UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

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FORM 10-Q

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(Mark One)



þQUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934



For the quarterly period ended March 31, 2009

OR



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



For the transition period from ___________ to ______________.

Commission File Number 333-140204



Atlas Oil and Gas, Inc.

(Exact name of small business issuer as specified in its charter)





|                                |                    
|------------------------------- | -------------------
|Nevada                          | 76-0672176         
|(State or other jurisdiction of | (IRS Employer      
|incorporation or organization)  | Identification No.)



1020 Brookstown Avenue, Suite 30

Winston Salem, NC 27101

(Address of principal executive offices)(Zip Code)

(336) 723-0908

(Registrant's telephone number, including area code)



(Former name, former address and former fiscal year, if changed since last report)

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

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

As of May 19, 2009, we had 32,000,000 shares of $0.001 par value Common Stock outstanding.

Transitional Small Business Disclosure Format (check one) Yes  ̈  No þ













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Atlas Oil and Gas, Inc.

FORM 10-Q

INDEX





|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Page
PART I. FINANCIAL INFORMATION
Item 1.Financial Statements (Unaudited)
2
Balance Sheet as of March 31, 2008
2
Statements Of Operations for the Three Months Ended March 31, 2009 and 2008
3
Statements Of Cash Flows for the Three Months Ended March 31, 2009 and 2008
4
Notes To Financial Statements
5
Item 2.Management's Discussion And Analysis Or Plan Of Operations
17
Item 3.Quantitative And Qualitative Disclosures About Market Risk
21
Item 4.Controls And Procedures
21
PART II OTHER INFORMATION
Item 1.Legal Proceedings
23
Item 1A.Risk Factors
23
Item 2.Changes In Securities And Small Business Issuer Purchases Of Equity Securities
26
Item 3.Defaults Upon Senior Securities
26
Item 4.Submission Of Matters To A Vote Of Security Holders
26
Item 5.Other Information
26
Item 6.Exhibits
27







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PART I FINANCIAL INFORMATION

General

The accompanying reviewed financial statements have been prepared in accordance with the instructions to Form 10-Q. Therefore, they do not include all information and footnotes necessary for a complete presentation of consolidated financial position, results of operations, cash flow, and stockholders' equity in conformity with generally accepted accounting principles. Except as disclosed herein, there has been no material change in the information disclosed in the notes to the financial statements included in the Company's registration statement on Form 10-K for the year ended December 31, 2008 (audited). In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature. Operating results for the quarter ended March 31, 2009 are not necessarily indicative of the results that can be expected for the year ending December 31, 2009.





1



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ITEM 1.

FINANCIAL STATEMENTS (UNAUDITED)

ATLAS OIL AND GAS, INC.

BALANCE SHEET



|                                                                                                                      |  |                |          |   |                   |   |           |  
|--------------------------------------------------------------------------------------------------------------------- |  | -------------- | -------- | - | ----------------- | - | --------- | -
|                                                                                                                      |  | March 31,
2009 |          |   | December 31,
2008 |  
|ASSETS                                                                                                                |  |                |          |   |                   |  
|CURRENT ASSETS                                                                                                        |  |                |          |   |                   |  
|Cash and cash equivalents                                                                                             |  | $              | -0-      |   |                   | $ | -0-       |  
|Total current assets                                                                                                  |  |                | -0-      |   |                   |   | -0-       |  
|INTEREST IN FOUST WELLS                                                                                               |  |                | 70,344   |   |                   |   | 70,344    |  
|PROPERTY AND EQUIPMENT                                                                                                |  |                | 700      |   |                   |   | 700       |  
|Total assets                                                                                                          |  | $              | 71,044   |   |                   | $ | 71,044    |  
|                                                                                                                      |  |                |          |   |                   |   |           |  
|LIABILITIES AND SHAREHOLDERS DEFICIT                                                                                 |  |                |          |   |                   |   |           |  
|                                                                                                                      |  |                |          |   |                   |   |           |  
|CURRENT LIABILITIES                                                                                                   |  |                |          |   |                   |   |           |  
|Accounts payable and Accrued Expenses                                                                                 |  | $              | 209,829  |   |                   | $ | 209,031   |  
|Notes payables                                                                                                        |  |                | 246,361  |   |                   |   | 236,767   |  
|Total current liabilities                                                                                             |  |                | 456,190  |   |                   |   | 445,798   |  
|                                                                                                                      |  |                |          |   |                   |   |           |  
|COMMITMENTS AND CONTINGENCIES                                                                                         |  |                |          |   |                   |   |           |  
|                                                                                                                      |  |                |          |   |                   |   |           |  
|SHAREHOLDERS DEFICIT                                                                                                 |  |                |          |   |                   |   |           |  
|Preferred stock, $0.001 par value; 20,000,000 shares authorized:                                                      |  |                |          |   |                   |   |           |  
|Series A convertible preferred stock, $0.001 par value; 6,000,000 shares authorized; 2,818,000 outstanding and issued |  |                | 2,818    |   |                   |   | 2,818     |  
|Series B convertible preferred stock, $0.001 par value; 2,700,000 shares authorized and issued; none outstanding      |  |                |        |   |                   |   |         |  
|Common stock, $0.001 par value; 100,000,000 shares authorized; 30,000,000 shares issued and outstanding               |  |                | 30,000   |   |                   |   | 30,000    |  
|Additional paid-in capital                                                                                            |  |                | 554,480  |   |                   |   | 554,480   |  
|Retained deficit                                                                                                      |  |                | (972,444 | ) |                   |   | ( 962,052 | )
|Total shareholders deficit                                                                                           |  |                | (385,146 | ) |                   |   | ( 374,754 | )
|Total liabilities and shareholders deficit                                                                           |  | $              | 71,044   |   |                   | $ | 71,044    |  







