UNITED
STATES




SECURITIES
AND EXCHANGE COMMISSION




WASHINGTON, D.C.
20549




FORM
10-KSB/A




ANNUAL REPORT PURSUANT TO SECTION 13
OR 15(D) OF THE




SECURITIES
EXCHANGE ACT OF 1934




FOR THE FISCAL YEAR
ENDED DECEMBER 31, 2007




Commission File No.
001-28911




BRIGHTON
OIL & GAS, INC.








Nevada
            
            91-1869677(State
      or other jurisdiction of incorporation or organization)
            
            (IRS
      Employer Identification No.)







15851
Dallas Parkway, Suite 190, Addison, Texas 75001


( Principal Executive Offices




972 /
450-5990


(Issuer's Telephone Number)




Securities registered under Section
12(b) of the Exchange Act: None Securities registered under Section 12(g) of the
Exchange Act: Common Stock, $0.001 par value




Check whether the issuer is not
required to file reports pursuant to Section 13 or 15 (d) of the Exchange
Act.[  ]




Check
whether the issuer (1) filed all reports required to be filed by Section 13 or
15(d) of the Exchange Act during the past 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days. Yes [X] No [  ]




Check if there is no disclosure of
delinquent filers in response to Item 405 of Regulation S-B contained in this
form, and no disclosure will be contained, to the best of registrant's
knowledge, in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB.
[X]




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




The issuer's revenues for its most
recent fiscal year were $0.00




As of February 25, 2008, the aggregate
market value of the common stock held by non-affiliates based on the closing
sale price of Common Stock  was $106,798. For the purposes of the
foregoing calculation only, all directors, executive officers, related parties
and holders of more than 10% of the issued and outstanding common stock of the
registrant have been deemed affiliates.




As of
February 25, 2008, the issuer had 13,271,985 shares of common stock outstanding.
Documents incorporated by reference: none Transitional Small Business Disclosure
Format (check one): Yes [ ] No [X]























PART
I




Item 1. Description
of Business




Business
Development




On July 19, 2005, National Healthcare
Technology, Inc., (now Brighton Oil & Gas, Inc.) a Colorado corporation,
(the "Company", "us" or "we") completed the acquisition of Special Stone
Surfaces, Es3, Inc., a Nevada corporation ("Es3") pursuant to the terms of an
Exchange Agreement (the "Exchange Agreement") by and among the Company, Crown
Partners, Inc., a Nevada corporation and at  such time, the largest
stockholder of the Company ("Crown Partners"), Es3, and certain stockholders of
Es3 (the "Es3 Stockholders"). The transactions effected by the Exchange
Agreement have been accounted for as a reverse merger. As a result of the
transactions contemplated by the Exchange Agreement, we had one active operating
subsidiary, Es3. Es3 was formed on January 27, 2005 and began operations in
March 2005. Effective October 1, 2005, we transferred all of the capital stock
of Es3 that we acquired under the Exchange Agreement to Liquid Stone Partners
("Liquid Stone") in exchange for Liquid Stone assuming all known and unknown
liabilities of Es3.






Business of
Issuer




Upon the close of the acquisition of
Es3 by the Company on July 19, 2005, we intended to use the public markets to
secure additional working capital and to make acquisitions using either common
stock or cash. A significant component of the intermediate term growth strategy
was the acquisition and integration of companies in related building materials
fields. However, with little or no investor interest in Es3 and its products we
were unable to secure necessary working capital through the public market to
develop a commercially viable market for our products.




On April
3, 2006, our Board of Director's approved a change of direction for the Company,
from the business of manufacturing and distributing decorative stone veneers and
finishes, to the business of oil and gas exploration and production, mineral
lease purchasing and all activities associated with acquiring, operating and
maintaining the assets of such operations. Pursuant to an agreement effective
retroactively to October 1, 2005, we transferred all of the capital stock of Es3
that we acquired under the Exchange Agreement to Liquid Stone Partners ("Liquid
Stone") in exchange for Liquid Stone assuming all known and unknown liabilities
of Es3.




In
furtherance of this change of direction, we entered into consulting agreements
with third parties to provide business management services and advice as it
relates to our future. As of December 31, 2007 the agreements were either
completed or cancelled as the services, which were to include the drafting and
preparation of business plans, operating budgets, cash flow projections and
other business management services as we move into the oil and gas business,
were not moving the company forward in its new direction.





The
Company is in the development stage as defined in Statement of Financial
Accounting Standards No. 7.




Item 2.
Properties.


The
Company currently shares an office at 15851 Dallas Parkway, Suite 190, Addison,
Texas 75001.  . As of December 31, 2007, the Company had no future
rental commitments.




Item
3. Legal Proceedings.




We are
not a party to any material pending legal proceeding and no such action by or,
to the best of our knowledge, against us have been threatened.




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




None.








2




PART
II




Item
5. Market for Registrant's Common Equity and Related Shareholder
Matters.




Market information: Our common stock is
quoted on the over-the-counter market and quoted on the National Association of
Securities Dealers Electronic Bulletin Board ("OTC Bulletin Board") under the
symbol "BROG". The high and low bid prices for the common stock, as reported by
the National Quotation Bureau, Inc., are indicated for the periods described
below. Such prices are inter-dealer prices without retail markups, markdowns or
commissions, and may not necessarily represent actual
transactions.




Fiscal
      Year Ending December 2006
              
              HIGH
              
              
              LOWQuarter
      Ending March 31, 2006
              
              
              3.00
              
              
              
              2.35Quarter
      Ending June 30, 2006
              
              
              1.25
              
              
              
              1.25Quarter
      Ending September 30, 2006
              
              
              0.28
              
              
              
              0.28Quarter
      Ending December 31, 2006
              
              
              0.04
              
              
              
              0.04Fiscal
      Year Ending December 2007
              
              HIGH
              
              
              LOWQuarter
      Ending March 31, 2007
              
              
              0.09
              
              
              
              0.04Quarter
      Ending June 30, 2007
              
              
              0.30
              
              
              
              0.10Quarter
      Ending September 30, 2007
              
              
              0.20
              
              
              
              0.08Quarter
      Ending December 31, 2007
              
              
              0.20
              
              
              
              0.07




Holders




As of December 31, 2007, there were
approximately 147 shareholders of record (in street name) of our common
stock.




Dividends




We have not declared nor paid cash
dividends or made distributions in the past, and we do not anticipate that we
will pay cash dividends or make distributions in the foreseeable future. We
currently intend to retain and reinvest future earnings, if any, to finance and
expand our operations.




Recent Sales of
Unregistered Securities




During
the fiscal year ended December 31, 2007, we issued securities using the
exemptions available under the Securities Act of 1933 including unregistered
sales made pursuant to Section 4(2) of the Securities Act of 1933: we issued
36,200,000 shares to various consultants and affiliates for strategic,
management and oil and gas industry related consulting (after the 1:10 stock
split the issued shares equates to 3,620,000 of outstanding shares at December
31, 2007).  See the Management Discussion and Analysis for a further
breakdown of the share issuance.





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




This
report contains forward looking statements within the meaning of Section 27A of
the Securities Act of 1933, as amended and Section 21E of the Securities
Exchange Act of 1934, as amended. When used in this Form 10-KSB, the words
"anticipate", "estimate", "expect", "project" and similar expressions are
intended to identify forward-looking statements. Such statements are subject to
certain risks, uncertainties and assumptions including the possibility that the
Company's proposed plan of operation will fail to generate projected revenues.
Should one or more of these risks or uncertainties materialize, or should
underlying assumptions prove incorrect, actual results may vary materially from
those anticipated, estimated or projected. The Company's actual results could
differ materially from those set forth on the forward looking statements as a
result of the risks set forth in the Company's filings with the Securities and
Exchange Commission, general economic conditions, and changes in the assumptions
used in making such forward looking statements.




General




On April
3, 2006, our Board of Directors approved a change of direction for the Company,
from the business of manufacturing and distributing decorative stone veneers and
finishes, to the business of oil and gas exploration and production, mineral
lease purchasing and all activities associated with acquiring, operating and
maintaining the assets of such operations. The Board of Directors believes that
by changing the direction to the oil and gas markets we have improved our
prospects for success due to both the current and expected future positive
market conditions.  During 2007 and again in 2008 new Directors with
extensive oil and gas experience were appointed and we believe that this
experience will give the Company a better opportunity for success.




Results
for the years ended December 31, 2007 and 2006 and the period January 27 to
December 31, 2005




For the
year ended December 31, 2007, the Company had revenue of $12,239, vs. revenue of
$0 during the year ended December 31, 2006.  Revenue was also $0 for
the period January 27, to December 31, 2005.




For the
year ended December 31, 2007, the Company had a net operating loss of
$13,940,460 vs. a net operating loss of $37,121,584 for the year ended December
31, 2006.  The net loss was $807,600 for the period January 27, to
December 31, 2005.  The decrease in the loss in 2007 is attributable
to the decrease in professional fees and expense related to prior consulting
agreements of $13,091,316 and a decrease in other general and administrative
expenses of $15,107,569.This was partially off-set by writing-off prepaid
consulting fees of $4,085,417 in December 2007.   Total operating
expenses reduced significantly as the new officers and directors that were
appointed have agreed to $0 compensation unlike the management team in 2006 that
drove an increase in compensation accruals.  Plus the new management
is relying on their own expertise in the oil business versus contracting
consultants as the management team did in 2006.




For the
year ended December 31, 2007, the Company had a net loss of $15,007,117 versus
$36,906,584 for the year ended  December 31, 2006.  The
change in other income is $1,066,657 due to the amortization of the deemed
dividend during 2007.








3




Plan
of Operation


In
conjunction with our change of direction, in April 2006, we entered into
a consulting agreement with Summitt Oil and Gas, Inc. ("Summitt"), as well
as other third parties, to provide business management services, and advice
as it relates to the future of the company.  This service shall
include the drafting and preparation of business plans, operating budgets,
cash flow projections and other business management services as we venture
into the oil and gas business.  In September 2007 and February 2008
new officers and directors were appointed who have extensive experience in the
oil and gas industry and will rely on their own expertise to develop and grow
the Company.





In April
2006 we executed an assignment of an oil and gas lease under which
we acquired 100% of the leasehold  rights to drill and otherwise
exploit 160 acres of certain underlying oil and gas  reserves
located in the County of Custer, Oklahoma, which we acquired from Summitt
for 677,000  restricted  shares of our common stock and
agreed to pay Summitt a royalty equal to 3% of the value of
all oil  produced and removed  under the lease and the
net  proceeds  received by us from the sale of all gas
and  casinghead  gasoline  produced  and
sold under the lease.  The leasehold interest is not developed
and accordingly not currently producing oil or gas. Upon receiving the
necessary capitalization, we intend to explore the development of this
field.  The shares were valued at $406,200.  The Company
recorded the asset at the historical cost of $56,000 to the related party and
recorded $350,200 as a deemed dividend to the related party.  As of
December 31, 2006 the Company impaired the balance of the lease of
$46,667.





In April
2006, we entered into a consulting agreement with BlueFin, Inc.
("BlueFin").  BlueFin was retained to provide business
development, investor relations services, and introductions to qualified
funding sources, introductions to oil and gas business prospects and
introductions to accredited investors.  By leveraging BlueFin's
resources the Company anticipated that it would be able to find sources of
capital to fund its operations in the oil and gas business.





In April
2006, we also entered into an agreement with Monterosa Group
Limited ("Monterosa").  Monterosa was retained to provide
services including operation administration, transaction processing and
management, systems development, staff recruitment, acquisition transaction
support services, and other business management services as the Company
moves into the oil and gas business.





In April
2006, we also engaged Camden Holdings, Inc. ("Camden"), an
entity experienced in the energy sector that will assist the Company
in locating oil and gas opportunities.  Camden’s services include
the drafting and preparation of business plans, operating budgets, cash
flow projections
and other business management services as we venture into the oil and gas
business. We have also been able to leverage our relationship with Camden
to obtain short-term financing as needed.  Camden has also agreed to
advance sums to the Company to assist in funding its operations over the
short-term.  In September 2007, the engagement of Camden ceased and as
of December 31, 2007, the balance of advances by Camden to the Company was
$164,742.





In April
2006, we also engaged Design, Inc. ("Design"), an entity experienced in the
energy sector that will assist the Company in financing the
transactions introduced by Camden and our other consultants.





In July,
2006, the Company entered into a Consulting Agreement with Catalyst Consulting
Partners, LLC to provide the Company with business consulting services in
exchange for the issuance of 518,000 shares of the Company's common
stock.  These shares were issued during the quarter ended September
30, 2006.





In
September, 2006, the Company entered into a Consulting Agreement with Summitt
Ventures Inc. ("SVI") for six months which required the Company to issue
2,700,000 of its common stock to SVI for services to be provided to the Company
including business management services and related services.  These
shares were issued in September, 2006.





In
September, 2006, the Company entered into a Services Agreement with Rhone
Alternative Marketing Partners ("RAMP) for marketing and public relations
services in exchange for the issuance of 1,000,000 shares of the Company's
common stock.  These shares were issued during the quarter ended
September 30, 2006.





During
the quarter ended September 30, 2006, the Company compensated certain third
party individuals who provided services to the Company.  In August and
September, 2006, 600,000 shares were issued for services.  In
September, 2006, an additional 740,000 shares were issued to consultants for
services under the Company's 2006-1 Consultants and Employees Services
Plan.  This Plan was adopted in September, 2006 and reserved 3,800,000
shares of the Company's common stock to consultants and employees, which shares
were registered in September, 2006.  During the quarter ended December
31, 2006, 3,799,000 shares were issued under the Plan.




On
October 19, 2007, the Company issued 50,000,000 shares of restricted stock
K&D Investments for oil properties in Throckmorton County, Texas
(Walker-Buckler Trust 380-381).   The Company recorded the transaction
at fair market value of $5,000,000 and on December 31, 2007, recorded impairment
expense related to the property of $5,000,000 resulting a net capitalized amount
of $0.






