SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549





FORM
10-K





(Mark
One)


x
            ANNUAL REPORT UNDER SECTION 13
      OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
  1934





For the
Fiscal Year Ended December 31, 2008





o
            TRANSITION REPORT UNDER SECTION
      13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
  1934





For the
transition period from ____________ to _____________





Commission
File No. 333-140204




ATLAS
      OIL AND GAS, INC.(Name
      of Small Business Issuer in its
Charter)




NEVADA
                
                76-0672176(State
      or other jurisdiction of
                
                (I.R.S.
      Employer Identification No.)incorporation
      or organization)




1020
      Brookstown Avenue, Suite 30Winston
      Salem, NC 77493(Address
      of principal executive offices)(Zip
code)





Issuer's
telephone number, including area code:   (336) 723-0908





Securities
registered under Section 12(b) of the Exchange Act:





Title
      of each class
              
              Name
      of each exchange on which each is registeredNone
              
              None





Securities
registered under Section 12(g) of the Exchange Act:





None(Title
      of Class)





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





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  o





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-K or any
amendment to this Form 10-K.x





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




The
Issuer’s revenues for the fiscal year ended December 31, 2008 were
$-0-





The
aggregate market value of the voting and non-voting common equity held by
non-affiliates of the registrant on April 1, 2009, based on the last sales price
on the OTC Bulletin Board as of such date, was approximately
$180,000.





The
number of shares of the registrant’s common stock, $0.001 par value per share,
outstanding as of April 10, 2009 was 30,000,000.





DOCUMENTS
INCORPORATED BY REFERENCE





None





Transition
Small Business Disclosure Format:  Yes  o   No  x


2


Atlas
Oil and Gas, Inc.


FORM
10-K ANNUAL REPORT


FOR
THE FISCAL YEAR ENDED DECEMBER 31, 2008


TABLE
OF CONTENTS





PART IITEM 1.
                    BUSINESS
                    6ITEM 1A.
                    RISK
      FACTORS
                    9ITEM 1B.
                    UNRESOLVED
      STAFF COMMENTS
                    15ITEM 2.
                    PROPERTIES
                    15ITEM 3.
                    LEGAL
      PROCEEDINGS
                    15ITEM 4.
                    SUBMISSION
      OF MATTERS TO A VOTE OF SECURITY HOLDERS
                    15PART IIITEM 5.
                    MARKET
      FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
      PURCHASES OF EQUITY SECURITIES
                    16ITEM 6.
                    SELECTED
      FINANCIAL DATA
                    16ITEM 7.
                    MANAGEMENT’S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS
                    22ITEM 7A.
                    QUANTITATIVE
      AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
                    22ITEM 8.
                    CONSOLIDATED
      FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
                    22ITEM 9.
                    CHANGES
      IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
      DISCLOSURE
                    22ITEM 9A.
                    CONTROLS
      AND PROCEDURES
                    22ITEM 9B.
                    OTHER
      INFORMATION
                    24


3





PART IIIITEM 10.
              DIRECTORS,
      EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE.
              25ITEM 11.
              EXECUTIVE
      COMPENSATION
              28ITEM 12.
              SECURITY
      OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
      STOCKHOLDER MATTERS
              29ITEM 13.
              CERTAIN
      RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
      INDEPENDENCE
              31ITEM 14.
              PRINCIPAL
      ACCOUNTANT FEES AND SERVICES
              31PART IVITEM 15.
              EXHIBITS
      AND FINANCIAL STATEMENT SCHEDULES
              33SIGNATURES
              34CERTIFICATIONSExhibit
      31 – Management certification
              73Exhibit
      32 – Sarbanes-Oxley Act
              75


4




Forward
Looking Statements — Cautionary Language




Certain
statements made in these documents and in other written or oral statements made
by Atlas Oil and Gas, Inc. or on Atlas Oil and Gas, Inc’s behalf are
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995 ("PSLRA"). A forward-looking statement is a
statement that is not a historical fact and, without limitation, includes any
statement that may predict, forecast, indicate or imply future results,
performance or achievements, and may contain words like: "believe",
"anticipate", "expect", "estimate", "project", "will", "shall" and other words
or phrases with similar meaning in connection with a discussion of future
operating or financial performance. In particular, these include statements
relating to future actions, trends in our businesses, prospective products,
future performance or financial results. Atlas Oil and Gas, Inc. claims the
protection afforded by the safe harbor for forward-looking statements provided
by the PSLRA.  Forward-looking statements involve risks and
uncertainties that may cause actual results to differ materially from the
results contained in the forward-looking statements. Risks and uncertainties
that may cause actual results to vary materially, some of which are described in
this filing.  The risks included herein are not exhaustive. This
annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on
Form 8-K and other documents filed with the SEC include additional factors which
could impact Atlas Oil and Gas, Inc.'s business and financial performance.
Moreover, Atlas Oil and Gas, Inc. operates in a rapidly changing and competitive
environment. New risk factors emerge from time to time and it is not possible
for management to predict all such risk factors. Further, it is not possible to
assess the impact of all risk factors on Atlas Oil and Gas, Inc's business or
the extent to which any factor, or combination of factors, may cause actual
results to differ materially from those contained in any forward-looking
statements. Given these risks and uncertainties, investors should not place
undue reliance on forward-looking statements as a prediction of actual results.
In addition, Atlas Oil and Gas, Inc. disclaims any obligation to update any
forward-looking statements to reflect events or circumstances that occur after
the date of the report.


5


PART
I


ITEM 1.
DESCRIPTION OF BUSINESS.





Except
for historical information contained herein, the following discussion contains
forward-looking statements that involve risks and uncertainties.  Such
forward-looking statements include, but are not limited to, statements regarding
future events and the Company’s plans and expectations.  Actual
results could differ materially from those discussed herein.  Factors
that could cause or contribute to such differences include, but are not limited
to, those discussed elsewhere in this Form 10-K or incorporated herein by
reference, including those set forth in Management’s Discussion and Analysis
or Plan of Operation.





Unless
otherwise noted, references in this Form 10-K to “Atlas” the “Company,” “we,”
“our” or “us” means Atlas Oil and Gas,  Inc., a Nevada
corporation.





Corporate
History





Current
Year Developments





Discontinued
Operations





In June
2008, in connection with the execution of a Note Purchase Agreement and as a
result of recurring losses and negative cash flow, the Company determined to
discontinue its home security monitoring and smart home operations. Results
reflected in the accompanying Statements of Operations relating to the
operations so discontinued are reported, for the current periods and for prior
year periods, as Loss from Discontinued Operations.





Sale
of Monitoring Contracts





In
January 2008, the Company sold a number of alarm monitoring service contract
accounts for a total price of $96,511. The terms of the sale include a 10%
holdback reserve of $9,651 that was deducted from the gross proceeds by the
purchaser to cover potential contract default by the customer accounts they
purchased. The purchaser will have to pay the holdback reserve to the Company on
or before May 24, 2009. A reduction in the gross proceeds of $9,850 was made by
the purchaser for monies paid to the Company prior to the sale by the accounts
that are the subject of the sale, and where the purchaser must provide services
to these accounts post-closing that the Company would have otherwise been
obligated to provide. As a separate obligation, the Company must provide general
repair services to the sold accounts, on an as-needed basis, for a period of
twelve months following closing. The Company received a payment of $6,432 from
the purchaser as consideration for this obligation. Net proceeds received under
the agreement were $83,442. The sale was reported as Other Income - Gain on Sale
of Assets.





As a
result of the discontinued operations, the Company will not be able to perform
its obligation to provide general repair services to the sold accounts for the
twelve-month period specified in the Agreement. Consequently, the Company feels
it will not be in a position to negotiate a return of any of the 10% holdback
reserve held by the purchaser. Accordingly, both the unamortized portion of the
unearned revenue on the service agreements, and the 10% holdback reserve, have
been written off to Other Income/Expense in the financial statements. The net
effect of the write-offs is a loss of $4,113.





In June
2008, the Company sold 57 of its security and/or fire alarm monitoring accounts
for $15,285. The Company received the sale proceeds at closing. No guarantee
period was provided to the purchaser, and the Company assumed no liabilities for
the purchaser post-closing. The Company did sign a three-year agreement not to
compete for the accounts sold. This sale represented substantially all of the
remaining monitoring accounts owned by the Company.


6


Write-Off/Write-Down
of Assets





In June
2008, in connection with the determination to discontinue alarm monitoring and
related operations, wrote-off certain accounts receivable considered to be
uncollectible, wrote-off certain inventories of alarm equipment and small
supplies that are expected to be abandoned and wrote-down the recorded value of
certain equipment.





Renewal
of Notes Payable





A note
payable to two shareholders, in the original amount of $25,000 and dated
September 19, 2007, with a 6-month term at 10.223%, was renewed on March 25,
2008 in the amount of $22,500 after a principal payment of $2,500. The renewed
note was for a 6-month term at 13% interest. Interest only payments will begin
April 25, 2008, with a final payment of $22,748 due on September 25, 2008. The
note was in default at September 30, 2008.





The note
payable to a shareholder for $25,000, originally due February 26, 2008, has been
renewed for another 90-day term at 8%. The full principal and accrued interest
will be due May 26, 2008. The note was in default at September 30,
2008.





Conversion
of Line of Credit to Term Loan





In April
2008, the Company negotiated a conversion of a business line (credit card)
account balance to a single fully amortizing term loan in the amount of $49,692
with a fixed interest rate of 10.25%, and monthly payments of $1,062 through
April 15, 2013. Other than an over-funding of the loan in the amount of $1,154
in excess of the business line account balance, which was subsequently applied
back against the note principal, no payments have been made by the Company on
this new note and the note was in default at September 30, 2008.





Preferred
Stock Conversions





During
the nine months ended September 20, 2008, 867,000 Series A Preferred Stock
shares were converted to common stock on a one-to-one basis, leaving 3,833,000
shares not converted.





In July
2008, 1,014,500 shares of Series A Convertible Preferred Stock and 225,000
shares of Series B Convertible Preferred Stock were converted into 1,239,500
shares of common stock.





Note
Purchase Agreement





On June
5, 2008, the Company, Mark Trimble and various unaffiliated purchasers (the
“Purchasers”) entered into a Note Purchase Agreement (the “Note Purchase
Agreement”) pursuant to which the Company agreed to issue to the Purchasers
convertible promissory notes (the “Investor Notes”) in an aggregate amount up to
$575,000. Proceeds from the Investor Notes will be utilized to pay costs
associated with bringing the Company’s reports with the SEC current (“Reporting
Costs”), to provide working capital to support operations, and to pay
outstanding debt of the Company.





As of
September 30, 2008, $50,000 had been advanced under the Note Purchase Agreement
to pay Reporting Costs and to support operations (the “Working Capital
Advance”). Within 45 days from the execution of the Note Purchase Agreement (the
“Full Funding Date”), the Company and the Purchasers are required to prepare a
schedule of all liabilities of the Company and the Purchasers are required to
provide funding (“Debt Retirement Funding”) to the Company in an amount equal to
the lesser of the amount of liabilities so scheduled (excluding installment
debt) or $175,000 (less $60,000 being paid pursuant to the terms of the CRI
Purchase Agreement described below) with such amount being applied to retire
debt of the Company; provided, however, that the Purchasers may elect to extend
the Full Funding Date by 15 days if not less than $87,500 of Debt Retirement
Funding has been provided by the original Full Funding Date. Also, by the Full
Funding Date, the Purchasers must make satisfactory arrangements to fund the
retirement of all remaining debt (the “Excess Debt”) of the Company, assume and
pay such remaining debt or cause the Company to issue convertible notes to
settle such Excess Debt, or any combination thereof. Total funds to be advanced
by the Purchasers to pay Reporting Costs, the Working Capital Advance and the
Debt Retirement Funding or to be settled as Excess Debt is limited to $575,000
(the “Total Funding Commitment,” and the actual amounts so funded or settled
being referred to as the “Funded Amount”).


7


Pursuant
to the terms of the Note Purchase Agreement, the Company and the Purchasers
entered into a Stock Purchase Agreement (the “Trimble Purchase Agreement”) with
Mark Trimble and John Peper, the principal officers of the Company, and a Stock
Purchase Agreement (the “CRI Purchase Agreement” and, together with the Trimble
Purchase Agreement, the “Stock Purchase Agreements”) with Company Reporter
Investments II (“CRI”), the holder of the Company’s outstanding preferred stock
(the “Preferred Stock”). Under the terms of the Stock Purchase Agreements,
Messrs. Trimble and Peper agreed to terminate and release all claims under their
respective employment agreements with the Company and to convey all of their
shares of common stock of the Company to the Purchasers and CRI agreed to waive
and release certain rights that it holds under the Preferred Stock and to convey
all of its shares of Preferred Stock to the Purchasers. The aggregate
consideration to Messrs. Trimble and Peper and to CRI under the Stock Purchase
Agreements is the excess, if any, of Total Funding Commitment over the Funded
Amount (such excess, if any, being the “Unallocated Purchase
Price”).




The
amount payable as Unallocated Purchase Price shall be payable by delivery of
convertible promissory notes (the “Selling Shareholder Notes”) of the Company.
Each of the Selling Shareholder Notes matures on June 30, 2009, accrues interest
at 8% per annum and is convertible, commencing 6 months from issuance, at a
price equal to 85% of the market price of the Company’s common stock on the date
of conversion.





The
Unallocated Purchase Price is allocated 10% to Messrs. Trimble and Peper and 90%
to CRI. On signing of the CRI Purchase Agreement, the Purchasers paid to CRI
$60,000 and CRI transferred to the Purchasers 1,149,900 shares of Series A
Convertible Preferred Stock and 67,500 shares of Series B Convertible Preferred
Stock. The shares held by Messrs. Trimble and Peper, and the remaining Preferred
Stock held by CRI, will be released to the Purchasers pro rata as the principal
balances on the Selling Shareholder Notes are reduced.





The
Investor Notes are payable in full on June 30, 2009, accrue interest at 8% per
annum and are convertible into common stock of the Company at a conversion price
of $0.005 per share, provided, however, that the Investor Notes may only be
converted on or after the Total Funding Commitment has been
satisfied.





Pursuant
to the terms of the Note Purchase Agreement, on June 6, 2008, Daniel Motsinger,
a designee of the Purchasers, was appointed as a Director and Chief Executive
Officer of the Company. On or before the Full Funding Date, and provided that
the Purchasers comply with the provisions of the Note Purchase Agreement through
that date, the Company’s current officers and directors will resign in such
capacity.





As a
result of the transactions contemplated by the Note Purchase Agreement, control
of the Company has effectively passed from Messrs. Trimble and Peper to the
Purchasers.





In August
2008, the Company and the Purchasers entered into an amendment to the Note
Purchase Agreement pursuant to which the Full Funding Date was extended until
August 31, 2008.





Oil
and Gas Operations





During
the year ended December 31, 2008, the Company acquired a 15% working interest
with an 11.25% working interest in the Eric Foust 4-9 well in Pawnee County,
Oklahoma. The well was drilled and is awaiting completion. The Company’s cost in
the well was $70,344. Funds to pay for the Company’s interest in the well were
advanced by Purchasers under the Note Purchase Agreement. Subsequent to the
acquisition of the Foust 4-9, the operator approached the Company with a
proposition whereby the 4-9 well interest would be reduced, the Company would
invest additional funds and the agreements would be re-structured in such a way
that the Company would end up with working interests in 8 wells in Pawnee
County, Oklahoma as follows:





Atlas Oil
and Gas, Inc hereby consents to a re-structuring of its working interest as set
forth below





Well Name
                  
                  API/PUN No.
                  
                  
                  Working Int.
                  