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

2



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Atlas Oil and Gas, Inc.

STATEMENTS OF OPERATIONS
(Unaudited)



|                                          |  |                              |            |   |      |   |            |  
|----------------------------------------- |  | ---------------------------- | ---------- | - | ---- | - | ---------- | -
|                                          |  | Three Months Ended March 31, |           
|                                          |  | 2008                         |            |   | 2008 |  
|REVENUES:                                 |  |                              |            |   |      |  
|                                          |  |                              |            |   |      |  
|Revenues                                  |  | $                            | -0-        |   |      | $ | -0-        |  
|                                          |  |                              |            |   |      |   |            |  
|EXPENSES:                                 |  |                              |            |   |      |   |            |  
|                                          |  |                              |            |   |      |   |            |  
|General and administrative                |  |                              | 10,392     |   |      |   | 39,959     |  
|TOTAL EXPENSES                            |  |                              | 10,392     |   |      |   | 39,959     |  
|                                          |  |                              |            |   |      |   |            |  
|LOSS FROM OPERATIONS                      |  |                              | (10,392    | ) |      |   | (39,959    | )
|                                          |  |                              |            |   |      |   |            |  
|OTHER INCOME / EXPENSE                    |  |                              |            |   |      |   |            |  
|                                          |  |                              |            |   |      |   |            |  
|Loss on discontinued operations           |  |                              | -0-        |   |      |   | (55,013    | )
|Other income                              |  |                              | -0-        |   |      |   | 30         |  
|Gain on sale/abandonment of assets        |  |                              | -0-        |   |      |   | 89,067     |  
|Interest expense and finance charges      |  |                              | -0-        |   |      |   | (7,338     | )
|TOTAL OTHER INCOME (EXPENSES)             |  |                              | -0-        |   |      |   | 26,746     |  
|                                          |  |                              |            |   |      |   |            |  
|PROVISION FOR INCOME TAXES                |  |                              |          |   |      |   |          |  
|                                          |  |                              |            |   |      |   |            |  
|NET LOSS                                  |  |                              | (10,392    | ) |      |   | (13,213    | )
|                                          |  |                              |            |   |      |   |            |  
|Preferred dividends accrued               |  |                              | -0-        |   |      |   | (449       | )
|                                          |  |                              |            |   |      |   |            |  
|NET LOSS AVAILABLE TO COMMON SHARES       |  | $                            | (10,392    | ) |      | $ | (13,662    | )
|                                          |  |                              |            |   |      |   |            |  
|Basic and diluted net loss per share      |  | $                            | (0.00      | ) |      | $ | (0.00      | )
|                                          |  |                              |            |   |      |   |            |  
|Basic and diluted weighted average shares |  |                              | 30,000,000 |   |      |   | 24,445,220 |  







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

3



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Atlas Oil and Gas, Inc.

STATEMENTS OF CASH FLOWS
(Unaudited)

