| ý | ANNUAL      REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF      1934For      The Fiscal Year Ended December 31, 2008OR                                                |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ¨ | TRANSITION      REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF      1934For      The Transition Period from ___________ to ________Commission      File Number 0-6247 |

| Delaware(State      or other jurisdiction of incorporation or organization)                             | 75-1256622(I.R.S.      EmployerIdentification      No.)  |
|--------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------|
| 10830      North Central Expressway Suite 175Dallas,      Texas(Address      of principal executive offices) | 75231(Zip      code)                                          |

----

----

|  PART      I                                                                                                                                                                                                                                              |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ITEM      1.   BUSINESS                                                                                                                                                                                                                         |   |
|                                                                                                                                                                                                                                                           | General | 1 |
|                                                                                                                                                                                                                                                           | International      Operations | 2 |
|                                                                                                                                                                                                                                                           | Competition | 5 |
|                                                                                                                                                                                                                                                           | Environmental      Matters | 6 |
|                                                                                                                                                                                                                                                           | Personnel | 7 |
|                                                                                                                                                                                                                                                           | Available      Information | 8 |
|                                                                                                                                                                                                                                                           |   |   |
| ITEM      1A.  RISK FACTORS                                                                                                                                                                                                                          | 8 |
|                                                                                                                                                                                                                                                           |   |   |
| ITEM      1B.  UNRESOLVED STAFF COMMENTS                                                                                                                                                                                                             | 11 |
|                                                                                                                                                                                                                                                           |   |   |
| ITEM      2.   PROPERTIES                                                                                                                                                                                                                       |   |
|                                                                                                                                                                                                                                                           | United      States Specialty Products Facility | 11 |
|                                                                                                                                                                                                                                                           | Saudi      Arabia Mining Properties | 13 |
|                                                                                                                                                                                                                                                           | United      States Mineral Interests | 18 |
|                                                                                                                                                                                                                                                           | Offices | 19 |
|                                                                                                                                                                                                                                                           |   |   |
| ITEM      3.   LEGAL PROCEEDINGS                                                                                                                                                                                                                | 21 |
|                                                                                                                                                                                                                                                           |   |   |
| ITEM      4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY      HOLDERS                                                                                                                                                                         | 21 |
|                                                                                                                                                                                                                                                           |   |   |
|                                                                                                                                                                                                                                                           |  PART      II  |   |
| ITEM      5.   MARKET FOR REGISTRANT’S COMMON EQUITY AND      RELATED   SHAREHOLDER   MATTERS      AND ISSUER PURCHASES OF EQUITY SECURITIES                                                                | 22 |
|                                                                                                                                                                                                                                                           |   |   |
| ITEM      6.   SELECTED FINANCIAL DATA                                                                                                                                                                                                          | 23 |
|                                                                                                                                                                                                                                                           |   |   |
| ITEM      7.   MANAGEMENT’S DISCUSSION AND ANALYSIS OF      FINANCIAL  CONDITION AND   RESULTS      OF OPERATION                                                                                                 |   |
|                                                                                                                                                                                                                                                           | General | 23 |
|                                                                                                                                                                                                                                                           | Liquidity      and Capital Resources | 23 |
|                                                                                                                                                                                                                                                           | Results      of Operations | 27 |
|                                                                                                                                                                                                                                                           | Critical      Accounting Policies | 32 |
|                                                                                                                                                                                                                                                           |   |   |
| ITEM      7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET    RISK                                                                                                                                                                                    | 35 |
|                                                                                                                                                                                                                                                           |   |   |
| ITEM      8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY      DATA                                                                                                                                                                           | 35 |
|                                                                                                                                                                                                                                                           |   |   |
| ITEM      9.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON      ACCOUNTING   AND      FINANCIAL DISCLOSURE                                                                                                            | 36 |
|                                                                                                                                                                                                                                                           |   |   |
| ITEM      9A.  CONTROLS AND PROCEDURES                                                                                                                                                                                                               | 36 |
|                                                                                                                                                                                                                                                           |   |   |
| ITEM      9B.  OTHER INFORMATION                                                                                                                                                                                                                     | 37 |
|                                                                                                                                                                                                                                                           |   |   |
|                                                                                                                                                                                                                                                           | PART      III  |   |
| ITEM      10.   DIRECTORS AND EXECUTIVE OFFICERS OF THE      REGISTRANT                                                                                                                                                                         | 38 |
|                                                                                                                                                                                                                                                           |   |   |
| ITEM      11.   EXECUTIVE COMPENSATION                                                                                                                                                                                                          | 39 |
|                                                                                                                                                                                                                                                           |   |   |
| ITEM      12.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL      OWNERS                    AND      MANAGEMENT AND RELATED STOCKHOLDER MATTERS | 43 |
|                                                                                                                                                                                                                                                           |   |   |
| ITEM      13.   CERTAIN RELATIONSHIPS AND RELATED      TRANSACTIONS                                                                                                                                                                             | 45 |

----

|                                                                      |               |   |
|---------------------------------------------------------------------------|--------------------|--------|
| ITEM      14.   PRINCIPAL ACCOUNTING FEES ANDSERVICES      | 45                 |
|                                                                      |               |   |
|                                                                      | PART      IV  |   |
| ITEM      15.   EXHIBITS, FINANCIAL STATEMENT    SCHEDULES | 47                 |

----

----

|   | • | ongoing      instability or changes in a country’s or region’s economic or political      conditions, including inflation, recession, interest rate fluctuations and      actual or anticipated military or political  conflicts; |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | trade      regulations and procedures and actions affecting production, pricing and      marketing of products; |
|--------|---------|-----------------------------------------------------------------------------------------------------------------|

----

|   | • | import,      export or other business licensing requirements or requirements relating      to making foreign direct investments, which could affect our ability to      obtain favorable terms for labor and raw materials or lead to penalties or      restrictions; |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | difficulties      associated with repatriating cash generated or held abroad in a      tax-efficient manner and changes in tax laws;  and |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | fluctuations      in freight costs and disruptions in the transportation and shipping      infrastructure at important geographic points of exit and entry for our      products and shipments. |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

----

----

----

|   | • | Speculation      in the press or investment community about, or actual changes in, our      executive team, strategic position, business, organizational structure,      operations, financial condition, financial reporting and results,      effectiveness of cost cutting efforts, prospects or extraordinary      transactions; |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Announcements      of new products, services, technological innovations or acquisitions by      the Company or competitors; and |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------|

|   | • | Quarterly      increases or decreases in revenue, gross margin or earnings, changes in      estimates by the investment community or guidance provided by the Company,      and variations between actual and estimated financial    results. |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | combining      product offerings and entering into new markets in which the Company is      not experienced; |
|--------|---------|--------------------------------------------------------------------------------------------------------------|

|   | • | convincing      customers and distributors that the transaction will not diminish client      service standards or business focus, preventing customers and distributors      from deferring purchasing decisions or switching to other suppliers (which      could result in      our incurring additional obligations in order to address customer      uncertainty), and      coordinating sales, marketing and distribution      efforts; |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | • | minimizing      the diversion of management attention from ongoing business      concerns; |
|--------|---------|--------------------------------------------------------------------------------------------|

|   | • | persuading      employees that business cultures are compatible, maintaining employee      morale and retaining key employees, engaging with employee works councils      representing an acquired company’s non-U.S. employees, integrating      employees into the Company, correctly estimating employee benefit costs      and implementing restructuringprograms; |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | coordinating      and combining administrative, manufacturing, and other operations,      subsidiaries, facilities and relationships with third parties in      accordance with local laws and other obligations while maintaining      adequate standards, controls andprocedures; |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | managing      integration issues shortly after or pending the completion of other      independent transactions. |
|--------|---------|------------------------------------------------------------------------------------------------------------------|

----

----

----

----

1

2

----

| 1 | “Gossan”      means the rust colored oxidized, capping or staining of a mineral deposit,      generally formed by the oxidation or alteration of iron      sulphide. |
|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2 | “Dore”      means unrefined gold and silver bullion bars consisting of approximately      90% precious metals which will be further refined to almost pure      metal. |
|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | Average      Price               | Spot      Price as of                       | Percentage          |   |
|--------|----------------------------------|---------------------------------------------|---------------------|--------|
|   | For 2006-2008                    | 12/31/08                                    | Increase (Decrease) |   |
| Gold   | $723.00      per ounce           | $869.75      per ounce                      |                | 20.30  | % |
| Silver | $      13.30 per ounce           | $      10.79  per ounce           |                | (18.87 | %) |
| Copper | $  3.16      per pound | $  1.32  per      pound |                | (58.23 | %) |
| Zinc   | $  1.47      per pound | $  0.51  per      pound |                | (65.31 | %) |

  

----

----

| Zone          |   | MineralizedMaterials(Tonnes) |      |   | Copper (%) |   |   | Zinc (%) |   |   | Gold  (g/t) |   |   | Silver (g/t) |   |
|---------------|--------|------------------------------|-----------|--------|-----------------|--------|--------|---------------|--------|--------|-----------------------|--------|--------|-------------------|--------|
| Saadah        |   |                         | 3,872,400 |   |            |   | 1.67   |          |   |   | 4.73                  |   |   |              | 1.00   |   |   |   | 28.36 |   |
| Al      Houra |   |                         | 2,465,230 |   |            |   | 1.22   |          |   |   | 4.95                  |   |   |              | 1.46   |   |   |   | 50.06 |   |
| Moyeath       |   |                         | 874,370   |   |            |   | 0.88   |          |   |   | 8.92                  |   |   |              | 1.29   |   |   |   | 64.85 |   |
| Total         |   |                         | 7,212,000 |   |            |   | 1.42   |          |   |   | 5.31                  |   |   |              | 1.19   |   |   |   | 40.20 |   |

----

----

----

----

----

|                                        |   | NASDAQ/OTC      Bulletin Board |   |
|---------------------------------------------|--------|--------------------------------|--------|
|                                        |   | High                           |   |   | Low |   |
| Fiscal      Year Ended December 31, 2008    |   |                           |   |   |   |   |
| First Quarter ended March 31,      2008     |   | $                              | 7.16   |   |   | $ | 6.88 |   |
| Second Quarter ended June 30,      2008     |   | $                              | 6.21   |   |   | $ | 5.89 |   |
| Third Quarter ended September 30,      2008 |   | $                              | 4.66   |   |   | $ | 4.35 |   |
| Fourth Quarter ended December 31,      2008 |   | $                              | 1.76   |   |   | $ | 1.50 |   |
|                                        |   |                           |   |   |   |   |   |   |
| Fiscal      Year Ended December 31, 2007    |   |                           |   |
| First Quarter ended March 31,      2007     |   | $                              | 3.41   |   |   | $ | 3.30 |   |
| Second Quarter ended June 30,      2007     |   | $                              | 6.30   |   |   | $ | 6.00 |   |
| Third Quarter ended September 30,      2007 |   | $                              | 6.07   |   |   | $ | 5.91 |   |
| Fourth Quarter ended December 31,      2007 |   | $                              | 7.74   |   |   | $ | 7.55 |   |
|                                        |   |                           |   |   |   |   |   |   |