                  
                  NRI
                  
                  
                  Net NRIEric
      Foust 1-9
                  
                  
                  117-23331
                  
                  
                  
                  3.50
                  %
                  
                  
                  75.00
                  %
                  
                  
                  2.625
                  %Eric
      Foust 2-9
                  
                  
                  117-23333
                  
                  
                  
                  3.50
                  %
                  
                  
                  75.00
                  %
                  
                  
                  2.625
                  %Eric
      Foust 3-9
                  
                  
                  117-23334
                  
                  
                  
                  3.50
                  %
                  
                  
                  75.00
                  %
                  
                  
                  2.625
                  %Eric
      Foust 4-9
                  
                  
                  117-23335
                  
                  
                  
                  3.50
                  %
                  
                  
                  75.00
                  %
                  
                  
                  2.625
                  %Eric
      Foust 5-9
                  
                  
                  117-23340
                  
                  
                  
                  3.50
                  %
                  
                  
                  75.00
                  %
                  
                  
                  2.625
                  %Eric
      Foust 6-9
                  
                  
                  117-23341
                  
                  
                  
                  3.50
                  %
                  
                  
                  75.00
                  %
                  
                  
                  2.625
                  %Foust/Davis
      1-A
                  
                  117-039224
                  (PUN)
                  
                  
                  3.50
                  %
                  
                  
                  75.00
                  %
                  
                  
                  2.625
                  %Foust
      #4S
                  
                  117-039224
                  (PUN)
                  
                  
                  3.50
                  %
                  
                  
                  75.00
                  %
                  
                  
                  2.625
                  %


8


Employees





The
Company’s team currently consists of zero (0) employees and several independent
contractors.  Each management hire has been carefully selected to
address immediate needs in particular functional areas, but also with
consideration of the Company’s future needs during a period of expected rapid
growth and expansion.  Value is placed not only on outstanding
credentials in specific areas of functional expertise, but also on
cross-functionality, collegiality, a strong knowledge of content acquisition and
distribution, along with hands-on experience in scaling operations from initial
beta and development stage through successful commercial
deployment.





WHERE YOU CAN FIND MORE
INFORMATION





You are
advised to read this Form 10-K in conjunction with other reports and documents
that we file from time to time with the SEC.  In particular, please
read our Quarterly Reports on Form 10-Q and Current Reports on Form 8-K that we
file from time to time.  You may obtain copies of these reports
directly from us or from the SEC at the SEC’s Public Reference Room at 100 F.
Street, N.E. Washington, D.C. 20549, and you may obtain information about
obtaining access to the Reference Room by calling the SEC at
1-800-SEC-0330.  In addition, the SEC maintains information for
electronic filers at its website http://www.sec.gov.




ITEM 1A
- Risk Factors





An
investment in our common stock involves a high degree of risk. You should
carefully consider the following information about these risks, together with
the other information contained in this Annual Report on Form 10-K, before
investing in our common stock. If any of the events anticipated by the risks
described below occur, our results of operations and financial condition could
be adversely affected which could result in a decline in the market price of our
common stock, causing you to lose all or part of your investment.




BECAUSE
WE ARE QUOTED ON THE OTCBB INSTEAD OF AN EXCHANGE OR NATIONAL QUOTATION SYSTEM,
OUR INVESTORS MAY HAVE A TOUGHER TIME SELLING THEIR STOCK OR EXPERIENCE NEGATIVE
VOLATILITY ON THE MARKET PRICE OF OUR STOCK.


9




Our
common stock is traded on the OTCBB. The OTCBB is often highly illiquid, in part
because it does not have a national quotation system by which potential
investors can follow the market price of shares except through information
received and generated by a limited number of broker-dealers that make markets
in particular stocks. There is a greater chance of volatility for securities
that trade on the OTCBB as compared to a national exchange or quotation system.
This volatility may be caused by a variety of factors, including the lack of
readily available price quotations, the absence of consistent administrative
supervision of bid and ask quotations, lower trading volume, and market
conditions. Investors in our common stock may experience high fluctuations in
the market price and volume of the trading market for our securities. These
fluctuations, when they occur, have a negative effect on the market price for
our securities. Accordingly, our stockholders may not be able to realize a fair
price from their shares when they determine to sell them or may have to hold
them for a substantial period of time until the market for our common stock
improves.




FAILURE
TO ACHIEVE AND MAINTAIN EFFECTIVE INTERNAL CONTROLS IN ACCORDANCE
WITH SECTION 404 OF THE SARBANES-OXLEY ACT COULD HAVE A MATERIAL
ADVERSE EFFECT ON OUR BUSINESS AND OPERATING RESULTS.




It may be
time consuming, difficult and costly for us to develop and implement the
additional internal controls, processes and reporting procedures required by the
Sarbanes-Oxley Act. We may need to hire additional financial reporting, internal
auditing and other finance staff in order to develop and implement appropriate
additional internal controls, processes and reporting procedures. If we are
unable to comply with these requirements of the Sarbanes-Oxley Act, we may not
be able to obtain the independent accountant certifications that the
Sarbanes-Oxley Act requires of publicly traded companies.




If we
fail to comply in a timely manner with the requirements of Section 404 of
the Sarbanes-Oxley Act regarding internal control over financial reporting or to
remedy any material weaknesses in our internal controls that we may identify,
such failure could result in material misstatements in our financial statements,
cause investors to lose confidence in our reported financial information and
have a negative effect on the trading price of our common stock.




Pursuant
to Section 404 of the Sarbanes-Oxley Act and current SEC regulations,
beginning with our annual report on Form 10-K for our fiscal period ending
December 31, 2007, we will be required to prepare assessments regarding
internal controls over financial reporting and beginning with our annual report
on Form 10-K for our fiscal period ending December 31, 2008, furnish a
report by our management on our internal control over financial reporting. We
have begun the process of documenting and testing our internal control
procedures in order to satisfy these requirements, which is likely to result in
increased general and administrative expenses and may shift management time and
attention from revenue-generating activities to compliance activities. While our
management is expending significant resources in an effort to complete this
important project, there can be no assurance that we will be able to achieve our
objective on a timely basis. There also can be no assurance that our auditors
will be able to issue an unqualified opinion on management’s assessment of the
effectiveness of our internal control over financial reporting. Failure to
achieve and maintain an effective internal control environment or complete our
Section 404 certifications could have a material adverse effect on our
stock price.


10




In
addition, in connection with our on-going assessment of the effectiveness of our
internal control over financial reporting, we may discover “material weaknesses”
in our internal controls as defined in standards established by the Public
Company Accounting Oversight Board, or the PCAOB. A material weakness is a
significant deficiency, or combination of significant deficiencies, that results
in more than a remote likelihood that a material misstatement of the annual or
interim financial statements will not be prevented or detected. The PCAOB
defines “significant deficiency” as a deficiency that results in more
than a remote likelihood that a misstatement of the financial statements
that is more than inconsequential will not be prevented or
detected.




In the
event that a material weakness is identified, we will employ qualified personnel
and adopt and implement policies and procedures to address any material
weaknesses that we identify. However, the process of designing and implementing
effective internal controls is a continuous effort that requires us to
anticipate and react to changes in our business and the economic and regulatory
environments and to expend significant resources to maintain a system of
internal controls that is adequate to satisfy our reporting obligations as a
public company. We cannot assure you that the measures we will take will
remediate any material weaknesses that we may identify or that we will implement
and maintain adequate controls over our financial process and reporting in the
future.




Any
failure to complete our assessment of our internal control over financial
reporting, to remediate any material weaknesses that we may identify or to
implement new or improved controls, or difficulties encountered in their
implementation, could harm our operating results, cause us to fail to meet our
reporting obligations or result in material misstatements in our financial
statements. Any such failure could also adversely affect the results of the
periodic management evaluations of our internal controls and, in the case of a
failure to remediate any material weaknesses that we may identify, would
adversely affect the annual auditor attestation reports regarding the
effectiveness of our internal control over financial reporting that are required
under Section 404 of the Sarbanes-Oxley Act. Inadequate internal controls
could also cause investors to lose confidence in our reported financial
information, which could have a negative effect on the trading price of our
common stock.





RISKS
RELATING TO OWNERSHIP OF OUR COMMON STOCK




Although
there is presently a market for our common stock, the price of our common stack
may be extremely volatile and investors may not be able to sell their shares at
or above their purchase price, or at all. We anticipate that the market may be
potentially highly volatile and may fluctuate substantially because
of:




·
            Actual
      or anticipated fluctuations in our future business and operating
      results;





·
            Changes
      in or failure to meet market
expectations;





·
            Fluctuations
      in stock market price and
volume


11


WE
DO NOT INTEND TO PAY DIVIDENDS





We do not
anticipate paying cash dividends on our common stock in the foreseeable future.
We may not have sufficient funds to legally pay dividends. Even if funds are
legally available to pay dividends, we may nevertheless decide in our sole
discretion not to pay dividends. The declaration, payment and amount of any
future dividends will be made at the discretion of the board of directors, and
will depend upon, among other things, the results of our operations, cash flows
and financial condition, operating and capital requirements, and other factors
our board of directors may consider relevant. There is no assurance that we will
pay any dividends in the future, and, if dividends are rapid, there is no
assurance with respect to the amount of any such dividend.




VOLATILITY
IN OUR COMMON SHARE PRICE MAY SUBJECT US TO SECURITIES LITIGATION, THEREBY
DIVERTING OUR RESOURCES THAT MAY HAVE A MATERIAL EFFECT ON OUR PROFITABILITY AND
RESULTS OF OPERATIONS.




As
discussed in the preceding risk factors, the market for our common shares is
characterized by significant price volatility when compared to seasoned issuers,
and we expect that our share price will continue to be more volatile than a
seasoned issuer for the indefinite future. In the past, plaintiffs have often
initiated securities class action litigation against a company following periods
of volatility in the market price of its securities. We may in the future be the
target of similar litigation. Securities litigation could result in substantial
costs and liabilities and could divert management’s attention and
resources.




OPERATING
HISTORY AND LACK OF PROFITS WHICH COULD LEAD TO WIDE FLUCTUATIONS IN OUR SHARE
PRICE. THE PRICE AT WHICH YOU PURCHASE OUR COMMON SHARES MAY NOT BE INDICATIVE
OF THE PRICE THAT WILL PREVAIL IN THE TRADING MARKET. YOU MAY BE UNABLE TO SELL
YOUR COMMON SHARES AT OR ABOVE YOUR PURCHASE PRICE, WHICH MAY RESULT IN
SUBSTANTIAL LOSSES TO YOU.  THE MARKET PRICE FOR OUR COMMON SHARES IS
PARTICULARLY VOLATILE GIVEN OUR STATUS AS A RELATIVELY UNKNOWN COMPANY WITH A
SMALL AND THINLY TRADED PUBLIC FLOAT.




The
market for our common shares is characterized by significant price volatility
when compared to seasoned issuers, and we expect that our share price will
continue to be more volatile than a seasoned issuer for the indefinite future.
The volatility in our share price is attributable to a number of factors. First,
as noted above, our common shares are sporadically and thinly traded. As a
consequence of this lack of liquidity, the trading of relatively small
quantities of shares by our shareholders may disproportionately influence the
price of those shares in either direction. The price for our shares could, for
example, decline precipitously in the event that a large number of our common
shares are sold on the market without commensurate demand, as compared to a
seasoned issuer which could better absorb those sales without adverse impact on
its share price. Secondly, we are a speculative or “risky” investment due to our
limited operating history and lack of profits to date, and uncertainty of future
market acceptance for our potential products. As a consequence of this enhanced
risk, more risk-adverse investors may, under the fear of losing all or most of
their investment in the event of negative news or lack of progress, be more
inclined to sell their shares on the market more quickly and at greater
discounts than would be the case with the stock of a seasoned issuer. Many of
these factors are beyond our control and may decrease the market price of our
common shares, regardless of our operating performance. We cannot make any
predictions or projections as to what the prevailing market price for our common
shares will be at any time, including as to whether our common shares will
sustain their current market prices, or as to what effect that the sale of
shares or the availability of common shares for sale at any time will have on
the prevailing market price.


12




Shareholders
should be aware that, according to SEC Release No. 34-29093, the market for
penny stocks has suffered in recent years from patterns of fraud and abuse. Such
patterns include (1) control of the market for the security by one or a few
broker-dealers that are often related to the promoter or issuer;
(2) manipulation of prices through prearranged matching of purchases and
sales and false and misleading press releases; (3) boiler room practices
involving high-pressure sales tactics and unrealistic price projections by
inexperienced sales persons; (4) excessive and undisclosed bid-ask
differential and markups by selling broker-dealers; and (5) the wholesale
dumping of the same securities by promoters and broker-dealers after prices have
been manipulated to a desired level, along with the resulting inevitable
collapse of those prices and with consequent investor losses. Our management is
aware of the abuses that have occurred historically in the penny stock market.
Although we do not expect to be in a position to dictate the behavior of the
market or of broker-dealers who participate in the market, management will
strive within the confines of practical limitations to prevent the described
patterns from being established with respect to our securities. The occurrence
of these patterns or practices could increase the volatility of our share
price.




OUR
BUSINESS PLAN CALLS FOR EXTENSIVE AMOUNTS OF FUNDING AND WE MAY NOT BE ABLE TO
OBTAIN SUCH FUNDING WHICH COULD ADVERSELY AFFECT OUR BUSINESS, OPERATIONS, AND
FINANCIAL CONDITION.




We will
be relying on additional financing and funding. We are currently in discussions
with potential sources of financing but no definitive agreements are in place.
If we cannot achieve the requisite financing or complete the projects as
anticipated, this could adversely affect our business, the results of our
operations, prospects, and financial condition.





OUR
BUSINESS PLAN RELIES ON SIGNIFICANT REVENUE FROM NATIONAL, STATE AND LOCAL
GOVERNMENTS AND REDUCTION IN GOVERNMENT REVENUE COULD EFFECT OUR BUSINESS
PLAN





A
significant portion of our business plan relies upon our ability to successfully
charge licensing and other fees to governmental agencies for our
services.    The recent worldwide financial crisis, coupled with
dramatic reductions in state revenues due to reduced property values and the
economic downturn, creates substantial additional uncertainty in both the size
and administration of governmental budgets.  In turn, our business plan may
be adversely affected if governmental budgets are reduced, if any limitations or
restrictions are placed upon the acquisition of new products or services like
ours (such as a “freeze” on new products or services) or if expenditure
priorities are changed, particularly if budgets available for emergency
management services are reduced.    We believe that our services
provide a key benefit to emergency managers and the general public,  and
that we will ultimately be able to successfully market our services on a
widespread basis  but we have no control over general economic conditions
or the administration of public funds, so the actual timing of the rate of
adoption is subject to additional uncertainty.    Should such
uncertainties otherwise adversely affect the execution of our business plan, we
will make appropriate adjustments to our plan, generally, and/or to the
execution of our plan, specifically, in light of the then-available resources,
existing prospects, and rapidly changing conditions.   By way of
example, if our adoption rates in the governmental sector are significantly
reduced, we may elect to curtail the growth of our operations, divert more
resources toward the pursuit of private sector (rather than governmental)
enterprises, adjust the pricing or terms of our offerings, or any combination of
the foregoing.   In anticipation of the potential for a reduction in
the short-term revenue from our services, particularly from our governmental
prospects, we have already scaled back expenditures beyond previously planned
levels.


13


SHOULD
ONE OR MORE OF THE FOREGOING RISKS OR UNCERTAINTIES MATERIALIZE, OR SHOULD THE
UNDERLYING ASSUMPTIONS PROVE INCORRECT, ACTUAL RESULTS MAY DIFFER SIGNIFICANTLY
FROM THOSE ANTICIPATED, BELIEVED, ESTIMATED, EXPECTED, INTENDED OR
PLANNED.




FORWARD-LOOKING
STATEMENTS




This
Annual Report contains certain forward-looking statements regarding management’s
plans and objectives for future operations including plans and objectives
relating to our planned marketing efforts and future economic performance. The
forward-looking statements and associated risks set forth in this Annual Report
include or relate to, among other things, (a)  our growth strategies,
(b) anticipated trends in our industry, (c) our ability to obtain and
retain sufficient capital for future operations, and (d) our anticipated
needs for working capital. These statements may be found under “Management’s
Discussion and Analysis or Plan of Operations” and “Business,” as well as in
this Annual Report generally. Actual events or results may differ materially
from those discussed in forward-looking statements as a result of various
factors, including, without limitation, the risks outlined under “Risk Factors”
and matters described in this Annual Report generally. In light of these risks
and uncertainties, there can be no assurance that the forward-looking statements
contained in this Annual Report will in fact occur.