4








On
October 29, 2007, the Company paid $30,000 to an individual for oil properties
in Throckmorton County, Texas (Putnam M Well).   The Company recorded
the transaction at fair market value of $30,000 and on December 31, 2007,
recorded impairment expense related to the property of $30,000 resulting a net
capitalized amount of $0.




We
believe  that by
changing  our  direction  to the oil and gas
markets we have improved our prospects  for success due to both
the current and
expected  future positive  market  conditions  which
we expect to exploit initially from the valuable contacts, industry
expertise and business  opportunities we expect to derive from
our officers and directors who have extensive oil and gas experience and
contact.





We
anticipate that we will have to raise additional capital to fund
operations over the next 12 months.  To the extent that we are
required to raise additional funds to acquire properties, and to cover
costs of operations, we intend to do so through additional public or
private offerings of debt or equity securities.





We
currently have no full-time employees.  We will primarily rely on our
officers and directors to develop and grow the Company.




Risk
Factors




Risks related to the
Company




Need for additional
financing.





We have a
line-of-credit for $100,000 with a related party, and at December 31, 2007, the
balance is $66,657.  This line-of-credit will not be sufficient to
satisfy our obligations and continue operations through the end of 2008, and
therefore we have an immediate need for capital.  Although our current
strategy requires significantly less capital versus the strategy from the prior
management team, there can be no assurance that we will be able to obtain the
sufficient short-term capital needed to sustain operations. The full and timely
development and implementation of our business plan and growth strategy will
require additional resources. We may not be able to obtain the working capital
necessary to implement our growth strategy. Furthermore, our growth strategy may
not produce material revenue even if successfully funded. Management intends to
explore a number of options to secure alternative sources of capital, including
the issuance of secured debt, volumetric production payments, subordinated debt,
or additional equity, including preferred equity securities or other equity
securities. We might not succeed, however, in raising additional equity capital
or in negotiating and obtaining additional and acceptable financing when we need
it. Our ability to obtain additional capital will also depend on market
conditions, national and global economies and other factors beyond our control.
Even if we are able to obtain the short-term capital necessary to sustain our
operations, if adequate capital is not available or is not available on acceptable terms at a time when we
needed it, our ability to close acquisitions, execute our growth plans, develop
or enhance our services or respond to competitive pressures will be
significantly impaired. There are no assurances that we will be able to
implement or capitalize on various financing alternatives or otherwise obtain
required working capital, the need for which is substantial given our operating
loss history.




We have a limited operating
history.





We are a development stage
company with a limited operating history, and we face all the risks common to
companies in their early stages of development, including undercapitalization
and uncertainty of funding sources, high initial expenditure levels and
uncertain revenue streams, an unproven business model, and difficulties in
managing growth. Our prospects must be considered in light of the risks,
expenses, delays and difficulties frequently encountered in establishing a new
business. Any forward-looking statements in this report do not reflect any
adjustments that might result from the outcome of these types of uncertainty.
Since inception, we have incurred significant losses. No assurance can be given
that we will be successful.




We may incur unforeseen costs and we
may need to raise capital in addition to that required by our business
plan.





We are currently operating at a loss
and intend to increase our operating expenses significantly as we begin our
acquisitions and oil and gas production. Additionally, we may encounter
unforeseen costs that could also require us to seek additional capital. There
can be no assurance that we will be able to raise sufficient additional capital
on acceptable terms, if at all. Any additional financing may result in
significant dilution to our existing stockholders.





Maintaining any reserves and revenue we
may acquire in the future depends on successful development and
acquisitions.




In general, the volume of production
from oil and natural gas properties declines as reserves are depleted, with the
rate of decline depending on reservoir characteristics. Except to the extent we
acquire properties containing proved reserves or conduct successful development
activities, or both, our proved reserves that we may acquire will decline. Our
future oil and natural gas production is, therefore, highly dependent upon our
level of success in finding or acquiring additional
reserves.




We are subject to substantial operating
risks


The oil and natural gas business
involves certain operating hazards such as well blowouts, mechanical failures,
explosions, uncontrollable flows of oil, natural gas or well fluids, fires,
formations with abnormal pressures, hurricanes, pollution, releases of toxic gas
and other environmental hazards and risks. We could suffer substantial losses as
a result of any of these events. While we intend to carry general liability,
control of well, and operator's extra expense coverage typical in our industry,
we will not be fully insured against all risks incident to our business, such as
acts of God.




We may not always be the operator of
some of our wells. As a result, our operating risks for those wells and our
ability to influence the operations for these wells will be less subject to our
control. Operators of these wells may act in ways that are not in our best
interests.






5




Our operations have significant capital
requirements.





We expect to experience substantial
working capital needs as we begin our active development and acquisition
programs. Even if we are able to obtain the short-term capital necessary to
maintain our operations, additional financing will be required in the future to
fund our growth and operations. No assurances can be given as to the
availability or terms of any such additional financing that may be required or
that financing will continue to be available under new credit facilities. In the
event such capital resources are not available to us, our drilling and other
activities would be curtailed.




We may have difficulty managing future
growth and the related demands on ourresources
and may have difficulty in achieving future growth.




We expect to experience rapid growth
through acquisitions and development activity for the foreseeable future. Any
future growth may place a significant strain on our financial, technical,
operational and administrative resources. Our ability to grow will depend upon a
number of factors, including our ability to identify and acquire new development
or acquisition prospects, our ability to develop existing properties, our
ability to continue to retain and attract skilled personnel, hydrocarbon prices
and access to capital. There can be no assurance that we will be successful in
achieving growth or any other aspect of our business
strategy.




We face
strong competition from larger oil and natural gas
companies.




Our competitors include major
integrated oil and natural gas companies and numerous independent oil and
natural gas companies, individuals and drilling and income programs. Many of our
competitors are large, well-established companies with substantially larger
operating staffs and greater capital resources than us. We may not be able to
successfully conduct our operations, evaluate and select suitable properties and
consummate transactions in this highly competitive environment. Specifically,
these larger competitors may be able to pay more for development projects and
productive oil and natural gas properties and may be able to define, evaluate,
bid for and purchase a greater number of properties and prospects than our
financial or human resources permit. In addition, such companies may be able to
expend greater resources on the existing and changing technologies that we
believe are and will be increasingly important to attaining success in the
industry.




Our acquisition program may be
unsuccessful, particularly in light of our recent formation and limited history
of acquisitions.





Although our personnel have had
significant experience within the oil and gas industry, we may not be in as good
a position as our more larger and better funded competitors to execute a
successful acquisition program or close additional future transactions. The
successful acquisition of producing properties requires an assessment of
recoverable reserves, future oil and natural gas prices, operating costs,
potential environmental and other liabilities and other factors. Such
assessments, even when performed by experienced personnel, are necessarily
inexact and their accuracy inherently uncertain. Our review of subject
properties, which generally includes on-site inspections and the review of
reports filed with various regulatory entities, will not reveal all existing or
potential problems, deficiencies and capabilities. We may not always perform
inspections on every well, and may not be able to observe structural and
environmental problems even when we undertake an inspection. Even when problems
are identified, the seller may be unwilling or unable to provide effective
contractual protection against all or part of such problems. There can be no
assurances that any acquisition of property interests by us will be successful
and, if unsuccessful, that such failure will not have an adverse effect on our
future results of operations and financial condition.




We cannot
market our production without the assistance of third
parties.




The marketability of our production
depends upon the proximity of our reserves to, and the capacity of, facilities
and third party services, including oil and natural gas gathering systems,
pipelines, trucking or terminal facilities, and processing facilities. The
unavailability or lack of capacity of such services and facilities could result
in the shut-in of producing wells or the delay or discontinuance of development
plans for properties. A shut-in or delay or discontinuance could adversely
affect our financial condition. In addition, federal and state regulation of oil
and natural gas production and transportation affect our ability to produce and
market our oil and natural gas on a profitable basis.




Risks Relating to
the Oil and Gas Industry




Oil and Gas Drilling, re-completions
and re-working are speculative activitiesand involve
numerous risks and substantial and uncertain costs.




Our growth will be materially dependent
upon the success of our future drilling and development program. Drilling for
oil and gas and re-working existing wells involve numerous risks, including the
risk that no commercially productive oil or natural gas reservoirs will be
encountered. The cost of drilling, completing and operating wells is substantial
and uncertain, and drilling operations may be curtailed, delayed or cancelled as
a result of a variety of factors beyond our control, including unexpected
drilling conditions, pressure or irregularities in formations, equipment
failures or accidents, adverse weather conditions, compliance with governmental
requirements and shortages or delays in the availability of drilling rigs or
crews and the delivery of equipment. Although we believe that our focus on
re-developing existing oil and gas field and advanced drilling technology should
increase the probability of success of our wells and should reduce average
finding costs through elimination of prospects that might otherwise be drilled
using other traditional methods, drilling or reworking remains a speculative
activity. Even when fully utilized, lateral drilling does not predetermine if
hydrocarbons will in fact be present in such structures if they are
drilled.  Our future drilling activities may not be successful and, if
unsuccessful, such failure will have an adverse effect on our future results of
operations and financial condition. There can be no assurance that our overall
drilling success rate or our drilling success rate for activity within a
particular geographic area will not decline. Although we may discuss drilling
prospects that we have identified or budgeted for, we may ultimately not lease
or drill these prospects within the expected time frame, or at all. We may
identify and develop prospects through a number of methods, some of which do not
include horizontal drilling. The drilling and results for these prospects may be
particularly uncertain Our drilling schedule may vary from our capital budget.
The final determination with respect to the drilling of any scheduled or
budgeted wells will be dependent on a number of factors, including, but not
limited to: (i) the results of previous development efforts and the acquisition,
review and analysis of data; (ii) the availability of sufficient capital
resources to us and the other participants for the drilling of the
prospects;(iii) the approval of the
prospects by other participants after additional data has been compiled; (iv)
economic and industry conditions at the time of drilling, including prevailing
and anticipated prices for oil and natural gas and the availability of drilling
rigs and crews; (v) our financial resources and results; (vi) the availability
of leases and permits on reasonable terms for the prospects; and (vii) the
success of our drilling technology. There can be no assurance that these
projects can be successfully developed or that the wells discussed will, if
drilled, encounter reservoirs of commercially productive oil or natural gas.
There are numerous uncertainties in estimating quantities of proved reserves,
including many factors beyond our control.








6




Reliance on
technological development and possible technological
obsolescence.




Our business is dependent upon
utilization of changing technology. As a result, our ability to adapt to
evolving technologies, obtain new technology and maintain technological
advantages will be important to our future success. We believe that our ability
to utilize state of the art technologies will give us an advantage over many of
our competitors. This advantage, however, is based in part upon technologies
developed by others, and we may not be able to maintain this advantage. As new
technologies develop, we may be placed at a competitive disadvantage, and
competitive pressures may force us to implement such new technologies at
substantial cost. There can be no assurance that we will be able to successfully
utilize, or expend the financial resources necessary to acquire, new technology,
or that others will not either achieve technological expertise comparable to or
exceeding that of our Company or that others will not implement new technologies
before us. One or more of the technologies we end up adopting or implementing
may, in the future, become obsolete. In such case, our business, financial
condition and results of operations could be materially adversely affected. If
we are unable to utilize the most advanced commercially available technology,
our business, financial condition and results of operations could be materially
and adversely affected.




Oil and natural gas prices are highly
volatile in general and low prices negatively affect our financial
results.





Our revenue, profitability, cash flow,
future growth and ability to borrow funds or obtain additional capital, as well
as the carrying value of our properties, are substantially dependent upon
prevailing prices of oil and natural gas. Lower oil and natural gas prices also
may reduce the amount of oil and natural gas that we can produce economically.
Historically, the markets for oil and natural gas have been volatile, and such
markets are likely to continue to be volatile in the future. Prices for oil and
natural gas are subject to wide fluctuation in response to relatively minor
changes in the supply of and demand for oil and natural gas, market uncertainty
and a variety of additional factors that are beyond our control. These factors
include the level of consumer product demand, weather conditions, domestic and
foreign governmental regulations, the price and availability of alternative
fuels, political conditions, the foreign supply of oil and natural gas, the
price of foreign imports and overall economic conditions It is impossible to
predict future oil and natural gas price movements with certainty. Declines in
oil and natural gas prices may materially adversely affect our financial
condition, liquidity, ability to finance planned capital expenditures and
results of operations.




Government regulation and liability for
environmental matters may adversely affect our business and results of
operations.





Oil and natural gas operations are
subject to extensive federal, state and local government regulations, which may
be changed from time to time. Matters subject to regulation include discharge
permits for drilling operations, drilling bonds, reports concerning operations,
the spacing of wells, unitization and pooling of properties and taxation. From
time to time, regulatory agencies have imposed price controls and limitations on
production by restricting the rate of flow of oil and natural gas wells below
actual production capacity in order to conserve supplies of oil and natural gas.
There are federal, state and local laws and regulations primarily relating to
protection of human health and the environment applicable to the development,
production, handling, storage, transportation and disposal of oil and natural
gas, by-products thereof and other substances and materials produced or used in
connection with  oil and natural gas operations. In addition, we may
be liable for environmental damages caused by previous owners of property we
purchase or lease As a result, we may incur substantial liabilities to third
parties or governmental entities. We are also subject to changing and extensive
tax laws, the effects of which cannot be predicted. The implementation of new,
or the modification of existing, laws or regulations could have a material
adverse effect on us.




Risks Associated
with Our Stock




Our stock
price has been and may continue to be very volatile.




Our common stock is thinly traded and
the market price has been, and is likely to continue to be, highly volatile.
During the 12 months prior to December 31, 2007, our stock price as traded on
the OTC Bulletin Board has ranged from $0.20 to $0.07.  The variance
in our share price makes it extremely difficult to forecast with any certainty
the stock price at which you may be able to buy or sell shares of our common
stock. The market price for our  common stock could be subject to wide
fluctuations due to factors beyond our control, such as: actual or anticipated
variations in our results of operations, naked short selling of our common stock
and stock price manipulation, changes or fluctuations in  the
commodity prices of oil and natural gas, general conditions and trends in the
oil and gas industry, general economic, political and market
conditions.






7




Use of our common stock to pay for
third party services could dilute current investors.