|                                                                                           |  |                                      |         |   |      |   |         |  
|------------------------------------------------------------------------------------------ |  | ------------------------------------ | ------- | - | ---- | - | ------- | -
|                                                                                           |  | For the Three Months Ended March 31, |        
|                                                                                           |  | 2008                                 |         |   | 2007 |  
|CASH FLOWS FROM OPERATING ACTIVITIES                                                       |  |                                      |         |   |      |  
|Net loss                                                                                   |  | $                                    | (10,392 | ) |      | $ | (13,213 | )
|Adjustments to reconcile net loss to net cash used in operating activities                 |  |                                      |         |   |      |   |         |  
|Depreciation and amortization                                                              |  |                                      |         |   |      |   | 635     |  
|Non-cash expenses                                                                          |  |                                      |         |   |      |   | 4,695   |  
|Gain on abandonment of assets                                                              |  |                                      |         |   |      |   | (2,406  | )
|Changes in operating assets and liabilities:                                               |  |                                      |         |   |      |   |         |  
|Accounts receivable                                                                        |  |                                      |         |   |      |   | (3,447  | )
|Inventories                                                                                |  |                                      |         |   |      |   | (1,766  | )
|Prepaid expense                                                                            |  |                                      |         |   |      |   | (980    | )
|Accounts payable                                                                           |  |                                      | 798     |   |      |   | 9,755   | )
|Credit cards payable                                                                       |  |                                      |         |   |      |   | (884    | )
|Payroll, sales tax and other accrued liabilities                                           |  |                                      |         |   |      |   | (217    | )
|Unearned revenue on contracts                                                              |  |                                      |         |   |      |   | (3,146  | )
|                                                                                           |  |                                      |         |   |      |   |         |  
|NET CASH USED IN OPERATING ACTIVITIES                                                      |  |                                      | (9,594  | ) |      |   | (2,722  | )
|                                                                                           |  |                                      |         |   |      |   |         |  
|CASH FLOWS FROM INVESTING ACTIVITIES                                                       |  |                                      |         |   |      |   |         |  
|Cash received from abandonment of assets                                                   |  |                                      | -0-     |   |      |   | 3,406   |  
|                                                                                           |  |                                      |         |   |      |   |         |  
|NET CASH PROVIDED BY INVESTING ACTIVITIES                                                  |  |                                      | -0-     |   |      |   | 3,406   |  
|                                                                                           |  |                                      |         |   |      |   |         |  
|CASH FLOWS FROM FINANCING ACTIVITIES                                                       |  |                                      |         |   |      |   |         |  
|Proceeds from notes payable                                                                |  |                                      | 9,594   |   |      |   |       |  
|Principal payment on notes payable                                                         |  |                                      |       |   |      |   | (2,500  | )
|                                                                                           |  |                                      |         |   |      |   |         |  
|NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES                                        |  |                                      | 9,594   |   |      |   | (2,500  | )
|                                                                                           |  |                                      |         |   |      |   |         |  
|NET DECREASE IN CASH                                                                       |  |                                      | -0-     |   |      |   | (1,816  | )
|Cash, beginning of period                                                                  |  |                                      | -0-     |   |      |   | 10,946  |  
|Cash, end of period                                                                        |  | $                                    | -0-     |   |      | $ | 9,130   |  
|                                                                                           |  |                                      |         |   |      |   |         |  
|SUPPLEMENTAL CASH FLOW INFORMATION:                                                        |  |                                      |         |   |      |  
|Interest paid                                                                              |  | $                                    | -0-     |   |      | $ | 4,509   |  
|Taxes paid                                                                                 |  |                                      |       |   |      |   |       |  
|SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING 
AND FINANCING ACTIVITIES:                     |  |                                      |         |   |      |   |         |  
|Increase in paid-in capital resulting from:                                                |  |                                      |         |   |      |   |         |  
|Sale of preferred and common stock                                                         |  |                                      |       |   |      |   |       |  
|Deferred offering costs, expenses and assets paid for by a 
Series A preferred shareholder |  |                                      | -0-     |   |      |   | 4,070   |  
|Increase in common stock par value from:                                                   |  |                                      |         |   |      |   |         |  
|Sale of common stock                                                                       |  |                                      |       |   |      |   |       |  
|Conversion of Series A preferred stock to common stock                                     |  |                                      | -0-     |   |      |   | 867     |  
|Increase (decrease) in preferred stock par value from:                                     |  |                                      |         |   |      |   |         |  
|Sale of preferred stock                                                                    |  |                                      |       |   |      |   |       |  
|Conversion of Series A preferred stock to common stock                                     |  |                                      | -0-     |   |      |   | (867    | )
|Decrease in retained earnings for preferred stock dividend                                 |  |                                      | -0-     |   |      |   | (448    | )





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

4



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Atlas Oil and Gas, Inc.

Notes to Financial Statements

March 31, 2009

(Unaudited)

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").

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.

NOTE 2 - 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.

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 March31, 2009 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.



5



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Atlas Oil and Gas, Inc.

Notes to Financial Statements

March 31, 2009

(Unaudited)

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.

REVENUE RECOGNITION

The Company recognizes revenue in accordance with the Securities and Exchange Commission, Staff Accounting Bulletin (SAB) No. 104, Revenue Recognition (SAB No. 104). SAB 104 clarifies application of generally accepted accounting principles related to revenue transactions. The Company also follows the guidance in EITF Issue No. 00-21, Revenue Arrangements with Multiple Deliverables ("EITF Issue No. 00-21"), in arrangements with multiple deliverables.

The Company recognizes revenues when all of the following criteria are met: (1) persuasive evidence of an arrangement exists, (2) delivery of products and services has occurred, (3) the fee is fixed or determinable and (4) collectability is reasonably assured.

The Company receives revenue for consulting services, video streaming services, equipment sales and leasing, installation, content licensing, and maintenance agreements. Sales and leasing agreement terms generally are for one year, and are renewable year to year thereafter. Revenue for consulting services is recognized as the services are provided to customers. For upfront payments and licensing fees related to contract research or technology, the Company determines if these payments and fees represent the culmination of a separate earnings process or if they should be deferred and recognized as revenue as earned over the life of the related agreement. Milestone payments are recognized as revenue upon achievement of contract-specified events and when there are no remaining performance obligations. Revenues from monthly video streaming agreements, as well as equipment maintenance, are recorded when earned. Operating equipment lease revenues are recorded as they become due from customers. Revenues from equipment sales and installation are recognized when equipment delivery and installation have occurred, and when collectability is reasonably assured.