----

|                                                       |   | 2008 |    |   | 2007   |   |    | 2006   |   |   | 2005   |   |   | 2004 |   |
|------------------------------------------------------------|--------|------|---------|--------|--------|--------|---------|--------|--------|--------|--------|--------|--------|------|--------|
| Revenues                                                   |   | $    | 154,630 |   |   | $      | 108,638 |   |   | $      | 98,502 |   |   | $    | 82,416 |   |   | $ | 59,793 |   |
| Net      Income (Loss)                                     |   | $    | (8,875  | )      |   | $      | 7,771   |   |   | $      | 7,875  |   |   | $    | 16,636 |   |   | $ | (2,551 | ) |
| Net      Income (Loss) Per Share-Diluted                   |   | $    | (0.38   | )      |   | $      | 0.33    |   |   | $      | 0.34   |   |   | $    | 0.73   |   |   | $ | (.11 | ) |
| Total      Assets (at December 31)                         |   | $    | 98,146  |   |   | $      | 84,221  |   |   | $      | 71,590 |   |   | $    | 66,974 |   |   | $ | 51,048 |   |
| Notes      Payable (at December 31)                        |   | $    | 12      |   |   | $      | 11,012  |   |   | $      | 11,013 |   |   | $    | 11,026 |   |   | $ | 11,744 |   |
| Current      Portion of Long-Term Debt (at December 31)    |   | $    | 4,920   |   |   | $      | 31      |   |   | $      | 489    |   |   | $    | 1,426  |   |   | $ | 3,071 |   |
| Total      Long-Term Debt Obligations(at      December 31) |   | $    | 23,557  |   |   | $      | 9,078   |   |   | $      | 5,108  |   |   | $    | 9,839  |   |   | $ | 4,916 |   |

----

----

----

----

|                                                                                            |   | Payments      due by period |       |
|-------------------------------------------------------------------------------------------------|--------|-----------------------------|------------|
| Contractual Obligations                                                                         |   | Total                       |       |   | Less      than1 year |   |   | 1-3      years |   |   | 3-5      years |   |   | More      than 5 years |   |
| Long-Term      Debt Obligations                                                                 |   | $                           | 28,458,726 |   |   | $ | 4,901,432 |   |   | $ | 13,326,312 |   |   | $ | 2,707,585 |   |   | $ | 7,523,397 |   |
| Capital      Lease Obligations                                                                  |   |                        | 19,523     |   |   |   | 19,523 |   |   |   | --- |   |   |   | --- |   |   |   | --- |   |
| Operating      Lease Obligations                                                                |   |                        | ---        |   |   |   | --- |   |   |   | --- |   |   |   | --- |   |   |   | --- |   |
| Purchase      Obligations                                                                       |   |                        | ---        |   |   |   | --- |   |   |   | --- |   |   |   | --- |   |   |   | --- |   |
| Other      Long-Term Liabilities Reflected on the Company’s Balance Sheet under      GAAP |   |                        | ---        |   |   |   | --- |   |   |   | --- |   |   |   | --- |   |   |   | --- |   |
| Total                                                                                           |   | $                           | 28,478,249 |   |   | $ | 4,920,955 |   |   | $ | 13,326,312 |   |   | $ | 2,707,585 |   |   | $ | 7,523,397 |   |

----

|                                      |   | 2008                |    |   | 2007   |   |    | 2006   |   |
|-------------------------------------------|--------|---------------------|---------|--------|--------|--------|---------|--------|--------|
| TOCCO                                     |   | (in      thousands) |    |
| Petrochemical      Product Sales          |   | $                   | 130,264 |   |   | $      | 103,205 |   |   | $ | 93,855 |   |
| Transloading      Sales                   |   |                | 20,239  |   |   |   | -       |   |   |   | - |   |
| Toll      Processing                      |   |                | 4,127   |   |   |   | 5,433   |   |   |   | 4,647 |   |
| Gross      Revenue                        |   | $                   | 154,630 |   |   | $      | 108,638 |   |   | $ | 98,502 |   |
|                                      |   |                |    |   |   |   |    |   |   |   |   |   |
| Volume      of sales (thousand gallons)   |   |                | 46,311  |   |   |   | 40,144  |   |   |   | 38,073 |   |
|                                      |   |                |    |   |   |   |    |   |   |   |   |   |
| Cost      of Materials                    |   | $                   | 131,665 |   |   | $      | 66,989  |   |   | $ | 60,131 |   |
| Total      Operating Expense              |   | $                   | 27,562  |   |   | $      | 22,696  |   |   | $ | 19,758 |   |
| Natural      Gas Expense                  |   | $                   | 7,310   |   |   | $      | 6,109   |   |   | $ | 5,707 |   |
| General      & Administrative Expense |   | $                   | 6,966   |   |   | $      | 5,687   |   |   | $ | 4,600 |   |
|                                      |   |                |    |   |   |   |    |   |   |   |   |   |
| Capital      Expenditures                 |   | $                   | 15,038  |   |   | $      | 10,799  |   |   | $ | 3,734 |   |

----

----

| (in      thousands)             |   | 2008 |   |   | 2007   |   |   | 2006   |   |
|---------------------------------|--------|------|--------|--------|--------|--------|--------|--------|--------|
| General      corporate expenses |   | $    | 2,399  |   |   | $      | 2,178  |   |   | $ | 1,242 |   |

----

----

----

----

----

----

----

----

| Name;      Current Positions Held                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | Age            |   | Date      of Election     |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------|--------|---------------------------|
|  Hatem      El      Khalidi                                                                           President      of the Company since 1975; prior to 1975 Vice President of the Company;      Chief Executive Officer of the Company since February 1994 |   |  84       |   |  April      1968     |
|  Nicholas      N. Carter ……………………………………………….Executive      Vice President, Chief Executive Officer of the Company since January 2008,      President of the Petrochemical Company since 1987                                                                                                                                                                                                                                                                                                                                            |   |  62  |   |  August      2004    |
|  Robert      E. Kennedy ……………………………………………….Chairman      of the Audit and Compensation Committees; Member of Nominating      Committee                                                                                                                                                                                                                                                                                                                                                                                                  |   |  65       |   |  January      2007   |
|  Ghazi      Sultan                                                                           Chairman      of the Nominating Committee; Member of  Compensation and Audit      Committees                                                          |   |  71       |   |  September      1993 |
| Ibrahim      Al      Moneef                                                                           Member      of the Compensation and Nominating Committees                                                                                                   |   |  68       |   |  April      2007     |
| Mohammed      Al      Omair                                                                           Member      of  Audit, Compensation and Nominating Committees                                                                                |   |  65       |   |  October      2007   |
| Charles      Goehringer,      Jr.                                                                           Member      of Compensation and Nominating Committees                                                                                                 |   |  50       |   |  October      2007   |

----

| Name                    |   | Positions                                                                                  |   | Age |
|-------------------------|--------|--------------------------------------------------------------------------------------------|--------|-----|
| Hatem      El Khalidi   |   | President,      Chief Executive Officer and Director                                       |   | 84  |
| Nicholas      N. Carter |   | Executive      Vice President, Chief Operating Officer and Director/President -      TOCCO |   | 62  |
| Connie      Cook        |   | Secretary      and Treasurer/Secretary - TOCCO                                             |   | 46  |

----

----

| Name      andPrincipal Position                                                                                        | Year   |   | Salary($) (1) |    |   | Bonus($) |   |   | RestrictedStockAward(s)($) |   |   | Stock      Award(s) |   |   | Non-EquityIncentivePlanCompensation($) |   |   | Change      in Pension Value and Nonqualified Deferred Compensation      Earnings($) |   |   | All      OtherCompensation($) (2)(3) |   |   | Total      ($) |   |
|------------------------------------------------------------------------------------------------------------------------|--------|--------|---------------|---------|--------|----------|--------|--------|----------------------------|--------|--------|---------------------|--------|--------|----------------------------------------|--------|--------|--------------------------------------------------------------------------------------|--------|--------|--------------------------------------|--------|--------|----------------|--------|
| Hatem      El Khalidi,President      and ChiefExecutive      Officer, Director                                         | 2008   |   | $             | 72,000  |   |     |   | --     |                       |   |   | --                  |   |   |                                   | --     |   |                                                                                 |   | --     |                                 |   |   | --             |   |   | $ | 8,000 |   |   | $ | 80,000 |   |
| 2007                                                                                                                   |   | $      | 72,000        |    |   |     | --     |   |                       |   | --     |                |   |   | --                                     |   |   |                                                                                 | --     |   |                                 |   | --     |           |   | $ | 8,000 |   |   | $ | 80,000 |   |
| 2006                                                                                                                   |   | $      | 72,000        |    |   |     | --     |   |                       |   | --     |                |   |   | --                                     |   |   |                                                                                 | --     |   |                                 |   | --     |           |   | $ | 8,000 |   |   | $ | 80,000 |   |
| Nicholas      N. Carter,Executive      Vice President and Chief Operating OfficerPresident,      Petrochemical Company | 2008   |   | $             | 209,918 |   |     | $      | 78,665 |                       |   | $      | 99,800              |   |   |                                   | --     |   |                                                                                 |   | --     |                                 |   |   | --             |   |   | $ | 12,595 |   |   | $ | 400,978 |   |
| 2007                                                                                                                   |   | $      | 172,059       |    |   | $        | 96,506 |   |                       | $      | 66,000 |                |   |   | --                                     |   |   |                                                                                 | --     |   |                                 |   | --     |           |   | $ | 10,324 |   |   | $ | 344,889 |   |
| 2006                                                                                                                   |   | $      | 163,044       |    |   | $        | 97,994 |   |                       | $      | 30,000 |                |   |   | --                                     |   |   |                                                                                 | --     |   |                                 |   | --     |           |   | $ | 9,783 |   |   | $ | 300,821 |   |
| Connie      J. Cook,Secretary      and Treasurer                                                                       | 2008   |   | $             | 133,009 |   |     | $      | 51,143 |                       |   | $      | 49,900              |   |   |                                   | --     |   |                                                                                 |   | --     |                                 |   |   | --             |   |   | $ | 7,981 |   |   | $ | 242,033 |   |
| 2007                                                                                                                   |   | $      | 108,500       |    |   | $        | 70,085 |   |                       | $      | 33,000 |                |   |   | --                                     |   |   |                                                                                 | --     |   |                                 |   | --     |           |   | $ | 6,510 |   |   | $ | 218,095 |   |
| 2006                                                                                                                   |   | $      | 102,816       |    |   | $        | 73,057 |   |                       | $      | 15,000 |                |   |   | --                                     |   |   |                                                                                 | --     |   |                                 |   | --     |           |   | $ | 6,169 |   |   | $ | 197,042 |   |
| Mark      D. Williamson,Vice      President of Marketing, Petrochemical Company                                        | 2008   |   | $             | 240,705 |   |     | $      | 51,143 |                       |   |   | 49,900              |   |   |                                   | --     |   |                                                                                 |   | --     |                                 |   |   | --             |   |   | $ | 14,442 |   |   | $ | 356,190 |   |
| 2007                                                                                                                   |   | $      | 190,393       |    |   | $        | 70,023 |   |                       |   | --     |                |   |   | --                                     |   |   |                                                                                 | --     |   |                                 |   | --     |           |   | $ | 11,424 |   |   | $ | 271,840 |   |
| 2006                                                                                                                   |   | $      | 193,830       |    |   | $        | 80,124 |   |                       | $      | 15,000 |                |   |   | --                                     |   |   |                                                                                 | --     |   |                                 |   | --     |           |   | $ | 11,630 |   |   | $ | 300,584 |   |