The
forward-looking statements herein are based on current expectations that involve
a number of risks and uncertainties. Such forward-looking statements are based
on assumptions described herein. The assumptions are based on judgments with
respect to, among other things, future economic, competitive and market
conditions, and future business decisions, all of which are difficult or
impossible to predict accurately and many of which are beyond our control.
Accordingly, although we believe that the assumptions underlying the
forward-looking statements are reasonable, any such assumption could prove to be
inaccurate and therefore there can be no assurance that the results contemplated
in forward-looking statements will be realized. In addition, as disclosed
elsewhere in the “Risk Factors” section of this prospectus, there are a number
of other risks inherent in our business and operations which could cause our
operating results to vary markedly and adversely from prior results or the
results contemplated by the forward-looking statements. Management decisions,
including budgeting, are subjective in many respects and periodic revisions must
be made to reflect actual conditions and business developments, the impact of
which may cause us to alter marketing, capital investment and other
expenditures, which may also materially adversely affect our results of
operations. In light of significant uncertainties inherent in the
forward-looking information included in this prospectus, the inclusion of such
information should not be regarded as a representation by us or any other person
that our objectives or plans will be achieved.


14




Some of
the information in this annual report contains forward-looking statements that
involve substantial risks and uncertainties. Any statement in this prospectus
and in the documents incorporated by reference into this prospectus that is not
a statement of an historical fact constitutes a “forward-looking statement”.
Further, when we use the words “may”, “expect”, “anticipate”, “plan”, “believe”,
“seek”, “estimate”, “internal”, and similar words, we intend to identify
statements and expressions that may be forward- looking statements. We believe
it is important to communicate certain of our expectations to our investors.
Forward-looking statements are not guarantees of future performance. They
involve risks, uncertainties and assumptions that could cause our future results
to differ materially from those expressed in any forward-looking statements.
Many factors are beyond our ability to control or predict. You are accordingly
cautioned not to place undue reliance on such forward-looking statements.
Important factors that may cause our actual results to differ from such
forward-looking statements include, but are not limited to, the risk factors
discussed herein.





ITEM
1B.  UNRESOLVED STAFF COMMENTS





Not
applicable to small business issuers.





ITEM 2. DESCRIPTION OF
PROPERTY.





Our
executive and operations offices are located in Winston-Salem, North Carolina.
The  offices have no rent and there is no lease in place. The offices
are provided by executives of the Company on a “as need” basis.





ITEM 3. LEGAL
PROCEEDINGS.





We are
currently not involved in any litigation that we believe could have a materially
adverse effect on our financial condition or results of
operations.  There is no action, suit, proceeding, inquiry, or
investigation before or by any court, public board, government agency,
self-regulatory organization, or body pending or, to the knowledge of the
executive officers of our company or any of our subsidiaries, threatened against
or affecting our company, our common stock, any of our subsidiaries, or of our
company’s or our company’s subsidiaries’ officers or directors in their
capacities as such, in which an adverse decision could have a material adverse
effect.





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





The
Company submitted no matters to a vote of its security holders during the fiscal
year ended December 31, 2008.


15


PART II





ITEM 5. MARKET PRICE
AND  DIVIDENDS ON THE  REGISTRANTS  COMMON EQUITY
AND OTHER SHAREHOLDER MATTERS.





Our
common stock commenced trading on the OTC Bulletin Board (“OTCBB”) under the
symbol “ATOC.OB”. The
following table sets forth the range of high and low sales prices on the OTCBB
for each quarter since the commencement of trading.





High
                  
                  
                  LowCalendar
      Year 2008Fourth
      Quarter
                  
                  $
                  0.006
                  
                  
                  $
                  0.006





At April
1, 2009, the closing price of the common stock on OTCBB was $0.006.





As of
April 1, 2008, there were approximately 12 holders of our common
stock.





We have
not paid any cash dividends since inception and presently anticipate that all
earnings, if any, will be retained for development of our business and that no
dividends on our common stock will be declared in the foreseeable future. Any
future dividends will be subject to the discretion of our board of directors and
will depend upon, among other things, future earnings, operating and financial
condition, capital requirements, general business conditions and other pertinent
facts. Therefore, there can be no assurance that any dividends on our common
stock will be paid in the future.





UNREGISTERED SALES OF EQUITY SECURITIES
AND USE OF PROCEEDS





In the
quarter ended September 30, 2008, a single holder of an aggregate of 1,014,500
shares of the Company’s Series A Convertible Preferred Stock and 225,000 shares
of the Company’s Series B Convertible Preferred Stock converted those shares
into, and the Company issued, 1,239,500 shares of common stock.





The
shares were issued pursuant to Section 4(2) of the Securities Act and the rules
and regulations promulgated thereunder on the basis that such transaction did
not involve a public offering. No sales were commissions were paid in connection
with the issuance of the shares.




ITEM
6.  SELECTED FINANCIAL DATA.





Not
required for smaller reporting Companies





ITEM
7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OR PLAN OF OPERATION.





The
following is management’s discussion and analysis of certain significant factors
that have affected our financial position and operating results during the
periods included in the accompanying consolidated financial statements, as well
as information relating to the plans of our current management. This report
includes forward-looking statements. Generally, the words “believes,”
“anticipates,” “may,” “will,” “should,” “expect,” “intend,” “estimate,”
“continue,” and similar expressions or the negative thereof or comparable
terminology are intended to identify forward-looking statements. Such statements
are subject to certain risks and uncertainties, including the matters set forth
in this report or other reports or documents we file with the Securities and
Exchange Commission from time to time, which could cause actual results or
outcomes to differ materially from those projected. Undue reliance should not be
placed on these forward-looking statements which speak only as of the date
hereof. We undertake no obligation to update these forward-looking
statements.


16


The
following discussion and analysis should be read in conjunction with our
consolidated financial statements and the related notes thereto and other
financial information contained elsewhere in this Form 10-K.





We
prepare our consolidated financial statements in accordance with accounting
principles generally accepted in the United States of America. The preparation
of these financial statements requires the use of 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 amount of revenues and expenses during the reporting period. Our
management periodically evaluates the estimates and judgments made. Management
bases its estimates and judgments on historical experience and on various
factors that are believed to be reasonable under the circumstances. Actual
results may differ from these estimates as a result of different assumptions or
conditions.





RESULTS
OF OPERATIONS





TWELVE MONTHS ENDED DECEMBER
31, 2008 COMPARED TO TWELVE MONTHS ENDED DECEMBER 31, 2007





Current
Year Developments





Discontinued
Operations





In June
2008, in connection with the execution of a Note Purchase Agreement and as a
result of recurring losses and negative cash flow, the Company determined to
discontinue its home security monitoring and smart home operations. Results
reflected in the accompanying Statements of Operations relating to the
operations so discontinued are reported, for the current periods and for prior
year periods, as Loss from Discontinued Operations.





Sale
of Monitoring Contracts





In
January 2008, the Company sold a number of alarm monitoring service contract
accounts for a total price of $96,511. The terms of the sale include a 10%
holdback reserve of $9,651 that was deducted from the gross proceeds by the
purchaser to cover potential contract default by the customer accounts they
purchased. The purchaser will have to pay the holdback reserve to the Company on
or before May 24, 2009. A reduction in the gross proceeds of $9,850 was made by
the purchaser for monies paid to the Company prior to the sale by the accounts
that are the subject of the sale, and where the purchaser must provide services
to these accounts post-closing that the Company would have otherwise been
obligated to provide. As a separate obligation, the Company must provide general
repair services to the sold accounts, on an as-needed basis, for a period of
twelve months following closing. The Company received a payment of $6,432 from
the purchaser as consideration for this obligation. Net proceeds received under
the agreement were $83,442. The sale was reported as Other Income - Gain on Sale
of Assets.





As a
result of the discontinued operations, the Company will not be able to perform
its obligation to provide general repair services to the sold accounts for the
twelve-month period specified in the Agreement. Consequently, the Company feels
it will not be in a position to negotiate a return of any of the 10% holdback
reserve held by the purchaser. Accordingly, both the unamortized portion of the
unearned revenue on the service agreements, and the 10% holdback reserve, have
been written off to Other Income/Expense in the financial statements. The net
effect of the write-offs is a loss of $4,113.


17


In June
2008, the Company sold 57 of its security and/or fire alarm monitoring accounts
for $15,285. The Company received the sale proceeds at closing. No guarantee
period was provided to the purchaser, and the Company assumed no liabilities for
the purchaser post-closing. The Company did sign a three-year agreement not to
compete for the accounts sold. This sale represented substantially all of the
remaining monitoring accounts owned by the Company.





Write-Off/Write-Down
of Assets





In June
2008, in connection with the determination to discontinue alarm monitoring and
related operations, wrote-off certain accounts receivable considered to be
uncollectible, wrote-off certain inventories of alarm equipment and small
supplies that are expected to be abandoned and wrote-down the recorded value of
certain equipment.





Renewal
of Notes Payable





A note
payable to two shareholders, in the original amount of $25,000 and dated
September 19, 2007, with a 6-month term at 10.223%, was renewed on March 25,
2008 in the amount of $22,500 after a principal payment of $2,500. The renewed
note was for a 6-month term at 13% interest. Interest only payments will begin
April 25, 2008, with a final payment of $22,748 due on September 25, 2008. The
note was in default at December 31, 2008.





The note
payable to a shareholder for $25,000, originally due February 26, 2008, has been
renewed for another 90-day term at 8%. The full principal and accrued interest
will be due May 26, 2008. The note was in default at December 31,
2008.





Conversion
of Line of Credit to Term Loan





In April
2008, the Company negotiated a conversion of a business line (credit card)
account balance to a single fully amortizing term loan in the amount of $49,692
with a fixed interest rate of 10.25%, and monthly payments of $1,062 through
April 15, 2013. Other than an over-funding of the loan in the amount of $1,154
in excess of the business line account balance, which was subsequently applied
back against the note principal, no payments have been made by the Company on
this new note and the note was in default at December 31, 2008.





Preferred
Stock Conversions





During
the year ended September 20, 2008, 867,000 Series A Preferred Stock shares were
converted to common stock on a one-to-one basis, leaving 3,833,000 shares not
converted.





In July
2008, 1,014,500 shares of Series A Convertible Preferred Stock and 225,000
shares of Series B Convertible Preferred Stock were converted into 1,239,500
shares of common stock.





Note
Purchase Agreement





On June
5, 2008, the Company, Mark Trimble and various unaffiliated purchasers (the
“Purchasers”) entered into a Note Purchase Agreement (the “Note Purchase
Agreement”) pursuant to which the Company agreed to issue to the Purchasers
convertible promissory notes (the “Investor Notes”) in an aggregate amount up to
$575,000. Proceeds from the Investor Notes will be utilized to pay costs
associated with bringing the Company’s reports with the SEC current (“Reporting
Costs”), to provide working capital to support operations, and to pay
outstanding debt of the Company.





As of
December 31, 2008, $50,000 had been advanced under the Note Purchase Agreement
to pay Reporting Costs and to support operations (the “Working Capital
Advance”). Within 45 days from the execution of the Note Purchase Agreement (the
“Full Funding Date”), the Company and the Purchasers are required to prepare a
schedule of all liabilities of the Company and the Purchasers are required to
provide funding (“Debt Retirement Funding”) to the Company in an amount equal to
the lesser of the amount of liabilities so scheduled (excluding installment
debt) or $175,000 (less $60,000 being paid pursuant to the terms of the CRI
Purchase Agreement described below) with such amount being applied to retire
debt of the Company; provided, however, that the Purchasers may elect to extend
the Full Funding Date by 15 days if not less than $87,500 of Debt Retirement
Funding has been provided by the original Full Funding Date. Also, by the Full
Funding Date, the Purchasers must make satisfactory arrangements to fund the
retirement of all remaining debt (the “Excess Debt”) of the Company, assume and
pay such remaining debt or cause the Company to issue convertible notes to
settle such Excess Debt, or any combination thereof. Total funds to be advanced
by the Purchasers to pay Reporting Costs, the Working Capital Advance and the
Debt Retirement Funding or to be settled as Excess Debt is limited to $575,000
(the “Total Funding Commitment,” and the actual amounts so funded or settled
being referred to as the “Funded Amount”).


18


Pursuant
to the terms of the Note Purchase Agreement, the Company and the Purchasers
entered into a Stock Purchase Agreement (the “Trimble Purchase Agreement”) with
Mark Trimble and John Peper, the principal officers of the Company, and a Stock
Purchase Agreement (the “CRI Purchase Agreement” and, together with the Trimble
Purchase Agreement, the “Stock Purchase Agreements”) with Company Reporter
Investments II (“CRI”), the holder of the Company’s outstanding preferred stock
(the “Preferred Stock”). Under the terms of the Stock Purchase Agreements,
Messrs. Trimble and Peper agreed to terminate and release all claims under their
respective employment agreements with the Company and to convey all of their
shares of common stock of the Company to the Purchasers and CRI agreed to waive
and release certain rights that it holds under the Preferred Stock and to convey
all of its shares of Preferred Stock to the Purchasers. The aggregate
consideration to Messrs. Trimble and Peper and to CRI under the Stock Purchase
Agreements is the excess, if any, of Total Funding Commitment over the Funded
Amount (such excess, if any, being the “Unallocated Purchase
Price”).




The
amount payable as Unallocated Purchase Price shall be payable by delivery of
convertible promissory notes (the “Selling Shareholder Notes”) of the Company.
Each of the Selling Shareholder Notes matures on June 30, 2009, accrues interest
at 8% per annum and is convertible, commencing 6 months from issuance, at a
price equal to 85% of the market price of the Company’s common stock on the date
of conversion.





The
Unallocated Purchase Price is allocated 10% to Messrs. Trimble and Peper and 90%
to CRI. On signing of the CRI Purchase Agreement, the Purchasers paid to CRI
$60,000 and CRI transferred to the Purchasers 1,149,900 shares of Series A
Convertible Preferred Stock and 67,500 shares of Series B Convertible Preferred
Stock. The shares held by Messrs. Trimble and Peper, and the remaining Preferred
Stock held by CRI, will be released to the Purchasers pro rata as the principal
balances on the Selling Shareholder Notes are reduced.





The
Investor Notes are payable in full on June 30, 2009, accrue interest at 8% per
annum and are convertible into common stock of the Company at a conversion price
of $0.005 per share, provided, however, that the Investor Notes may only be
converted on or after the Total Funding Commitment has been
satisfied.





Pursuant
to the terms of the Note Purchase Agreement, on June 6, 2008, Daniel Motsinger,
a designee of the Purchasers, was appointed as a Director and Chief Executive
Officer of the Company. On or before the Full Funding Date, and provided that
the Purchasers comply with the provisions of the Note Purchase Agreement through
that date, the Company’s current officers and directors will resign in such
capacity.





As a
result of the transactions contemplated by the Note Purchase Agreement, control
of the Company has effectively passed from Messrs. Trimble and Peper to the
Purchasers.





In August
2008, the Company and the Purchasers entered into an amendment to the Note
Purchase Agreement pursuant to which the Full Funding Date was extended until
August 31, 2008.





Oil
and Gas Operations





During
the year ended December 31, 2008, the Company acquired a 15% working interest
with an 11.25% working interest in the Eric Foust 4-9 well in Pawnee County,
Oklahoma. The well was drilled and is awaiting completion. The Company’s cost in
the well was $70,344. Funds to pay for the Company’s interest in the well were
advanced by Purchasers under the Note Purchase Agreement. Subsequent to the
acquisition of the Foust 4-9, the operator approached the Company with a
proposition whereby the 4-9 well interest would be reduced, the Company would
invest additional funds and the agreements would be re-structured in such a way
that the Company would end up with working interests in 8 wells in Pawnee
County, Oklahoma as follows:





Atlas Oil
and Gas, Inc hereby consents to a re-structuring of its working interest as set
forth below


19





Well Name
                  
                  API/PUN No.
                  
                  
                  Working Int.
                  
                  
                  NRI
                  
                  
                  Net NRIEric
      Foust 1-9
                  
                  
                  117-23331
                  
                  
                  
                  3.50
                  %
                  
                  
                  75.00
                  %
                  
                  
                  2.625
                  %Eric
      Foust 2-9
                  
                  
                  117-23333
                  
                  
                  
                  3.50
                  %
                  
                  
                  75.00
                  %
                  
                  
                  2.625
                  %Eric
      Foust 3-9
                  
                  
                  117-23334
                  
                  
                  
                  3.50
                  %
                  
                  
                  75.00
                  %
                  
                  
                  2.625
                  %Eric
      Foust 4-9
                  
                  
                  117-23335
                  
                  
                  
                  3.50
                  %
                  
                  
                  75.00
                  %
                  
                  
                  2.625
                  %Eric
      Foust 5-9
                  
                  
                  117-23340
                  
                  
                  
                  3.50
                  %
                  
                  
                  75.00
                  %
                  
                  
                  2.625
                  %Eric
      Foust 6-9
                  
                  
                  117-23341
                  
                  
                  
                  3.50
                  %
                  
                  
                  75.00
                  %
                  
                  
                  2.625
                  %Foust/Davis
      1-A
                  
                  117-039224
                  (PUN)
                  
                  
                  3.50
                  %
                  
                  
                  75.00
                  %
                  
                  
                  2.625
                  %Foust
      #4S
                  
                  117-039224
                  (PUN)
                  
                  
                  3.50
                  %
                  
                  
                  75.00
                  %
                  
                  
                  2.625
                  %





Results
of Operations





In light
of the determination, in connection with entering the Note Purchase Agreement,
to commence oil and gas operations and to terminate and liquidate the prior
operations and assets of the Company, all operations for the three and year
ended December 31, 2008 have been classified as Discontinued Operations and all
operations for the same periods in 2007 have been reclassified as Discontinued
Operations.