In certain cases, the Company enters into agreements with customers that involve the delivery of more than one product or service. Revenue for such arrangements is allocated to the separate units of accounting using the relative fair value method in accordance with EITF Issue No. 00-21. The delivered item(s) is considered a separate unit of accounting if all of the following criteria are met: (1) the delivered item(s) has value to the customer on a standalone basis, (2) there is objective and reliable evidence of the fair value of the undelivered item(s) and (3) if the arrangement includes a general right of return, delivery or performance of the undelivered item(s) is considered probable and substantially in the control of the vendor. If all the conditions above are met and there is objective and reliable evidence of fair value for all units of accounting in an arrangement, the arrangement consideration is allocated to the separate units of accounting based on their relative fair values.



6



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Atlas Oil and Gas, Inc.

Notes to Financial Statements

March 31, 2009

(Unaudited)

Explicit return rights are not offered to customers; however, the Company may accept returns in limited circumstances. There have been no returns through March 31, 2009.  Therefore, a sales return allowance has not been established since management believes returns will be insignificant.

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.

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 quarter ended March 31, 2009

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 quarter ended March 31, 2009 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.



7



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Atlas Oil and Gas, Inc.

Notes to Financial Statements

March 31, 2009

(Unaudited)

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 quarter ended March 31, 2009, the Company did not grant any stock options.

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).

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 quarter 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.



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Atlas Oil and Gas, Inc.

Notes to Financial Statements

March 31, 2009

(Unaudited)

NOTE 3 - RECENT ACCOUNTING PRONOUNCEMENTS

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.

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



9



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Atlas Oil and Gas, Inc.

Notes to Financial Statements

March 31, 2009

(Unaudited)

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.

On January 1, 2009, the Company adopted Financial Accounting Standards Board (FASB) Statement No. 141R, Business Combinations(FAS 141R), FSP No. FAS 142-3, Determination of the Useful Life of Intangible Assets(FSP FAS 142-3), Statement No. 160, Noncontrolling Interests in Consolidated Financial Statementsan amendment of ARB No. 51(FSP 160), Statement No. 161, Disclosures about Derivative Instruments and Hedging Activities(FAS 161), Emerging Issues Task Force (EITF) Issue No. 07-1 (EITF 07-1), Accounting for Collaborative Arrangements,EITF Issue No. 08-6, Equity Method Investment Accounting Considerations(EITF 08-6), EITF Issue No. 08-7, Accounting for Defensive Intangible Assets(EITF 08-7), FASB Staff Position EITF 03-6-1, Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities(FSP EITF 03-6-1) and FASB Staff Position APB 14-1, Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement)(APB 14-1).

FAS 141R expands the scope of acquisition accounting to all transactions under which control of a business is obtained. This standard requires an acquirer to recognize the assets acquired and liabilities assumed at the acquisition date fair values with limited exceptions. Additionally, FAS 141R requires that contingent consideration as well as contingent assets and liabilities be recorded at fair value on the acquisition date, that acquired in-process research and development be capitalized and recorded as intangible assets at the acquisition date, and also requires transaction costs and costs to restructure the acquired company be expensed. Transactions are now being accounted for under this standard. On April 1, 2009, the FASB issued Staff Position FAS 141(R)-1, Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies,which is effective January 1, 2009, and amends the guidance in FAS 141R to require that assets acquired and liabilities assumed in a business combination that arise from contingencies be recognized at fair value if fair value can reasonably be estimated. If the acquisition date fair value of an asset acquired or liability assumed that arises from a contingency cannot be determined, the asset or liability would be recognized in accordance with FASB Statement No. 5, Accounting for Contingencies(FAS 5),and FASB Interpretation No. 14, Reasonable Estimation of the Amount of a Loss.If the fair value is not determinable and the FAS 5 criteria are not met, no asset or liability would be recognized.

FSP FAS 142-3 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.



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Atlas Oil and Gas, Inc.

Notes to Financial Statements

March 31, 2009

(Unaudited)

FAS 160 provides guidance for the accounting, reporting and disclosure of non-controlling interests and requires, among other things, that non-controlling interests be recorded as equity in the consolidated financial statements.  The adoption of FAS 160 did not affect the Companys consolidated financial position or consolidated results of operations.

FAS 161 requires enhanced disclosures about derivative instruments and hedging activities to allow for a better understanding of their effects on an entitys financial position, financial performance, and cash flows. Among other things, FAS 161 requires disclosure of the fair values of derivative instruments and associated gains and losses in a tabular format. Since FAS 161 requires only additional disclosures about the Companys derivatives and hedging activities, the adoption of FAS 161 did not affect the Companys consolidated financial position or consolidated results of operations.