In the past we have used our common
stock to pay for the services of third party consultants.  Due to the
experience of our current investors we do not anticipate having to use third
party consultants to execute our growth strategy.  However, unforeseen
circumstances may arise where third party services are required and common stock
may be used to pay for said services.  As of February 28,
2008,  we have issued 33,335,000 shares  of our common stock
to said consultants. Further issuances in exchange for such services will dilute
current investors. Future sales of our common stock in the public market could
adversely affect the price of our common stock.




Sales of substantial amounts of common
stock in the public market that are not currently freely tradable, or even the
potential for these sales, could have an adverse effect on the market price for
the shares of our common stock. These shares include approximately 28.2 million
shares held by founders, investors and service providers, and 1,800,000 warrants
at February 28, 2007. Unregistered shares may not be sold except in compliance
with Rule 144 promulgated by the SEC, or some other exemption from registration.
Rule 144 does not prohibit the sale of these shares but does place conditions
and restrictions on their resale, which must be complied with before they can be
resold.




A summary
of the warrant activity for the period ended December 31, 2007 is as
follows:





Warrants
      Outstanding
            Weighted
      Average Exercise Price
            Aggregate
      Intrinsic ValueOutstanding,
      December 31, 2006
            1,800,000
            $0.67
            $-Granted
            -
            2.63
            -Forfeited
      / Canceled
            -
            2.63
            -Exercised
            -
            -
            -Outstanding,
      December 31, 2007
            1,800,000
            $0.67
            $-





The weighted average remaining
contractual life of warrants outstanding is2.10 years atDecember31, 2007.





Outstanding
      Warrants
            
            
            Exercisable
      WarrantsRange
      of Exercise Price
            Number
            Average
      Remaining Contractual Life
            Average
      Exercise Price
            Number$0.67
            1,800,000
            2.10
            $0.67
            1,800,000





The
Company estimated the fair value of each stock warrant at the grant date by
using the Black-Scholes option-pricing mode.





The
weighted-average assumptions used in estimating the fair value of warrantsgranted during the year
ended December 31, 2007, and the period ended December 31, 2006 along with
theweighted-average
grant date fair values, were as follows.





2007
            2006Expected
      volatility
            80.0%
            80.0%Expected
      life in years
            5
      years
            5
      yearsRisk
      free interest rate
            5.07%
            5.07%Dividend
      yield
            0%
            0%







During
the period ended December 31, 2007, the Company did not grant any
warrants.




Future sales of our common stock in the
public market could limit our ability to raise capital.





Sales of substantial amounts of our
common stock pursuant to Rule 144, upon exercise or conversion of derivative
securities or otherwise, or even the potential of these sales, could also affect
our ability to raise capital through the sale of equity
securities.




The Company has never paid cash
dividends on its common stock and does not intend to do so in the foreseeable
future.





Present management and directors may
control the election of our directors andall other
matters submitted to the stockholders for approval.




Our executive officers and directors,
in the aggregate, beneficially own approximately 0.0% of our outstanding common
stock. K&D Equity Investments is our single largest shareholder owning
37.67% of our common stock.  Summitt Oil Inc, holds 31.43% of
our  common stock and is our second largest shareholder. Accordingly,
this concentration of ownership may have the effect of delaying, deferring or
preventing a change in control of the Company, impede a merger, consolidation,
takeover or other business combination involving the Company or discourage a
potential acquirer from making a tender offer or otherwise attempting to obtain
control of the Company, which in turn could have an adverse effect on the market
price of our common stock.


8





"Penny stock" regulations may impose
certain restrictions on marketability of securities.


The SEC adopted regulations, which
generally define "penny stock" to be an equity security that has a market price
of less than $5.00 per share. Our common stock may be subject to rules that
impose additional sales practice requirements on broker-dealers who sell these
securities to persons other than established customers and accredited investors
(generally those with assets in excess of $1,000,000, or annual incomes
exceeding $200,000 or $300,000 together with their spouse). For transactions
covered by these rules, the broker-dealer must make a special suitability
determination for the purchase of these securities and have received the
purchaser's prior written consent to the transaction.




Additionally, for any transaction,
other than exempt transactions, involving a penny stock, the rules require the
delivery, prior to the transaction, of a risk disclosure document mandated by
the SEC relating to the penny stock market. The broker-dealer also must disclose
the commissions payable to both the broker-dealer and the registered
representative, current quotations for the securities and, if the broker-dealer
is the sole market-maker, the broker-dealer must disclose this fact and the
broker-dealer's presumed control over the market. Finally, monthly statements
must be sent disclosing recent price information for the penny stock held in the
account and information on the limited market in penny stocks. Consequently, the
"penny stock" rules may restrict the ability of broker-dealers to sell our
common stock and may affect the ability to sell our common stock in the
secondary market.




The market for our Company's securities
is limited and may not provide adequate liquidity.





Our
common stock is currently traded on the OTC Bulletin Board ("OTCBB"), a
regulated quotation service that displays real-time quotes, last-sale prices,
and volume information in over-the-counter equity securities. As a result, an
investor may find it more difficult to dispose of, or obtain accurate quotations
as to the price of, our securities than if the securities were traded on the
Nasdaq Stock market, or another national exchange. There are a limited number of
active market makers of our common stock. In order to trade shares of our common
stock you must use one of these market makers unless you trade your shares in a
private transaction. In the twelve months prior to December 31, 2007, the actual
trading volume ranged from a low of no shares of common stock to a high of
154,400 shares of common stock. On most days, this trading volume means there is
limited liquidity in our shares of common stock. Selling our shares is more
difficult because smaller quantities of shares are bought and sold and news
media coverage about us is limited. These factors result in a limited trading
market for our common stock and therefore holders of our Company's stock may be
unable to sell shares  purchased should they desire to do
so.




Item 7. Financial
Statements.




The report of independent auditors and
financial statements are set forth in this report beginning on Page
F-1.





Item 8. Changes in
and Disagreements with Accountants on Accounting and Financial
Disclosure.




There
were no disagreements with accountants on accounting and financial disclosure
during the relevant period.




Item 8A. Controls
and Procedures





During
the course of the audit for our year ended December 31, 2005 in May, 2006, our
auditor discovered numerous errors in our financial statements in our financial
statements in our quarterly report for the period ended September 30, 2005 as
disclosed in our Form 8-K/A filed on June 14, 2006. As a result of these errors,
and others, we restated our  Form 10-QSB for the quarter ended
September 30, 2005, and will restate the financial statements for the period
ended June 30, 2005, in our Form 8-K/A filed on January 24, 2006. Our conclusion
to restate our Form 10-QSB for the quarter ended September 30, 2005 and Form
8-K/A filed on January 24, 2006, resulted in the Company recognizing that its
controls and procedures were not effective as of the period ended December 31,
2005 and constituted material weaknesses which began after the close of the
Exchange Agreement on or about July 16, 2005. The material weaknesses were
primarily the result of our having no controller and no qualified personnel and
as a result, transactions were omitted, recorded incorrectly, or recorded
without support.  In May, 2006, we remediated the material weakness in
internal control over financial reporting by having our Chief Executive Officer
and Chief Financial Officer review in detail all adjustments affecting the
issuances of our securities and we retained an outside consultant to make
accounting entries.




Evaluation of Disclosure
Controls and Procedures




Disclosure,
controls and procedures include, without limitation, controls and procedures
designed to ensure that information required to be disclosed by an issuer in the
reports that it files or submits under the Securities Exchange Act of 1934, as
amended (the "Act") is accumulated and communicated to the issuer's management,
including its principal executive and principal financial officers, or persons
performing similar functions, as appropriate to allow timely decisions regarding
required disclosure. It should be noted that the design of any system of
controls is based in part upon certain assumptions about the likelihood of
future events, and there can be no assurance that any design will succeed in
achieving its stated goals under all potential future conditions, regardless of
how remote.  As of the end of the period covered by this Annual Report, we
carried out an evaluation, under the supervision and with the participation of
our President, also serving as our Chief Financial Officer, of the effectiveness
of the design and operation of our disclosure controls and procedures. 
Based on this evaluation, our President has concluded that the Company’s
disclosure controls and procedures are not effective because of the
identification of a material weakness in our internal control over financial
reporting which is identified below, which we view as an integral part of our
disclosure controls and procedures.








9




Changes in Internal Controls
over Financial Reporting




We have
not yet made any changes in our internal controls over financial reporting that
occurred during the period covered by this report on Form 10-K that has
materially affected, or is reasonably likely to materially affect, our
internal control over financial reporting.




Management’s Annual Report
on Internal Control Over Financial Reporting




Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting, as such term is defined in
Rules 13a-15(f) and 15d-15(f) of the Exchange Act. Our internal control
system was designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes, in accordance with generally accepted accounting principles. Because
of inherent limitations, a system of 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 due to change in conditions, or that the degree of compliance with
the policies or procedures may deteriorate.




Our
management conducted an evaluation of the effectiveness of our internal control
over financial reporting using the criteria set forth by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO) in Internal
Control—Integrated Framework. Based on its evaluation, our management concluded
that there is a material weakness in our internal control over financial
reporting. A material weakness is a deficiency, or a combination of control
deficiencies, in internal control over financial reporting such that there is a
reasonable possibility that a material misstatement of the Company’s annual or
interim financial statements will not be prevented or detected on a timely
basis.




The
material weakness relates to the lack of segregation of duties in financial
reporting, as our financial reporting and all accounting functions are performed
by external accountants who may not always get full information and therefore
something is not recorded appropriately.  Our President does not possess
accounting expertise and our company does not have an audit committee. 
This weakness is due to the company’s lack of working capital to hire additional
staff.  To remedy this material weakness, we intend to engage another
accountant to assist with financial reporting as soon as our finances will
allow.




This
annual report does not include an attestation report of the Company’s registered
public accounting firm regarding internal control over financial
reporting.  Management’s report was not subject to the attestation by the
Company’s registered public accounting firm pursuant to temporary rules of the
SEC that permit the Company to provide only management’s report in this annual
report.







PART
III






Item
9. Directors, Executive Officers, Promoters and Control Persons;
Compliance




with
Section 16(a) of the Exchange Act. Identification of Directors and Executive
Officers of the Company Our current officers and directors consist of the
following persons:




NAME
              
              AGE
              
              OFFICE
              
              SINCEJeffery
      Joyce
              
              45
              
              President
      & CEO
              
              2008Dean
      Elliott
              
              54
              
              Secretary
              
              2008Michelle
      Sheriff
              
              35
              
              Director
              
              2007


The Director named above will serve
until the next annual meeting of our shareholders. Thereafter, Directors will be
elected for one-year terms at the annual shareholders' meeting. Officers will
hold their positions at the pleasure of the Board of Directors. There is no
arrangement or understanding between the Directors and Officers of the Company
and any other person pursuant to which any Director or Officer was or is to be
selected as a Director or Officer of the Company.




There is no family relationship between
or among any Officer and Director.




On
September 25, 2007, Charles Stidham and E. Robert Barbee were appointed
directors. Concurrently, Mr. Stidham and Ms. Michele Sheriff were appointed as
President, Chief Executive Officer and Chief Financial Officer and as Secretary,
respectively. Immediately following the appointment of the new directors, Linda
Contreras resigned as officer and director. Mr. Stidham also succeeded Ms.
Contreras as Chief Executive Officer and Chief Financial Officer of the
Registrant.




On
February 4, 2007, the Board of Directors filled two Director vacancies due to
the resignation of Mr. Duke and Mr. Barbee.  Jeffery Joyce and Dean
Elliott were appointed to fill the vacancies.  After the appointment
of the new Directors, Mr. Stidham offered his resignation as President and
Director.  Mr. Joyce was appointed President and Mr. Elliott was
appointed Vice President and Secretary.




We have no audit committee. We have a
compensation committee that administers our 2006 Employee Stock Option Plan that
we adopted in April 2006.





The following is a brief account of the
business experience during at the least the last five years of the directors and
executive officers, indicating their principal occupations and employment during
that period, and the names and principal businesses of the organizations in
which such occupations and employment were carried out.





Mr. Joyce
was appointed as a member of the Board of Directors of the Company and President
effective February 4, 2008.  Mr. Joyce's expertise is in project
management and sales development, having been active in project management and
sales development roles for various real estate concerns in the Dallas, Texas
area





Dean
Elliott was appointed as a member of the Board of Directors of the Company and
President effective February 4, 2008.  Mr. Elliott, has over 30 years
experience in various oil and gas executive positions varying from mid-size
independent oil & gas operators to large fully integrated publicly traded
energy companies. For more than the last five years, Mr. Elliott has been an
independent oil and gas developer. Mr. Elliott has extensive knowledge in
seeking, evaluating, securing, drilling and developing over 100 oil and gas
wells in Texas, Oklahoma and Louisiana. His background also includes extensive
experience in mergers and acquisitions, financing and hands-on experience in all
aspects of oil and gas operations, from prospect to pipeline.  Mr.
Elliott is 54.





Michelle
Sheriff was appointed as a member of the Board of Directors of the Company
September 25, 2007.  Ms. Sheriff has been Vice-President of Curado
Energy Resources in Dallas, Texas since 2005. Her experience includes drilling
operations, field operations management, oil and gas accounting,
land/lease/equipment purchasing, well operation evaluations, contract
preparation, and marketing programs management. Prior to joining Curado Energy,
Ms. Sheriff was employed with AirGATE Technologies, a Texas- based corporation
focusing on enterprise wireless technology solutions in the area of
RFID.  Ms. Sheriff has over 16 years sales and marketing experience
developing customer relationships with Fortune 500 and national
corporations.  Ms. Sheriff is 35.






10





Linda
Contreras was appointed our sole Director on April 12, 2007.  She has
been working for the past year as the Research & Acquisitions Officer for
Summitt Oil & Gas in Beverly Hills, California. She has led the acquisitions
team in the evaluation of offerings in oil and gas development programs, and
provides economic analysis of all proposed acquisitions, divestitures, and
drilling activities.  Ms. Contreras received her Bachelor of Arts in
Political Science from the University of California at Berkeley in
2003.