| (1) | Includes      $0, $0 and $0 in compensation for the fiscal years ended December 31,      2008, 2007, and 2006, respectively, that was deferred at the election of      Mr. El Khalidi.  All present deferred compensation owing to Mr.      El Khalidi aggregating $37,409 is considered, and future deferred      compensation owing to Mr. El Khalidi, if any, will be considered payable      to Mr. El Khalidi on demand. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Includes      $8,000 in termination benefits for each of the fiscal years ended December      31, 2008, 2007, and 2006, respectively, that was accrued for Mr. El      Khalidi in accordance with Saudi Arabian employment laws. The total amount      of accrued termination benefits due to Mr. El Khalidi as of December 31,      2008 was $316,000. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Includes      amounts as shown for Mr. Carter, Ms. Cook, and Mr. Williamson that were      contributed on the employee’s behalf into the Company’s 401(k)      plan. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Name                  |   | Number      of Securities Underlying Unexercised Options (#) Exercisable |    |   | Number      of Securities Underlying Unexercised Options (#)      Unexercisable |   |   | Equity      Incentive Plan Awards:Number      of Securities Underlying Unexercised Unearned Options(#) |   |   | Option Exercise Price |   | Option      Expiration Date |
|-----------------------|--------|--------------------------------------------------------------------------|---------|--------|--------------------------------------------------------------------------------------|--------|--------|--------------------------------------------------------------------------------------------------------|--------|--------|---------------------------------|--------|-----------------------------|
| Hatem      El Khalidi |   |                                                                     | 400,000 |   |                                                                                 |   | -      |                                                                                                   |   |   | -                               |   |                        | $ | 1.00 |   | Undetermined |
| Ghazi      Sultan     |   |                                                                     | 100,000 |   |                                                                                 |   | -      |                                                                                                   |   |   | -                               |   |                        | $ | 2.00 |   | 08/28/09 |

| Name                    |   | Number      of Shares Acquired on Vesting      (#) |   |   | Value      Realized on Vesting    ($) |   |
|-------------------------|--------|----------------------------------------------------|--------|--------|---------------------------------------|--------|
| Nicholas      N. Carter |   |                                               | 20,000 |   |                                  | $      | 99,800 |   |
| Connie      Cook        |   |                                               | 10,000 |   |                                  | $      | 49,900 |   |
| Mark      Williamson    |   |                                               | 10,000 |   |                                  | $      | 49,900 |   |

| Name                    | Grant Date            |   | All      Other Stock Awards: Number of Shares of Stock or Units (#) |   |   | Grant      Date Fair Value of Stock Awards |   |
|-------------------------|-----------------------|--------|-------------------------------------------------------------------------------|--------|--------|--------------------------------------------|--------|
| Nicholas      N. Carter | January      15, 2008 |   |                                                                          | 20,000 |   |                                       | $      | 141,000 |   |
| Connie      Cook        | January      15, 2008 |   |                                                                          | 10,000 |   |                                       | $      | 70,500 |   |
| Mark      Willaimson    | January      15, 2008 |   |                                                                          | 10,000 |   |                                       | $      | 70,500 |   |

----

|  Name      and AddressOf      Beneficial Owner                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | SharesBeneficiallyOwned      (1) |   |  Percentof      Class |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------|--------|----------------------------|
|  Fahad      Mohammed Saleh Al      Athel                                                                               c/o      Saudi FalP.      O. Box 4900Riyadh,      Saudi Arabia  11412 |   |  3,632,953                  |   |  15.3%                |
|  Mohammad      Salem ben      Mahfouz                                                                               c/o      National Commercial BankJeddah,      Saudi Arabia                         |   |  1,500,000                  |   |  6.3%                 |
|  Harb      S. Al      Zuhair                                                                               P.O.      Box 3750Riyadh,      Saudi Arabia                                                 |   |  1,423,750                  |   |  6.0%                 |
|  Prince      Talal Bin Abdul      Aziz                                                                               P.      O. Box 930Riyadh,      Saudi Arabia                                       |   |  1,272,680                  |   |  5.4%                 |
|  Hatem      El      Khalidi                                                                               10830      North Central Expressway, Suite 175Dallas,      Texas 75231                       |   |  460,000(2)                 |   |  1.9%                 |
|  Ghazi      Sultan                                                                               P.O.      Box 5360Jeddah,      Saudi Arabia  21422                                          |   |  190,000      (3)           |   |  0.8%                 |
|  Nicholas      N.      Carter                                                                               P.O.      Box 1636Silsbee,      Texas 77656                                                |   |  207,918                    |   |  0.9%                 |
|  Charles      W. Goehringer,      Jr.                                                                               P.O.      Box 4915Beaumont,      Texas 77704                                       |   |  32,967                     |   |  0.1%                 |
|  Robert      E.      Kennedy.                                                                               450      Gears Rd., Suite 290Houston,      Texas 77067                                     |   |   10,000               |   |   *              |
|  Mohammed      O. Al      Omair.                                                                               P.      O. Box 4900Riyadh,      Saudi Arabia                                            |   |   1,667                |   |   *              |

----

|         Name      and AddressOf      Beneficial Owner                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |        SharesBeneficiallyOwned      (1) |   |         Percentof      Class |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------|--------|----------------------------------------|
|  Ibrahim      Al      Moneef.                                                                               P.      O. Box 10850Riyadh,      Saudi Arabia        |   |  600,000                                |   |  2.5%                             |
|  Connie      J.      Cook.                                                                               P.      O. Box 1636Silsbee,      Texas  77656 |   |  32,500                                 |   |  0.1%                             |
|  Mark      Williamson.                                                                               P.      O. Box 1636Silsbee,      Texas  77656     |   |  20,000                                 |   |  0.1%                             |
|  All      directors and executive officers as a group (8 persons)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |  1,555,052(4)                           |   |  6.6%                        |

| (1) | Unless      otherwise indicated, to the knowledge of the Company, all shares are owned      directly and the owner has sole voting and investment    power. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Includes      400,000 shares which Mr. El Khalidi has the right to acquire through the      exercise of presently exercisable stock options. Excludes 385,000 shares      owned by Ingrid El Khalidi, Mr. El Khalidi’s wife, and 443,000 shares      owned by relatives of Hatem ElKhalidi. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Includes      100,000 shares which Mr. Sultan has the right to acquire through the      exercise of presently exercisable stockoptions. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------|

| (4) | Includes      500,000 shares which certain directors and executive officers have the      right to acquire through the exercise of stock options or other rights      exercisable presently or within 60 days. Excludes 385,000 shares owned by      Ingrid El Khalidi, the wife of Hatem El Khalidi, the President, Chief      Executive Officer and a director of the Company, and 443,000 shares owned      by relatives of Hatem El Khalidi. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                    |   | 2008 |    |   | 2007   |   |
|-------------------------|--------|------|---------|--------|--------|--------|
| Audit      Fees         |   | $    | 335,173 |   |   | $      | 209,325 |   |
| Audit-Related      Fees |   | $    | 0       |   |   | $      | 0 |   |
| Tax      Fees           |   | $    | 33,545  |   |   | $      | 23,200 |   |
| All      Other Fees     |   | $    | 0       |   |   | $      | 0 |   |

----

----

|   | Reports      of Independent Registered Public Accounting  Firm. |
|--------|-----------------------------------------------------------------|

|   | Consolidated      Balance Sheets dated December 31, 2008 and2007. |
|--------|-------------------------------------------------------------------|

|   | Consolidated      Statements of Operations for the three years ended December 31,      2008. |
|--------|----------------------------------------------------------------------------------------------|

|   | Consolidated      Statement of Stockholders’ Equity for the three years ended December 31,      2008. |
|--------|-------------------------------------------------------------------------------------------------------------|

|   | Consolidated      Statements of Cash Flows for the three years ended December 31,      2008. |
|--------|----------------------------------------------------------------------------------------------|

|   | Notes      to Consolidated FinancialStatements. |
|--------|-------------------------------------------------|

|   | Schedule      II -- Valuation and Qualifying Accounts for the three years ended December      31, 2008. |
|--------|---------------------------------------------------------------------------------------------------------|

| ExhibitNumber | Description                                                                                                                                                                                                                                                                                                                                               |
|---------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3(a)          |  - Certificate      of Incorporation of the Company as amended through the Certificate of      Amendment filed with the Delaware Secretary of State on July 19, 2000      (incorporated by reference to Exhibit 3(a) to the Company’s Annual Report      on Form 10-K for the year ended December 31, 2000 (File No.      0-6247)).  |
| 3(b)          |  - Restated      Bylaws of the Company dated April 26, 2007 (incorporated by reference to      Item 5.03 to the Company’s Form 8-K dated April 26, 2007 (File No.      0-6247)).                                                                                                                                                     |
| 10(a)         |  - Loan      Agreement dated January 24, 1979 between the Company, National Mining      Company and the Government of Saudi Arabia (incorporated      by reference to Exhibit 10(b) to the Company’s Annual Report on Form 10-K      for the year ended December 31, 1999 (File No. 0-6247)).                                   |

----

|        ExhibitNumber |         Description                                                                                                                                                                                                                                                                                                                                                                            |
|---------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10(b)                     |  - Mining      Lease Agreement effective May 22, 1993 by and between the Ministry of      Petroleum and Mineral Resources and the Company (incorporated      by reference to Exhibit 10(c) to the Company’s Annual Report on Form 10-K      for the year ended December 31, 1999 (File No. 0-6247)).                                                                           |
| 10(c)                     |  - Equipment      Lease Agreement dated November 14, 2003, between Silsbee Trading and      Transportation Corp. and South Hampton Refining Company (incorporated by      reference to Exhibit 10(o) to the Company’s Annual Report on Form 10-K for      the year ended December 31, 2003 (File No. 0-6247)).                                                                      |
| 10(d)                     |  - Addendum      to Equipment Lease Agreement dated August 1, 2004, between Silsbee Trading      and Transportation Corp. and south Hampton Refining Company (incorporated      by reference to Exhibit 10(q) to the Company’s Quarterly Report on Form      10-Q for the quarter ended September 30, 2004 (File No.      0-6247)).                                                 |
| 10(e)                     |  - Partnership      Agreement dated August 6, 2006 between Arabian American Development      Company, Thamarat Najran Company, Qasr Al-Ma’adin Corporation, and Durrat      Al-Masani’ Corporation (incorporated by reference to Exhibit 10(i) to the      Company’s Quarterly Report on Form 10-Q/A for the quarter ended September      30, 2006 (file No. 0-6247)).  |
| 10(f)                     |  - Financial      Legal Service and Advice Agreement dated August 5, 2006 between Arabian      American Development Company, Nassir Ali Kadasa, and Dr. Ibrahim      Al-Mounif.  (incorporated by reference to Exhibit 10(j) to the      Company’s Quarterly Report on Form 10-Q for the quarter ended September      30, 2006 (file No. 0-6247)).                        |
| 10(g)*                    |  - Retirement      Awards Program dated January 17, 2007 between Arabian American Development      Company and Jack Crichton (incorporated by reference to Exhibit 10(h) to      the Company’s Quarterly Report on Form 10-Q for the quarter ended March      31, 2007 (file No. 0-6247)).                                                                                          |
| 10(h)*                    |  - Retirement      Awards Program dated February 16, 2007 between Arabian American      Development Company and Hatem El Khalidi (incorporated by reference to      Exhibit 10(i) to the Company’s Quarterly Report on Form 10-Q for the      quarter ended March 31, 2007 (file No. 0-6247)).                                                                                      |

----

|        ExhibitNumber |         Description                                                                                                                                                                                                                                     |
|---------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10(i)*                    |  - Stock      Option Plan of Arabian American Development Company for Key Employees      adopted April 7, 2008 (incorporated by reference to Exhibit A to the      Company’s Form DEF 14A filed April 30, 2008 (file No.      001-33926)).   |
| 10(j)*                    |  - Arabian      American Development Company Non-Employee Director Stock Option Plan      adopted April 7, 2008 (incorporated by reference to Exhibit B to the      Company’s Form DEF 14A filed April 30, 2008 (file No.      001-33926)).  |
| 14                        |  - Code      of Ethics for Senior Financial Officers (incorporated by reference to      Exhibit 14 to the Company’s Annual Report on Form 10-K for the year ended      December 31, 2003 (File No. 0-6247)).                                 |
| 16                        |  - Letter      re change in certifying accountant (incorporated by reference to Exhibit      16 to the Company’s Current Report on Form 8-K/A dated January 31, 2003      (File No. 0-6247)).                                                |
| 21                        |  - Subsidiaries      (incorporated by reference to Exhibit 21 to the Company’s Annual Report on      Form 10-K for the year ended December 31, 2001 (File No.      0-6247)).                                                                 |
| 23.1                      |  - Consent      of Independent Registered Public Accounting Firm                                                                                                                                                                                   |
| 24                        |  - Power      of Attorney (set forth on the signature page hereto).                                                                                                                                                                                |
| 31.1                      |  - Certification      of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley      Act of 2002.                                                                                                                                   |
| 31.2                      |  - Certification      of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley      Act of 2002.                                                                                                                                   |
| 32.1                      |  - Certification      of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted      pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                    |
| 32.2                      |  - Certification      of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted      pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                    |

|   | (b) | The      following reports on Form 8-K were filed during the last quarter of the      period covered by this Report. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------|

| 8.01 |  - Conditional      approval by Saudi Arabian Ministry of Petroleum & Mineral Resources      for transfer of Al Masane lease to AMAK dated September 28,      2008.  |
|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 8.01 |  - Approval      of transfer of Al Masane Lease to Al Masane Al Kobra Company completion      dated November 23, 2008.                                                   |