With the
change in our business plan, we expect that the nature and amount of our
revenues and operating expenses will be substantially altered beginning in the
third quarter of 2008 to reflect operation as an oil and gas exploration
company.





Loss From Discontinued
Operations. During the three and year ended December 31, 2008, we
realized a net loss from discontinued operations of $19,685 and $223,173 as
compared to a net loss from discontinued operations of $35,393 and $149,167
during the three and year ended December 31, 2007.





Interest Expense. Interest
and finance charges increased to $18,226 for the year ended December 31, 2008
period from $17,327 for the 2007 period. The increase in interest expense was
attributable to increased debt levels, including the issuance of $50,000 of
Investor Notes.





Net Gain on Sale, Abandonment,
Write-Off of Assets. During the year ended December 31, 2008, we realized
a net gain of $103,210 from the one-time sale of security monitoring contracts
and the abandonment or write-off of other assets.





Financial
Condition





Cash Position and Short-Term
Liquidity. At December 31, 2008, we had a cash balance of $3,348 and a
working capital deficit of $372,106 as compared to a cash balance of $10,946 and
a working capital deficit of $265,265 at December 31, 2007.





Operations
used cash in the amount of $108,954 during the year ended December 31, 2008 as
compared to $99,971 used in operations during the year ended December 31,
2007.





Financing Transactions and
Facilities. Our short-term financing requirements have, in recent
periods, been financed primarily through short-term borrowing from our principal
officer, Mark Trimble, borrowings on credit cards, borrowings under a line of
credit, borrowings from a supplier and borrowings arranged through directors.
During the six months ended June 30, 2008 we reduced by $2,500 the principal
balance of, and extended, an existing $25,000 loan arranged through two
directors, extended the maturity on a second shareholder loan, sold
substantially all of our monitoring contracts and converted a bank credit line
(credit card) account to a term loan. Substantially all of our credit facilities
were in default at December 31, 2008.





In an
effort to assure that we are able to meet our ongoing obligations in light of
weak market conditions, in June 2008 we entered into a Note Purchase Agreement
pursuant to which we agreed to issue up to $575,000 in principal amount of
convertible promissory notes in order to secure financing to meet our
obligations and support basic operations. As of December 31, 2008 we had
received $50,000 of funding under the Note Purchase Agreement. Subsequent to
June 30, 2008, the Note Purchase Agreement was amended to extend the Full
Funding Date to August 31, 2008. We expect to receive additional funding with
the intent of settling all outstanding indebtedness. As a result of the
transactions contemplated in the Note Purchase Agreement, the purchasers in that
agreement effectively took control of our company. While the Note Purchase
Agreement provides potential funding to support our operations, there is no
assurance that the purchasers under that agreement will fully fund their
obligations thereunder, in which case their notes will not be convertible into
common stock and will be due June 30, 2009.


20


Off-Balance
Sheet Arrangements





The
Company had no off-balance sheet arrangements at December 31, 2008.





Inflation





The
Company believes that inflation has not had a significant impact on operations
since inception.




Critical
Accounting Policies





Accounting Policies and
Estimates





The
preparation of our financial statements in conformity with accounting principles
generally accepted in the United States of America requires our management to
make certain estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period.  Our management periodically
evaluates the estimates and judgments made. Management bases its estimates and
judgments on historical experience and on various factors that are believed to
be reasonable under the circumstances. Actual results may differ from these
estimates as a result of different assumptions or conditions.


As such,
in accordance with the use of accounting principles generally accepted in the
United States of America, our actual realized results may differ from
management’s initial estimates as reported.  A summary of significant
accounting policies are detailed in notes to the financial statements which are
an integral component of this filing.





Revenue
Recognition





Revenue
from product sales is recognized upon shipment to customers at which time such
customers are invoiced.  Units are shipped under the terms of FOB
shipping point when determination is made that collectibility is
probable.  Revenues for services are recognized upon completion of the
services.  For consulting services and other fee-for-service
arrangements, revenue is recognized upon completion of the
services.  The Company has adopted the Securities and Exchange
Commission’s Staff Accounting Bulletin (SAB) No. 104, which provides guidance on
the recognition, presentation and disclosure of revenue in financial
statements.





Stock Based
Compensation





In
December 2004, the FASB issued a revision of SFAS No. 123 ("SFAS No. 123(R)")
that requires compensation costs related to share-based payment transactions to
be recognized in the statement of operations. With limited exceptions, the
amount of compensation cost will be measured based on the grant-date fair value
of the equity or liability instruments issued. In addition, liability awards
will be re-measured each reporting period. Compensation cost will be recognized
over the period that an employee provides service in exchange for the award.
SFAS No. 123(R) replaces SFAS No. 123 and is effective as of the beginning of
January 1, 2006. Based on the number of shares and awards outstanding as of
December 31, 2008 (and without giving effect to any awards which may be granted
in 2009), we do not expect our adoption of SFAS No. 123(R) in January 2006 to
have a material impact on the financial statements.


21


ITEM 7A.  QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK





Not
applicable to smaller reporting Companies




BITEM
8.  FINANCIAL STATEMENTS





TABLE OF CONTENTS
                                                  
                                                  PageINDEPENDENT
      REGISTERED PUBLIC ACCOUNTING FIRM:
                                                  
                                                  F-1CONSOLIDATED
      FINANCIAL STATEMENTS:Consolidated
      Balance Sheet at December 31, 2008 and 2007
                                                  
                                                  F-2Consolidated
      Statements of Operations for the years endedDecember
      31, 2008 and 2007
                                                  
                                                  F-3Consolidated
      Statements of Stockholders’ Equity for the years endedDecember
      31, 2008 and 2007
                                                  
                                                  F-5Consolidated
      Statements of Cash Flows for the years endedDecember
      31, 2008 and 2007
                                                  
                                                  F-4NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS
                                                  
                                                  F-6




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




We have
no changes or disagreements with our auditors.




ITEM
9A. CONTROLS AND PROCEDURES




Our
management team, under the supervision and with the participation of our
principal executive officer and our principal financial officer, evaluated the
effectiveness of the design and operation of our disclosure controls and
procedures as such term is defined under Rule 13a-15(e) promulgated under
the Securities Exchange Act of 1934, as amended (Exchange Act), as of the last
day of the fiscal period covered by this report, December 31,
2008.  The term disclosure controls and procedures means our controls
and other procedures that are designed to ensure that information required to be
disclosed by us in the reports that we file or submit under the Exchange Act is
recorded, processed, summarized, and reported within the time periods specified
in the SEC’s rules and forms.  Disclosure controls and procedures
include, without limitation, controls and procedures designed to ensure that
information required to be disclosed by us in the reports that we file or submit
under the Exchange Act is accumulated and communicated to management, including
our principal executive and principal financial officer, or persons performing
similar functions, as appropriate to allow timely decisions regarding required
disclosure. Based on this evaluation, our principal executive officer and our
principal financial officer concluded that our disclosure controls and
procedures were effective as of December 31, 2008.


22


Our
principal executive officer and our principal financial officer, are responsible
for establishing and maintaining adequate internal control over financial
reporting, as such term is defined in Exchange Act
Rules 13a-15(f).  Management is required to base its assessment
of the effectiveness of our internal control over financial reporting on a
suitable, recognized control framework, such as the framework developed by the
Committee of Sponsoring Organizations (COSO).  The COSO framework,
published in Internal
Control-Integrated Framework, is known as the COSO Report.  Our
principal executive officer and our principal financial officer, have has chosen
the COSO framework on which to base its assessment. Based on this evaluation,
our management concluded that our internal control over financial reporting was
effective as of December 31, 2008.





This
annual report on Form 10-K does not include an attestation report of our
registered public accounting firm regarding internal control over financial
reporting.  Management’s report was not subject to attestation by our
registered public accounting firm pursuant to temporary rules of the Securities
and Exchange Commission that permit us to provide only management’s report in
this annual report on Form 10-K.





There
were no changes in our internal control over financial reporting that occurred
during the last quarter of 2008 that have materially affected, or are reasonably
likely to materially affect, our internal control over financial
reporting.





LACK
OF INDEPENDENT BOARD OF DIRECTORS AND AUDIT COMMITTEE





Management
is aware that an audit committee composed of the requisite number of independent
members along with a qualified financial expert has not yet been
established.  Considering the costs associated with procuring and
providing the infrastructure to support an independent audit committee and the
limited number of transactions, Management has concluded that the risks
associated with the lack of an independent audit committee are not
justified.  Management will periodically reevaluate this
situation.





LACK
OF SEGREGATION OF DUTIES





Management
is aware that there is a lack of segregation of duties at the Company due to the
small number of employees dealing with general administrative and financial
matters. However, at this time management has decided that considering the
abilities of the employees now involved and the control procedures in place, the
risks associated with such lack of segregation are low and the potential
benefits of adding employees to clearly segregate duties do not justify the
substantial expenses associated with such increases.  Management will
periodically re-evaluate this situation





23




ITEM 9B. OTHER
INFORMATION





None.


24


PART III





ITEM 10
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE





Set
forth below is information regarding the Company’s current directors and
executive officers. There are no family relationships between any of our
directors or executive officers. The directors are elected annually by
stockholders. The executive officers serve at the pleasure of the Board of
Directors.




Summary
Compensation Table




The
following table includes information concerning compensation of our CEO and all
executive officers whose compensation exceeded $100,000 during 2007 and
2008:





NameandPrincipalPosition
                      
                      Year
                      
                      Salary
                        ($)
                      
                      Option
                        Awards
                        ($)
                      
                      Non-Equity
                        IncentivePlan
                        Compensation
                        ($)
                      
                      AllOther
                        Compensation
                        ($)
                      
                      Total
                        ($)Mark
      Trimble, CEO and CFO
                      
                      
                      2008
                      
                      54,843
                      
                      
                      —
                      
                      —
                      
                      
                      5,500
                      (1)
                      60,3432007
                      
                      44,769
                      
                      
                      —
                      
                      —
                      
                      
                      6,000
                      (1)
                      50,769





(1)                      
 Consists of an automobile allowance.




Employment
Agreements





In
October 2005, we entered into employment agreements with our principal officers,
Mark Trimble and John Peper. The employment agreements of both Mr. Trimble and
Mr. Peper are for terms ending December 31, 2010 and include non-disclosure and
non-compete provisions.




Mr.
Trimbles’ employment agreement provides for a base salary of $58,200 in 2006,
$64,200 in 2007, $70,200 in 2008, $76,200 in 2009 and $82,200 in 2010 plus a
monthly auto allowance of $500 and standard benefits generally available to
employees. A bonus plan provides that Mr. Trimble may receive bonuses based on
achievement of specific revenue and EBITDA targets with the maximum bonuses
fixed at $45,000 in 2006, $55,000 in 2007, $60,000 in 2008, $65,000 in 2009 and
$70,000 in 2010. Additionally, Mr. Trimble may earn a bonus in an amount equal
to 20% of the excess, if any, of actual EBITDA in any year over target EBITDA
if, and only if, actual revenues exceed target revenues by 20% and actual EBITDA
exceeds target EBITDA by 50%.





Mr.
Peper’s employment agreement provides for a base salary of $34,200 in 2006,
$40,200 in 2007, $46,200 in 2008, $52,200 in 2009 and $58,200 in 2010 plus use
of a company automobile or, at the option of the company, a monthly auto
allowance of $500, and standard benefits generally available to employees. A
bonus plan provides that Mr. Peper may receive bonuses based on achievement of
specific revenue and EBITDA targets with the maximum bonuses fixed at $35,000 in
2006, $40,000 in 2007, $45,000 in 2008, $50,000 in 2009 and $55,000 in 2010.
Additionally, Mr. Peper may earn a bonus in an amount equal to 20% of the
excess, if any, of actual EBITDA in any year over target EBITDA if, and only if,
actual revenues exceed target revenues by 20% and actual EBITDA exceeds target
EBITDA by 50%.





No
performance bonuses were earned by, or paid to, Mr. Trimble or Mr. Peper during
either 2006 or 2007.


25


2005
Stock Option Plan




Our 2005
Stock Option Plan is intended to motivate participants by means of stock options
to achieve our long-term performance goals and to enable our employees,
officers, director and consultants to participate in our long-term growth and
financial success. The plan is administered by our board of directors and
currently authorizes the issuance and grant of options for a maximum of
1,000,000 shares. The stock options granted under the plan will be either
incentive stock options, within the meaning of Section 422 of the Internal
Revenue Code, or non-qualified stock options. Incentive stock options must be
granted at an exercise price of not less than the fair market value of our
common stock at the time of grant and incentive stock options granted to 10% or
greater stockholders of ours must be granted at an exercise price of not less
than 110% of the fair market value of our common stock on the date of grant. If
any award under the plan terminates, expires unexercised or is cancelled, the
shares of common stock that would otherwise have been issuable pursuant thereto
will be available for issuance under the grant of new awards. As of December 31,
2007, no options had been granted under the plan.




Director
Compensation





We do not
presently compensate any of our directors for service in such capacity but may
reimburse directors for direct expenses incurred as a result of their service.
We intend to evaluate the appointment of one or more independent directors and,
in connection therewith, may commence paying fees and/or granting options or
other equity compensation for service as non-employee directors





Audit
Committee Financial Expert





The
Company does not have an audit committee or a compensation committee of its
board of directors.  In addition, the Company’s board of directors has
determined that the Company does not have an audit committee financial expert
serving on the board.  When the Company develops its operations, it
will create an audit and a compensation committee and will seek an audit
committee financial expert for its board and audit committee.





Conflicts
of Interest





Members
of our management are associated with other firms involved in a range of
business activities.  Consequently, there are potential inherent
conflicts of interest in their acting as officers and directors of our
company.   Although the officers and directors are engaged in
other business activities, we anticipate they will devote an important amount of
time to our affairs.





Our
officers and directors are now and may in the future become shareholders,
officers, or directors of other companies, which may be formed for the purpose
of engaging in business activities similar to ours.  Accordingly,
additional direct conflicts of interest may arise in the future with respect to
such individuals acting on behalf of us or other entities.  Moreover,
additional conflicts of interest may arise with respect to opportunities which
come to the attention of such individuals in the performance of their duties or
otherwise.  Currently, we do not have a right of first refusal
pertaining to opportunities that come to their attention and may relate to our
business operations.





Our
officers and directors are, so long as they are our officers or directors,
subject to the restriction that all opportunities contemplated by our plan of
operation which come to their attention, either in the performance of their
duties or in any other manner, will be considered opportunities of, and be made
available to us and the companies that they are affiliated with on an equal
basis.  A breach of this requirement will be a breach of the fiduciary
duties of the officer or director.  If we or the companies with which
the officers and directors are affiliated both desire to take advantage of an
opportunity, then said officers and directors would abstain from negotiating and
voting upon the opportunity.  However, all directors may still
individually take advantage of opportunities if we should decline to do
so.  Except as set forth above, we have not adopted any other conflict
of interest policy with respect to such transactions.


26


Compliance
With Section 16(A) Of The Exchange Act 9.A. Directors And Executive Officers,
Promoters, And Control Persons:





Section
16(a) of the Securities Exchange Act of 1934, as amended, requires our executive
officers, directors, and persons who own more than 10% of a registered class of
our equity securities to file certain reports with the SEC regarding ownership
of, and transactions in, our securities.  Such officers, directors,
and 10% shareholders are also required by the SEC to furnish us with all Section
16(a) forms that they file.




Based
solely on our review of such forms furnished to us and written representations
from certain reporting persons, we believe that all filing requirements
applicable to our executive officers, directors, and more than 10% stockholders
were not complied with during the fiscal year ended December 31,
2008.