On or about March 1, 2006, in the U.S.
Bankruptcy Court for the Southern District of California, an involuntary
petition for bankruptcy under chapter 7 under the United States Bankruptcy Code
was filed against Boston Equities Corporation, our then largest shareholder
holding approximately 25.90% of our issued and outstanding common stock. After
such filing, Boston Equities Corporation converted the case from chapter 7 to
chapter 11.




Compliance with
Section 16(a) of the Exchange Act




Section 16(a) of the Securities
Exchange Act of 1934 requires the Company's directors and executive officers,
and persons who own more than 10% of a registered class of the Company's equity
securities to file with the Securities and Exchange Commission initial reports
of ownership and reports of changes in ownership of Common Stock and other
equity securities of the Company. Officers, directors and greater than 10%
shareholders are required by SEC regulations to furnish the
Company  with copies of all Section 16(a) forms they
file.




To our knowledge, based solely on its
review of the copies of such reports furnished to the company and written
representations that no other reports were required during the fiscal year ended
December 31, 2006, all Section 16(a) filing requirements applicable to its
officers, directors and greater than 10% beneficial owners were complied
with.





Code of
Ethics




Code of Ethics for the Chief Executive
Officer and the Principal Financial Officer




Our Board
of Directors has adopted the Code of Ethical and Professional Standards of
National Healthcare Technology, Inc. and Affiliated Entities Code of Business
Conduct and Ethics that applies to its officers and employees effective on April
11, 2007, a copy of which is filed as an exhibit hereto. We will provide any
person without charge, a copy of our code of ethics, upon receiving a written
request in writing addressed to the Company at the Company's address, attention:
Secretary.




Item 10. Executive
Compensation.




During
fiscal 2007 we paid a total of $81,375- in executive compensation, all of which
was regular compensation. The table below shows the compensation
split:





Cash
      compensation
            Stock
      issuances
            Total
      CompensationJohn
      Carlson
            $75,000
            $0
            $75,000Linda
      Contreras
            6,375
            0
            6,375$81,375
            $0
            $75,000








Employment
Agreements


The
following transaction took place between the Company and Ross-Lyndon James,the Company's then Chief
Executive Officer and Director:  On April 3, 2006, theCompany entered into an
employment agreement with Ross Lyndon James who has beenserving as the Company's
President without compensation and written agreementsince being appointed to
such office by the Board of Directors of the Company inJune 2005. Mr. Lyndon
James had also served without compensation as a directorof the Company. Under the
terms of the agreement, Mr. Lyndon James receivedcompensation equal to
twenty five thousand dollars ($25,000) per month payablemonthly in
advance.  He was also  granted one
million  eight  hundred thousand(1,800,000)  restricted  shares
of common stock upon execution of the employmentagreement  as a
signing  bonus,  as well as
a  termination  grant of two
million (2,000,000)  shares
of  restricted  common  stock.  All
shares have piggy-backregistration rights.
Additionally, the Company agreed to grant him a warrant toacquire three hundred
thousand (300,000) restricted shares of the Company'scommon stock. The exercise
price is to be based on the bid price of the stock onthe date of the
agreement.  The warrants expire five years after the date ofgrant.  Additionally,
Mr. Lyndon James will be entitled to participate in anystock option program
offered by the Company to its employees. In July 24, 2006, Mr. Lyndon James
resigned as the Company’s Chief Executive Officer and Director. On the
resignation of the Director, the Company forfeited the warrants. The Company
recorded shares to be issued of $2,500,000 for the termination
shares.





On April
3, 2006,  the Company  entered into an
employment  agreement with BrianHarcourt who has been
serving as an officer of the Company without  compensationand  written  agreement  since  being  appointed  to
such office by the Board ofDirectors  of
the Company in June 2005.  Mr. Harcourt has also served withoutcompensation as a director
of the Company. Under the terms of the agreement, Mr. Harcourt will receive
compensation equal to twenty five thousand dollars($25,000) per month
payable monthly in advance.  He was also granted one millioneight  hundred  thousand  (1,800,000)  restricted  shares
of common  stock  uponexecution  of  the  employment  agreement  as
a  signing  bonus,  as  well  as
atermination  grant
of two million  (2,000,000)  restricted  shares of
the commonstock. All
shares have piggy back registration rights. Additionally, the Companyagreed to grant him a
warrant to acquire three hundred thousand (300,000)restricted shares of the
Company's common stock.  The exercise price is to bebased on the bid price of
the stock on the date of the agreement.  The warrantsexpire five years after
the date of grant.  Additionally, Mr. Harcourt will beentitled to participate in
any stock option program offered by the Company toits
employees.  In July 24, 2006, Mr. Harcourt resigned as the Company’s
Chief Financial Officer and Director. On the resignation of the Director, the
Company forfeited the warrants. The Company recorded shares to be issued of
$2,500,000 for the termination shares.






11






Currently,
the Company has no employment agreements outstanding.


Stock Option
Plan




The Company adopted an Incentive Stock
Option Plan for non-employee directors on October 1, 1998. We have not awarded
any options under this Plan. No director receives or accrues any compensation
for his services as a director, including committee participation and/or special
assignments.




On April 3, 2006, our Board of
Directors authorized and approved the adoption of the 2006 Stock Option Plan
effective April 3, 2006 (the "2006 Stock Option Plan").




The 2006 Stock Option Plan is
administered by the duly appointed compensation committee. Our compensation
committed consists of Rosamaria DeSimone, a consultant to the Company, and Brian
Harcourt. The 2006 Stock Option Plan provides authorization to grant stock
options of up to 2,500,000 shares. At the time a stock option is granted under
the Stock Option Plan, the compensation committee shall fix and determine the
exercise price at which shares of common stock of the Company may be acquired
and vesting period thereof.




In the event an optionee ceases to be
employed by or to provide services to the Company for reasons other than cause,
retirement, disability or death, any stock option that is vested and held by
such optionee generally may be exercisable within up to ninety (90) calendar
days after the effective date that his position ceases, and after such 90-day
period any unexercised stock option shall expire. In the event an optionee
ceases to be employed by or to provide services to the Company for reasons of
retirement, disability or death, any stock option that is vested and held by
such optionee generally may be exercisable within up to one-year after the
effective date that his position ceases, and after such one-year period any
unexercised stock option shall expire.




No stock options granted under the 2006
Stock Option Plan will be transferable by the optionee, and each stock option
will be exercisable during the lifetime of the optionee subject to the option
period of ten (10) years or limitations described above. Any
stock  option held by an optionee at the time of his death may be
exercised by his estate within one (1) year of his death or such longer period
as the compensation committee may determine.




Upon exercise of the options, the
optionee will deliver consideration in the amount of the exercise price
multiplied by the number of shares to be issued as a result of the exercise;
provided, however, the compensation committee reserves, at any and all times,
the right, in its sole and absolute discretion, to establish, decline to approve
or terminate any program or procedures for the exercise of stock options by
means of a cashless exercise




Compensation of
Directors




Directors are entitled to reimbursement
for reasonable travel and other out-of-pocket expenses incurred in connection
with attendance at meeting of the Board of Directors.




We have
no written employment agreements with our directors.




Item 11. Security
Ownership of Certain Beneficial Owners and Management




There
were 13,271,985 shares of our common stock issued and outstanding on February
25, 2007.  The following tabulates holdings of shares of the Company
by each person who, subject to the above, at the date of this Report, holds of
record or is known by Management to own beneficially more than five percent (5%)
of our common stock and, in addition, by all of our directors and officers
individually and as a group.






NAME
      AND ADDRESS
              NUMBER
      OF SHARES OWNED BENEFICIALLY
              PERCENT
      OF SHARES OWNEDBoston
      Equities Corporation(1)
                1600
      Union Street
                San
      Diego, CA 90802
              900,751
              8.79%Summitt
      Oil & Gas(1)
                9595
      Wilshire Boulevard Suite 510
                Beverly
      Hills, CA  90212
              4,170,800
              31.43%K&D
      Equity Investments
                1692
      Club Hill Drive
                Dallas,
      TX  75248
              5,000,000
              37.67%Cede
      & Co.
                PO Box 222, Bowling Green Station
                New York, NY 10274
              1,912,800
              14.41%ALL
      DIRECTORS AND EXECUTIVE OFFICERS
              0
              0.00%





12







Changes
in Control




There are
no arrangements known by us, including any pledge by any person of securities of
the Company, the operation of which may at a subsequent date result in a change
of control of the Company.




Item 12. Certain
Relationships and Related Transactions.




During
the year the following transactions occurred between the Company and certain
related parties:





A.       Ross-Lyndon
James





The
following transaction took place between the Company and Ross-Lyndon James,the Company's Chief
Executive Officer and Director:  On April 3, 2006, theCompany entered into an
employment agreement with Ross Lyndon James who has beenserving as the Company's
President without compensation and written agreementsince being appointed to
such office by the Board of Directors of the Company inJune 2005. Mr. Lyndon
James had also served without compensation as a directorof the Company. Under the
terms of the agreement, Mr. Lyndon James receivedcompensation equal to
twenty five thousand dollars ($25,000) per month payablemonthly in
advance.  He was also  granted one
million  eight  hundred thousand(1,800,000)  restricted  shares
of common stock upon execution of the employmentagreement  as a
signing  bonus,  as well as
a  termination  grant of two
million (2,000,000)  shares
of  restricted  common  stock.  All
shares have piggy-backregistration rights.
Additionally, the Company agreed to grant him a warrant toacquire three hundred
thousand (300,000) restricted shares of the Company'scommon stock. The exercise
price is to be based on the bid price of the stock onthe date of the
agreement.  The warrants expire five years after the date ofgrant.  Additionally,
Mr. Lyndon James will be entitled to participate in anystock option program
offered by the Company to its employees. In July 24, 2006, Mr. Lyndon James
resigned as the Company’s Chief Executive Officer and Director. On the
resignation of the Director, the Company forfeited the warrants. The Company
recorded shares to be issued of $2,500,000 for the termination
shares.





B.       Brian
Harcourt





The
following transaction took place between the Company and Brian Harcourt,
theCompany's Chief
Financial Officer and Director and parties related to BrianHarcourt:





On April
3, 2006,  the Company  entered into an
employment  agreement with BrianHarcourt who has been
serving as an officer of the Company without  compensationand  written  agreement  since  being  appointed  to
such office by the Board ofDirectors  of
the Company in June 2005.  Mr. Harcourt has also served withoutcompensation as a director
of the Company. Under the terms of the agreement, Mr. Harcourt will receive
compensation equal to twenty five thousand dollars($25,000) per month
payable monthly in advance.  He was also granted one millioneight  hundred  thousand  (1,800,000)  restricted  shares
of common  stock  uponexecution  of  the  employment  agreement  as
a  signing  bonus,  as  well  as
atermination  grant
of two million  (2,000,000)  restricted  shares of
the commonstock. All
shares have piggy back registration rights. Additionally, the Companyagreed to grant him a
warrant to acquire three hundred thousand (300,000)restricted shares of the
Company's common stock.  The exercise price is to bebased on the bid price of
the stock on the date of the agreement.  The warrantsexpire five years after
the date of grant.  Additionally, Mr. Harcourt will beentitled to participate in
any stock option program offered by the Company toits
employees.  In July 24, 2006, Mr. Harcourt resigned as the Company’s
Chief Financial Officer and Director. On the resignation of the Director, the
Company forfeited the warrants. The Company recorded shares to be issued of
$2,500,000 for the termination shares.





On April
5, 2006, the Company entered into a consulting agreement with First CreditHolding Ltd ("First
Credit") to provide business management services and adviceas it relates to the
Company's future.  Under the terms of the agreement, theCompany agreed to pay
First Credit a fee of three million five hundred thousand(3,500,000) restricted
shares of common stock. The fee is non-refundable andconsidered earned when the
shares are delivered.  The company is amortizing theexpense over the period of
the services.  Brian Harcourt, one of our directors,is the controlling
shareholder of First Credit. The shares of stock were issuedin April
2006.








13




Item
13. Exhibits and Reports on Form 8-K




Exhibits




Exhibit
              
              Description10.4
              
              Consulting
      Agreement dated April 3, 2006 by and between Summitt Oil and Gas, Inc. and
      Company (previously filed as an exhibit to our Form 8-K, file no.
      001-28911, on April 5, 2006 and incorporated herein by
      reference).10.5
              
              Management
      Employment Agreement dated April 3, 2006 by and between Ross Lyndon James
      and the Company (previously filed as an exhibit to our Form 8-K, file no.
      001-28911, on April 5, 2006 and incorporated herein by
      reference).10.6
              
              Management
      Employment Agreement dated April 3, 2006 by and between Brian
      Harcourt  and the Company (previously filed as an exhibit to our
      Form 8-K, file no. 001-28911, on April 5, 2006 and incorporated herein by
      reference).10.7
              
              2006
      Employee Stock Option Plan (previously filed as an exhibit to the
      Company’s Form 8-K, file no. 001-28911, on April 5, 2006 and incorporated
      herein by reference).10.8
              
              Consulting
      Agreement by and between us and Camden Holdings, Inc. dated January 8,
      2006 (previously filed as an exhibit to our Form 10-KSB/A, file no.
      001-28911, on June 8, 2006 and incorporated herein by
      reference).10.9
              
              Consulting
      Agreement by and between us and Design, Inc. dated January 8, 2006
      (previously filed as an exhibit to our Form 10-KSB/A, file no. 001-28911,
      on June 8, 2006 and incorporated herein by reference).10.10
              
              Stock
      Purchase Agreement between us and Liquid Stone Partners dated April 4,
      2006  (previously filed as an exhibit to our Form 10-KSB/A, file
      no. 001-28911, on June 8, 2006 and incorporated herein by
      reference).10.11
              
              Amended
      Assignment of leasehold rights between us and Summitt Holdings, Inc. dated
      April 4, 2006 (previously filed as an exhibit to our Form 10-KSB/A, file
      no. 001-28911, on June 8, 2006 and incorporated herein by
      reference).10.12
              
              Consulting
      Agreement between us and Credit First Holdings, Inc. dated April 5, 2006
      (previously filed as an exhibit to our Form 10-KSB/A, file no. 001-28911,
      on June 8, 2006 and incorporated herein by reference).10.13
              
              Promissory
      note executed by us to repay Camden Holdings, Inc. dated April 25, 2006
      (previously filed as an exhibit to our Form 10-KSB/A, file no. 001-28911,
      on June 8, 2006 and incorporated herein by reference).10.14
              
              Promissory
      note executed by us to repay Camden Holdings, Inc. dated June 8, 2006
      (previously filed and incorporated herein by
reference).10.16
              
              Consolidated
      note and security agreement with Camden Holdings, Inc. dated January 5,
      2007  (previously filed as an exhibit to our 8-K, file no.
      01-28911 and incorporated herein by reference).10.17
              
              Consulting
      agreement with Camden Holdings, Inc. dated January 5, 2007 (previously
      filed as an exhibit to our 8-K, file no. 01-28911 and incorporated herein
      by reference)10.18
              
              Consolidated
      note and security agreement with Summitt Oil & Gas, Inc. dated January
      5, 2007 (previously filed as an exhibit to our Form 8-K, file no. 01-28911
      and incorporated herein by reference).10.18
              
              Consulting
      agreement with Summitt Oil & Gas, Inc. dated January 5, 2007
      (previously filed as an exhibit to our Form 8-K, file no. 01-28911 and
      incorporated herein by reference)14.1
              
              Code
      of Ethical and Professional Standards of Brighton Oil & Gas, Inc. and
      Affiliated Entities, attached hereto.31.1
              
              Certification
      by Earl Moore, Chief Executive Officer, as required under Section 302
      of  Sarbannes-Oxley Act of 2002, attached
  hereto.31.2
              
              Certification
      by Mark Smith, Chief Financial Officer, as required under Section 302
      of  Sarbannes-Oxley Act of 2002, attached
  hereto.32.1
              
              Certification
      as required under Section 906 of Sarbannes-Oxley Act of 2002, attached
      hereto.