----

| Dated:      March 13, 2009 | By: | /s/ Hatem El      Khalidi |
|----------------------------|-----|---------------------------|

----

| Signature                                               | Title                                                                                   |
|---------------------------------------------------------|-----------------------------------------------------------------------------------------|
| /s/ Hatem El KhalidiHatem      El Khalidi               | President,      Chief Executive Officer and Director (principal executive      officer) |
| /s/ Nicholas CarterNicholas      Carter                 | Executive      Vice President, Chief Operating Officer and Director                     |
| /s/ Connie CookConnie      Cook                         | Secretary      and Treasurer(principal      financial and accounting officer)           |
| /s/ Charles Goehringer, Jr.Charles      Goehringer, Jr. | Director                                                                                |
| /s/ Robert KennedyRobert      Kennedy                   | Director                                                                                |
| /s/ Ghazi SultanGhazi      Sultan                       | Director                                                                                |
| /s/ Ibrahim Al MoneefDr.      Ibrahim Al Moneef         | Director                                                                                |
| /s/ Mohammed Al OmairMohammed      Al Omair             | Director                                                                                |

----

| INDEX      TO FINANCIAL STATEMENTS                                                                                             | Page   |
|--------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                           |   |
| Report      of Independent Registered Public Accounting Firm                                                                   | F-1    |
|                                                                                                                           |   |
| Report      of Independent Registered Public Accounting Firm on Internal  Control      Over Financial Reporting      | F-2    |
|                                                                                                                           |   |
| Consolidated      Balance Sheets at December 31, 2008 and 2007                                                                 | F-4    |
|                                                                                                                           |   |
| Consolidated      Statements of Operations For the Years Ended   December      31, 2008, 2007 and 2006          | F-6    |
|                                                                                                                           |   |
| Consolidated      Statement of Stockholders’ Equity For the Years Ended  December      31, 2008, 2007 and 2006 | F-7    |
|                                                                                                                           |   |
| Consolidated      Statements of Cash Flows For the Years Ended  December      31, 2008, 2007 and 2006                | F-8    |
|                                                                                                                           |   |
| Notes      to Consolidated Financial Statements                                                                                | F-10   |
|                                                                                                                           |   |
|  INDEX      TO FINANCIAL STATEMENT SCHEDULES                                                                              |   |
|                                                                                                                           |   |
| Report      of Independent Registered Public Accounting Firm on    Schedules                                                   | F-36   |
|                                                                                                                           |   |
| Schedule      II – Valuation and Qualifying Accounts For the Three Years      Ended  December      31, 2008    | F-37   |
|                                                                                                                           |   |

----

----

----

----

|                                                                                                                                   |   | December 31, |        |
|----------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|-------------|
|                                                                                                                                   |   | 2008         |        |   | 2007 |   |
| ASSETS                                                                                                                                 |   |         |        |   |   |   |
| CURRENT      ASSETS                                                                                                                    |   |         |        |   |   |   |
|   Cash      and cash equivalents                                                                                             |   | $            | 2,759,236   |   |   | $ | 4,789,924 |   |
|    Trade      Receivables, net of allowance for doubtful accounts of      $500,000 and $35,000, respectively       |   |         | 11,904,026  |   |   |   | 12,310,561 |   |
|    Current      portion of notes receivable, net of discount of $53,628 and      $101,620,  respectively |   |         | 528,549     |   |   |   | 609,777 |   |
|    Derivative      instruments                                                                                          |   |         | --          |   |   |   | 206,832 |   |
|    Derivative      instrument deposits                                                                                  |   |         | 3,950,000   |   |   |   | -- |   |
|    Prepaid      expenses and other assets                                                                               |   |         | 799,342     |   |   |   | 648,313 |   |
|    Inventories                                                                                                          |   |         | 2,446,200   |   |   |   | 2,887,636 |   |
|    Deferred      income taxes                                                                                           |   |         | 8,785,043   |   |   |   | -- |   |
|    Taxes      receivable                                                                                                |   |         | 429,626     |   |   |   | 1,070,407 |   |
|                                                                                                                                   |   |         |        |   |   |   |   |   |
|           Total      current assets                                                  |   |         | 31,602,022  |   |   |   | 22,523,450 |   |
|                                                                                                                                   |   |         |        |   |   |   |   |   |
|   PLANT,      PIPELINE, AND EQUIPMENT – AT COST                                                                        |   |         | 47,184,865  |   |   |   | 32,229,709 |   |
|     LESS      ACCUMULATED DEPRECIATION                                                                             |   |         | (14,649,791 | ) |   |   | (12,463,214 | ) |
|                                                                                                                                   |   |         |        |   |   |   |   |   |
|   PLANT,      PIPELINE, AND EQUIPMENT, NET                                                                                   |   |         | 32,535,074  |   |   |   | 19,766,495 |   |
|                                                                                                                                   |   |         |        |   |   |   |   |   |
|   AL      MASANE PROJECT                                                                                                     |   |         | --          |   |   |   | 37,468,080 |   |
|   INVESTMENT      IN AMAK                                                                                                    |   |         | 33,002,407  |   |   |   | -- |   |
|   OTHER      INTERESTS IN SAUDI ARABIA                                                                                       |   |         | --          |   |   |   | 2,431,248 |   |
|   MINERAL      PROPERTIES IN THE UNITED STATES                                                                               |   |         | 588,311     |   |   |   | 1,084,617 |   |
|   NOTES      RECEIVABLE, net of discount of $16,793 and $70,421,      respectively, net of current portion              |   |         | 407,388     |   |   |   | 935,937 |   |
|   OTHER      ASSETS                                                                                                          |   |         | 10,938      |   |   |   | 10,938 |   |
|                                                                                                                                   |   |         |        |   |   |   |   |   |
| TOTAL      ASSETS                                                                                                                      |   | $            | 98,146,140  |   |   | $ | 84,220,765 |   |

----

|                                                                                                                                                                                        |   | December 31, |       |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|------------|
|                                                                                                                                                                                        |   | 2008         |       |   | 2007 |   |
|  LIABILITIES      AND STOCKHOLDERS’ EQUITY                                                                                                                                       |   |         |       |   |   |   |
|   CURRENT      LIABILITIES                                                                                                                                                        |   |         |       |   |   |   |
|     Accounts      payable                                                                                                                                               |   | $            | 6,069,851  |   |   | $ | 4,524,042 |   |
|     Accrued      interest                                                                                                                                               |   |         | 147,461    |   |   |   | 85,552 |   |
|     Derivative      instruments                                                                                                                                         |   |         | 8,673,311  |   |   |   | -- |   |
|     Accrued      liabilities                                                                                                                                            |   |         | 1,029,690  |   |   |   | 1,931,822 |   |
|     Accrued      liabilities in Saudi Arabia                                                                                                                            |   |         | 1,429,156  |   |   |   | 1,406,801 |   |
|     Notes      payable                                                                                                                                                  |   |         | 12,000     |   |   |   | 11,012,000 |   |
|     Current      portion of long-term debt                                                                                                                              |   |         | 4,920,442  |   |   |   | 30,573 |   |
|     Current      portion of other liabilities                                                                                                                           |   |         | 544,340    |   |   |   | 630,731 |   |
|                                                                                                                                                                                        |   |         |       |   |   |   |   |   |
|           Total      current liabilities                                                                                                  |   |         | 22,826,251 |   |   |   | 19,621,521 |   |
|                                                                                                                                                                                        |   |         |       |   |   |   |   |   |
|   LONG-TERM      DEBT, net of current portion                                                                                                                                     |   |         | 23,557,294 |   |   |   | 9,077,737 |   |
|   POST      RETIREMENT BENEFIT                                                                                                                                                    |   |         | 823,500    |   |   |   | 441,500 |   |
|   OTHER      LIABILITIES, net      of current portion                                                                                                                             |   |         | 446,035    |   |   |   | 990,375 |   |
|   DEFERRED      INCOME TAXES                                                                                                                                                      |   |         | 3,356,968  |   |   |   | 677,131 |   |
|   MINORITY      INTEREST IN CONSOLIDATED SUBSIDIARIES                                                                                                                             |   |         | 289,223    |   |   |   | 794,646 |   |
|                                                                                                                                                                                        |   |         |       |   |   |   |   |   |
|   COMMITMENTS      AND CONTINGENCIES                                                                                                                                              |   |         |       |   |   |   |   |   |
|                                                                                                                                                                                        |   |         |       |   |   |   |   |   |
| STOCKHOLDERS'      EQUITY                                                                                                                                                                   |   |         |       |   |   |   |   |   |
|   Common Stock      - authorized 40,000,000 shares of $.10 par value; issued      and outstanding, 23,421,995 and 22,601,994 shares in      2008 and 2007, respectively |   |         | 2,342,199  |   |   |   | 2,260,199 |   |
|   Additional      Paid-in Capital                                                                                                                                                 |   |         | 41,325,207 |   |   |   | 37,183,206 |   |
|   Accumulated      Other Comprehensive Loss                                                                                                                                       |   |         | (1,120,072 | ) |   |   | -- |   |
|   Retained      Earnings                                                                                                                                                          |   |         | 4,299,535  |   |   |   | 13,174,450 |   |
|                                                                                                                                                                                        |   |         |       |   |   |   |   |   |
|        Total      stockholders' equity                                                                                                                   |   |         | 46,846,869 |   |   |   | 52,617,855 |   |
|                                                                                                                                                                                        |   |         |       |   |   |   |   |   |
|      TOTAL      LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                                               |   | $            | 98,146,140 |   |   | $ | 84,220,765 |   |