Code
of Ethics




We have
adopted a code of ethics that applies to all of our executive officers,
directors, and employees.  Code of ethics codifies the business and
ethical principles that govern all aspects of our business.  This
document will be made available in print, free of charge, to any shareholder
requesting a copy in writing from the Company and it is attached as Exhibit 14.1
to our annual report for December 31, 2007.





Indemnification of Officers
and Directors





As
permitted by Nevada law,  Atlas Oil and Gas,  Inc.'s Amended
and Restated  Articles of Incorporation  provide that Atlas
Oil and Gas, Inc. will indemnify its directors and officers against expenses and
liabilities they incur to defend, settle, or satisfy any civil or
criminal  action brought against  them on account of
their  being or
having  been  Company  directors  or
officers unless, in any such action,  they are adjudged to have acted
with gross negligence or willful misconduct.





Pursuant
to the foregoing  provisions, Atlas Oil and Gas,  Inc. has
been informed that, in the opinion of the  Securities  and
Exchange  Commission, such  indemnification  is
against public policy as expressed in that Act and is, therefore,
unenforceable.





Exclusion of
Liability





Pursuant
to the Nevada Business Corporation Act, Atlas Oil and Gas, Inc.'s Amended and
Restated Articles of Incorporation exclude personal liability for its directors
for  monetary  damages  based  upon
any  violation  of their fiduciary duties as directors,
except as to liability for any breach of the duty of loyalty, acts or omissions
not in good faith or which  involve intentional misconduct or a
knowing violation of law, acts in violation of the  Nevada Business
Corporation Act, or any transaction from which a director receives an improper
personal benefit.  This exclusion of liability does not limit any
right that a director may have to be indemnified and does not affect any
director's liability under federal or applicable state securities
laws.


27


ITEM
      11.
            SECURITY
      OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
      STOCKHOLDER MATTERS





The table
below shows the number of our shares of common stock beneficially owned as of
April 1, 2008 by:




•
              each
      person or group known by us to beneficially own more than 5% of our
      outstanding common stock;




•
              each
      director;




•
              each
      executive officer named in the Summary Compensation Table under Item 10.
      “Executive Compensation;” and




•
              all
      of our current directors and executive officers as a
  group.




The
number of shares beneficially owned by each 5% holder, director or executive
officer is determined by the rules of the SEC, and the information does not
necessarily indicate beneficial ownership for any other purpose. Under such
rules, beneficial ownership includes any shares over which the person or entity
has sole or shared voting power or investment power and also any shares that the
person or entity can acquire within 60 days of April 1, 2009 through the
exercise of any stock option or other right. For purposes of computing the
percentage of outstanding shares of common stock held by each person or entity,
any shares that the person or entity has the right to acquire within 60 days
after April 1, 2009 are deemed to be outstanding with respect to such person or
entity but are not deemed to be outstanding for the purpose of computing the
percentage of ownership of any other person or entity. Unless otherwise
indicated, each person or entity has sole investment and voting power (or shares
such power with his or her spouse) over the shares set forth in the following
table. The inclusion in the table below of any shares deemed beneficially owned
does not constitute an admission of beneficial ownership of those shares. As of
April 1, 2009, there were 30,000,000 shares of common stock issued and
outstanding.





Name and Address of Beneficial Owner
                
                Shares of
                  Common Stock
                  Beneficially Owned
                
                
                Percentage of
                  Common Stock
                  OutstandingMark Trimble(1)
                
                
                10,559,049
                
                
                
                35.2
                %John Peper(1)
                
                
                3,694,298
                
                
                
                12.3
                %Steven Trimble(1)
                
                
                2,326,029
                
                
                
                7.8
                %David Hammeke(1)
                
                
                2,326,029
                
                
                
                7.8
                %All
      beneficial owners as a group (4 persons)
                
                
                18,905,405
                
                
                
                63.0
                %





(1)                       Address
is., 5150 Franz Rd., Suite 100, Katy, Texas 77439.


28


In
addition to the shares of common stock outstanding at April 1, 2009, we had
outstanding 3,833,000 shares of Series A Convertible Preferred Stock and 225,000
shares of Series B Convertible Preferred Stock which, collectively, are
convertible into 4,058,000 shares of common stock. All of the outstanding shares
of Series A Convertible Preferred Stock and Series B Convertible Preferred Stock
were held by Company Reporter Investments II, L.P., at December 31, 2007.
Michael Long may be deemed the beneficial holder of all shares held by Company
Reporter Investments II, L.P. Pursuant to the terms of the Series A Convertible
Preferred Stock, the conversion of Series A Convertible Preferred Stock and
Series B Preferred Stock into shares of common stock is limited such that,
immediately following any conversion, the holder may not hold in excess of 4.99%
of the then outstanding shares of common stock. As a result of such limitation,
the shares indicated as beneficially owned at April 1, 2009 exclude shares that
might be deemed to be beneficially owned by Company Reporter Investments II,
L.P. upon conversion of the Series A Convertible Preferred Stock and the Series
B Convertible Preferred Stock.




Equity
Compensation Plan Information





The
following table provides information as of December 31, 2007 with respect to the
shares of our common stock that may be issued under our existing equity
compensation plans.





Plan Category
                            
                            Number of securities to
                              be issued upon exercise
                              of outstanding options,
                              warrants and rights (a)
                            
                            Weighted-average
                              exercise price of
                              outstanding
                              options, warrants
                              and rights (b)
                            
                            Number of securities
                              remaining available for
                              future issuance under
                              equity compensation
                              plans (excluding
                              securities reflected in
                              column (a))Equity compensation plans
      approved by security holders(1)
                            
                            
                            0
                            
                            NA
                            
                            
                            1,000,000Equity
      compensation plans not approved by security holders
                            
                            
                            -
                            
                            NA
                            
                            
                            -Total
                            
                            
                            0
                            
                            NA
                            
                            
                            1,000,000





(1)
              Consists
      of shares reserved for issuance under 2005 Stock Option
    Plan.





ITEM
      12.
            CERTAIN
      RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
      INDEPENDENCE





We have
from time to time entered into transactions with Mark Trimble, our President and
principal shareholder, pursuant to which Mr. Trimble has provided financing in
the form of loans, credit card advances and a vehicle lease.





Since
October 2004, we have leased a vehicle owned by Mr. Trimble under a lease
originally running through September 2007 pursuant to which we paid to Mr.
Trimble $7,500 during 2007. The term of the lease was extended during 2007 to
run through September 2010.





In
September 2007, two of our directors arranged a loan to us in the amount of
$25,000 to support operations. The directors are the borrowers under the loan
facility and we received the loan proceeds and agreed to repay the loan. The
loan bears interest at 10.25% and is repayable in monthly installments of
interest. The loan was originally due March 19, 2008. During the first quarter
of 2008, the principal balance of the loan was reduced by $2,500 and the loan
was renewed with an extended maturity date of September 19, 2008.





We have
no current written policy with respect to entering into transactions with
members of management or affiliated companies. Any non-arm’s length transaction
we consider will be reviewed and voted on by disinterested members of our board
of directors and be in accordance with our articles of incorporation, bylaws and
Texas law.





Director
Independence





None of
our present directors are independent, as independence is commonly determined or
under the independence standards of any national securities
exchange.


29




Changes
in Control




We are
not aware of any arrangements that may result in a change in control of the
Company.




Common
Stock




The
shares of our common stock presently outstanding, and any shares of our common
stock issues upon exercise of stock options and/or warrants, will be fully paid
and non-assessable. Each holder of common stock is entitled to one vote for each
share owned on all matters voted upon by shareholders, and a majority vote is
required for all actions to be taken by shareholders. In the event we liquidate,
dissolve or wind-up our operations, the holders of the common stock are entitled
to share equally and ratably in our assets, if any, remaining after the payment
of all our debts and liabilities and the liquidation preference of any shares of
preferred stock that may then be outstanding. The common stock has no preemptive
rights, no cumulative voting rights, and no redemption, sinking fund, or
conversion provisions. Since the holders of common stock do not have cumulative
voting rights, holders of more than 50% of the outstanding shares can elect all
of our Directors, and the holders of the remaining shares by themselves cannot
elect any Directors.  Holders of common stock are entitled to receive
dividends, if and when declared by the Board of Directors, out of funds legally
available for such purpose, subject to the dividend and liquidation rights of
any preferred stock that may then be outstanding.




Voting
Rights





Each
holder of Common Stock is entitled to one vote for each share of Common Stock
held on all matters submitted to a vote of stockholders.





Dividends





Subject
to preferences that may be applicable to any then-outstanding shares of
Preferred Stock, if any, and any other restrictions, holders of Common Stock are
entitled to receive ratably those dividends, if any, as may be declared from
time to time by the Company’s board of directors out of legally available funds.
The Company and its predecessors have not declared any dividends in the past.
Further, the Company does not presently contemplate that there will be any
future payment of any dividends on Common Stock.




Amendment
of our Bylaws




Our
bylaws may be adopted, amended or repealed by the affirmative vote of a majority
of our outstanding shares. Subject to applicable law, our bylaws also may be
adopted, amended or repealed by our board of directors.


30




ITEM
13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE.





No
officer, director, promoter, or affiliate of Atlas Oil and Gas, Inc. has or
proposes to have any direct or indirect material interest in any asset held by
Atlas Oil and Gas, Inc. through security holdings, contracts, options, or
otherwise.





Although
there is no current compensation plan in existence, it is probable that Atlas
Oil and Gas, Inc. will adopt a plan to pay or accrue compensation to its
Officers and Directors for services related to development of the company's
business plan.




ITEM
14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES




Fiscal
2007





(1)     Audit  Fees





The
aggregate fees billed by the independent accountants for the last fiscal year
for professional services for the audit of the Company's annual financial
statements and the review included in the Company's Form 10-Q and services that
are normally provided by the accountants in connection with statutory and
regulatory filings or engagements for those fiscal years were
$15,500.





(2)     Audit-Related  Fees





The
aggregate fees billed in each of the last two fiscal years for assurance and
related services by the principal accountants that are reasonably related to the
performance of the audit or review of the Company’s financial statements and are
not reported under Item 9 (e)(1) of Schedule 14A was NIL.





(3)     Tax  Fees





The  aggregate
fees billed in each of the last two fiscal years for professional
services  rendered  by the principal accountants for tax
compliance, tax advise,
and  tax  planning  was  $-0-.





(4)     All  Other  Fees





There  were  no
other fees charged by the
principal  accountants  other  than  those  disclosed  in  (1)
and (3) above.


31


Fiscal
2008





(1)     Audit  Fees





The
aggregate fees billed by the independent accountants for the last fiscal
year  for professional services for the audit of the Company's annual
financial
statements  and  the  review  included
in the Company's Form 10-Q and services that are normally provided by the
accountants in connection with statutory and regulatory filings or engagements
for those fiscal years were $15,000.





(2)     Audit-Related  Fees





The
aggregate fees billed in each of the last two fiscal years for assurance and
related services by the principal accountants that are reasonably related to the
performance of the audit or review of the Company’s financial statements and are
not  reported  under  Item  9  (e)(1)  of  Schedule  14A  was  NIL.





(3)     Tax  Fees





The  aggregate
fees billed in each of the last two fiscal years for professional
services  rendered  by the principal accountants for tax
compliance, tax advise,
and  tax  planning  was  $-0-.





(4)     All  Other  Fees





There  were  no
other fees charged by the
principal  accountants  other  than  those  disclosed  in  (1)  and  (3)
above.





Audit  Committee's  Pre-approval  Policies





At  the
present time, there are not sufficient directors, officers and employees
involved  with  Brampton
Crest  to  make  any  pre-approval
policies meaningful.  Once Brampton Crest has elected more directors
and appointed directors and non-directors to
the  Audit  Committee it will have meetings and function in
a meaningful manner.





Audit  Hours  Incurred





The  principal  accountants  spent  approximately  50
percent of the total hours spent  on  the
accounting.  The hours were about equal to the hours spent by the
Company's  internal  accountant.


32





The Board
of Directors has reviewed and discussed with the Company's management and
independent registered public accounting firm the audited consolidated
financial  statements of the Company contained in the Company's Annual
Report on Form 10-K for the Company's 2008 fiscal year. The Board has also
discussed with the auditors the matters required to be discussed pursuant to SAS
No. 61 (Codification of Statements on Auditing Standards, AU Section 380), which
includes, among other items, matters related to the conduct of the audit of the
Company's consolidated financial statements.





The Board
has received and reviewed the written disclosures and the letter from the
independent registered public accounting firm required by Independence Standards
Board Standard No. 1 (Independence Discussions with Audit Committees), and has
discussed with its auditors its independence from the Company. The Board has
considered whether the provision of services other than audit services is
compatible with maintaining auditor independence.





Based on
the review and discussions referred to above, the Board approved the inclusion
of the audited consolidated financial statements be included in the Company's
Annual Report on Form 10-K for its 2008fiscal year for filing with the
SEC.





Pre-Approval
Policies





The
Board's policy is now to pre-approve all audit services and all permitted
non-audit services (including the fees and terms thereof) to be provided by the
Company's independent registered public accounting firm; provided, however,
pre-approval requirements for non-audit services are not required if all such
services (1) do not aggregate to more than five percent of total revenues paid
by the Company to its accountant in the fiscal year when services are provided;
(2) were not recognized as non-audit services at the time of the engagement; and
(3) are promptly brought to the attention of the Board and approved prior to the
completion of the audit.





The Board
pre-approved all fees described above.





PART
IV


ITEM
15.  EXHIBITS AND REPORTS.




Exhibits3.1
                
                Articles
      of Incorporation (1)3.2
                
                Amendments
      to Articles of Incorporation (1)3.1
                
                Bylaws
      of the Corporation (1)14,
                
                Code
      of Ethics (1)21
                
                Subsidiaries
      (2)31.1
                
                Certification
      of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley
      Act. (2)31.2
                
                Certification
      of Principal Financial and Accounting Officer Pursuant to Section 302 of
      the Sarbanes-Oxley Act. (2)32.1
                
                Certification
      of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley
      Act.  (2)32.2
                
                Certification
      of Chief Accounting Officer Pursuant to Section 906 of the Sarbanes-Oxley
      Act.  (2)


__________________________________________________


33


(1).
Incorporated by reference.


(2)  Filed
herein.





(a)  (3)   EXHIBITS





The
exhibits required to be filed herewith by Item 601 of Regulation S-B, as
described in the following index of exhibits, are incorporated herein by
reference, as follows:


Signatures





In
accordance with the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements of filing on Form 10-K and authorized this registration statement
to be signed on its behalf by the undersigned, on the 12th day of April,
2009





Atlas Oil
and Gas, Inc.





/S/ Dan MotsingerDan
      Motsinger(Chief
      Executive Officer)




34





PART
F/S.  FINANCIAL STATEMENTS.





ATLAS OIL
AND GAS, INC.





Report
      of Independent Registered Public Accounting Firm
                          
                          
                          F-1Financial
      Statements:Balance
      Sheets as of December 31, 2008 and 2007
                          
                          
                          F-2Statements
      of Operations  for the years ended December 31, 2008 and
      2007
                          
                          
                          F-3Statements
      of Stockholders' Equity for the years ended December 31, 2008 and
      2007
                          
                          
                          F-4Statements
      of Cash Flows for the years ended  December 31, 2008 and
      2007
                          
                          
                          F-4Notes
      to Financial Statements
                          
                          
                          F-6




35


Lawrence
Scharfman & Co., CPA P.A.


Certified
Public Accountants





18
      E. Sunrise Hwy
              9608
      Honey Bell CircleSuite
      201
              Boynton
      Beach, FL 33437Freeport,
      NY 11520Telephone:
      (516) 771-5900
              Telephone:
      (561) 733-0296Fax:          (516) 771-2598
              Fax:          (561) 740-0613





REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





To the
Board of Directors and Stockholders


Atlas Oil
and Gas, Inc.


Winston-Salem,
North Carolina





We have
audited the accompanying  balance sheets of Atlas Oil and Gas, Inc.
("the Company") as of December 31, 2008, and the related statements of
operations, stockholders' equity and cash flows for the period ended December
31, 2008. 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 audit in accordance with standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial presentation. We believe that our audit
provided a reasonable basis for our opinion.





The
accompanying financial statements have been prepared assuming that the company
will continue as a going concern. The company's existence is dependent upon
management's ability to develop profitable operations. Management is hopeful
that the Company will attain profitable status and liquidity if they are able to
raise additional capital.