EITF 07-1 defines collaborative arrangements and establishes reporting requirements for transactions between participants in a collaborative arrangement and between participants in the arrangement and third parties. The effect of adoption of EITF 07-1 did not affect the Companys consolidated financial position or consolidated results of operations.

EITF 08-6, which is effective January 1, 2009, clarifies the accounting for certain transactions and impairment considerations involving equity method investments and is applied on a prospective basis to future transactions.

EITF 08-7, which is effective January 1, 2009, clarifies that a defensive intangible asset (an intangible asset that the entity does not intend to actively use, but intends to hold to prevent others from obtaining access to the asset) should be accounted for as a separate unit of accounting and should be assigned a useful life that reflects the entitys consumption of the expected benefits related to the asset. EITF 08-7 is applied on a prospective basis to future transactions.

FSP EITF 03-6-1 clarifies that share-based payment awards that entitle holders to receive nonforfeitable dividends before they vest will be considered participating securities and included in the earnings per share calculation pursuant to the two class method. The effect of adoption of FSP EITF 03-6-1 was not material to the Companys consolidated results of operations.

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 was adopted on January 1, 2009, and did not affect the Companys consolidated financial position or consolidated results of operations.

Recently Issued Accounting Standards

The FASB recently issued Staff Position FAS 157-4, Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly (FSP FAS 157-4), Staff Position FAS 115-2 and FAS 124-2, Recognition and Presentation of Other-Than-Temporary Impairments(FSP FAS 115-2/124-2) and Staff Position FAS 107-1 and APB 28-1, Interim Disclosures about Fair Value of Financial Instruments(FSP FAS 107-1/APB 28-1). Under FSP FAS 157-4, if an entity determines that there has been a significant decrease in the volume and level of activity for an asset or liability in relation to the normal market activity for the asset or liability (or similar assets or liabilities), then transactions or quoted prices may not accurately reflect fair value. In addition, if there is evidence that the transaction for the asset or liability is not orderly, the entity shall place little, if any, weight on that transaction price as an indicator of fair value. Since FSP FAS 157-4 is effective for interim reporting periods ending after June 15, 2009, the Company will adopt the provisions of FSP FAS 157-4 during the second quarter of 2009 and is currently assessing the impact of adoption on its consolidated financial position and consolidated results of operations.



11



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Atlas Oil and Gas, Inc.

Notes to Financial Statements

March 31, 2009

(Unaudited)

FSP FAS 115-2/124-2 changes existing guidance for determining whether debt securities are other-than-temporarily impaired and replaces the existing requirement that the entitys management assert it has both the intent and ability to hold an impaired security until recovery with a requirement that management assert: (a) it does not have the intent to sell the security; and (b) it is more likely than not it will not have to sell the security before recovery of its cost basis. FSP FAS 115-2/124-2 requires entities to separate an other-than-temporary impairment of a debt security into two components when there are credit related losses associated with the impaired debt security for which management asserts that it does not have the intent to sell the security, and it is more likely than not that it will not be required to sell the security before recovery of its cost basis. The amount of the other-than-temporary impairment related to a credit loss is recognized in earnings, and the amount of the other-than-temporary impairment related to other factors is recorded in other comprehensive loss. Since FSP FAS 115-2/124-2 is effective for interim reporting periods ending after June 15, 2009, the Company will adopt the provisions of FSP FAS 115-2/124-2 during the second quarter of 2009 and is currently assessing the impact of adoption on its consolidated financial position and consolidated results of operations.

FSP FAS 107-1/APB 28-1 requires disclosures about fair values of financial instruments in interim and annual financial statements. Prior to the issuance of FSP FAS 107-1/APB 28-1, disclosures about fair values of financial instruments were only required to be disclosed annually. FSP FAS 107-1/APB 28-1 requires disclosures about fair value of financial instruments in interim and annual financial statements. Since FSP FAS 107-1/APB 28-1 is effective for interim reporting periods ending after June 15, 2009, the Company will adopt FSP FAS 107-1/APB 28-1 in the second quarter 2009. Since FSP FAS 107-1/APB 28-1 requires only additional disclosures of fair values of financial instruments in interim financial statements, the adoption will not affect the Companys consolidated financial position or consolidated results of operations.

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 March 31, 2009 the Company had Federal and state net operating losses of approximately $972,000 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.

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.



12



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Atlas Oil and Gas, Inc.

Notes to Financial Statements

March 31, 2009

(Unaudited)

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 $10,392 and has retained deficit of $972,444 at March 31, 2009. In addition, the Company has not generated cash flows from operations for the quarter ended March 31, 2009. 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 - 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 March 31, 2009.

NOTE 9 - 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 March 31, 2009.

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 March 31, 2009.

NOTE 10  NET GAIN ON THE SALE, ABANDOMENT OR WRITE-OFF OF ASSETS

During the year ended March 31, 2009, 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.



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Atlas Oil and Gas, Inc.

Notes to Financial Statements

March 31, 2009

(Unaudited)

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.

NOTE 11  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 March 31, 2009, $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



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Atlas Oil and Gas, Inc.