----

|                                                                                                                                                                             |   | 2008   |        |   | 2007   |   | 2006        |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-------------|--------|--------|--------|-------------|
| Revenues                                                                                                                                                                         |   |   |        |   |   |   |        |
|   Petrochemical      product sales                                                                                                                                     |   | $      | 130,264,329 |   |   | $      | 103,204,565 |   | $ | 93,854,726 |   |
|   Transloading      sales                                                                                                                                              |   |   | 20,238,841  |   |   |   | --          |   |   | -- |   |
|   Processing      fees                                                                                                                                                 |   |   | 4,127,064   |   |   |   | 5,433,550   |   |   | 4,647,431 |   |
|                                                                                                                                                                             |   |   | 154,630,234 |   |   |   | 108,638,115 |   |   | 98,502,157 |   |
| Operating      costs and expenses                                                                                                                                                |   |   |        |   |   |   |        |   |   |   |   |   |
|   Cost      of petrochemical product sales and  Processing      (including depreciation of $1,299,580,      $793,220, and $672,280,  respectively) |   |   | 159,226,896 |   |   |   | 89,654,585  |   |   | 80,561,052 |   |
|    Gross      Profit (Loss)                                                                                                                                       |   |   | (4,596,662  | )      |   |   | 18,983,530  |   |   | 17,941,105 |   |
|                                                                                                                                                                             |   |   |        |   |   |   |        |   |   |   |   |   |
| General      and Administrative Expenses                                                                                                                                         |   |   |        |   |   |   |        |   |   |   |   |   |
|   General      and administrative                                                                                                                                      |   |   | 9,034,366   |   |   |   | 7,619,280   |   |   | 5,842,564 |   |
|   Depreciation                                                                                                                                                         |   |   | 331,703     |   |   |   | 281,542     |   |   | 186,779 |   |
|                                                                                                                                                                             |   |   | 9,366,069   |   |   |   | 7,900,822   |   |   | 6,029,343 |   |
|                                                                                                                                                                             |   |   |        |   |   |   |        |   |   |   |   |   |
| Operating      income (loss)                                                                                                                                                     |   |   | (13,962,731 | )      |   |   | 11,082,708  |   |   | 11,911,762 |   |
|                                                                                                                                                                             |   |   |        |   |   |   |        |   |   |   |   |   |
| Other      income (expense)                                                                                                                                                      |   |   |        |   |   |   |        |   |   |   |   |   |
|   Interest      income                                                                                                                                                 |   |   | 204,635     |   |   |   | 297,494     |   |   | 276,184 |   |
|   Interest      expense                                                                                                                                                |   |   | (605,254    | )      |   |   | (142,696    | ) |   | (704,282 | ) |
|   Minority      interest                                                                                                                                               |   |   | 505,424     |   |   |   | 22,912      |   |   | 17,535 |   |
|   Miscellaneous      income (expense)                                                                                                                                  |   |   | 4,165       |   |   |   | (62,794     | ) |   | 383,545 |   |
|                                                                                                                                                                             |   |   | 108,970     |   |   |   | 114,916     |   |   | (27,018 | ) |
|  Income      (loss) before income tax expense (benefit)                                                                                                                     |   |   | (13,853,761 | )      |   |   | 11,197,624  |   |   | 11,884,744 |   |
|                                                                                                                                                                             |   |   |        |   |   |   |        |   |   |   |   |   |
| Income      tax expense (benefit)                                                                                                                                                |   |   | (4,978,846  | )      |   |   | 3,426,243   |   |   | 4,009,416 |   |
|                                                                                                                                                                             |   |   |        |   |   |   |        |   |   |   |   |   |
|    Net      income (loss)                                                                                                                                         |   | $      | (8,874,915  | )      |   | $      | 7,771,381   |   | $ | 7,875,328 |   |
|                                                                                                                                                                             |   |   |        |   |   |   |        |   |   |   |   |   |
| Net      income (loss) per common share                                                                                                                                          |   |   |        |   |   |   |        |   |   |   |   |   |
|     Basic      earnings (loss) per share                                                                                                                     |   | $      | (0.38       | )      |   | $      | 0.34        |   | $ | 0.35 |   |   |
|     Diluted      earnings (loss) per share                                                                                                                   |   | $      | (0.38       | )      |   | $      | 0.33        |   | $ | 0.34 |   |   |
|                                                                                                                                                                             |   |   |        |   |   |   |        |   |   |   |   |   |
| Weighted      average number of common                                                                                                                                           |   |   |        |   |   |   |        |   |   |   |   |   |
|   shares      outstanding                                                                                                                                              |   |   |        |   |   |   |        |   |   |   |   |   |
|      Basic                                                                                                                                              |   |   | 23,409,458  |   |   |   | 22,895,394  |   |   | 22,804,567 |   |   |
|      Diluted                                                                                                                                            |   |   | 23,409,458  |   |   |   | 23,291,669  |   |   | 23,030,573 |   |   |

----

|                                                               |   |         |       |   |    |   |      |          |   |   | Accumulated |   |   |      |       |   |   |
|--------------------------------------------------------------------|--------|--------------|------------|--------|---------|--------|-----------|---------------|--------|--------|-------------|--------|--------|-----------|------------|--------|--------|
|                                                               |   |         |       |   |    |   |      | Additional    |   |   | Other       |   |   | Retained  |       |   |   |
|                                                               |   | Common stock |       |   | paid-in |   |      | Comprehensive |   |   | Earnings    |   |   |      |       |   |
|                                                               |   | Shares       |       |   | Amount  |   |      | capital       |   |   | Loss        |   |   | (Deficit) |       |   | Total  |
|                                                               |   |         |       |   |    |   |      |          |   |   |        |   |   |      |       |   |   |
| DECEMBER      31, 2005                                             |   |         | 22,431,994 |   |    | $      | 2,243,199 |          |   | $      | 36,512,206  |   |   | $         | -          |   |   | $ | (2,472,259 | ) |   | $ | 36,283,146 |   |
|                                                               |   |         |       |   |    |   |      |          |   |   |        |   |   |      |       |   |   |   |   |   |   |   |   |   |   |
|   Common      Stock                                      |   |         |       |   |    |   |      |          |   |   |        |   |   |      |       |   |   |   |   |   |   |   |   |   |   |
|      Issued      to Employees             |   |         | 40,000     |   |    |   | 4,000     |          |   |   | 56,000      |   |   |      | -          |   |   |   | - |   |   |   | 60,000 |   |
|      Issued      to Directors             |   |         | 100,000    |   |    |   | 10,000    |          |   |   | 290,000     |   |   |      | -          |   |   |   | - |   |   |   | 300,000 |   |
|                                                               |   |         |       |   |    |   |      |          |   |   |        |   |   |      |       |   |   |   |   |   |   |   |   |   |   |
|   Stock      options issued to directors            |   |         | -          |   |    |   | -         |          |   |   | 229,000     |   |   |      | -          |   |   |   | - |   |   |   | 229,000 |   |
|                                                               |   |         |       |   |    |   |      |          |   |   |        |   |   |      |       |   |   |   |   |   |   |   |   |   |   |
|    Net      income                                  |   |         | -          |   |    |   | -         |          |   |   | -           |   |   |      | -          |   |   |   | 7,875,328 |   |   |   | 7,875,328 |   |
|                                                               |   |         |       |   |    |   |      |          |   |   |        |   |   |      |       |   |   |   |   |   |   |   |   |   |   |
| DECEMBER      31, 2006                                             |   |         | 22,571,994 |   |    | $      | 2,257,199 |          |   | $      | 37,087,206  |   |   | $         | -          |   |   | $ | 5,403,069 |   |   | $ | 44,747,474 |   |
|                                                               |   |         |       |   |    |   |      |          |   |   |        |   |   |      |       |   |   |   |   |   |   |   |   |   |   |
| Common      Stock                                                  |   |         |       |   |    |   |      |          |   |   |        |   |   |      |       |   |   |   |   |   |   |   |   |   |   |
|   Issued      to Employees                               |   |         | 30,000     |   |    |   | 3,000     |          |   |   | 96,000      |   |   |      | -          |   |   |   | - |   |   |   | 99,000 |   |
|                                                               |   |         |       |   |    |   |      |          |   |   |        |   |   |      |       |   |   |   |   |   |   |   |   |   |   |
|   Net      Income                                        |   |         | -          |   |    |   | -         |          |   |   | -           |   |   |      | -          |   |   |   | 7,771,381 |   |   |   | 7,771,381 |   |
|                                                               |   |         |       |   |    |   |      |          |   |   |        |   |   |      |       |   |   |   |   |   |   |   |   |   |   |
| DECEMBER      31, 2007                                             |   |         | 22,601,994 |   |    | $      | 2,260,199 |          |   | $      | 37,183,206  |   |   | $         | -          |   |   | $ | 13,174,450 |   |   | $ | 52,617,855 |   |
|                                                               |   |         |       |   |    |   |      |          |   |   |        |   |   |      |       |   |   |   |   |   |   |   |   |   |   |
| Common      Stock Issued      for Services                    |   |         | 750,000    |   |    |   | 75,000    |          |   |   | 3,637,500   |   |   |      | -          |   |   |   | - |   |   |   | 3,712,500 |   |
|                                                               |   |         |       |   |    |   |      |          |   |   |        |   |   |      |       |   |   |   |   |   |   |   |   |   |   |
| Common      Stock Issued to Directors                         |   |         | 30,001     |   |    |   | 3,000     |          |   |   | 226,501     |   |   |      | -          |   |   |   | - |   |   |   | 229,501 |   |
|                                                               |   |         |       |   |    |   |      |          |   |   |        |   |   |      |       |   |   |   |   |   |   |   |   |   |   |
| Common      Stock Issued to Employees                         |   |         | 40,000     |   |    |   | 4,000     |          |   |   | 278,000     |   |   |      | -          |   |   |   | - |   |   |   | 282,000 |   |
|                                                               |   |         |       |   |    |   |      |          |   |   |        |   |   |      |       |   |   |   |   |   |   |   |   |   |   |
| Unrealized      Loss on Interest Rate Swap (net of income tax |   |         |       |   |    |   |      |          |   |   |        |   |   |      |       |   |   |   |   |   |   |   |   |   |   |
|   benefit      of $ 577,007)                             |   |         | -          |   |    |   | -         |          |   |   | -           |   |   |      | (1,120,072 | )      |   |   | - |   |   |   | (1,120,072 | ) |
|                                                               |   |         |       |   |    |   |      |          |   |   |        |   |   |      |       |   |   |   |   |   |   |   |   |   |   |
|   Net      Loss                                          |   |         |       |   |    |   |      |          |   |   |        |   |   |      |       |   |   |   | (8,874,915 | ) |   |   | (8,874,915 | ) |
|       Comprehensive      Loss        |   |         | -          |   |    |   | -         |          |   |   | -           |   |   |      | -          |   |   |   | - |   |   |   | (9,994,987 | ) |
|                                                               |   |         |       |   |    |   |      |          |   |   |        |   |   |      |       |   |   |   |   |   |   |   |   |   |   |
| DECEMBER      31, 2008                                             |   |         | 23,421,995 |   |    | $      | 2,342,199 |          |   | $      | 41,325,207  |   |   | $         | (1,120,072 | )      |   | $ | 4,299,535 |   |   | $ | 46,846,869 |   |
|                                                               |   |         |       |   |    |   |      |          |   |   |        |   |   |      |       |   |   |   |   |   |   |   |   |   |   |