In our
opinion,  the financial  statements  referred to
above present fairly, in all material respects, the financial position of Atlas
Oil and Gas, Inc.("the Company") as of December 31, 2008, and the related
statements of operations, stockholders' equity and cash flows for the period
ended December 31, 2008 in conformity with accounting principles generally
accepted in the United States of America.





Lawrence
Scharfman CPA


April
15th 2009





Member:


American
      Institute CPAS
              Florida
      Institute CPAS


Licensed
in Florida & New York


F-1




Atlas Oil
and Gas, Inc.


BALANCE
SHEET


December
31, 2008





ASSETSCURRENT
      ASSETSCash
      and cash equivalents
                      
                      $
                      -0-Total
      current assets
                      
                      
                      -0-INTEREST
      IN FOUST WELLS
                      
                      
                      70,344PROPERTY
      AND EQUIPMENT
                      
                      
                      700Total
      assets
                      
                      $
                      71,044LIABILITIES AND SHAREHOLDERS’
      DEFICITCURRENT
      LIABILITIESAccounts
      payable and Accrued Expenses
                      
                      $
                      209,031Notes
      payables
                      
                      
                      236,767Total
      current liabilities
                      
                      
                      445,798COMMITMENTS
      AND CONTINGENCIESSHAREHOLDERS’
      DEFICITPreferred
      stock, $0.001 par value; 20,000,000 shares authorized:Series
      A convertible preferred stock, $0.001 par value; 6,000,000 shares
      authorized and issued; 2,818,000 outstanding, $191,650 liquidation value,
      no redemption value
                      
                      
                      2,818Series
      B convertible preferred stock, $0.001 par value; 2,700,000 shares
      authorized and issued; none outstanding, $22,500 liquidation value, no
      redemption value
                      
                      
                      -Common
      stock, $0.001 par value; 100,000,000 shares authorized; 30,000,000 shares
      issued and outstanding
                      
                      
                      30,000Additional
      paid-in capital
                      
                      
                      554,480Retained
      deficit
                      
                      
                      (
      962,052
                      )Total
      shareholders’ deficit
                      
                      
                      (
      374,754
                      )Total
      liabilities and shareholders’ deficit
                      
                      $
                      71,044





The
accompanying notes are an integral part of these financial
statements


F-2




Atlas Oil
and Gas, Inc.


STATEMENTS
OF OPERATIONS





Year Ended
                  December 31,2008
                
                
                2007Loss
      from discontinued operations
                
                $
                (226,521
                )
                
                $
                (210,053
                ) )Other
      income / expenseInterest
      income
                
                
                -
                
                
                
                377Other
      income (expense)
                
                
                (3,793
                )
                
                
                8,237Net
      gain on sale, abandonment or write-off of assets
                
                
                105,210
                
                
                
                -Interest
      expense and finance charges
                
                
                (18,226
                )
                
                
                (23,518
                ) )Total
      Other Income (Expenses)
                
                
                83,191
                
                
                
                (14,904
                ) )PROVISION
      FOR INCOME TAXES
                
                
                -
                
                
                
                -NET
      LOSS
                
                
                (143,330
                )
                
                
                (224,957
                ) )Preferred
      dividends accrued
                
                
                (898
                )
                
                
                (16,896
                ) )Elimination
      of accrued preferred dividends upon conversion of preferred
      stock
                
                
                19,936
                
                
                
                -NET
      LOSS AVAILABLE TO COMMON SHARES
                
                $
                (124,292
                )
                
                $
                (241,853
                ) )Basic
      and diluted net loss per share
                
                $
                (0.00
                )
                
                $
                (0.01
                ) )Basic
      and diluted weighted average shares outstanding
                
                
                25,693,610
                
                
                
                21,870,736




The
accompanying notes are an integral part of these financial
statements


F-3




Atlas Oil
and Gas, Inc.


STATEMENTS
OF CASH FLOWS





For the Year Ended December 31,2008
                
                
                2007CASH
      FLOWS FROM OPERATING ACTIVITIESNet
      loss
                
                $
                (124,292
                )
                
                $
                (224,957
                )Adjustments
      to reconcile net loss to net cash used in operating
    activitiesDepreciation
      and amortization
                
                
                1,771
                
                
                
                6,226Non-cash
      expenses
                
                
                4,070
                
                
                
                114,585Loss
      on abandonment or write-off of assets
                
                
                3,793
                
                
                
                -Changes
      in operating assets and liabilities:Accounts
      receivable
                
                
                43,334
                
                
                
                26,245Inventories
                
                
                15,848
                
                
                
                (7
                )Prepaid
      expense
                
                
                2,681
                
                
                
                (668
                )Accounts
      payable
                
                
                8,118
                
                
                
                (15,297
                )Credit
      cards payable
                
                
                (43,993
                )
                
                
                (546
                )Payroll,
      sales tax and other accrued liabilities
                
                
                (14,708
                )
                
                
                (26,637
                )Unearned
      revenue on contracts
                
                
                (8,924
                )
                
                
                (2,457
                )NET
      CASH USED IN OPERATING ACTIVITIES
                
                
                (112,302
                )
                
                
                (123,513
                )CASH
      FLOWS FROM INVESTING ACTIVITIESPurchase
      of fixed assets
                
                
                -0-
                
                
                
                (3,314
                )Cash
      received from sale of assets
                
                
                5,092
                
                
                
                -NET
      CASH PROVIDED BY INVESTING ACTIVITIES
                
                
                5,092
                
                
                
                (3,314
                )CASH
      FLOWS FROM FINANCING ACTIVITIESPrincipal
      payments on notes payable
                
                
                (1,462
                )
                
                
                (34,784
                )Advance
      from shareholder
                
                
                47,726
                
                
                
                50,000Proceeds
      from related party loan
                
                
                50,000
                
                
                
                -0-Proceeds
      from sale of stock
                
                
                -
                
                
                
                45,000NET
      CASH PROVIDED BY FINANCING ACTIVITIES
                
                
                96,264
                
                
                
                60,216NET
      (DECREASE) IN CASH
                
                
                (10,946
                )
                
                
                (66,611
                )Cash,
      beginning of period
                
                
                10,946
                
                
                
                77,557Cash,
      end of period
                
                $
                -0-
                
                
                $
                10,946


F-4


Atlas Oil
and Gas, Inc.


STATEMENTS
OF CASH FLOWS


(Continued)





For the Year Ended
                  December 31,2008
                
                
                2007SUPPLEMENTAL
      CASH FLOW INFORMATION:Interest
      paid
                
                $
                5,946
                
                
                $
                20,898Taxes
      paid
                
                
                -
                
                
                
                -SUPPLEMENTAL
      SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:Increase
      in paid-in capital resulting from:Deferred
      offering costs, expenses and assets paid for by a Series A preferred
      shareholder
                
                
                4,070
                
                
                
                114,585Increase
      in common stock par value from:Conversion
      of Series A preferred stock to common stock
                
                
                867
                
                
                
                3775Decrease
      in preferred stock par value from:Conversion
      of Series A preferred stock to common stock
                
                
                (867
                )
                
                
                3775Increase
      (decrease) in retained earnings from:Preferred
      stock dividend
                
                
                (898
                )
                
                
                16,896Extinguishment
      of accrued preferred stock dividends following conversion of preferred
      stock
                
                
                19,936
                
                
                
                -


F-5


Atlas
Oil and Gas, Inc.


Notes
to Financial Statements


December
31, 2008





NOTE
1 - BASIS OF PRESENTATION





The
accompanying unaudited financial statements of Atlas Oil and Gas, Inc., a Nevada
corporation (the "Company"), have been prepared in accordance with accounting
principles generally accepted in the United States of America for interim
financial information and with the rules and regulations of the Securities and
Exchange Commission. They do not include all of the information and footnotes
required by accounting principles generally accepted in the United States of
America for a complete financial presentation. In the opinion of management, all
adjustments, consisting only of normal recurring adjustments, considered
necessary for a fair presentation, have been included in the accompanying
unaudited financial statements. Operating results for the periods presented are
not necessarily indicative of the results that may be expected for the full
year. See “Note 2 – Discontinued Operations.”





BASIS OF
PRESENTATION





The
consolidated financial statements are prepared in accordance with generally
accepted accounting principles in the United States of America ("US
GAAP").  The consolidated financial statements of the Company include
the Company and its wholly-owned subsidiaries, America’s Emergency Network, Inc.
and Laurentian Peak Capital.  All material intercompany balances and
transactions have been eliminated





GOING
CONCERN AND MANAGEMENT’S PLAN





The
accompanying consolidated financial statements have been prepared in conformity
with accounting principles generally accepted in the United States of America,
which contemplate the continuation of the Company as a going concern. However,
as shown in the accompanying consolidated financial statements, the Company has
incurred losses from operations the last two years and has a significant working
capital deficiency as of December31, 2008 of $375,384





Management
believes the Company can raise adequate capital for the Company’s required
working capital needs for 2009. Management also believes that it still needs
substantial capital in order to carry out its business plan,  No
assurance can be given that the Company can obtain the required estimated
additional working capital, or if obtained, that such funding will not cause
substantial dilution to stockholders of the Company. The Company is subject to
all the risks inherent in the establishment of a new enterprise and the
marketing of its product, many of which risks are beyond the control of the
Company. All of the factors discussed above raise substantial doubt about the
Company's ability to continue as a going concern.





These
consolidated financial statements do not include any adjustments relating to the
recoverability of recorded asset amounts that might be necessary as a result of
the above uncertainty.





USE OF
ESTIMATES





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





INVENTORY





Inventory  was  comprised  of  finished  goods
of  consumer  personal  care products and is
stated at lower of cost or market. As of December 31, 2008 the company has
written off the inventory due to spoilage.


F-6


Atlas
Oil and Gas, Inc.


Notes
to Financial Statements


December
31, 2008





IMPAIRMENT
OF LONG-LIVED ASSETS AND LONG-LIVED ASSETS TO BE DISPOSED OF





The
Company accounts for the impairment of long-lived assets in accordance with
Statement of Financial Accounting Standards No. 144, “Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of”
(“SFAS No. 144”). SFAS No. 144 requires write-downs 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 amount.





Assets
with a carrying value of $3.4 million held and used by the Company during the
year ended December 31, 2008, including amortizable intangible assets, are
reviewed for impairment whenever events or circumstances ATLAS OIL indicate
that the carrying amount of an asset may not be recoverable. For purposes of
evaluating the recoverability of long-lived assets to be held and used, a
recoverability test is performed based on assumptions concerning the amount and
timing of estimated future cash flows reflecting varying degrees of perceived
risk. Impairments to long-lived assets to be disposed of are recorded based upon
the fair value of the applicable assets. Since judgment is involved in
determining the fair value and useful lives of long-lived assets, there is a
risk that the carrying value of our long-lived assets may be overstated or
understated. Management believes that a change in any material underlying
assumptions would not by itself result in the need to impair an
asset.





If the
long-lived assets are identified as being planned for disposal or sale, they
would be separately presented in the balance
sheet and reported at the lower of the carrying amount or fair value less costs
to sell, and are no longer depreciated. The assets and liabilities of a disposed
group classified as held for sale would be presented separately in the
appropriate asset and liability sections of the balance sheet. As of December
31, 2008 this does not apply.





GOODWILL
AND OTHER INTANGIBLE ASSETS





In June
2001, the FASB issued Statement No. 142 Goodwill and Other Intangible
Assets.  This statement addresses financial accounting and reporting
for acquired goodwill and other intangible assets and supersedes APB Opinion No.
17, Intangible Assets.  It addresses how intangible assets that are
acquired individually or with a group of other assets (but not those acquired in
a business combination) should be accounted for in financial statements upon
their acquisition.  This
Statement also addresses how goodwill and other intangible assets should be
accounted for after they have been initially recognized in the financial
statements.





Goodwill
and intangible assets with indefinite useful lives are not amortized. Intangible
assets with finite useful lives are amortized generally on a straight-line basis
over the periods benefited, with a weighted average useful life of 15
years.





In
performing this assessment, management uses the income approach and the similar
transactions method of the market approach to develop the fair value of the
acquisition in order to assess its potential impairment of goodwill. The income
approach is based on a discounted cash flow model which relies on a number of
factors, including operating results, business plans, economic projections and
anticipated future cash flows. Rates used to discount future cash flows are
dependent upon interest rates and the cost of capital at a point in time. The
similar transactions method is a market approach methodology in which the fair
value of a business is estimated by analyzing the prices at which companies
similar to the subject, which are used as guidelines, have sold in controlling
interest transactions (mergers and acquisitions). Target companies are compared
to the subject company, and multiples paid in transactions are analyzed and
applied to subject company data, resulting in value indications. Comparability
can be affected by, among other things, the product or service produced or sold,
geographic markets served, competitive position, profitability, growth
expectations, size, risk perception, and capital structure. There are inherent
uncertainties related to these factors and management’s judgment in applying
them to the analysis of goodwill impairment. It is possible that assumptions
underlying the impairment analysis will change in such a manner that impairment
in value may occur in the future.


F-7


Atlas
Oil and Gas, Inc.


Notes
to Financial Statements


December
31, 2008




REVENUE
RECOGNITION





Revenue
for video streaming and maintenance services is recognized monthly as services
are provided pursuant to the terms of contracts or purchase orders, which have
prices that are fixed and determinable. The Company assesses the clients ability
to meet the contract terms, including meeting payment obligations, before
entering into the contract. Deferred revenue results from customers who are
billed for monitoring in advance of the period in which the services are
provided, on a monthly, quarterly or annual basis.





The
Company follows Staff Accounting Bulletin 104 (SAB 104), which requires the
Company to defer certain installation revenue and expenses, primarily equipment,
direct labor and direct and incremental sales commissions incurred. The
capitalized costs and deferred revenues related to the installation are then
amortized over the 10 year life of an average customer relationship, on a
straight line basis. If the customer being monitored is disconnected prior to
the expiration of the original expected life, the unamortized portion of the
deferred installation revenue and related capitalized costs are recognized in
the period the disconnection becomes effective. In accordance with EITF
00-21,





“Revenue
Arrangements with Multiple Deliverables”, the security service contracts that
include both installation and monitoring services are considered a single unit
of accounting. The criteria in EITF 00-21 that the Company does not meet for
monitoring services and installation services to be considered separate units of
accounting is that the installation service to customers has no standalone
value. The installation service alone is not functional to customers without the
monitoring service.





Revenue
for installation services, for which no contract is connected, is recognized at
the time the installation is completed.





PROPERTY
AND EQUIPMENT





Property
and equipment are stated at cost.  Depreciation is computed using
the  straight-line method over the estimated  useful lives
of the assets. Expenditures for major  betterments and additions
are  capitalized,  while replacement, maintenance and
repairs, which do not extend the lives of the  respective
assets,  are currently charged to expense.  Any gain or loss
on  disposition of assets is recognized currently in the statement of
income.





FAIR
VALUE OF FINANCIAL INSTRUMENTS





The
Company's  financial  instruments  consist
primarily of cash, accounts  payable
and  accrued  expenses,  and
debt.  The  carrying  amounts of
such  financial  instruments  approximate their
respective  estimated fair value


due to
the short-term  maturities and approximate market interest rates
of  these instruments.  The estimated fair value is not
necessarily indicative of the amounts the Company would realize in a
current  market  exchange or


from
future earnings or cash flows.




F-8




Atlas
Oil and Gas, Inc.


Notes
to Financial Statements


December
31, 2008





INCOME
TAXES





The
Company adopted Financial Accounting Standards Board (“FASB”) Interpretation No.
(FIN) 48, “Accounting for Uncertainty in Income Taxes.” FIN 48 clarifies the
accounting for uncertainty in income taxes recognized in financial statements in
accordance with SFAS No. 109, “Accounting for Income Taxes.” FIN 48 prescribes a
recognition threshold and measurement attribute for the financial statement
recognition and measurement of a tax position taken or expected to be taken in a
tax return. FIN 48 requires that the Company determine whether the benefits of
the Company’s tax positions are more likely than not of being sustained upon
audit based on the technical merits of the tax position. The provisions of FIN
48 also provide guidance on de-recognition, classification, interest and
penalties, accounting in interim periods, and disclosure. The Company did not
have any unrecognized tax benefits and there was no effect on the financial
condition or results of operations as a result of implementing FIN 48. The
Company does not have any interest and penalties in the statement of operations
for the years ended December 31, 2007 and  2008.




