuance
of Common Stock for Subscription Agreement




In
January 2008, USA Superior issued 400,000 shares of stock to an employee of the
company in exchange for a stock subscription receivable in the amount of
$130,000.  The shares were valued at $300,000 on the date of
issuances.  USA Superior recognized $170,000 of compensation expense
related to the difference in the market value of the shares and the cash to be
received from the employee.














SIGNATURES





Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.








USA Superior Energy Holdings,
Inc.


(the “Registrant”)








By: _/s/ G. Rowland Carey


G.
Rowland Carey


President, Chief Executive
Officer,


& Chief Financial
Officer








Dated: May 20,
2008