(b) Reports on Form
8-K:





Item 14. Principal
Accountant Fees and Services.




Audit Fees: The aggregate fees billed
for the last fiscal year for services rendered by our principal accountant for
the audit of our financial statements






14




Item 14. Principal
Accountant Fees and Services.
  Audit Fees: The aggregate fees billed
for the last fiscal year for services rendered by our principal accountant for
the audit of our financial statements and review of financial statements
included in our form 10QSB's for the fiscal years ended December 31, 2007
and  2006 were $35,000 and $29,500
respectively.




Audit Related Fees: $
35,000




Tax Fees: $ -0-




All Other
Fees: $ -0-




SIGNATURES




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




Brighton Oil & Gas, Inc.





By:
      /s/ EARL
MOORE
              Earl
      Moore,
              Chief
      Executive Officer
              
              Dated:
      August 20,2008







In accordance with the Exchange
Act, this report has been duly signed below by the following persons on behalf
of the Registrant and in the capacities and on the dates
indicated.




/s/EARL
MOORE
 Earl
Moore
 CEO,
Director
 
 /s/  MARK
SMITH
 Mark
Smith
 CFO,
Director










15




BRIGHTON
OIL & GAS, INC.




(A DEVELOPMENT STAGE
COMPANY)




CONSOLIDATED
FINANCIAL STATEMENTS




DECEMBER 31, 2007






F-1




BRIGHTON OIL &
GAS, INC.




(A DEVELOPMENT STAGE
COMPANY)




CONSOLIDATED
FINANCIAL STATEMENTS




DECEMBER 31, 2007




C O N T E N T
S






Report
      of Independent Registered Public Accounting Firm
              
              F-3Consolidated
      Balance Sheet
              
              F-4Consolidated
      statements of Operations
              
              F-5Consolidated
      Statements of Changes in Shareholders’ Equity/(Deficit)
              
              F-6Consolidated
      Statements of Cash Flows
              
              F-7Notes
      to Consolidated Financial Statements
              
              F-8
      – F-18




F-2


REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM








The Board
of Directors and Stockholders


Brighton
Oil & Gas, Inc.





We have
audited the accompanying balance sheet of Brighton Oil & Gas, Inc. as of
December 31, 2007, and the related statements of operations, stockholders'
equity (deficit), and cash flows for the years ended December 31, 2007 and 2006
and for the period from January 25, 2005 (inception) to December 31, 2007 .
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.





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





In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of the Company as of December 31,
2007, and the results of its operations and its cash flows for the years ended
December 31, 2007 and 2006 and for the period from January 25, 2005 (inception)
to December 31, 2007, in conformity with accounting principles generally
accepted in the United States of America.





The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. As discussed in Note 2 to the financial
statements, the Company had accumulated deficit of $53,071,501 as of December
31, 2007and net losses of $15,007,117
for the year ended December 31, 2007. These factors raise substantial doubt
about its ability to continue as a going concern. Management’s plans concerning
these matters are also described in Note 2. The accompanying consolidated
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.





As stated
in Note 9, the Financial  Statements  for the year ended
December 31, 2006 were restated.





/ s/ Kabani & Company,
Inc.





Los
Angeles, California




August 10,
2008






F-3




BRIGHTON
OIL & GAS, INC.




(A
DEVELOPMENT STAGE COMPANY)









CONSOLIDATED
BALANCE SHEET




DECEMBER 31,2007




ASSETSCash
      & cash equivalents
            
            $
            4,769Accounts
      receivable
            
            
            11,675Total
      Current Assets
            
            
            16,444Property
      & equipment, net
            
            
            1,967TOTAL
      ASSETS
            
            $
            18,411LIABILITIES
      AND STOCKHOLDERS' DEFICITCurrent
      liabilities:Accounts
      payable
            
            $
            329,583Accrued
      expenses
            
            
            1,432,525Accrued
      interest payable to affiliate
            
            
            64,860Due
      to former officers
            
            
            5,000,000Loan
      payable to affiliate
            
            
            814,742Line-of-Credit
      to affiliate
            
            
            66,657Total
      Current Liabilities
            
            
            7,708,367Stockholders'
      DeficitCommon
      Stock, $.001 par value, 300,000,000 shares authorized,13,281,985
      issued and outstanding as of December 31, 2007
            
            
            13,282Additional
      paid in capital
            
            
            45,368,263Accumulated
      deficit
            
            
            (53,071,501
            )Total
      stockholders' deficit
            
            
            (7,689,956
            )Total
      liabilities and stockholders' deficit
            
            $
            18,411









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






F-4


BRIGHTON
OIL & GAS, INC.


(A
DEVELOPMENT STAGE COMPANY)





CONSOLIDATED
STATEMENT OF OPERATIONS


FOR
THE YEARS ENDED DECEMBER 31, 2007 AND 2006


AND THE CUMMULATIVE PERIOD FROM
JANUARY 27, 2005 (INCEPTION) TO DECEMBER 31, 2007,


December
      31, 2007
            
            
            December
      31, 2006
            
            
            Period
      from January 27, 2005 (inception) to December 31, 2007NET
      REVENUE
            
            $
            12,239
            
            
            $
            -
            
            
            $
            12,239OPERATING
      EXPENSESProfessional
      fees
            
            
            8,719,580
            
            
            
            21,810,896
            
            
            
            30,995,780Technology
      license royalties
            
            
            -
            
            
            
            -
            
            
            
            160,417Impairment
      of oil & gas well lease
            
            
            5,030,000
            
            
            
            46,667
            
            
            
            5,076,667Other
      general and administrative
            
            
            203,119
            
            
            
            15,310,688
            
            
            
            15,649,019Total
      operating expenses
            
            
            13,952,699
            
            
            
            37,121,584
            
            
            
            51,881,883NET
      OPERATING LOSS
            
            
            (13,940,460
            )
            
            
            (37,121,584
            )
            
            
            (51,869,644
            )Beneficial
      conversion feature
            
            
            (1,066,657
            )
            
            
            -
            
            
            
            (1,066,657
            )Gain
      on settlement of debt
            
            
            -
            
            
            
            215,000
            
            
            
            215,000NET
      LOSS
            
            $
            (15,007,117
            )
            
            $
            (36,906,584
            )
            
            $
            (52,721,301
            )LOSS
      PER SHARE - BASIC & DILUTED
            
            $
            (0.20
            )
            
            $
            (1.13
            )WEIGHTED
      AVERAGE SHARES OUTSTANDING - BASIC & DILUTED
            
            
            74,515,857
            
            
            
            32,695,891









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



















F-5




BRIGHTON
OIL & GAS, INC.
 (A
DEVELOPMENT STAGE COMPANY)
 
 CONSOLIDATED
STATEMENT OF STOCKHOLDERS' EQUITY/(DEFICIT)
 FOR
THE YEARS ENDED DECEMBER 31, 2007 AND 2006
 AND THE CUMMULATIVE PERIOD FROM
JANUARY 27, 2005 (INCEPTION) TO DECEMBER 31, 2007,












Shares
            
            
            Common
      stock
              amount
            
            
            Additional
      paid in Capital
            
            
            Prepaid
      counsulting
            
            
            Deficit
      accumulated during the development stage
            
            
            Total
      Stockequity/(deficit)Balance,
      January 27, 2005 (inception)
            
            
            -
            
            
            $
            -
            
            
            $
            -
            
            
            $
            -
            
            
            $
            -
            
            
            $
            -Founder's
      stock issued
            
            
            838,000
            
            
            
            838
            
            
            
            (838
            )
            
            
            -
            
            
            
            -
            
            
            
            -Stock
      issued for debt
            
            
            80,000
            
            
            
            80
            
            
            
            399,920
            
            
            
            -
            
            
            
            -
            
            
            
            400,000Shares
      issued for license agreement
            
            
            861,875
            
            
            
            862
            
            
            
            (862
            )
            
            
            -
            
            
            
            -
            
            
            
            -Effect
      of reverse merger
            
            
            138,401
            
            
            
            138
            
            
            
            (200,138
            )
            
            
            -
            
            
            
            -
            
            
            
            (200,000
            )Divestiture
      of subsidiary to related party
            
            
            -
            
            
            
            -
            
            
            
            544,340
            
            
            
            -
            
            
            
            -
            
            
            
            544,340Net
      loss for the year
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (807,600
            )
            
            
            (807,600
            )Balance,
      December 31, 2005
            
            
            1,918,276
            
            
            
            1,918
            
            
            
            742,422
            
            
            
            -
            
            
            
            (807,600
            )
            
            
            (63,260
            )Shares
      issued for employment
            
            
            455,000
            
            
            
            455
            
            
            
            8,487,045
            
            
            
            -
            
            
            
            -
            
            
            
            8,487,500Shares
      issued for services
            
            
            1,710,800
            
            
            
            1,711
            
            
            
            28,796,789
            
            
            
            (7,633,750
            )
            
            
            -
            
            
            
            21,164,750Shares
      issued for lease agreement
            
            
            67,700
            
            
            
            68
            
            
            
            406,132
            
            
            
            -
            
            
            
            (350,200
            )
            
            
            56,000Net
      loss for the year
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (36,906,584
            )
            
            
            (36,906,584
            )Balance,
      December 31, 2006
            
            
            4,151,776
            
            
            $
            4,152
            
            
            $
            38,432,388
            
            
            $
            (7,633,750
            )
            
            $
            (38,064,384
            )
            
            $
            (7,261,594
            )Shares
      issued for services
            
            
            630,205
            
            
            
            630
            
            
            
            527,718
            
            
            
            (387,500
            )
            
            
            -
            
            
            
            140,848Shares
      issued for debt conversion
            
            
            3,500,000
            
            
            
            3,500
            
            
            
            346,500
            
            
            
            
            
            
            
            -
            
            
            
            350,000Beneficial
      conversion feature
            
            
            
            
            
            
            
            
            
            
            1,066,657
            
            
            
            
            
            
            
            
            
            
            
            1,066,657Amortization
      of shares issued for services
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            8,021,250
            
            
            
            
            
            
            
            8,021,250Shares
      issued for properties
            
            
            5,000,000
            
            
            
            5,000
            
            
            
            4,995,000
            
            
            
            
            
            
            
            
            
            
            
            5,000,000Net
      loss for the year
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (15,007,117
            )
            
            
            (15,007,117
            )Balance,
      December 31, 2007
            
            
            13,281,981
            
            
            $
            13,282
            
            
            $
            45,368,263
            
            
            $
            -
            
            
            $
            (53,071,501
            )
            
            $
            (7,689,956
            )The
      accompanying notes are an integral part of these unaudited financial
      statements.