EARNINGS
(LOSS) PER SHARE




Earnings
(loss) per share is computed in accordance with SFAS No. 128, "Earnings per
Share". Basic earnings (loss) per share is computed by dividing net income
(loss), after deducting preferred stock dividends accumulated during the period,
by the weighted-average number of shares of common stock outstanding during each
period. Diluted earnings per share is computed by dividing net income by the
weighted-average number of shares of common stock, common stock equivalents and
other potentially dilutive securities outstanding during the period. The
outstanding warrants for the years ended December 31, 2007 and  2008,
respectively are anti-dilutive and therefore are not included in earnings (loss)
per share.





ACCOUNTING
FOR STOCK-BASED COMPENSATION




The
Company adopted SFAS No. 123R, "Accounting for Stock-Based Compensation". This
statement requires a public entity to measure the cost of employee services
received in exchange for an award of equity instruments based on the grant-date
fair value of the award (with limited exceptions). That cost will be recognized
over the period during which an employee is required to provide service.




In
addition, a public entity is required to measure the cost of employee services
received in exchange for an award of liability instruments based on its current
fair value. The fair value of that award has been remeasured subsequently at
each reporting date through the settlement date. Changes in fair value during
the requisite service period will be recognized as compensation cost over that
period.





STOCK
BASED COMPENSATION





Effective
January 1, 2006, the Company adopted Statement of Financial Accounting Standards
No. 123 (revised 2004), Share Based Payment(“SFAS
No. 123R”). SFAS No. 123R establishes the financial accounting and
reporting standards for stock-based compensation plans. As required by SFAS
No. 123R, the Company recognized the cost resulting from all stock-based
payment transactions including shares issued under its stock option plans in the
financial statements.




For the
year ended December 31, 2008, the Company did not grant any stock
options.





NOTE 2 -
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)





NON-EMPLOYEE
STOCK BASED COMPENSATION





The cost
of stock based compensation awards issued to non-employees for services are
recorded at either the fair value of the services rendered or the instruments
issued in exchange for such services, whichever is more readily determinable,
using the measurement date guidelines enumerated in Emerging Issues Task Force
Issue (“EITF”) 96-18, “Accounting for Equity Instruments That Are Issued to
Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or
Services” (“EITF 96-18”).


F-9


Atlas
Oil and Gas, Inc.


Notes
to Financial Statements


December
31, 2008





NOTE 2 -
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)





COMMON
STOCK PURCHASE WARRANTS





The
Company accounts for common stock purchase warrants in accordance with the
provisions of Emerging Issues Tack Force Issue (“EITF”) issue No. 00-19
“Accounting for Derivative Financial Instruments Indexed to, and Potentially
Settled in, a Company’s Own Stock” (“EITF 00-19”).  Based on the
provisions of EITF 00-19, the Company classifies as equity any contracts that
(i) require physical settlement or net-share settlement, or (ii) gives the
company a choice of net-cash settlement or settlement in its own shares
(physical settlement or net-share settlement).  The Company classifies
as assets or liabilities any contracts that (i) require net-cash settlement
(including a requirement to net cash settle the contract if an event occurs and
if that event is outside the control of the company), or (ii) give the
counterparty a choice of net-cash settlement or settlement in shares (physical
settlement or net-share settlement).





COMMON
STOCK PURCHASE WARRANTS





The
Company accounts for common stock purchase warrants in accordance with the
provisions of Emerging Issues Tack Force Issue (“EITF”) issue No. 00-19
“Accounting for Derivative Financial Instruments Indexed to, and Potentially
Settled in, a Company’s Own Stock” (“EITF 00-19”).  Based on the
provisions of EITF 00-19, the Company classifies as equity any contracts that
(i) require physical settlement or net-share settlement, or (ii) gives the
company a choice of net-cash settlement or settlement in its own shares
(physical settlement or net-share settlement). The Company classifies as assets
or liabilities any contracts that (i) require net-cash settlement (including a
requirement to net cash settle the contract if an event occurs and if that event
is outside the control of the company), or (ii) give the counterparty a choice
of net-cash settlement or settlement in shares (physical settlement or net-share
settlement).





INCOME
TAXES





The
Company accounts for income taxes using SFAS No. 109,  "Accounting
for  Income Taxes," which requires  recognition of deferred
tax liabilities and  assets
for  expected  future  tax  consequences  of
events  that have been included in the
financial  statements  or tax returns.  Under this
method,  deferred tax liabilities and assets are determined based on
the difference  between the
financial  statement  and tax bases of assets
and  liabilities using  enacted  tax rates in
effect for the year in which the  differences are  expected
to reverse.  A valuation  allowance is recorded for
deferred  tax assets if it is more likely  than not that
some  portion or all of the  deferred tax assets will not be
realized.





In July
2006, the Financial Accounting Standards Board (FASB) issued FASB Interpretation
(FIN) No. 48, Accounting for Uncertainty in Income Taxes-an interpretation of
FASB Statement No. 109." This interpretation provides guidance for recognizing
and measuring uncertain tax positions, as defined in SFAS No. 109, "Accounting
for Income Taxes." FIN No. 48 prescribes a threshold condition that a tax
position must meet for any of the benefit of an uncertain tax position to be
recognized in the financial statements. Guidance is also provided regarding
de-recognition, classification, and disclosure of uncertain tax positions. FIN
No. 48 is effective for fiscal years beginning
after December 15, 2006. The Company does not expect that this interpretation
will have a material impact on its financial position, results of operations, or
cash flows.





In May
2007, the FASB issued FASB Staff Position No. FIN 48-1,Definition of Settlement in FASB
Interpretation No. 48  (“the FSP”). The FSP provides
guidance about how an enterprise should determine whether a tax position is
effectively settled for the purpose of recognizing previously unrecognized tax
benefits. Under the FSP, a tax position could be effectively settled on
completion of examination by a taxing authority if the entity does not intend to
appeal or litigate the result and it is remote that the taxing authority would
examine or re-examine the tax position. The Company does not expect that this
interpretation will have a material impact on its financial position, results of
operations, or cash flows.


F-10


Atlas
Oil and Gas, Inc.


Notes
to Financial Statements


December
31, 2008





NOTE 3 -
RECENT ACCOUNTING PRONOUNCEMENTS




In
September 2006, the FASB issued SFAS No. 157, which is effective for fiscal
years beginning after November 15, 2007 and for interim periods within
those years. This statement defines fair value, establishes a framework for
measuring fair value and expands the related disclosure requirements. This
statement applies under other accounting pronouncements that require or permit
fair value measurements. The statement indicates, among other things, that a
fair value measurement assumes that the transaction to sell an asset or transfer
a liability occurs in the principal market for the asset or liability or, in the
absence of a principal market, the most advantageous market for the asset or
liability. SFAS 157 defines fair value based upon an exit price model. Relative
to SFAS 157, the FASB issued FSP FAS 157-1, FAS 157-2, and FAS 157-3. FSP FAS
157-1 amends SFAS 157 to exclude SFAS 13 and its related interpretive accounting
pronouncements that address leasing transactions, while FSP FAS 157-2 delays the
effective date of SFAS 157 for all nonfinancial assets and nonfinancial
liabilities, except those that are recognized or disclosed at fair value in the
financial statements on a recurring basis. FSP FAS 157-3 clarifies the
application of SFAS 157 as it relates to the valuation of financial assets in a
market that is not active for those financial assets. This FSP is effective
immediately and includes those periods for which financial statements have not
been issued. We currently do not have any financial assets that are valued using
inactive markets, and as such are not impacted by the issuance of this FSP. We
adopted SFAS 157 as of January 1, 2008, with the exception of the
application of the statement to non-recurring nonfinancial assets and
nonfinancial liabilities.





In
February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial
Assets and Financial Liabilities. SFAS No. 159 permits entities to choose to
measure eligible financial instruments at fair value. The unrealized gains and
losses on items for which the fair value option has been elected should be
reported in earnings. The decision to elect the fair value options is determined
on an instrument by instrument basis, it should be applied to an entire
instrument, and it is irrevocable. Assets and liabilities measured at fair value
pursuant to the fair value option should be reported separately in the balance
sheet from those instruments measured using another measurement attribute. SFAS
No. 159 is effective as of the beginning of the first fiscal year that begins
after November
15, 2007. The Company has adapted SFAS No. 159 to its consolidated financial
statements. The adoption of this standard has no material effect on the
Company’s consolidated financial statements.




In
December 2007, the FASB issued SFAS No. 141 (revised 2007), “Business
Combinations” (SFAS 141(R)), which replaces SFAS No. 141, “Business
Combinations” (SFAS 141). SFAS 141(R) retains the underlying concepts of SFAS
141 in that all business combinations are still required to be accounted for at
fair value under the acquisition method of accounting but SFAS 141(R) changed
the method of applying the acquisition method in a number of significant
aspects. Acquisition costs will generally be expensed as incurred;
noncontrolling interests will be valued at fair value at the acquisition date;
in-process research and development will be recorded at fair value as an
indefinite-lived intangible asset at the acquisition date, until either
abandoned or completed, at which point the useful lives will be determined;
restructuring costs associated with a business combination will generally be
expensed subsequent to the acquisition date; and changes in deferred tax asset
valuation allowances and income tax uncertainties after the acquisition date
generally will affect income tax expense. SFAS 141(R) is effective on a
prospective basis for all business combinations for which the acquisition date
is on or after the beginning of the first annual period subsequent to
December 15, 2008, with the exception of the accounting for valuation
allowances on deferred taxes and acquired tax contingencies. SFAS 141(R) amends
SFAS No. 109, “Accounting for Income Taxes” (SFAS 109) such that
adjustments made to valuation allowances on deferred taxes and acquired tax
contingencies associated with acquisitions that closed prior to the effective
date of SFAS 141(R) would also apply the provisions of SFAS 141(R). Early
adoption is not permitted. Upon adoption, SFAS 141(R) will not have a
significant impact on our consolidated financial position and results of
operations; however, any business combination entered into after the adoption
may significantly impact our financial position and results of operations when
compared to acquisitions accounted for under existing U.S. Generally Accepted
Accounting Principles (GAAP).




F-11


Atlas
Oil and Gas, Inc.


Notes
to Financial Statements


December
31, 2008





NOTE 3 -
RECENT ACCOUNTING POLICIES (CONTINUED)





In
December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
Consolidated Financial Statements—an amendment of ARB No. 51.” This
statement is effective for fiscal years, and interim periods within those fiscal
years, beginning on or after December 15, 2008, with earlier adoption
prohibited. This statement requires the recognition of a noncontrolling interest
(minority interest) as equity in the consolidated financial statements and
separate from the parent’s equity. The amount of net income attributable to the
noncontrolling interest will be included in consolidated net income on the face
of the income statement. It also amends certain of ARB No. 51’s
consolidation procedures for consistency with the requirements of SFAS 141(R).
This statement also includes expanded disclosure requirements regarding the
interests of the parent and its noncontrolling interest. We have evaluated this
new statement and have determined that the statement will not have a significant
impact on the reporting of our financial position and results of
operations.





In
December 2007, the Securities and Exchange Commission (SEC) issued
Staff Accounting Bulletin (SAB) No. 110. This guidance allows
companies, in certain circumstances, to utilize a simplified method in
determining the expected term of stock option grants when calculating the
compensation expense to be recorded under Statement of Financial Accounting
Standards (SFAS) No. 123(R),Share-Based
Payment . The simplified method can be used after December 31, 2007
only if a company’s stock option exercise experience does not provide a
reasonable basis upon which to estimate the expected option term. Through 2007,
we utilized the simplified method to determine the expected option term, based
upon the vesting and original contractual terms of the option. On
January 1, 2008, we began calculating the expected option term based on our
historical option exercise data. This change did not have a significant impact
on the compensation expense recognized for stock options granted in
2008.





In March
2008, the FASB issued SFAS No. 161, “Disclosures about Derivative
Instruments and Hedging Activities, an amendment of FASB Statement No. 133”
(SFAS 161). This statement is intended to improve transparency in financial
reporting by requiring enhanced disclosures of an entity’s derivative
instruments and hedging activities and their effects on the entity’s financial
position, financial performance, and cash flows. SFAS 161 applies to all
derivative instruments within the scope of SFAS 133, “Accounting for Derivative
Instruments and Hedging Activities” (SFAS 133) as well as related hedged items,
bifurcated derivatives, and nonderivative instruments that are designated and
qualify as hedging instruments. Entities with instruments subject to SFAS 161
must provide more robust qualitative disclosures and expanded quantitative
disclosures. SFAS 161 is effective prospectively for financial statements issued
for fiscal years and interim periods beginning after November 15, 2008,
with early application permitted. We are currently evaluating the disclosure
implications of this statement; however, the new statement will not have an
impact on the determination of our financial results.




In April
2008, the FASB issued FSP No. FAS 142-3, “Determination of the Useful Life of
Intangible Assets.” This FSP amends the factors that should be considered in
developing renewal or extension assumptions used to determine the useful life of
a recognized intangible asset under SFAS No. 142, “Goodwill and Other
Intangible Assets” (SFAS 142). The objective of this FSP is to improve the
consistency between the useful life of a recognized intangible asset under SFAS
142 and the period of expected cash flows used to measure the fair value of the
asset under SFAS 141(R), and other principles of GAAP. This FSP applies to all
intangible assets, whether acquired in a business combination or otherwise, and
shall be effective for financial statements issued for fiscal years beginning
after December 15, 2008, and interim periods within those fiscal years and
applied prospectively to intangible assets acquired after the effective date.
Early adoption is prohibited. We have evaluated the new statement and have
determined that it will not have a significant impact on the determination or
reporting of our financial results.


F-12


Atlas
Oil and Gas, Inc.


Notes
to Financial Statements


December
31, 2008





NOTE 3 -
RECENT ACCOUNTING POLICIES (CONTINUED)





In May
2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted
Accounting Principles” (SFAS 162). This statement identifies the sources of
accounting principles and the framework for selecting the principles used in the
preparation of financial statements of nongovernmental entities that are
presented in accordance with GAAP. With the issuance of this statement, the FASB
concluded that the GAAP hierarchy should be directed toward the entity and not
its auditor, and reside in the accounting literature established by the FASB as
opposed to the American Institute of Certified Public Accountants (AICPA)
Statement on Auditing Standards No. 69, “The Meaning of Present Fairly in
Conformity With Generally Accepted Accounting Principles.” This statement is
effective 60 days following the SEC’s approval of the Public Company Accounting
Oversight Board amendments to AU Section 411, “The Meaning of Present
Fairly in Conformity With Generally Accepted Accounting Principles.” We have
evaluated the new statement and have determined that it will not have a
significant impact on the determination or reporting of our financial
results.





In May
2008 the FASB issued FASB Staff Position (FSP) APB 14-1, “Accounting for Convertible Debt
Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash
Settlement). ” APB 14-1 requires the issuer to separately account for the
liability and equity components of convertible debt instruments in a manner that
reflects the issuer’s nonconvertible debt borrowing rate. The guidance will
result in companies recognizing higher interest expense in the
statement of operations due to amortization of the discount that results from
separating the liability and equity components. APB 14-1 will be effective for
financial statements issued for fiscal years beginning after December 15, 2008,
and interim periods within those fiscal years. The Company is currently
evaluating the impact of adopting APB 14-1 on its consolidated financial
statements.




In June
2008, the FASB issued FSP No. EITF 03-6-1, "Determining Whether Instruments
Granted in Share-Based Payment Transactions Are Participating Securities". This
FASB Staff Position (FSP) addresses whether instruments granted in share-based
payment transactions are participating securities prior to vesting and,
therefore, need to be included in the earnings allocation in computing earnings
per share (EPS) under the two-class method described in paragraphs 60 and 61 of
FASB Statement No. 128, Earnings per Share. This FSP provides that unvested
share-based payment awards that contain non forfeitable rights to dividends or
dividend equivalents (whether paid or unpaid) are participating securities and
shall be included in the computation of EPS pursuant to the two-class method.
The provisions of FSP No. 03-6-1 shall be effective for financial statements
issued for fiscal years beginning after December 15, 2008, and interim periods
within those years. All prior-period EPS data presented shall be adjusted
retrospectively (including interim financial statements, summaries of earnings,
and selected financial data) to conform with the provisions of this FSP. Early
application is not permitted. The provisions of FSP No. 03-6-1 are effective for
the Company retroactively in the first quarter ended March 31, 2009. The Company
is currently assessing the impact of FSP No. EITF 03-6-1 on the calculation and
presentation of earnings per share in its’ consolidated financial
statements.