----

|                                                                                                                   |   | 2008   |             |   | 2007   |   |        | 2006   |   |
|------------------------------------------------------------------------------------------------------------------------|--------|--------|------------------|--------|--------|--------|-------------|--------|--------|
| Operating      activities                                                                                              |   |   |             |   |   |   |        |   |   |
|   Net      income (loss)                                                                                     |   | $      | (      8,874,915 | )      |   | $      | 7,771,381   |   |   | $ | 7,875,328 |   |
|   Adjustments      to reconcile net income (loss)                                                            |   |   |             |   |   |   |        |   |   |   |   |   |
|     to      net cash provided by (used in) operating activities:                              |   |   |             |   |   |   |        |   |   |   |   |   |
|     Depreciation                                                                                   |   |   | 1,631,283        |   |   |   | 1,074,762   |   |   |   | 859,059 |   |
|     Accretion      of notes receivable discounts                                                   |   |   | (101,619         | )      |   |   | (148,355    | )      |   |   | (166,959 | ) |
|     Accretion      of unrealized gross profit                                                      |   |   | -                |   |   |   | (52,137     | )      |   |   | (44,534 | ) |
|     Unrealized      (gain) loss on derivative instruments                                          |   |   | 5,485,914        |   |   |   | (972,504    | )      |   |   | 840,424 |   |
|     Share-based      compensation                                                                  |   |   | 282,000          |   |   |   | 99,000      |   |   |   | 589,000 |   |
|     Bad      debt expense                                                                          |   |   | 465,000          |   |   |   | -           |   |   |   | - |   |
|     Deferred      income taxes                                                                     |   |   | (5,528,129       | )      |   |   | 137,131     |   |   |   | 243,000 |   |
|     Postretirement      obligation                                                                 |   |   | 202,000          |   |   |   | 621,500     |   |   |   | - |   |
|     Impairment      loss                                                                           |   |   | 496,306          |   |   |   | -           |   |   |   | - |   |
|     Minority      interest                                                                         |   |   | (505,423         | )      |   |   | (22,912     | )      |   |   | (17,104 | ) |
|   Changes      in operating assets and liabilities:                                                          |   |   |             |   |   |   |        |   |   |   |   |   |
|     (Increase)      decrease in trade receivables                                                  |   |   | (58,465          | )      |   |   | (3,417,379  | )      |   |   | 4,079,475 |   |
|     Decrease      in notes receivable                                                              |   |   | 711,396          |   |   |   | 806,447     |   |   |   | 689,386 |   |
|     (Increase)      decrease in income tax receivable                                              |   |   | 640,781          |   |   |   | (450,809    | )      |   |   | (619,598 | ) |
|     (Increase)      decrease in inventories                                                        |   |   | 441,436          |   |   |   | 688,681     |   |   |   | (2,411,643 | ) |
|     (Increase)      decrease in other assets                                                       |   |   | (151,029         | )      |   |   | 215,831     |   |   |   | 207,877 |   |
|     (Increase)      decrease in derivative instruments      deposits |   |   | (3,950,000       | )      |   |   | 1,500,000   |   |   |   | (1,500,000 | ) |
|     Increase      in prepaid expenses                                                              |   |   | -                |   |   |   | (244,085    | )      |   |   | (38,671 | ) |
|     Increase      in accounts payable and                                                          |   |   |             |   |   |   |        |   |   |   |   |   |
|         accrued      liabilities                                               |   |   | 2,750,258        |   |   |   | 2,076,607   |   |   |   | 1,128,911 |   |
|     Increase      in accrued interest                                                              |   |   | 61,909           |   |   |   | 25,695      |   |   |   | 1,108 |   |
|     Increase      (decrease) in accrued liabilities in Saudi      Arabia                      |   |   | 22,355           |   |   |   | (238,456    | )      |   |   | (762,025 | ) |
|     Net      cash provided by (used in) operating activities                                  |   |   | (5,978,942       | )      |   |   | 9,470,398   |   |   |   | 10,953,034 |   |
|                                                                                                                   |   |   |             |   |   |   |        |   |   |   |   |   |
| Investing      activities                                                                                              |   |   |             |   |   |   |        |   |   |   |   |   |
|   Additions      to Al Masane Project                                                                        |   |   | (390,579         | )      |   |   | (331,058    | )      |   |   | (332,924 | ) |
|   Additions      to plant, pipeline and equipment                                                            |   |   | (15,030,593      | )      |   |   | (10,799,205 | )      |   |   | (3,738,856 | ) |
|   Additions      to mineral properties in the United States                                             |   |   | -                |   |   |   | 94          |   |   |   | - |   |
|     Net      cash used in investing activities                                                     |   |   | (15,421,172      | )      |   |   | (11,130,169 | )      |   |   | (4,071,780 | ) |
|                                                                                                                   |   |   |             |   |   |   |        |   |   |   |   |   |
| Financing      Activities                                                                                              |   |   |             |   |   |   |        |   |   |   |   |   |
|   Additions      to long-term debt                                                                           |   |   | 25,900,000       |   |   |   | 6,000,000   |   |   |   | 5,058,726 |   |
|   Repayment      of long-term debt                                                                           |   |   | (6,530,574       | )      |   |   | (2,488,827  | )      |   |   | (10,726,183 | ) |
|   Repayment      of note to stockholders                                                                     |   |   | -                |   |   |   | (500        | )      |   |   | (13,333 | ) |
|     Net      cash provided (used) in financing activities                                          |   |   | 19,369,426       |   |   |   | 3,510,673   |   |   |   | (5,680,790 | ) |

----

|                                                |   | 2008   |       |   | 2007   |   |      | 2006   |   |
|-----------------------------------------------------|--------|--------|------------|--------|--------|--------|-----------|--------|--------|
|                                                |   |   |       |   |   |   |      |   |   |
| Net      increase (decrease) in cash                |   |   | (2,030,688 | )      |   |   | 1,850,902 |   |   |   | 1,200,464 |   |
|                                                |   |   |       |   |   |   |      |   |   |   |   |   |
| Cash      and cash equivalents at beginning of year |   |   | 4,789,924  |   |   |   | 2,939,022 |   |   |   | 1,738,558 |   |
|                                                |   |   |       |   |   |   |      |   |   |   |   |   |
| Cash      and cash equivalents at end of year       |   | $      | 2,759,236  |   |   | $      | 4,789,924 |   |   | $ | 2,939,022 |   |

|                                                                                                        |   | 2008   |       |   | 2007   |   |      | 2006   |   |
|-------------------------------------------------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|-----------|--------|--------|
| Supplemental      disclosure of cash flow information:                                                      |   |   |       |   |   |   |      |   |   |
|   Cash      payments for interest                                                                 |   | $      | 918,845    |   |   | $      | 294,206   |   |   | $ | 720,752 |   |
|   Cash      payments (net of refunds) for taxes                                                   |   | $      | 4,814      |   |   | $      | 3,585,000 |   |   | $ | 3,908,398 |   |
|                                                                                                        |   |   |       |   |   |   |      |   |   |   |   |   |
| Supplemental      disclosure of non-cash items:                                                             |   |   |       |   |   |   |      |   |   |   |   |   |
|   Notes      receivable issued for capital expansion                                              |   | $      | -          |   |   | $      | -         |   |   | $ | 952,900 |   |
|   Capital      expansion amortized to depreciation expense                                        |   | $      | (630,731   | )      |   | $      | (584,348  | )      |   | $ | (480,002 | ) |
|   Investment      in AMAK                                                                         |   | $      | 33,002,407 |   |   |   | --        |   |   |   | -- |   |
|   Issuance      of common stock for settlement of accrued Directors’      compensation |   | $      | 229,501    |   |   | $      | --        |   |   | $ | -- |   |
|   Unrealized      loss on interest rate swap, net of tax benefit                             |   | $      | 1,120,072  |   |   | $      | --        |   |   | $ | -- |   |

----

|   | NOTE      1 - BUSINESS AND OPERATIONS OF THE COMPANY AND SUMMARY OF SIGNIFICANT      ACCOUNTING POLICIES |
|--------|----------------------------------------------------------------------------------------------------------|

|   | Business      and Operations of the Company |
|--------|---------------------------------------------|

----

----

----

----

|   | NOTE      1 - BUSINESS AND OPERATIONS OF THE COMPANY AND SUMMARY OF SIGNIFICANT      ACCOUNTING POLICIES – Continued |
|--------|----------------------------------------------------------------------------------------------------------------------------|

----

|   | NOTE      1 - BUSINESS AND OPERATIONS OF THE COMPANY AND SUMMARY OF SIGNIFICANT      ACCOUNTING POLICIES – Continued |
|--------|----------------------------------------------------------------------------------------------------------------------------|

----

|   | NOTE      1 - BUSINESS AND OPERATIONS OF THE COMPANY AND SUMMARY OF SIGNIFICANT      ACCOUNTING POLICIES – Continued |
|--------|----------------------------------------------------------------------------------------------------------------------------|

|                                                                              |   | Saudi Arabia |       |   | United States |   |       | Total  |   |
|-----------------------------------------------------------------------------------|--------|--------------|------------|--------|---------------|--------|------------|--------|--------|
|                                                                              |   |         |       |   |          |   |       |   |   |
| Current      assets                                                               |   | $            | 151,796    |   |          | $      | 31,450,226 |   |   | $ | 31,602,022 |   |
|                                                                              |   |         |       |   |          |   |       |   |   |   |   |   |
| Current      liabilities                                                          |   |         | 1,448,092  |   |          |   | 21,378,159 |   |   |   | 22,826,251 |   |
|                                                                              |   |         |       |   |          |   |       |   |   |   |   |   |
| Excess      (shortage) of current assets  over      current liabilities |   | $            | (1,296,296 | )      |          | $      | 10,072,067 |   |   | $ | 8,775,771 |   |
|                                                                              |   |         |       |   |          |   |       |   |   |   |   |   |

----

----

| Level      1 inputs | Level      1 inputs utilize quoted prices (unadjusted) in active markets for      identical assets or liabilities that the Company has the ability to      access.                                                                                                                                                                                                                                                                                                                                            |
|---------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Level      2 inputs | Level      2 inputs are inputs other than quoted prices included in Level 1 that are      observable for the asset or liability, either directly or      indirectly.  Level 2 inputs may include quoted prices for      similar assets and liabilities in active markets, as well as inputs that      are observable for the asset or liability (other than quoted prices), such      as interest rates, foreign exchange rates, and yield curves that are      observable at commonly quoted intervals. |
| Level      3 inputs | Level      3 inputs are unobservable inputs for the asset or liability, which is      typically based on an entity’s own assumptions, as there is little, if      any, related market activity.                                                                                                                                                                                                                                                                                                              |

----

|                              |   |                   |      |   | Fair      Value Measurements Using |   |
|-----------------------------------|--------|------------------------|-----------|--------|------------------------------------|--------|
|                              |   | December      31, 2008 |      |   | Level      1                       |   |   | Level      2 |   |   | Level      3 |   |
| Liabilities:                      |   |                   |      |   |                               |   |   |   |   |   |   |   |
| Financial      Swaps on Feedstock |   | $                      | 5,855,850 |   |                               | $      | 5,855,850 |   |   | $ | - |   |   | $ | - |   |
| Options      on Crude             |   |                   | 1,120,382 |   |                               |   | - |   |   |   | 1,120,382 |   |   |   | - |   |
| Interest      Rate Swap           |   |                   | 1,697,079 |   |                               |   | - |   |   |   | 1,697,079 |   |   |   | - |   |
|   Total                 |   | $                      | 8,673,311 |   |                               | $      | 5,855,850 |   |   | $ | 2,817,461 |   |   | $ | - |   |

|                   |   | 2008   |      |   | 2007   |   |
|------------------------|--------|--------|-----------|--------|--------|--------|
|                   |   |   |      |   |   |   |
| Raw      material      |   | $      | 1,291,400 |   |   | $      | 1,377,878 |   |
| Finished      products |   |   | 1,154,800 |   |   |   | 1,509,758 |   |
|                   |   |   |      |   |   |   |   |   |
| Total      inventory   |   | $      | 2,446,200 |   |   | $      | 2,887,636 |   |