Notes to Financial Statements

March 31, 2009

(Unaudited)

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.

Pursuant to the terms of the Note Purchase Agreement, on June 6, 2008, Daniel Motsinger, 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 12  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.



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Atlas Oil and Gas, Inc.

Notes to Financial Statements

March 31, 2009

(Unaudited)

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:

|                |  |             |           |  |              |      |      |     |  |       |         |   |  |       |       |  
|--------------- |  | ----------- | --------- |  | ------------ | ---- | ---- | --- |  | ----- | ------- | - |  | ----- | ----- | -
|Well Name       |  | API/PUN No. |           |  | Working Int. |      |      | NRI |  |       | Net NRI |  
|Eric 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 | %    



Name and Domicile Change

In October 2008, 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.





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ITEM 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

The following is management's discussion and analysis of certain significant factors that have affected our financial condition, results of operations and cash flows during the periods included in the accompanying unaudited financial statements. This discussion should be read in conjunction with the financial statements and notes included in our Annual Report on Form 10-K.

Special Note Regarding Forward Looking Statements

This Quarterly Report on Form 10-Q contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. The Act provides a safe harbor for forward-looking statements to encourage companies to provide prospective information about themselves so long as they identify these statements as forward-looking and provide meaningful cautionary statements identifying important factors that could cause actual results to differ from the projected results. All statements, other than statements of historical fact, that we make in this Quarterly Report on Form 10-Q are forward-looking. The words "anticipates," "believes," "expects," "intends," "will continue," "estimates," "plans," "projects," the negative of these terms and similar expressions are intended to identify forward-looking statements. However, the absence of these words does not mean the statement is not forward-looking.

Forward-looking statements involve risks, uncertainties or other factors which may cause actual results to differ materially from the future results, performance or achievements expressed or implied by the forward-looking statements. These statements are based on our management's beliefs and assumptions, which in turn are based on currently available information. Certain risks, uncertainties or other important factors are detailed in this Quarterly Report on Form 10-Q and may be detailed from time to time in other reports we file with the Securities and Exchange Commission, including on Forms 8-K and 10-K.

Examples of forward looking statements in this Quarterly Report on Form 10-Q include, but are not limited to, our expectations regarding our ability to generate operating cash flows and to fund our working capital and capital expenditure requirements. Important assumptions relating to the forward-looking statements include, among others, assumptions regarding demand for our products, pricing levels, the timing and cost of capital expenditures, competitive conditions and general economic conditions. These assumptions could prove inaccurate. Although we believe that the estimates and projections reflected in the forward-looking statements are reasonable, our expectations may prove to be incorrect. Important factors that could cause actual results to differ materially from the results and events anticipated or implied by such forward-looking statements include:

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the risks of a development stage company;

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managements plans, objectives and budgets for its future operations and future economic performance;

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capital budget and future capital requirements;

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meeting future capital needs;

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our dependence on management and the need to recruit additional personnel;

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limited trading for our common stock

·

the level of future expenditures;

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impact of recent accounting pronouncements;

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the outcome of regulatory and litigation matters; and

·

the assumptions described in this report underlying such forward-looking statements. Actual results and developments may materially differ from those expressed in or implied by such statements due to a number of factors, including:

·

those described in the context of such forward-looking statements;

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future product development and marketing costs;

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changes in our pricing plans;

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timely development and acceptance of our products;

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the markets of our domestic operations;

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the impact of competitive products and pricing;

·

the political, social and economic climate in which we conduct operations; and

·

the risk factors described in other documents and reports filed with the Securities and Exchange Commission.



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We operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for us to predict all of those risks, nor can we assess the impact of all of those risks on our business or the extent to which any factor may cause actual results to differ materially from those contained in any forward-looking statement. We believe these forward-looking statements are reasonable. However, you should not place undue reliance on any forward-looking statements, which are based on current expectations. Further, forward-looking statements speak only as of the date they are made, and unless required by law, we expressly disclaim any obligation or undertaking to update publicly any of them in light of new information or future events.

In this Quarterly Report on Form 10-Q, "Company," "the Company," "us," and "our" refer to Atlas Oil and Gas, Inc., a Nevada corporation, and our subsidiaries, unless the context requires otherwise.

Prior Year Developments

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 was $83,442. The sale was reported as Other Income  Gain on Sale of Assets.

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 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.

Preferred Stock Conversions

During the first quarter of 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.

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 June 9, 2008, $25,000 had been advanced under the Note Purchase Agreement to pay Reporting Costs. During the subsequent four-week period, the Purchasers are obligated to provide working capital of up to $25,000 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



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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 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.

Results of Operations

During the three months ended March 31, 2009, we realized a net loss from operations of $10,392 as compared to a net loss of $39,959 during the three months ended March 31, 2008. The difference is a result of less administrative expenses in the current year.

The Company had losses from businesses discontinued which were offset by gain on the abandonment of assets in the prior comparable quarter ended March 31, 2008.