F-6








BRIGHTON
      OIL & GAS, INC.(A
      DEVELOPMENT STAGE COMPANY)CONSOLIDATED
      STATEMENT OF CASH FLOWSFOR
      THE YEARS ENDED DECEMBER 31, 2007 AND 2006AND
      THE CUMULATIVE PERIOD FROM JANUARY 27, 2005 (INCEPTION) TO DECEMBER 31,
      20072007
              
              
              2006
              
              
              Period
      from January 27, 2005 (inception) to Dec 31, 2007CASH
      FLOWS FROM OPERATING ACTIVITIESNet
      loss
              
              $
              (15,007,117
              )
              
              $
              (36,906,584
              )
              
              $
              (52,721,301
              )Adjustments
      to reconcile net loss to cash used by operating
activities:Depreciation
      and depletion
              
              
              33
              
              
              
              -
              
              
              
              3,844Amortization
      on investment in custer leasehold
              
              
              -
              
              
              
              9,333
              
              
              
              9,333Impairment
      on oil lease investments
              
              
              5,030,000
              
              
              
              46,667
              
              
              
              5,076,667Stock
      issued for services
              
              
              140,848
              
              
              
              29,652,250
              
              
              
              29,793,098Amortization
      of prepaid consulting fees
              
              
              8,021,250
              
              
              
              -
              
              
              
              8,021,250Amortization
      of beneficial conversion feature
              
              
              1,066,657
              
              
              
              -
              
              
              
              1,066,657Shares
      to be issued
              
              
              -
              
              
              
              5,000,000
              
              
              
              5,000,000Changes
      in certain assets and liabilities, net of divestitureIncrease
      in accounts receivable
              
              
              (11,675
              )
              
              
              -
              
              
              
              (11,675
              )Increase
      in inventory
              
              
              -
              
              
              
              -
              
              
              
              (29,102
              )Increase
      in other assets
              
              
              -
              
              
              
              -
              
              
              
              (2,087
              )Increase  in
      accrued interest to affiliate
              
              
              64,860
              
              
              
              -
              
              
              
              1,384,385Increase
      in accounts payable and accrued expenses
              
              
              853
              
              
              
              1,319,525
              
              
              
              853Increase
      in accrued expenses
              
              
              113,000
              
              
              
              265,470
              
              
              
              523,460CASH
      FLOWS USED IN OPERATING ACTIVITIES:
              
              
              (581,291
              )
              
              
              (613,339
              )
              
              
              (1,884,618
              )CASH
      FLOWS FROM INVESTING ACTIVITIES:Purchase
      of oil & gas leases
              
              
              (30,000
              )
              
              
              -
              
              
              
              (30,000
              )Purchase
      of property, plant & equipment
              
              
              (2,000
              )
              
              
              -
              
              
              
              (40,952
              )CASH
      FLOWS USED IN INVESTING ACTIVITIES
              
              
              (32,000
              )
              
              
              -
              
              
              
              (70,952
              )CASH
      FLOWS FROM FINANCING ACTIVITIESProceeds
      from convertible note - related party, net
              
              
              551,342
              
              
              
              -
              
              
              
              951,342Loans
      payable to affiliates
              
              
              66,657
              
              
              
              613,400
              
              
              
              1,008,997CASH
      FLOWS PROVIDED BY FINANCING ACTIVITIES
              
              
              617,999
              
              
              
              613,400
              
              
              
              1,960,339NET
      INCREASE IN CASH &CASH EQUIVALENTS
              
              
              4,708
              
              
              
              61
              
              
              
              4,769CASH
      &CASH EQUIVALENTS, BEGINNING OF PERIOD
              
              
              61
              
              
              
              -
              
              
              
              -CASH
      &CASH EQUIVALENTS, END OF PERIOD
              
              $
              4,769
              
              
              $
              61
              
              
              $
              4,769SUPPLEMENTAL
      CASH FLOW INFORMATION:Interest
      paid
              
              $
              -
              
              
              
              -
              
              
              $
              -Income
      taxes paid
              
              $
              -
              
              
              
              -
              
              
              $
              -Net
      liabilities assumed with recapitalization
              
              $
              -
              
              
              
              -
              
              
              $
              200,000Divestiture
      of subsidiary to related party
              
              $
              -
              
              
              
              -
              
              
              $
              544,340Common
      stock issued for debt
              
              $
              350,000
              
              
              
              -
              
              
              $
              1,050000Common
      stock issued for acquiring oil & gas leases
              
              $
              5,000,000
              
              
              
              406,200
              
              
              $
              5,406,200





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


F-7







BRIGHTON
OIL & GAS, INC.




(A
DEVELOPMENT STAGE COMPANY)




NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS




DECEMBER 31,
2007




1. Summary of Significant Accounting
Policies




A. Organization and General Description
of Business




Brighton Oil & Gas, Inc. (“We” or
“the Company”) was incorporated under the laws of the State of Colorado, on July
6, 2005. On July 19, 2005, the Company, completed the acquisition of Special
Stone Surfaces, Es3, Inc., a Nevada Corporation ("Es3") pursuant to the terms of
an Exchange Agreement (the "Exchange Agreement") by and among the Company, Crown
Partners, Inc., a Nevada corporation and at such time, the largest stockholder
of the Company ("Crown Partners"), Es3, and certain stockholders of Es3 (the
"Es3 Stockholders"). Under the terms of the Exchange Agreement, the Company
acquired all of the outstanding capital stock of Es3 in exchange for the
issuance of 19,182,759 shares of the Company's common stock to the Es3
Stockholders, Crown Partners and certain consultants The transactions effected
by the Exchange Agreement have been accounted for as a reverse merger. This
reverse merger transaction has been accounted for as a recapitalization of Es3,
as Es3 is the accounting acquirer, effective July 19, 2005. As a result, the
historical equity of the Company has been restated on a basis consistent with
the recapitalization. In addition, the Company changed its accounting year-end
from September 30 to December 31, which is Es3's accounting
year-end.




Accordingly
the financial statements contained in report include the operations of the
Company in its new line of business. As a result of the transactions
contemplated by the Exchange Agreement, the Company had one active operating
subsidiary--Es3. Es3 was formed in January 2005 and began operations in March
2005 in the business of manufacturing and distributing a range of decorative
stone veneers and finishes based on proprietary Liquid Stone Coatings(TM) and
Authentic Stone Veneers(TM).   Effective October 1, 2005, the
Company sold all of its shares in Es3.




On April 3, 2006 the Board of Directors
approved a change of direction for the Company, from the business of
Manufacturing and distributing decorative stone veneers and finishes, to the
business of oil and gas exploration and production, mineral lease purchasing and
all activities associated with acquiring, operating and maintaining the assets
of such operations.




B. Basis of Presentation and
Organization




The consolidated financial statements
of the Company for the periods January 1, 2007 to December 31, 2007 and from
January 27, 2005 (Inception) through December 31, 2007 have been prepared in
accordance with generally accepted accounting principles. The consolidated
financial statements include the accounts of the Company and its wholly owned
subsidiary, Es3, through October 1, 2005 (the effective date of disposition).
All inter-company transactions have been eliminated.




C. Use of Estimates




The preparation of financial statements
in conformity with generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues  and
expenses during the reporting period. Actual results could differ from those
estimates. Estimates and assumptions are reviewed periodically and the effects
of revisions are reflected in the financial statements in the period they are
determined.











F-8




BRIGHTON
OIL & GAS, INC.




(A
DEVELOPMENT STAGE COMPANY)









NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS




DECEMBER 31,
2007




D. Cash and Cash
Equivalents




Cash and cash equivalents include cash
in hand and cash in time deposits, certificates of deposit and all highly
liquid debt instruments with original maturities of three months or
less.





E.
Long-Lived Assets & Impairment on oil lease investments




Effective
January 1, 2002, the Company adopted Statement of Financial Accounting Standards
No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” (“SFAS
144”), which addresses financial accounting and reporting for the impairment or
disposal of long-lived assets and supersedes SFAS No. 121, “Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of,”
and the accounting and reporting provisions of APB Opinion No. 30, “Reporting
the Results of Operations for a Disposal of a Segment of a Business.” The
Company periodically evaluates the carrying value of long-lived assets to be
held and used in accordance with SFAS 144. SFAS 144 requires impairment losses
to be recorded on long-lived assets used in operations when indicators of
impairment are present and the undiscounted cash flows estimated to be generated
by those assets are less than the assets’ carrying amounts. In that event, a
loss is recognized based on the amount by which the carrying amount exceeds the
fair market value of the long-lived assets. Loss on long-lived assets to be
disposed of is determined in a similar manner, except that fair market values
are reduced for the cost of disposal.






Based on
its review, the Company believes that, as of December 31, 2006, the investment
in Custer oil & well lease of $56,000 was impaired and recorded an
impairment loss of $46,667.






During
the year ended Decemer 31, 2007, the Company had acquired two oil & well gas
leases in two separate transactions. One lease was acquired for cash
consideration of $30,000 and the other lease was acquired in exchange of
50,000,000 (pre reverse split) shares. The lease was valued at the fair market
value of the shares which was $5,000,000.






As of
December 31, 2007, the Company estimated the future cash flows expected to
result from the use and eventual disposition of the two oil & well gas
leases. Based on its review, the Company determined that the carrying value of
the assets is not recoverable and hence the leases were determined to be
impaired as of December 31, 2007. The Company recorded an impairment loss of
$5,030,000 for the year ended December 31, 2007..




F. Fair
Value of Financial Instruments





Statement
of financial accounting standard No. 107, Disclosures about fair value of
financial instruments, requires that the Company disclose estimated fair values
of financial instruments. The carrying amounts reported in the statements of
financial position for assets and liabilities qualifying as financial
instruments are a reasonable estimate of fair value.




G. Technology License and
Royalties




The
Company's former principal business activity focused on the commercialization of
distributing decorative coatings that can be used to resemble stone, which the
Company licensed from related parties. Minimum annual royalties for these
arrangements were accrued in 2005 on the Company's balance sheet till disposal
of the subsidiary.




The Company’s current principal
activity focuses on oil and gas exploration.  During 2007 the Company
acquired the rights to drill and otherwise exploit certain underlying reserves
and agreed to pay a royalty ranging from 17.7% to 21.8% on the value of the oil
removed or produced and on the net proceeds from all gas sold The royalty is
being deducted by the operator and therefore there are no applicable royalty
accruals on the Company’s balance sheet at December 31, 2007.  During
2006 the Company acquired the rights to drill and otherwise exploit certain
underlying reserves and agreed to pay a 3% royalty on the value of the oil
removed or produced and on the net proceeds from all gas sold.  To
date there are no applicable accruals on the Company’s balance sheet as there
has been no production or proceeds related to the acquired
rights.




H. Stock-Based
Compensation




In
December 2004, the FASB issued SFAS No. 123 (revised 2004),
‘‘Share-Based Payment’’ (‘‘SFAS 123R’’), which requires the measurement of all
employee share-based payments to employees, including grants of employee stock
options, using a fair-value-based method and the recording of such expense in
the consolidated statements of operations. In March 2005, the SEC issued Staff
Accounting Bulletin No. 107 (“SAB 107”) regarding the SEC’s interpretation
of SFAS 123R and the valuation of share-based payments for public companies. The
Company has adopted SFAS 123R and related FASB Staff Positions (“FSPs”) as of
January 01, 2006 and will recognize stock-based compensation expense using the
modified prospective method.


F-9





BRIGHTON
OIL & GAS, INC.


(A
DEVELOPMENT STAGE COMPANY)




NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


DECEMBER 31,
2007




I. Income Taxes




The Company accounts for its income
taxes using the Financial Accounting Standards Board Statements of Financial
Accounting Standards No. 109, "Accounting for Income Taxes," which requires the
establishment of a deferred tax asset or liability for the recognition of future
deductible or taxable amounts and operating loss and tax credit carry forwards.
Deferred tax expense or benefit is recognized as a result of timing differences
between the recognition of assets and liabilities for book and tax purposes
during the year.




Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income in the
years in which those temporary differences are expected to be recovered or
settled. Deferred tax assets are recognized for deductible temporary differences
and operating loss, and tax credit carry forwards. A valuation allowance is
established to reduce that deferred tax asset if it is "more likely than not"
that the related tax benefits will not be realized.




J. Basic and Diluted Net Earnings
(loss) per Share




The Company  adopted the
provisions of SFAS No. 128, "Earnings Per Share" ("EPS"). SFAS No. 128 provides
for the calculation of basic and diluted earnings per share. Basic EPS includes
no dilution and is computed by dividing income or loss available to common
shareholders by the weighted average number of common shares outstanding for the
period. Diluted EPS reflects the potential dilution of securities that could
share in the earnings or losses of the entity. For the periods January 1, 2007
to December 31, 2007 and from inception through December 31, 2007, basic and
diluted loss per share are the same since the calculation of diluted per share
amounts would result in an anti-dilutive calculation.




K.
Development Stage Enterprise




The
Company is a development stage enterprise, as defined in Financial Accounting
Standards Board No.7. The Company‘s planned principal operations have not
commenced, and, accordingly, insignificant revenue has been derived during this
period.




L. Recent
Accounting Pronouncements





In
September 2006, FASB issued SFAS 157 ‘Fair Value Measurements’. This Statement
defines fair value, establishes a framework for measuring fair value in
generally accepted accounting principles (GAAP), and expands disclosures about
fair value measurements. This Statement applies under other accounting
pronouncements that require or permit fair value measurements, the Board having
previously concluded in those accounting pronouncements that fair value is the
relevant measurement attribute. Accordingly, this Statement does not require any
new fair value measurements. However, for some entities, the application of this
Statement will change current practice. This Statement is effective for
financial statements issued for fiscal years beginning after November 15, 2007,
and interim periods within those fiscal years. The management is currently
evaluating the effect of this pronouncement on financial
statements.







In
September 2006, FASB issued SFAS 158 ‘Employers’ Accounting for Defined Benefit
Pension and Other Postretirement Plans—an amendment of FASB Statements No. 87,
88, 106, and 132(R)’ This Statement improves financial reporting by requiring an
employer to recognize the over funded or under funded status of a defined
benefit postretirement plan (other than a multiemployer plan) as an asset or
liability in its statement of financial position and to recognize changes in
that funded status in the year in which the changes occur through comprehensive
income of a business entity or changes in unrestricted net assets of a
not-for-profit organization. This Statement also improves financial reporting by
requiring an employer to measure the funded status of a plan as of the date of
its year-end statement of financial position, with limited exceptions. An
employer with publicly traded equity securities is required to initially
recognize the funded status of a defined benefit postretirement plan and to
provide the required disclosures as of the end of the fiscal year ending after
December 15, 2006. An employer without publicly traded equity securities is
required to recognize the funded status of a defined benefit postretirement plan
and to provide the required disclosures as of the end of the fiscal year ending
after June 15, 2007. However, an employer without publicly traded equity
securities is required to disclose the following information in the notes to
financial statements for a fiscal year ending after December 15, 2006, but
before June 16, 2007, unless it has applied the recognition provisions of this
Statement in preparing those financial statements:






a.              
A brief description of the provisions of this Statement




b.              
The date that adoption is required




c.              
The date the employer plans to adopt the recognition provisions of this
Statement, if earlier.




The
requirement to measure plan assets and benefit obligations as of the date of the
employer’s fiscal year-end statement of financial position is effective for
fiscal years ending after December 15, 2008. The management is currently
evaluating the effect of this pronouncement on financial
statements.