Other
accounting standards that have been issued or proposed by the FASB or other
standards-setting bodies that do not require adoption until a future date are
not expected to have a material impact on the consolidated financial statements
upon adoption.





NOTE 4 -
RECLASSIFICATIONS





Certain
prior periods' balances have been reclassified to conform to the current
period's financial statement presentation. These reclassifications had no impact
on previously reported results of operations or stockholders'
equity.





NOTE 5
-INCOME TAXES





As
of  December  31,  2007 and 2008 the Company had
Federal and state net  operating losses of approximately $559,000 and
$5,498,000, that are  subject  to limitations. The losses
are available to offset future income. The net operating  loss
carryforwards will expire in various years  through
2028.


F-13


Atlas
Oil and Gas, Inc.


Notes
to Financial Statements


December
31, 2008





The Tax
Reform Act of 1986 imposed substantial restrictions on the utilization of net
operating losses and tax credits in the event of an "ownership change", as
defined by the Internal Revenue Code. Federal and  state net operating
losses are subject to limitations as a result of these restrictions. The Company
experienced a substantial change in ownership exceeding 50%. As a result, the
Company's ability to utilize its net
operating  losses  against future income has been
significantly reduced.





In
assessing the amount of deferred tax asset to be recognized, management
considers whether it is more likely than not that some of the losses will be
used in the future. Management expects that they will not have benefit in the
future. Accordingly, a full valuation allowance has been
established.





NOTE
6 – DISCONTINUED OPERATIONS





In June
2008, in connection with the execution of a Note Purchase Agreement and as a
result of recurring losses and negative cash flow, the Company determined to
discontinue its home security monitoring and smart home operations. Results
reflected in the accompanying Statements of Operations relating to the
operations so discontinued are reported, for the current periods and for prior
year periods, as Loss from Discontinued Operations. See “Note 9 – Note Purchase
Agreement.”





NOTE
7 – GOING CONCERN





The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. As reflected in the accompanying financial
statements, the Company has incurred a loss of $120,944 for the year ended
December 31, 2008 and has retained deficit of $958,704 at December 31, 2008. In
addition, the Company has not generated cash flows from operations for the year
ended December 31, 2008. The Company’s continued existence is dependent on its
ability to attain profitable operations and achieving a level of revenue
adequate to support the Company's cost structure. These factors raise
substantial doubt about the Company’s ability to continue as a going concern.
There is no assurance that the Company will be able to attain profitable
operations or additional financing to support the Company’s current operations.
If management is not successful, the Company may have to substantially cut back
its level of operations that could have an adverse effect on the financial
position of the Company. The financial statements do not include any adjustments
relating to the recoverability or classification of recorded asset amounts or
the amount and classification of liabilities that might be necessary as a result
of this going concern uncertainty see “Note 9 – Note Purchase Agreement” and
“Note 10 - Subsequent Events – Oil and Gas Operations.”





NOTE
8 - PREFERRED STOCK CONVERSIONS





During
the year ended December 31, 2008, 1,170,000 Series A Preferred Stock shares were
converted to common stock on a one-to-one basis, leaving 2,818,000 shares not
converted.




NOTE
9 - NOTES PAYABLE IN DEFAULT





The
Company has defaulted on the note payable to an equipment supplier. The note was
originally dated July 28, 2004 for $69,240 at 7% interest and re-negotiated on
December 13, 2006, after a 14-month term of default, with a new principal amount
of $46,495, interest at 7%, and monthly payments of $6,798 beginning December
27, 2006. The last payment on this note was made on March 30, 2007. Accordingly,
pursuant to the terms of the note agreement, the default caused the entire
amount owed to become immediately due and payable. The note is uncollateralized
and personally guaranteed by the President of the Company.





In April
2008, the Company negotiated a conversion of a business line (credit card)
account balance to a single fully amortizing term loan in the amount of $49,692
with a fixed interest rate of 10.25%, and monthly payments of $1,062 through
April 15, 2013. Other than an over-funding of the loan in the amount of $1,154
in excess of the business line account balance, which was subsequently applied
back against the note principal, no payments have been made by the Company on
this new note and the note was in default at December 31, 2008.


F-14


Atlas
Oil and Gas, Inc.


Notes
to Financial Statements


December
31, 2008





NOTE
10 - NOTES PAYABLE IN DEFAULT – SHAREHOLDERS





A note
payable to two shareholders, in the original amount of $25,000 and dated
September 19, 2007, with a 6-month term at 10.223%, was renewed on March 25,
2008 in the amount of $22,500 after a principal payment of $2,500. The renewed
note was for a 6-month term at 13% interest. Interest only payments will begin
April 25, 2008, with a final payment of $22,748 due on September 25, 2008. The
note was in default at December 31, 2008.





A note
payable to a shareholder for $25,000, originally due February 26, 2008, was
renewed for another 90-day term at 8%. The full principal and accrued interest
was due May 26, 2008. The note was in default at December 31, 2008.





NOTE
11 – NET GAIN ON THE SALE, ABANDOMENT OR WRITE-OFF OF ASSETS





During
the year ended December 31, 2008, the Company recorded certain other
income/expenses and a net gain on the sale, abandonment or write-off of assets
arising from a sale of certain alarm monitoring contracts and from the
abandonment and/or write-off of assets as result of the determination to
discontinue the Company’s alarm monitoring business.





Sale
of Monitoring Contracts





On
January 24, 2008, the Company entered into an Asset Purchase Agreement whereby
the Company sold a number of alarm monitoring service contract accounts for a
total purchase price of $96,511. The terms of the Agreement included a 10%
holdback reserve of $9,651 that was deducted from the gross proceeds by the
purchaser to cover potential contract default by the customer accounts they
purchased. The purchaser will have to pay the holdback reserve to the Company on
or before May 24, 2009. Additionally, a reduction in the gross proceeds of
$9,850 was made by the purchaser for monies paid to the Company prior to the
sale of the accounts, and where the purchaser must provide services to these
accounts post-closing that the Company would have otherwise been obligated to
provide. As a separate obligation, the Company must provide general repair
services to the sold accounts, on an as-needed basis, for a period of twelve
months following closing. The Company received a payment of $6,432 from the
purchaser as consideration for this obligation. Net proceeds received under the
agreement were $83,442.




As a
result of the discontinued operations, the Company will not be able to perform
its obligation to provide general repair services to the sold accounts for the
twelve-month period specified in the Agreement. Consequently, the Company feels
it will not be in a position to negotiate a return of any of the 10% holdback
reserve held by the purchaser. Accordingly, both the unamortized portion of the
unearned revenue on the service agreements, and the 10% holdback reserve, have
been written off to Other Income/Expense in the financial statements. The net
effect of the write-offs is a loss of $4,113.





In June
2008, the Company sold 57 of its security and/or fire alarm monitoring accounts
for $15,285. The Company received the sale proceeds at closing. No guarantee
period was provided to the purchaser, and the Company assumed no liabilities for
the purchaser post-closing. The Company did sign a three-year agreement not to
compete for the accounts sold. This sale represented substantially all of the
remaining monitoring accounts owned by the Company.





Write-Off/Write-Down
of Assets





In June
2008, the Company made numerous unsuccessful attempts to sell off the remaining
inventory of alarm equipment and small supplies to other alarm companies. The
equipment and supplies are expected to be abandoned and, consequently, the
Company wrote off the entire cost of the $8,230 in alarm equipment and supplies
inventory remaining at June 30, 2008.





As of
December 31, 2008, the Company wrote down the recorded value of two computers
with a net book value of $2,087 to the estimated value of $700.


F-15


Atlas
Oil and Gas, Inc.


Notes
to Financial Statements


December
31, 2008





As of
December 31, 2008, the Company evaluated the collectability of its accounts
receivable from its customers and, based on that evaluation, wrote down $518 of
accounts considered uncollectible.





NOTE
12 – NOTE PURCHASE AGREEMENT





On June
5, 2008, the Company, Mark Trimble and various unaffiliated purchasers (the
“Purchasers”) entered into a Note Purchase Agreement (the “Note Purchase
Agreement”) pursuant to which the Company agreed to issue to the Purchasers
convertible promissory notes (the “Investor Notes”) in an aggregate amount up to
$575,000. Proceeds from the Investor Notes will be utilized to pay costs
associated with bringing the Company’s reports with the SEC current (“Reporting
Costs”), to provide working capital to support operations, and to pay
outstanding debt of the Company.





As of
December 31, 2008, $50,000 had been advanced under the Note Purchase Agreement
to pay Reporting Costs and support operations (the “Working Capital Advance”).
Within 45 days from the execution of the Note Purchase Agreement (the “Full
Funding Date”), the Company and the Purchasers are required to prepare a
schedule of all liabilities of the Company and the Purchasers are required to
provide funding (“Debt Retirement Funding”) to the Company in an amount equal to
the lesser of the amount of liabilities so scheduled (excluding installment
debt) or $175,000 (less $60,000 being paid pursuant to the terms of the CRI
Purchase Agreement described below) with such amount being applied to retire
debt of the Company; provided, however, that the Purchasers may elect to extend
the Full Funding Date by 15 days if not less than $87,500 of Debt Retirement
Funding has been provided by the original Full Funding Date. Also, by the Full
Funding Date, the Purchasers must make satisfactory arrangements to fund the
retirement of all remaining debt (the “Excess Debt”) of the Company, assume and
pay such remaining debt or cause the Company to issue convertible notes to
settle such Excess Debt, or any combination thereof. Total funds to be advanced
by the Purchasers to pay Reporting Costs, the Working Capital Advance and the
Debt Retirement Funding or to be settled as Excess Debt is limited to $575,000
(the “Total Funding Commitment,” and the actual amounts so funded or settled
being referred to as the “Funded Amount”).




Pursuant
to the terms of the Note Purchase Agreement, the Company and the Purchasers
entered into a Stock Purchase Agreement (the “Trimble Purchase Agreement”) with
Mark Trimble and John Peper, the principal officers of the Company, and a Stock
Purchase Agreement (the “CRI Purchase Agreement” and, together with the Trimble
Purchase Agreement, the “Stock Purchase Agreements”) with Company Reporter
Investments II (“CRI”), the holder of the Company’s outstanding preferred stock
(the “Preferred Stock”). Under the terms of the Stock Purchase Agreements,
Messrs. Trimble and Peper agreed to terminate and release all claims under their
respective employment agreements with the Company and to convey all of their
shares of common stock of the Company to the Purchasers and CRI agreed to waive
and release certain rights that it holds under the Preferred Stock and to convey
all of its shares of Preferred Stock to the Purchasers. The aggregate
consideration to Messrs. Trimble and Peper and to CRI under the Stock Purchase
Agreements is the excess, if any, of Total Funding Commitment over the Funded
Amount (such excess, if any, being the “Unallocated Purchase
Price”).





The
amount payable as Unallocated Purchase Price shall be payable by delivery of
convertible promissory notes (the “Selling Shareholder Notes”) of the Company.
Each of the Selling Shareholder Notes matures on June 30, 2009, accrues interest
at 8% per annum and is convertible, commencing 6 months from issuance, at a
price equal to 85% of the market price of the Company’s common stock on the date
of conversion.





The
Unallocated Purchase Price is allocated 10% to Messrs. Trimble and Peper and 90%
to CRI. On signing of the CRI Purchase Agreement, the Purchasers paid to CRI
$60,000 and CRI transferred to the Purchasers 1,149,900 shares of Series A
Convertible Preferred Stock and 67,500 shares of Series B Convertible Preferred
Stock. The shares held by Messrs. Trimble and Peper, and the remaining Preferred
Stock held by CRI, will be released to the Purchasers pro rata as the principal
balances on the Selling Shareholder Notes are reduced.





The
Investor Notes, in the amount of $50,000, are payable in full on June 30, 2009,
accrue interest at 8% per annum and are convertible into common stock of the
Company at a conversion price of $0.005 per share, provided, however, that the
Investor Notes may only be converted on or after the Total Funding Commitment
has been satisfied.


F-16


Atlas
Oil and Gas, Inc.


Notes
to Financial Statements


December
31, 2008





Pursuant
to the terms of the Note Purchase Agreement, on June 6, 2008, Daniel Motsinger,
a designee of the Purchasers, was appointed as a Director and Chief Executive
Officer of the Company. On or before the Full Funding Date, and provided that
the Purchasers comply with the provisions of the Note Purchase Agreement through
that date, the Company’s current officers and directors will resign in such
capacity.





As a
result of the transactions contemplated by the Note Purchase Agreement, control
of the Company has effectively passed from Messrs. Trimble and Peper to Mr. Dan
Motsinger and the Purchasers.





NOTE
13 – OTHER EVENTS





Preferred
Stock Conversions





In July
2008, the holder of 1,014,500 shares of Series A Convertible Preferred Stock and
225,000 shares of Series B Convertible Preferred Stock converted those shares
and the Company issued 1,239,500 shares of common stock pursuant to those
conversions.





Amendment
of Note Purchase Agreement





In August
2008, the Company and the Purchasers entered into an amendment to the Note
Purchase Agreement pursuant to which the Full Funding Date was extended until
August 31, 2008. In October of 2008 the Note Purchase Agreement was further
amended and extended until December 31, 2008 provided that the Purchasers agree
to provide, on or before Nov. 30, 2008 new capital in the amount of $57,500.00
and on or before December 31, 2008 provide new capital in the amount of
$115,000; that the Company deliver to Company Reporter Investments a promissory
note in the amount of $200,000 (less amounts previously paid and applied to the
CRI note; the Company deliver to Mark Trimble a promissory note in the amount of
$100,000 plus certain other amounts as specified in the Amendment.





Oil
and Gas Operations





In
keeping with the intent of the Company to pursue opportunities in the energy
business, the Company acquired a 15% working interest with an 11.25% working
interest in the Eric Foust 4-9 well in Pawnee County, Oklahoma. The well was
drilled and is awaiting completion. The Company’s cost in the well was $70,344.
Funds to pay for the Company’s interest in the well were advanced by Purchasers
under the Note Purchase Agreement. Pursuant to an agreement with the operator of
the field the Company agreed to invest an additional $59,130.00 and exchanged
its 15% working interest in the one Foust 4-9 into a smaller working interest in
eight wells as follows:





Atlas Oil
and Gas, Inc hereby consents to a re-structuring of its working interest as set
forth below:





WellName
                  
                  API/PUN No.
                  
                  
                  Working Int.
                  
                  
                  NRI
                  
                  
                  Net NRIEric
      Foust 1-9
                  
                  
                  117-23331
                  
                  
                  
                  3.50
                  %
                  
                  
                  75.00
                  %
                  
                  
                  2.625
                  %Eric
      Foust 2-9
                  
                  
                  117-23333
                  
                  
                  
                  3.50
                  %
                  
                  
                  75.00
                  %
                  
                  
                  2.625
                  %Eric
      Foust 3-9
                  
                  
                  117-23334
                  
                  
                  
                  3.50
                  %
                  
                  
                  75.00
                  %
                  
                  
                  2.625
                  %Eric
      Foust 4-9
                  
                  
                  117-23335
                  
                  
                  
                  3.50
                  %
                  
                  
                  75.00
                  %
                  
                  
                  2.625
                  %Eric
      Foust 5-9
                  
                  
                  117-23340
                  
                  
                  
                  3.50
                  %
                  
                  
                  75.00
                  %
                  
                  
                  2.625
                  %Eric
      Foust 6-9
                  
                  
                  117-23341
                  
                  
                  
                  3.50
                  %
                  
                  
                  75.00
                  %
                  
                  
                  2.625
                  %Foust/Davis
      1-A
                  
                  117-039224
                  (PUN)
                  
                  
                  3.50
                  %
                  
                  
                  75.00
                  %
                  
                  
                  2.625
                  %Foust
      #4S
                  
                  117-039224
                  (PUN)
                  
                  
                  3.50
                  %
                  
                  
                  75.00
                  %
                  
                  
                  2.625
                  %


F-17


Atlas
Oil and Gas, Inc.


Notes
to Financial Statements


December
31, 2008





Name and
Domicile Change





In
October, the Company changed its name to Atlas Oil and Gas, Inc. received a new
trading symbol OTC-BB "ATOG" and moved its domicile from Texas to Nevada to more
accurately reflect its move into the energy sector.


F-18