Financial Condition

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 first three months of 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 and sold a portion of our monitoring contracts, for which we received net proceeds of $83,442, to support short-term financing needs. Subsequent to March 31, 2008, in an effort to assure that we are able to meet our ongoing obligations in light of weak market conditions, we entered into a Note Purchase Agreement pursuant to which we agreed to issue up to $575,000 in principal amount of convertible



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promissory notes in order to secure financing to meet our obligations and support basic operations. As of June 9, 2008 we had received $25,000 of funding under the Note Purchase Agreement. We expect to receive additional funding over a 45-day period 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 are expected to effectively take 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.

Financing Transactions. In order to finance certain short-term requirements and operations, during the quarter ended March 31, 2008, we sold a portfolio of security monitoring contracts for net proceeds of $83,442. See Prior Year Developments - Sale of Monitoring Contracts above.

Off-Balance Sheet Arrangements

The Company had no off-balance sheet arrangements at March 31, 2009.

Inflation

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

CRITICAL ACCOUNTING POLICIES

The Securities and Exchange Commission issued Financial Reporting Release No. 60, "Cautionary Advice Regarding Disclosure about Critical Accounting Policies" suggesting that companies provide additional disclosure and commentary on their most critical accounting policies. In Financial Reporting Release No. 60, the Securities and Exchange Commission has defined the most critical accounting policies as the ones that are most important to the portrayal of a company's financial condition and operating results, and require management to make its most difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain. Based on this definition, we have identified the following significant policies as critical to the understanding of our condensed financial statements. The preparation of our condensed financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed financial statements and the reported amounts of expenses during the reporting periods. Areas where significant estimation judgments are made and where actual results could differ materially from these estimates are the carrying amount of our intangible assets.

We believe the following is among the most critical accounting policies that impact our financial statements:

We evaluate impairment of our long-lived assets by applying the provisions of SFAS No. 144. In applying those provisions, we have not recognized any impairment charge on our long-lived assets during the three-months ended March 31, 2009.

We suggest that our significant accounting policies, as described in our financial statements in the Summary of Significant Accounting Policies, be read in conjunction with this Management's Discussion and Analysis of Financial Condition and

Revenue Recognition

The Company recognizes revenue in accordance with the Securities and Exchange Commission, Staff Accounting Bulletin (SAB) No. 104, Revenue Recognition (SAB No. 104). SAB 104 clarifies application of generally accepted accounting principles related to revenue transactions. The Company also follows the guidance in EITF Issue No. 00-21, Revenue Arrangements with Multiple Deliverables ("EITF Issue No. 00-21"), in arrangements with multiple deliverables.

The Company recognizes revenues when all of the following criteria are met: (1) persuasive evidence of an arrangement exists, (2) delivery of products and services has occurred, (3) the fee is fixed or determinable and (4) collectability is reasonably assured.

The Company receives revenue for consulting services, video streaming services, equipment sales and leasing, installation, content licensing, and maintenance agreements. Sales and leasing agreement terms generally are for one year, and are renewable year to year thereafter. Revenue for consulting services is recognized as the services are provided to customers. For upfront payments and licensing fees related to contract research or technology, the



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Company determines if these payments and fees represent the culmination of a separate earnings process or if they should be deferred and recognized as revenue as earned over the life of the related agreement. Milestone payments are recognized as revenue upon achievement of contract-specified events and when there are no remaining performance obligations. Revenues from monthly video streaming agreements, as well as equipment maintenance, are recorded when earned. Operating equipment lease revenues are recorded as they become due from customers. Revenues from equipment sales and installation are recognized when equipment delivery and installation have occurred, and when collectability is reasonably assured.

In certain cases, the Company enters into agreements with customers that involve the delivery of more than one product or service. Revenue for such arrangements is allocated to the separate units of accounting using the relative fair value method in accordance with EITF Issue No. 00-21. The delivered item(s) is considered a separate unit of accounting if all of the following criteria are met: (1) the delivered item(s) has value to the customer on a standalone basis, (2) there is objective and reliable evidence of the fair value of the undelivered item(s) and (3) if the arrangement includes a general right of return, delivery or performance of the undelivered item(s) is considered probable and substantially in the control of the vendor. If all the conditions above are met and there is objective and reliable evidence of fair value for all units of accounting in an arrangement, the arrangement consideration is allocated to the separate units of accounting based on their relative fair values.

Explicit return rights are not offered to customers; however, the Company may accept returns in limited circumstances. There have been no returns through March 31, 2009.  Therefore, a sales return allowance has not been established since management believes returns will be insignificant.

WHERE YOU CAN FIND MORE INFORMATION

You are advised to read this Form 10-Q 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, Annual report on Form 10-K, 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 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We do not hold any derivative instruments and do not engage in any hedging activities.

ITEM 4.

CONTROLS AND PROCEDURES

a) Evaluation of Disclosure Controls and Procedures

Our Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of the Companys internal control over financial reporting as of March 31, 2009. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control  Integrated Framework. Based on this evaluation, our management, with the participation of the Chief Executive Officer and Chief Financial Officer, concluded that, as of March 31, 2009, our internal control over financial reporting was ineffective. However as of the date of the filing of the Form 10Q management has implemented changes that it has determined will make it financial reporting process effective as of the date of this filing.