In
February 2007, FASB issued FASB Statement No. 159, The Fair Value Option for
Financial Assets and Financial Liabilities. FAS 159 is effective for fiscal
years beginning after November 15, 2007. Early adoption is permitted subject to
specific requirements outlined in the new Statement. Therefore, calendar-year
companies may be able to adopt FAS 159 for their first quarter 2007 financial
statements.




F-10


BRIGHTON
OIL & GAS, INC.


(A
DEVELOPMENT STAGE COMPANY)





NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


DECEMBER 31,
2007








The new
Statement allows entities to choose, at specified election dates, to measure
eligible financial assets and liabilities at fair value that are not otherwise
required to be measured at fair value. If a company elects the fair value
option for an eligible item, changes in that item's fair value in subsequent
reporting periods must be recognized in current earnings. FAS 159 also
establishes presentation and disclosure requirements designed to draw comparison
between entities that elect different measurement attributes for similar assets
and liabilities.





In
December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
Consolidated Financial Statements”. This Statement amends ARB 51 to establish
accounting and reporting standards for the noncontrolling (minority) interest in
a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a
noncontrolling interest in a subsidiary is an ownership interest in the
consolidated entity that should be reported as equity in the consolidated
financial statements. SFAS No. 160 is effective for the Company’s fiscal year
beginning October 1, 2009. Management is currently evaluating the effect of this
pronouncement on financial statements.





In March
2008, the FASB issued FASB Statement No. 161, Disclosures about Derivative
Instruments and Hedging Activities. The new standard is intended to improve
financial reporting about derivative instruments and hedging activities by
requiring enhanced disclosures to enable investors to better understand their
effects on an entity’s financial position, financial performance, and cash
flows. It is effective for financial statements issued for fiscal years and
interim periods beginning after November 15, 2008, with early application
encouraged. The new standard also improves transparency about the location and
amounts of derivative instruments in an entity’s financial statements; how
derivative instruments and related hedged items are accounted for under
Statement 133; and how derivative instruments and related hedged items affect
its financial position, financial performance, and cash flows. Management is
currently evaluating the effect of this pronouncement on financial
statements.





In
December 2007, the FASB issued SFAS No. 141(R), “Business Combinations”. This
Statement replaces SFAS No. 141, Business Combinations. This Statement retains
the fundamental requirements in Statement 141 that the acquisition method of
accounting (which Statement 141 called the purchase method) be used for all
business combinations and for an acquirer to be identified for each business
combination. This Statement also establishes principles and requirements for how
the acquirer: a) recognizes and measures in its financial statements the
identifiable assets acquired, the liabilities assumed, and any noncontrolling
interest in the acquiree; b) recognizes and measures the goodwill acquired in
the business combination or a gain from a bargain purchase and c) determines
what information to disclose to enable users of the financial statements to
evaluate the nature and financial effects of the business combination. SFAS No.
141(R) will apply prospectively to business combinations for which the
acquisition date is on or after Company’s fiscal year beginning October 1, 2009.
While the Company has not yet evaluated this statement for the impact, if any,
that SFAS No. 141(R) will have on its consolidated financial statements, the
Company will be required to expense costs related to any acquisitions after
September 30, 2009.




F-11




BRIGHTON
OIL & GAS, INC.


(A
DEVELOPMENT STAGE COMPANY)




NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


DECEMBER 31,
2007







M.
Reclassifications





For
comparative purposes, prior year’s consolidated financial statements have been
reclassified to conform with report classifications of the current
year.





2. Going Concern




The accompanying financial statements
have been prepared in conformity with generally accepted accounting principles,
which contemplate the continuation of the Company as a going concern. The
Company reported an accumulated deficit of $53,071,501 and had a stockholder’s
deficit of $7,689,956 at December 31, 2007.




In view
of the matters described, there is substantial doubt as to the Company's ability
to continue as a going concern without a significant infusion of
capital.  At December 31, 2007, the Company had limited operations. In
view of the matters described, there is substantial doubt as to the Company's
ability to continue as a going concern without a significant infusion of
capital. There can be no assurance that management will be successful in
implementing its plans. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.




We anticipate that we will have to
raise additional capital to fund operations over the next 12 months.  To
the extent that we are required to raise additional funds to acquire properties, and to
cover costs of operations, we intend to do so through additional public or private
offerings of debt or equity securities.  There are
no  commitments  or arrangements  for  other  offerings  in  place,  no  guaranties  that  any  such financings would be
forthcoming,  or as to the terms of any such financings.
Any future financing
may involve substantial dilution to existing investors.Wehad beenrelying on our common stock to pay
third parties for services which has resulted substantial dilution to
existing investors.




3. Income Taxes




Deferred
income taxes are reported using the liability method. Deferred tax assets are
recognized for deductible temporary differences and deferred tax liabilities are
recognized for taxable temporary differences. Temporary differences are the
differences between the reported amounts of assets and liabilities and their tax
bases. Deferred tax assets are reduced by a valuation allowance when, in the
opinion of management, it is more likely than not that some portion or all of
the deferred tax assets will not be realized. Deferred tax assets and
liabilities are adjusted for the effects of changes in tax laws and rates on the
date of enactment.   Current year and accumulated deferred tax
benefit at the effective Federal income tax rate of 34% is $17,650,659,and
$12,548,239 respectively and a valuation allowance has been set up for the full
amount because of the unlikelihood that the accumulated deferred tax benefit
will be realized in the future.







At
December 31, 2007, the Company had available federal and state net operating
loss carryforwards amounting to approximately $53,071,501  that are
available to offset future federal and state taxable income and that expire in
various periods through 2027 for federal tax purposes and 2014 for state tax
purposes.  No benefit has been recorded for the loss carryforwards,
and utilization in future years may be limited under Sections 382 and 383
of the Internal Revenue Code if significant ownership changes have occurred or
from future tax legislation changes







The following table sets forth the
significant components of the net deferred tax assets for operation in the US as
of December 31, 2007 and 2006.





2007
            
            
            2006Net
      operation loss carry forward
            
            $
            53,071,501
            
            
            $
            38,064,384Total
      deferred tax assets
            
            
            17,650,659
            
            
            
            12,548,239Less:
      valuation allowance
            
            
            (17,650,659
            )
            
            
            (12,548,239
            )Net
      deferred tax assets
            
            $
            -
            
            
            $
            -









F-12




BRIGHTON
OIL & GAS, INC.


(A
DEVELOPMENT STAGE COMPANY)




NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


DECEMBER
31, 2007





The provision for
income taxes from continuing operations on income consists of the
following for the years ended December 31, 2007 and
2006:





2007
            
            
            2006US
      Current Income Tax Expense (Benefit)Federal
            
            $
            -
            
            
            $
            -State
            
            
            -
            
            
            
            -Total
      Provision for Income Tax
            
            $
            -
            
            
            $
            -





The
following is a reconciliation of the provision for income taxes at the U.S.
federal income tax rate to the income taxes reflected in the Consolidated
Statements of Operations:





December
      31
                2007
              
              
              December
      31
                2006Tax
      expense (credit) at statutory rate-federal
              
              
              (34
              )%
              
              
              (34
              )%State
      tax expense net of federal tax
              
              
              (6
              )
              
              
              (6
              )Valuation
      allowance
              
              
              40
              
              
              
              40Tax
      expense at actual rate
              
              
              -
              
              
              
              -






4.
Professional fee




Professional
fee, during the years ended December 31, 2007 and 2006, amounted to $8,719,580
and $21,810,896, respectively.




During
the year ended December 31, 2007 and 2006, the Company issued shares in exchange
for professional fee to various consultants under separate agreements. The
shares issued were valued at the fair market value pursuant to EITF- 96-18. The
Company issued 1,710,800 shares during the year ended December 31, 2006. Fair
market value of the shares was recorded at $28,798,500 and was expensed over the
term of the services provided. $21,164,750 was expensed during the year ended
December 31, 2006 and the balance of $7,633,750 was recorded as prepaid
consulting to be amortized as the services are performed.




During
the year ended December 31, 2007, the Company issued 630,205 shares to various
consultants under separate agreements and valued them at $528,348. $387,500 of
the total amount was initially recorded as prepaid consulting.




All of
the consulting agreements were completed during the year ended December 31, 2007
and the prepaid consulting of $8,021,250 was amortized to professional
fee.









5.  Accrued
Expenses





As of
December 31, 2007, the accrued expenses comprise of the following:





Accrued
      consulting fees
              
              $
              93,000Accrued
      audit fees
              
              
              25,000Accrued
      dispute settlement
              
              
              13,000Accrued
      payroll taxes
              
              
              1,285,651Accrued
      compensation costs
              
              
              6,374$
              1,432,525




6. Equity
Transactions





The
Company is authorized to issue 100,000,000 shares of common shares with a par
value of $.001 per share.  These shares have full voting
rights.  There were 13,281,985 issued and outstanding as of December
31, 2007.




A. Issuance of Common
Stock





In
February 2005, the Company issued 8,380,000 shares of unregistered commonstock at par value of
$0.001 to founding stockholders without consideration,including 6,250,000 shares
to Boston Equities Corporation (a related party).






F-13




BRIGHTON
OIL & GAS, INC.




(A
DEVELOPMENT STAGE COMPANY)









NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS




DECEMBER 31,
2007


In June
2005, the Company issued 800,000 shares of unregistered common stock atpar value of $0.001 in
exchange for the debt arising out of monies advanced tothe Company in the amount
of $400,000 by Boston Equities Corporation pursuant toa  convertible
debt agreement dated March 1, 2005. The terms of the convertible debt agreement
allowed Boston Equities Corporation to convert its debt to sharesof common stock at $.50
per share.





In
June  2005,  the  Company's  issued  an  aggregate  of  8,618,750  shares  ofunregistered  common
at par value of $0.001 stock to the shareholders of AroniteIndustries,  Inc.
("Aronite") in connection with the license of certaintrademarks from
Aronite.  Certain officers, directors and shareholders of theCompany are former or
current officers, directors and shareholders of Aronite.  Aronite and
the Company are under common control and, therefore, the transactionwas recorded at Aronite's
basis, which was zero.





In
July  2005,  in  accordance  with the
terms of the  Exchange  Agreement,  theCompany  issued
400,000  shares of registered  common stock to
two  consultants,d.b.a. WB International,
Inc. in accordance with the terms of the Exchange Agreement.





In July
2005,  the  Company  issued for
no  consideration  78,571  shares of itsunregistered  common
stock at par value of $0.001 to the former  shareholders ofNational
Healthcare  Technologies,  Inc. and an additional 905,438
shares of itsunregistered  common  stock
at par value of $0.001 to Crown  Partners,  a formermajor shareholder of
National Healthcare  Technologies,  Inc. in accordance
withthe terms of the
Exchange Agreement.





In April
2006, the Company issued 1,800,000  shares of
its  unregistered  commonstock to
its  Chief  Executive  Officer  and  Director,  Ross-Lyndon  James,  inaccordance with the terms
of the Management Employment Agreement. The shares, which vested upon issuance,
were recorded at the fair market value of $3,690,000 on the date of
issuance.





In April
2006, the Company issued 1,800,000 shares of its unregistered commonstock to its Chief
Financial Officer and Director, Brian Harcourt, in accordancewith the terms of the
Management Employment Agreement.  The shares, which vested upon issuance,
were recorded at the fair market value of $3,690,000 on the date of
issuance.





In April
2006, in accordance with the terms of a Consulting Agreement, theCompany issued 3,500,000
shares of the Company's common stock to Credit FirstHolding Limited, a related
party, for consulting services.  The Company recorded the shares at
the fair market value of $7,175,000. The expense is being amortized over the
period of the consulting agreement as the services are being performed. 
During the year ended December 31, 2007 and 2006, the Company amortized
$5,381,250 and $1,793,750,respectively..





In April
2006, in accordance with the terms of a Consulting Agreement, theCompany issued 700,000
shares of the Company's common stock to Monterosa GroupLimited for consulting
services. The Company recorded the shares at the fair market value of
$1,435,000. The expense is being amortized over the period of the consulting
agreement as the services are being performed.  During the years ended
December 31, 2007 and 2006, the Company amortized $1,076,250 & $6,440,000,
respectively.





In April
2006, in accordance with the terms of a Consulting Agreement, theCompany issued 2,800,000
shares of the Company's common stock to Design, Inc., arelated party, for
consulting services. The Company recorded the expense at the fair market value
of shares of $6,440,000.





In April
2006, in accordance with the terms of a Consulting
Agreement,  theCompany  issued  2,500,000  shares  of
the  Company's  common  stock  to  CamdenHoldings, Inc., a related
party, for consulting services.  The Company recorded the expense at
the fair market value of shares of $5,750,000.





In April
2006, in accordance with the terms of a Consulting Agreement, theCompany issued 1,800,000
shares of the Company's common stock to Summit Oil &Gas, a related party, for
consulting services The Company recorded the expense at the fair market value of
shares of $3,690,000





In April
2006, in accordance with the terms of a Consulting Agreement, theCompany issued 700,000
shares of the Company's common stock to Bluefin, LLC forconsulting
services.  The Company recorded the shares at the fair market value of
$1,435,000. The expense is being amortized over the period of the consulting
agreement as the services are being performed. During the years ended December
31, 2007 and 2006, the Company amortized $1,076,250 and $358,750,
respectively.





On June
16, 2006, we issued 375,000 shares each to John McDermit and John E.Havens, who served on our
advisory board.  The shares, which vested upon issuance, were recorded
at the fair market value on the date of issuance, for a total of
$1,027,500.





F-14


In
August, 2006, in accordance with an agreement between the parties, the Company
issued 677,000 shares of the Company's common stock to Summitt Oil & Gas to
acquire certain lease rights.  The shares were valued at
$406,200.  The Company recorded the asset at the historical cost of
$56,000 to the related party and recorded $350,200 as a deemed dividend to the
related party.





In
September, 2006, pursuant to the terms of a Consulting Agreement, the Company
issued 2,700,000 shares of its common stock to Summitt Ventures, under the
Company's 2006-1 Consultant and Employee Services Plan.   The
Company recorded the expense at the fair market value of shares of
$1,680,000.