----

|                                                              |   | 2008   |    |   | 2007   |   |
|-------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|
|                                                              |   |   |    |   |   |   |
| Note      with processing customer (A)                            |   | $      | 914,394 |   |   | $      | 1,404,608 |   |
|   Less      discount                                    |   |   | (68,612 | )      |   |   | (154,030 | ) |
|                                                              |   |   | 845,782 |   |   |   | 1,250,578 |   |
|                                                              |   |   |    |   |   |   |   |   |
| Note      with processing customer (B)                            |   |   | 91,964  |   |   |   | 313,147 |   |
| Less      discount                                                |   |   | (1,809  | )      |   |   | (18,011 | ) |
|                                                              |   |   | 90,155  |   |   |   | 295,136 |   |
|                                                              |   |   |    |   |   |   |   |   |
| Total      long-term notes receivable                             |   |   | 935,937 |   |   |   | 1,545,714 |   |
|                                                              |   |   |    |   |   |   |   |   |
| Less      current portion                                         |   |   | 528,549 |   |   |   | 609,777 |   |
|                                                              |   |   |    |   |   |   |   |   |
|  Total      long-term notes receivable, less current portion |   | $      | 407,388 |   |   | $      | 935,937 |   |
|                                                              |   |   |    |   |   |   |   |   |

|  (A) | The      Company has notes receivable from a long term processing customer for      capital costs incurred in making adjustments to the processing unit at      their request.  The payment term is 5 years with interest      imputed at a rate of 8%.  Payments of $40,851 are due      monthly. |
|-----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  (B) | The      Company has notes receivable from a long term processing customer for      capital costs incurred in making adjustments to the processing unit at      their request.  The payment term is 3 years with interest      imputed at a rate of 8%.  Payments of $18,432 are due      monthly. |
|-----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Payments      from long-term notes for the next five years ending December 31 are as      follows: |
|--------|----------------------------------------------------------------------------------------------------|

| Year      Ending December 31,  |   | Long-Term      Notes Receivable |      |
|-------------------------------------|--------|---------------------------------|-----------|
| 2009                                |   | $                               | 582,373   |   |
| 2010                                |   |                            | 423,985   |   |
| Total                               |   |                            | 1,006,358 |   |
| Less:      discount                 |   |                            | 70,421    |   |
|                                |   | $                               | 935,937   |   |

|                                                       |   | December 31, |        |
|------------------------------------------------------------|--------|--------------|-------------|
|                                                       |   | 2008         |        |   | 2007 |   |
| Platinum      catalyst                                     |   | $            | 1,318,068   |   |   | $ | 1,318,068 |   |
| Land                                                       |   |         | 552,705     |   |   |   | 552,705 |   |
| Property,      pipeline and equipment                      |   |         | 45,304,092  |   |   |   | 23,721,786 |   |
| Construction      in progress                              |   |         | 10,000      |   |   |   | 6,637,150 |   |
| Total      property, pipeline and equipment                |   |         | 47,184,865  |   |   |   | 32,229,709 |   |
|     Less      accumulated depreciation |   |         | (14,649,791 | ) |   |   | (12,463,214 | ) |
| Net      property, pipeline and equipment                  |   | $            | 32,535,074  |   |   | $ | 19,766,495 |   |

----

----

|                                                                                                                                                  |   | Balance      atDecember      31, 2008 |   |   | Investment      in AMAK |   |        | Activityfor 2008 |   |   | Balance      atDecember      31, 2007 |   |   | Activityfor 2007 |       |   | Balance      atDecember      31, 2006 |   |    | Activityfor 2006 |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------|--------|--------|------------------------------|--------|-------------|------------------|--------|--------|---------------------------------------|--------|--------|------------------|------------|--------|---------------------------------------|--------|---------|------------------|--------|
| Property      andequipment: Mining      equipment                                                                                                |   | $                                     | -      |   |                         | $      | (2,160,206  | )                |   |   | -                                     |   |   | $                | 2,160,206  |   |                                  |   | -       |             |   | $ | 2,160,206 |   |   |   | - |   |
|  Construction      costs                                                                                                                         |   |                                  | -      |   |                         |   | (3,140,493  | )                |   |   | -                                     |   |   |             | 3,140,493  |   |                                  |   | -       |             |   |   | 3,140,493 |   |   |   | - |   |
|     Total                                                                                                                         |   |                                  | -      |   |                         |   | (5,300,699  | )                |   |   | -                                     |   |   |             | 5,300,699  |   |                                  |   | -       |             |   |   | 5,300,699 |   |   |   | - |   |
|                                                                                                                                                  |   |                                  |   |   |                         |   |        |             |   |   |                                  |   |   |             |       |   |                                  |   |    |             |   |   |   |   |   |   |   |   |
| Other      costs:                                                                                                                                     |   |                                  |   |   |                         |   |        |             |   |   |                                  |   |   |             |       |   |                                  |   |    |             |   |   |   |   |   |   |   |   |
|  Labor,      consulting  Services      and   Project    administration    costs |   |                                  | -      |   |                         |   | (23,422,271 | )                |   |   | 390,579                               |   |   |             | 23,031,692 |   |                                  |   | 331,058 |             |   |   | 22,700,634 |   |   |   | 329,904 |   |
|   Materials      and     maintenance                                                                               |   |                                  | -      |   |                         |   | (6,175,232  | )                |   |   | -                                     |   |   |             | 6,175,232  |   |                                  |   | -       |             |   |   | 6,175,232 |   |   |   | - |   |
|   Feasibility      study                                                                                                                    |   |                                  | -      |   |                         |   | (2,960,457  | )                |   |   | -                                     |   |   |             | 2,960,457  |   |                                  |   | -       |             |   |   | 2,960,457 |   |   |   | 3,020 |   |
|       Total                                                                                                             |   |                                  | -      |   |                         |   | (32,557,960 | )                |   |   | 390,579                               |   |   |             | 32,167,381 |   |                                  |   | 331,058 |             |   |   | 31,836,323 |   |   |   | 332,924 |   |
|                                                                                                                                                  |   | $                                     | -      |   |                         | $      | (37,858,659 | )                |   | $      | 390,579                               |   |   | $                | 37,468,080 |   |                                  | $      | 331,058 |             |   | $ | 37,137,022 |   |   | $ | 332,924 |   |

----

----

|                                                                          |   | 2008   |       |   | 2007   |   |
|-------------------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|
| Notes      payable:                                                           |   |   |       |   |   |   |
|   Secured      note to Saudi Arabian government (A)                 |   | $      | --         |   |   | $      | 11,000,000 |   |
|   Other                                                             |   |   | 12,000     |   |   |   | 12,000 |   |
|      Total                                           |   | $      | 12,000     |   |   | $      | 11,012,000 |   |
|                                                                          |   |   |       |   |   |   |   |   |
| Long-term      debt:                                                          |   |   |       |   |   |   |   |   |
|   Capital      lease with affiliated party (B)                      |   |   | 19,010     |   |   |   | 49,584 |   |
|   Revolving      note to domestic bank (C)                          |   |   | 14,458,726 |   |   |   | 6,058,726 |   |
|   Term      note to domestic bank (D)                               |   |   | 14,000,000 |   |   |   | 3,000,000 |   |
|                                                                          |   |   |       |   |   |   |   |   |
|      Total      long-term debt                       |   |   | 28,477,736 |   |   |   | 9,108,310 |   |
|                                                                          |   |   |       |   |   |   |   |   |
|   Less      current portion                                         |   |   | 4,920,442  |   |   |   | 30,573 |   |
|                                                                          |   |   |       |   |   |   |   |   |
|      Total      long-term debt, less current portion |   | $      | 23,557,294 |   |   | $      | 9,077,737 |   |

|             (A) | The      Company had an interest-free loan of $11,000,000 from the Saudi Arabian      Ministry of Finance and National Economy, the proceeds of which were used      to finance the development phase of the Al Masane Project.  The      loan was repayable in ten equal annual installments of $1,100,000, with      the initial installment payable on December 31, 1984.  None of      the ten scheduled payments have been made.  Pursuant to the      mining lease transfer agreement, the loan was transferred to AMAK in      December 2008 along with the miningassets. |
|-----------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|             (B) | On      August 1, 2004, South Hampton entered into a $136,876 capital lease with a      transportation company owned by a Company officer for the purchase of a      diesel powered manlift.  The lease bears interest of 6.9% over a      5 year term with a monthly payment of $3,250.  Title transfers      to South Hampton at the end of the term.  The original cost of      the diesel powered manlift was $136,876 with accumulated depreciation of      $60,454 and $46,766 at December 31, 2008, and 2007,      respectively. |
|-----------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (C)   | On      May 25, 2006 South Hampton entered into a $12.0 million revolving loan      agreement with a domestic bank secured by accounts receivable and      inventory. The original agreement was due to expire October 31,      2008.  An amendment was entered into on January 28, 2008 which      extended the termination date to June 30, 2010.  Additional      amendments were entered into during 2008 which ultimately increased the      availability of the line to $21.0 million based upon the Company’s      accounts receivable and inventory.  At December 31, 2008, there      was a short-term amount outstanding of $3,994,855 due to the outstanding      amount surpassing the borrowing base limit allowed and a long-term amount      outstanding of $10,463,871. The credit agreement contains a sub-limit of      $3.0 million available to be used in support of the hedging      program.  The interest rate on the loan varies according to      several options and the amount outstanding.  At December 31,      2008 the rate was 3.0%, and the amount drawn on the loan exceeded the      borrowing base; therefore, no additional amount was available to be      drawn.  A commitment fee of 0.25% is due quarterly on the unused      portion of the loan.  If the amount outstanding surpasses the      amount calculated by the borrowing base, a principal payment would be due      to reduce the amount outstanding to the calculated base.  The      bank waived this requirement at December 31, 2008  and |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | NOTE      10 - NOTES PAYABLE, LONG-TERM DEBT AND LONG-TERM OBLIGATIONS –      Continued |
|--------|-----------------------------------------------------------------------------------------------|

| (D)   | On      September 19, 2007 South Hampton entered into a $10.0 million term loan      agreement with a domestic bank to finance the expansion of the      petrochemical facility.  An amendment was entered into on      November 26, 2008 which increased the term loan to $14.0 million due to      the increased cost of the expansion.  This note is secured by      property, pipeline and equipment. The agreement expires October 31,      2018.  At December 31, 2008, there was a short-term amount of      $906,577  and a long-term amount of $13,093,423      outstanding.  The interest rate on the loan varies according to      several options.  At December 31, 2008 the rate was      3.0%.  Interest is paidmonthly. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Principal      payments of long-term debt for the next five years and thereafter ending      December 31 are as follows: |
|--------|--------------------------------------------------------------------------------------------------------------------------|

| Year      Ending December 31,                  |   | Long-Term      Debt |       |   | Capital      Lease Obligations |   |
|-----------------------------------------------------|--------|---------------------|------------|--------|--------------------------------|--------|
| 2009                                                |   | $                   | 4,901,432  |   |                           | $      | 19,523 |   |
| 2010                                                |   |                | 12,032,147 |   |                           |   | -- |   |
| 2011                                                |   |                | 1,294,165  |   |                           |   | -- |   |
| 2012                                                |   |                | 1,333,528  |   |                           |   | -- |   |
| 2013                                                |   |                | 1,374,057  |   |                           |   | -- |   |
| Thereafter                                          |   |                | 7,523,397  |   |                           |   | -- |   |
| Total                                               |   | $                   | 28,458,726 |   |                           |   | 19,523 |   |
| Less:      Amount representing interest             |   |                |       |   |                           |   | (513 | ) |
| Present      value of future minimum lease payments |   |                |       |   |                           | $      | 19,010 |   |

|   | NOTE 11 – ACCRUED      LIABILITIES |
|--------|------------------------------------------|

|                                      |   | 2008   |      |   | 2007   |   |
|-------------------------------------------|--------|--------|-----------|--------|--------|--------|
| Accrued      state taxes                  |   | $      | 147,221   |   |   | $      | 258,407 |   |
| Accrued      operating costs              |   |   | --        |   |   |   | 275,000 |   |
| Accrued      payroll                      |   |   | 514,218   |   |   |   | 539,947 |   |
| Accrued      directors’ fees        |   |   | --        |   |   |   | 288,250 |   |
| Post      retirement obligation           |   |   | --        |   |   |   | 180,000 |   |
| Accrued      officers’ compensation |   |   | --        |   |   |   | 100,000 |   |
| Other      liabilities                    |   |   | 368,251   |   |   |   | 290,218 |   |
|                                      |   |   |      |   |   |   |   |   |
|    Total                   |   | $      | 1,029,690 |   |   | $      | 1,931,822 |   |