A controls system cannot provide absolute assurance, however, that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

Our Chief Executive Officer and Chief Financial Officer are responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their



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control objectives. Furthermore, smaller reporting companies face additional limitations. Smaller reporting companies employ fewer individuals and find it difficult to properly segregate duties. Often, one or two individuals control every aspect of the Company's operation and are in a position to override any system of internal control. Additionally, smaller reporting companies tend to utilize general accounting software packages that lack a rigorous set of software controls.

b) Changes in Internal Control over Financial Reporting.

During the Quarter ended March 31, 2009, there was no change in our internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.



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PART II OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS

The Company is not a party to any litigation and, to its knowledge, no action, suit or proceeding has been threatened against the Company.

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 Quarterly Report on Form 10-Q, 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.We have updated the risk factors previously disclosed in our Annual Report on Form 10K for the year ended December 31, 2008, which was filed with the Securities and Exchange Commission on April 1, 2009 (the Fiscal 2008 10K). We believe there are no changes that constitute material changes from the risk factors previously disclosed in the Fiscal 2008 10K except as updated and disclosed below.

POSSIBLE PENNY STOCK REGULATION

Any trading of our common stock in the Pink Sheets or on the OTC Bulletin Board may be subject to certain provisions of the Securities Exchange Act of 1934, commonly referred to as the penny stock rule.

Our common stock is deemed to be penny stock as that term is defined in Rule 3a51-1 promulgated under the Securities Exchange Act of 1934. Penny stocks are stock:

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With a price of less than $5.00 per share;

·

That are not traded on a recognized national exchange;

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Whose prices are not quoted on the Nasdaq automated quotation system (Nasdaq listed stock must still have a price of not less than $5.00 per share); or

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In issuers with net tangible assets less than $2.0 million (if the issuer has been in continuous operation for at least three years) or $5.0 million (if in continuous operation for less than three years), or with average revenues of less than $6.0 million for the last three years.

Broker/dealers dealing in penny stocks are required to provide potential investors with a document disclosing the risks of penny stocks. Moreover, broker/dealers are required to determine whether an investment in a penny stock is a suitable investment for a prospective investor. These requirements may reduce the potential market for our common stock by reducing the number of potential investors. This may make it more difficult for investors in our common stock to sell shares to third parties or to otherwise dispose of them. This could cause our stock price to decline.

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.

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.



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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

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.

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.

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.



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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.

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, LIMITED OPERATING HISTORY AND LACK OF PROFITS WHICH COULD LEAD TO WIDE FLUCTUATIONS IN OUR SHARE PRICE.

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.

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.



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FINRA SALES PRACTICE REQUIREMENTS MAY ALSO LIMIT A STOCKHOLDER'S ABILITY TO BUY AND SELL OURSTOCK.

In addition to the penny stock rules described above, the Financial Industry Regulatory Authority (FINRA) has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer's financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for our shares.

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.

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.

ITEM 2.

CHANGES IN SECURITIES AND SMALL BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES

There were no changes in securities and small business issuer purchases of equity securities during the period ended March 31, 2009

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

There were no defaults upon senior securities during the period ended March 31, 2009.

ITEM 4.

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

There were no matters submitted to the vote of securities holders during the period ended March 31, 2009.

ITEM 5.

OTHER INFORMATION

Subsequent events.  On May 8, 2009 the Company entered into a definitive agreement for the acquisition of Sagrada Investments, Inc. a newly formed Nevada corporation, the result of which will ultimately change control of the Company to Sagrada shareholders.  In the collateral agreements, Thomas Cunningham was elected a director and president of the Company. The Company has filed a Form 8(K) contemporaneously in conjunction with this event. Sagrada intends to further the Companys business in the oil and gas arena.  In addition the Company entered into agreements with Mark Trimble and John Peper which modified the prior agreements between the Note Purchase and Stock Purchase Agreements resulting in Messrs Trimble and Peper resigning from all positions in the Company and receiving a non-recourse note from the Company secured by the current oil and gas interests of the Company as explained in the Form 8(K).

There is no information with respect to which information is not otherwise called for by this form.



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ITEM 6.

EXHIBITS

Exhibits:

31.1

Certification of Chief Executive Officer and Principal Financial and Accounting Officer Pursuant to Section 302 of the Sarbanes-Oxley Act.



32.1

Certification of Chief Executive Officer and Principal Financial and Accounting Officer Pursuant to Section 906 of the Sarbanes-Oxley Act.



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SIGNATURES

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





| |                         |                            
| | ----------------------- | ---------------------------
| | ATLAS OIL AND GAS, INC.
| |                         |                            
| | By:                     | /s/ DAN MOTSINGER          
| |                         | Dan Motsinger              
| |                         | Chief Executive Officer and
| |                         | Chief Financial Officer    



Date: May 19, 2009



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