In
August, 2006, in accordance with the terms of a Consulting Agreement, the
Company issued 209,000 shares of its common stock to Catalyst Consulting,
Inc.  In September, 2006, pursuant to the terms of a Consulting
Agreement, the Company issued an additional 209,000 shares of its common stock
to Catalyst Consulting, Inc., under the Company's 2006-1 Consultant and Employee
Services Plan.  These shares issuances represent prepaid consulting
services for the period of July 1, 2006 through December 31, 2006. The Company
recorded the expense at the fair market value of shares of
$209,000.





On August
17, 2006, in accordance with the terms of a Consulting Agreement, the Company
issued 500,000 shares of its common stock to Ramp International,
Inc.  In September, 2006, pursuant to the terms of a Consulting
Agreement, the Company issued 500,000 shares of its common stock to Ramp
International, Inc., under the Company's 2006-1 Consultant and Employee Services
Plan.  This share issuance represents prepaid consulting expense for
the period from September 2, 2006 through February 2, 2007 with this expense to
be amortized over 18 months.  The agreement was based on fair market
value totaling $500,000 of which $400,000 was amortized during the year ended
December 31, 2006.  The Company also owed Ramp a cash payment of
$215,000 which was waived off by Ramp as of December 31, 2006, so this amount
has been recorded as a gain on settlement of debt.





On August
17, 2006, in accordance with the terms of a Consulting Agreement, the Company
issued 100,000 shares of its common stock to Jon Konheim.  The Company
recorded the expense at the fair market value of shares of $60,000.





In August
2006 in accordance with the terms of a Consulting Agreement, the Company issued
100,000 shares of its common stock to Linda Contreras.  The Company
recorded the expense at the fair market value of shares of $120,000





The
Company issued 200,000 shares of its common stock to its former president,
Samuel Petrossian, in September, 2006 as compensation for services, pursuant to
an employment agreement.  Mr. Petrossian resigned in November, 2006.
The Company recorded the expense at the fair market value of shares of
$80,000.





In
September, 2006, the Company adopted the 2006-1 Consultant and Employee Services
Plan wherein the Company registered 3,800,000 shares of its common stock for
issuance to consultants and employees of the Company.





In
September, 2006, pursuant to the terms of a Consulting Agreement, the Company
issued 190,000 shares of its common stock to Frank Layton under the Company's
2006-1 Consultant and Employee Services Plan.  The Company recorded
the expense at the fair market value of shares of $76,000.





In
September, 2006, pursuant to the terms of a Consulting Agreement, the Company
issued 150,000 shares, of its common stock to Linda Contreras under the
Company's 2006-1 Consultant and Employee Services Plan. The Company recorded the
expense at the fair market value of shares of $60,000.





In
September, 2006, pursuant to the terms of a Consulting Agreement, the Company
issued 400,000 shares of its common stock to Raymond Robinson under the
Company's 2006-1 Consultant and Employee Services Plan. The Company recorded the
expense at the fair market value of shares of $160,000.




In
October, 2006, pursuant to the terms of a Consulting Agreement, the Company
issued 50,000 shares of its common stock to Claudia J. Zaman, attorney., under
the Company's 2006-1 Consultant and Employee Services Plan.  The
Company recorded the expense at the fair market value of shares of
$8,500.




B. Warrants




In February 2005, the Company issued a
warrant to acquire up to 600,000 shares of unregistered common stock at an
exercise price of $0.60 per share to W.B. International, Inc., in exchange for
consulting services. All shares vested upon grant. The warrant expires 5 years
from the date of issuance.




In
June 2005, the Company issued a warrant to acquire up to 600,000 shares of
unregistered common stock at an exercise price of $0.70 per share to each of
Liquid Stone Manufacturing, Inc. and Stone  Mountain Finishes, Inc. in
consideration of certain license agreements. All shares vested upon grant. The
warrants expire 5 years from the date of issuance.





F-15


In June
2005, the Company issued a warrant to an employee to purchase up to 100,000
shares of the  company's restricted common stock at an exercise price
of $0.70 per share The shares vested monthly over three years and have a 10 year
option period. The employee was terminated in February 2006 and the warrants
were forfeited.




A summary of the warrant activity
for the period ended December 31, 2007 is as follows:








Warrants
              Outstanding
            
            
            Weighted
      Average Exercise Price
            
            
            Aggregate
      Intrinsic ValueOutstanding,
      December 31, 2006
            
            
            1,800,000
            
            
            $
            0.67
            
            
            $
            -Granted
            
            
            
            
            
            
            
            
            
            
            -Forfeited /
      Canceled
            
            
            
            
            
            
            
            
            
            
            -Exercised
            
            
            -
            
            
            
            -
            
            
            
            -Outstanding,
      December 31, 2007
            
            
            1,800,000
            
            
            $
            0.67
            
            
            $
            -





The weighted average remaining
contractual life of warrants outstanding is 2.10 years at December 31,
2007.





Outstanding
      Warrants
            
            Exercisable
      WarrantsRange
      of Exercise Price
            Number
            Average
      Remaining Contractual Life
            Average
      Exercise Price
            Number$0.67
            1,800,000
            2.10
            $0.67
            1,800,000





The
Company estimated the fair value of each stock warrant at the grant date by
using the Black-Scholes option-pricing mode.





The
weighted-average assumptions used in estimating the fair value of warrantsgranted during the year
ended December 31, 2006 along with the weighted-average grant
date fair values, were as follows.





Expected
      volatility
            80.0%Expected life
      in years
            5
      yearsRisk
      free interest rate
            5.07%Dividend
      yield
            0%





During theperiodendedDecember31, 2006, the Company granted
two warrants which
expire five years from date of grant and
are  convertible  into 300,000  shares of common
stock at an exercise  price of $2.63 per share to
each of
Brian  Harcourt and  Ross-Lyndon  James in
accordance  with their  respective Management  Employment  Agreements
executed by and between them and the Company, respectively.  The warrants
were granted on April 5, 2006 and vest 6 months after grant.Both Mr. Harcourt and Mr. James
resigned in July 24, 2006 and their warrants wereforfeited.




C.
Employee Options




On April
3, 2006, the Board of Directors of the Company authorized and approvedthe adoption of the 2006
Stock Option Plan effective April 3, 2006 (the "Plan").The Plan is administered
by the duly appointed compensation committee.  The Planis authorized to grant
stock options of up to 2,500,000 shares of the Company'scommon
stock.  At the time a
stock  option  is  granted  under  the  Plan,  thecompensation  committee  shall
fix and determine the exercise  price and vestingschedules  at
which such shares of common  stock of the
Company may be acquired.As of December 31, 2006
and December 31, 2007, no options to purchase the Company's common stock have
beengranted under
the Plan.





There
were no options outstanding at December 31, 2007.




In
September, 2006, the Board of Directors of the Company authorized and approved
the adoption of the 2006-1 Consultants and Employees Service Plan effective
September 7, 2006 (the "Consultants Plan").  The Plan is administered
by the duly appointed compensation committee.  The Plan is authorized
to grant stock options and make stock awards of up to  3,800,000
shares of the Company's common stock.  At the time a
stock  option  is  granted  under  the  Plan,  the
compensation  committee  shall fix and determine the
exercise  price and vestingschedules  at
which such shares of common  stock of the Company may be acquired. The
Consultants Plan was registered on September 15, 2006 and as of December 31,
2006 a total of 3,799,000 shares had been issued and granted under the
Consultants Plan. During 2007 no additional shares were issued.









F-16




BRIGHTON
OIL & GAS, INC.


(A
DEVELOPMENT STAGE COMPANY)






NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS


DECEMBER
31, 2007




7. Related Party
Transactions




During
the year the following transactions occurred between the Company and certain
related parties:





A.       Ross-Lyndon
James





Mr. James
resigned on July 24, 2006 and on his resignation Company warrants that had been
granted to him were forfeited.    The Company recorded
shares to be issued of $2,500,000 for the termination shares.





B.       Brian
Harcourt





Mr.
Harcourt resigned on July 24, 2006 and on his resignation Company warrants that
had been granted to him were forfeited.    The Company
recorded shares to be issued of $2,500,000 for the termination
shares.





On April
5, 2006, the Company entered into a consulting agreement with First CreditHolding Ltd ("First
Credit") to provide business management services and adviceas it relates to the
Company's future.  Under the terms of the agreement, theCompany agreed to pay
First Credit a fee of three million five hundred thousand(3,500,000) restricted
shares of common stock. The fee is non-refundable andconsidered earned when the
shares are delivered.  The company is amortizing theexpense over the period of
the services.  Brian Harcourt, one of our directors,is the controlling
shareholder of First Credit. The shares of stock were issuedin April
2006.





C.       Boston
Equities Corporation





The
following  transaction  took place  between the
Company and parties  sharingcommon  ownership
or control with Boston  Equities  Corporation,  a
shareholder,which
owns  approximately  25% of the
Company's  outstanding  and issued
common stock:





On April
3, 2006, the Company entered into a consulting agreement with SummittOil and Gas,
Inc.  ("Summit") to provide business management services and
adviceas it relates
to the future of the company.  Under the terms of
the  Agreement,the
Company  shall pay Summitt a fee of two hundred and
fifty  thousand  dollars($250,000)  in  cash  plus  one  million  eight  hundred  thousand   (1,800,000)restricted  of  the  Company's  common  stock.  The
fee is non-refundable andconsidered earned when the
shares are delivered. The agreement is for six monthsexpiring in October, 2006.
The Company has fully amortized the expensefor the cash and shares
paid for the period ended December 31, 2006.





On April
4, 2006, the Company entered into an assignment of an oil and gas leasewith
Summitt.  Under the  agreement in exchange for the
leasehold  rights in 160 acres in the County of
Custer,  Oklahoma,  the Company has agreed to pay
Summittconsideration  of  seventy-seven  thousand  (677,000)  restricted  shares  of
the Company's common
stock. The shares of stock have been issued on August 22, 2006. Additionally, there is
excepted from the assignment and conveyance and reserved and retained
in  Summitt an overriding  royalty equal to 3% of the value
of all oil produced and removed under the lease and the net proceeds received by
Assignee from the sale of all gas and  casing
head  gasoline  produced  and soldunder the
lease.





On April 25, 2006, the Company entered
into a short term bridge financing in the form of a promissory note to Camden
Holdings, Inc. in the amount of three hundred and fifty thousand dollars
($350,000) to beused as
working capital. The Note was due on August 25,
2006.  No interest is payable on the note.  On June
8, 2006, the Company
entered into a short term bridge financing in the form of
a  promissory note to Camden Holdings, Inc. in the amount of one
hundred and fifty thousand dollars ($150,000) to be used as working capital.  The Note
was due on December
31, 2006 and has been extended toDecember 31, 2007.  No interest is payable on
the note.On
January 11, 2007, Camden converted $650,000 of the advances into a Note Payable
bearing 10% interest per annum.  Advances due Camden at December 31,
2007 were$164,742.





On
October 4, 2007, the Company entered into a Letter of Credit agreement with
South Beach Live, Inc. (“South Beach”) whose sole shareholder and Director, is
Charles Stidham, CEO and President of Brighton at December 31,
2007.  The line-of-credit has a maximum of $100,000 and bears interest
at 10% per annum. payable quarterly.  The amount due at December 31,
207 was $66,657.  The note, if payments are not made as agreed, can be
converted into restricted stock at $.001 per share and therefore a deemed
dividend of $66,657 was recorded.















F-17


BRIGHTON
OIL & GAS, INC.
 (A
DEVELOPMENT STAGE COMPANY)
   NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS
 DECEMBER
31, 2007




8. Commitments and
Contingencies





A. Legal




On
December 19, 2006, Empire Relations Group Inc. (“Empire”) filed an arbitration
claim against the Company in connection with a consulting agreement entered into
by and between the Company and Empire on September 28, 2006. An arbitration
award in the amount of $13,000 was issued against the Company on March 9, 2007,
which also provided for interest at the rate of nine percent per annum,
commencing 30 days after the date of the award and continuing until paid in
full. The amount has been accrued in the accompanying financials.




The Company is periodically involved in
legal actions and claims that arise as a result of events that occur in the
normal course of operations. The Company is not currently aware of any
other  formal legal proceedings or claims that the Company believes
will have, individually or in the aggregate, a material adverse effect on the
Company's financial position or results of operations.




B. Operating Leases




The
company currently has no future lease obligations.  The space that is
being leased in Dallas is on a month-to-month basis.   Rent
expense for the periods ended December 31, 2007 and 2006 were $0 and $0
respectively.





9.
Restatement





Subsequent
to the issuance of the Company's financial statements for the year ended
December 31, 2006, the Company determined that certain transactions and
presentation in the financial statements had not been accounted for properly in
the Company's financial statements.  Specifically, the issuance of
shares pursuant to a consulting agreement was recorded twice and expensed due to
wrong certification by the stock transfer agent. The company has restated its
financial statements as of December 31, 2006 for that correction.





The
Company has restated its financial statements for these adjustments as of
December 31, 2006.





The
effect of the correction of the error is as follows:







ASPREVIOUSLY
            
            
            ASREPORTED
            
            
            RESTATEDBALANCE
      SHEETAs of December 31, 2006Stockholder's
      Equity:Additional
      paid-in capital
            
            $
            39,472,222
            
            
            $
            38,395,022Accumulated
      deficit
            
            $
            (39,144,384
            )
            
            $
            (38,064,384
            )STATEMENT
      OF OPERATIONS:For
      the period from inception toDecember 31, 2006Professional
      fee
            
            $
            23,356,200
            
            
            $
            22,276,200Total
      operating expenses
            
            $
            39,009,184
            
            
            $
            37,929,184Net
      operating loss
            
            $
            39,009,184
            
            
            $
            37,929,184Net
      loss
            
            $
            38,794,184
            
            
            $
            37,714,184STATEMENT
      OF CASH FLOWS:For
      the period from inception toDecember 31, 2006NET
      LOSS
            
            $
            38,794,184
            
            
            $
            37,714,184CASH
      FLOWS FROM OPERATING ACTIVITIESAdjustments
      to reconcile net loss to cash used by operating
activities:Stock
      issued for services
            
            $
            30,732,250
            
            
            $
            29,652,250













F-18