----

|                      |   | 2008   |      |   | 2007   |   |
|---------------------------|--------|--------|-----------|--------|--------|--------|
| Salaries                  |   | $      | 602,503   |   |   | $      | 603,147 |   |
| Termination      benefits |   |   | 807,944   |   |   |   | 783,170 |   |
| Other      liabilities    |   |   | 18,709    |   |   |   | 20,484 |   |
|                      |   |   |      |   |   |   |   |   |
|    Total   |   | $      | 1,429,156 |   |   | $      | 1,406,801 |   |

----

----

|                                    |   | 2008   |    |   | 2007                                     |   |   | 2006   |   |
|-----------------------------------------|--------|--------|---------|--------|------------------------------------------|--------|--------|--------|--------|
|                                    |   | Shares |    |   | Weighted      averageexercise price |   |   | Shares |   |   | Weighted      averageexercise price |   |   | Shares |   |   | Weighted      averageexercise price |   |
| Outstanding      at beginning of year   |   |   | 500,000 |   |                                     | $      | 1.20   |   |   |   | 500,000 |   |   | $ | 1.20 |   |   |   | 400,000 |   |   | $ | 1.00 |   |
| Granted                                 |   |   | -       |   |                                     |   |   |   |   |   | - |   |   |   |   |   |   |   | 100,000 |   |   | $ | 2.00 |   |
| Forfeited                               |   |   | -       |   |                                     |   |   |   |   |   | - |   |   |   |   |   |   |   | - |   |   |   |   |   |
| Outstanding      at end of year         |   |   | 500,000 |   |                                     | $      | 1.20   |   |   |   | 500,000 |   |   | $ | 1.20 |   |   |   | 500,000 |   |   | $ | 1.20 |   |
| Options      exercisable at end of year |   |   | 500,000 |   |                                     | $      | 1.20   |   |   |   | 500,000 |   |   | $ | 1.20 |   |   |   | 500,000 |   |   | $ | 1.20 |   |
|                                    |   |   |    |   |                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

| Options outstanding and      exercisable |    |
|------------------------------------------|---------|
| Number                                   |    | Remainingcontractual life |   | Exerciseprice |   |
|                                     | 400,000 |   | Undetermined |   | $ | 1.00 |   |
|                                     | 100,000 |   | 0.7      years |   | $ | 2.00 |   |

|   | NOTE      15 – INCOME TAXES |
|--------|-----------------------------------|

|                                      |   | Year      ended December 31, |       |
|-------------------------------------------|--------|------------------------------|------------|
|                                      |   | 2008                         |       |   | 2007 |   |   | 2006 |   |
|                                      |   |                         |       |   |   |   |   |   |   |
| Current      federal provision            |   | $                            | 376,030    |   |   | $ | 3,357,184 |   |   | $ | 3,196,005 |   |
| Current      state provision (benefit)    |   |                         | 173,323    |   |   |   | (68,103 | ) |   |   | 569,903 |   |
| Deferred      federal provision (benefit) |   |                         | (5,388,895 | ) |   |   | 141,443 |   |   |   | 222,721 |   |
| Deferred      state provision (benefit)   |   |                         | (139,304   | ) |   |   | (4,281 | ) |   |   | 20,787 |   |
|                                      |   |                         |       |   |   |   |   |   |   |   |   |   |
| Income      tax expense (benefit)         |   | $                            | (4,978,846 | ) |   | $ | 3,426,243 |   |   | $ | 4,009,416 |   |

----

|                                                     |   | 2008   |       |   | 2007   |   |      | 2006   |   |
|----------------------------------------------------------|--------|--------|------------|--------|--------|--------|-----------|--------|--------|
| Income      taxes at U.S. statutory rate                 |   | $      | (4,882,123 | )      |   | $      | 3,807,192 |   |   | $ | 4,048,863 |   |
| State      taxes, net of federal benefit                 |   |   | (42,141    | )      |   |   | 166,685   |   |   |   | 385,756 |   |
| Prior      year overpayments                             |   |   | (49,872    | )      |   |   | (145,250  | )      |   |   | (358,054 | ) |
| Refund      from amended state return                    |   |   | -          |   |   |   | (158,000  | )      |   |   | - |   |
| Permanent      and other items                           |   |   | (4,710     | )      |   |   | (244,384  | )      |   |   | ( 67,149 | ) |
|     Total      tax expense (benefit) |   | $      | (4,978,846 | )      |   | $      | 3,426,243 |   |   | $ | 4,009,416 |   |

|                                                                |   | December 31, |       |
|---------------------------------------------------------------------|--------|--------------|------------|
|                                                                |   | 2008         |       |   | 2007 |   |
| Deferred      tax liabilities:                                      |   |         |       |   |   |   |
|   Plant,      pipeline and equipment                      |   | $            | (4,122,410 | ) |   | $ | (1,368,531 | ) |
|   Unrealized      gains on swap agreements                |   |         | --         |   |   |   | (63,370 | ) |
| Deferred      tax assets:                                           |   |         |       |   |   |   |   |   |
|   Accounts      receivable                                |   |         | 265,901    |   |   |   | 82,250 |   |
|   Inventory                                               |   |         | 635,865    |   |   |   | 33,001 |   |
|   Mineral      interests                                  |   |         | 365,293    |   |   |   | 217,051 |   |
|   Accrued      liabilities                                |   |         | --         |   |   |   | 211,158 |   |
|   Net      operating loss and contribution carry-forwards |   |         | --         |   |   |   | -- |   |
|   Capital      loss carry-forward                         |   |         | 1,228,090  |   |   |   | 1,228,090 |   |
|   Deferred      gain on sale of property                  |   |         | --         |   |   |   | -- |   |
|   Unrealized      losses on swap agreements               |   |         | 7,306,270  |   |   |   | -- |   |
|   Unrealized      loss on interest rate swap              |   |         | 577,007    |   |   |   | -- |   |
|   Post      retirement benefits                           |   |         | 400,149    |   |   |   | 211,310 |   |
|   Gross      deferred tax assets                          |   |         | 10,778,575 |   |   |   | 1,982,860 |   |
|                                                                |   |         |       |   |   |   |   |   |
| Valuation      allowance                                            |   |         | (1,228,090 | ) |   |   | (1,228,090 | ) |
|                                                                |   |         |       |   |   |   |   |   |
|   Net      deferred tax assets (liabilities)              |   | $            | 5,428,075  |   |   | $ | (677,131 | ) |

|                                         |   | 2008   |       |   | 2007   |   |
|----------------------------------------------|--------|--------|------------|--------|--------|--------|
| Current      deferred tax asset              |   | $      | 8,785,043  |   |   | $      | -- |   |
|                                         |   |   |       |   |   |   |   |   |
| Non-current      deferred tax liability:     |   |   |       |   |   |   |   |   |
|                                         |   |   |       |   |   |   |   |   |
| Deferred      tax assets                     |   |   | 1,993,532  |   |   |   | 1,982,860 |   |
| Deferred      tax liability                  |   |   | (4,122,410 | )      |   |   | (1,431,901 | ) |
| Valuation      allowance                     |   |   | (1,228,090 | )      |   |   | (1,228,090 | ) |
| Non-current      deferred tax liability, net |   |   | (3,356,968 | )      |   |   | (677,131 | ) |
|                                         |   |   |       |   |   |   |   |   |
| Deferred      tax assets (liabilities), net  |   | $      | 5,428,075  |   |   | $      | (677,131 | ) |

----

|                                             |   | December      31, 2008 |        |
|--------------------------------------------------|--------|------------------------|-------------|
|                                             |   | Petrochemical          |        |   | Mining |   |   | Total |   |
| Continuing      operations                       |   |                   |        |   |   |   |   |   |   |
|   Revenue      from external customers |   | $                      | 154,630,234 |   |   | $ | - |   |   | $ | 154,630,234 |   |
|   Depreciation                         |   |                   | 1,630,428   |   |   |   | 856 |   |   |   | 1,631,284 |   |
|   Operating      income (loss)         |   |                   | (11,563,597 | ) |   |   | (2,399,134 | ) |   |   | (13,962,731 | ) |
|                                             |   |                   |        |   |   |   |   |   |   |   |   |   |
| Total      assets                                |   | $                      | 63,917,729  |   |   | $ | 34,228,411 |   |   | $ | 98,146,140 |   |

|                                             |   | December      31, 2007 |        |
|--------------------------------------------------|--------|------------------------|-------------|
|                                             |   | Petrochemical          |        |   | Mining |   |   | Total |   |
| Continuing      operations                       |   |                   |        |   |   |   |   |   |   |
|   Revenue      from external customers |   | $                      | 108,638,115 |   |   | $ | - |   |   | $ | 108,638,115 |   |
|   Depreciation                         |   |                   | 1,073,620   |   |   |   | 1,142 |   |   |   | 1,074,762 |   |
|   Operating      income (loss)         |   |                   | 13,261,809  |   |   |   | (2,179,101 | ) |   |   | 11,082,708 |   |
|                                             |   |                   |        |   |   |   |   |   |   |   |   |   |
| Total      assets                                |   | $                      | 42,077,819  |   |   | $ | 42,142,946 |   |   | $ | 84,220,765 |   |

|                                             |   | December      31, 2006 |       |
|--------------------------------------------------|--------|------------------------|------------|
|                                             |   | Petrochemical          |       |   | Mining |   |   | Total |   |
| Continuing      operations                       |   |                   |       |   |   |   |   |   |   |
|   Revenue      from external customers |   | $                      | 98,502,157 |   |   | $ | - |   |   | $ | 98,502,157 |   |
|   Depreciation                         |   |                   | 858,813    |   |   |   | 246 |   |   |   | 859,059 |   |
|   Operating      income (loss)         |   |                   | 13,130,693 |   |   |   | (1,218,931 | ) |   |   | 11,911,762 |   |
|                                             |   |                   |       |   |   |   |   |   |   |   |   |   |
| Total      assets                                |   | $                      | 29,638,657 |   |   | $ | 41,951,509 |   |   | $ | 71,590,166 |   |

----

|                             |   | Year      ended December 31, |    |
|----------------------------------|--------|------------------------------|---------|
|                             |   | 2008                         |    |   | 2007 |   |   | 2006 |   |
| Revenues                         |   |                         |    |   |   |   |   |   |   |
|   United      States   |   | $                            | 154,630 |   |   | $ | 108,638 |   |   | $ | 98,502 |   |
|   Saudi      Arabia    |   |                         | -       |   |   |   | - |   |   |   | - |   |
|                             |   | $                            | 154,630 |   |   | $ | 108,638 |   |   | $ | 98,502 |   |
|                             |   |                         |    |   |   |   |   |   |   |   |   |   |
| Long-lived      assets           |   |                         |    |   |   |   |   |   |   |   |   |   |
|   United      States   |   | $                            | 33,123  |   |   | $ | 20,851 |   |   | $ | 11,711 |   |
|   Saudi      Arabia(A) |   |                         | 33,002  |   |   |   | 39,899 |   |   |   | 39,568 |   |
|                             |   | $                            | 66,125  |   |   | $ | 60,750 |   |   | $ | 51,279 |   |

|                                                             |   | Year      ended December 31, |       |
|------------------------------------------------------------------|--------|------------------------------|------------|
|                                                             |   | 2008                         |       |   | 2007 |   |   | 2006 |   |
|                                                             |   |                         |       |   |   |   |   |   |   |
| Net      income (loss)                                           |   | $                            | (8,874,915 | ) |   | $ | 7,711,381 |   |   | $ | 7,875,328 |   |
|                                                             |   |                         |       |   |   |   |   |   |   |   |   |   |
| Basic      earnings (loss) per common share:                     |   |                         |       |   |   |   |   |   |   |   |   |   |
|                                                             |   |                         |       |   |   |   |   |   |   |   |   |   |
|     Weighted      average shares outstanding |   |                         | 23,409,458 |   |   |   | 22,895,394 |   |   |   | 22,804,567 |   |
|                                                             |   |                         |       |   |   |   |   |   |   |   |   |   |
|     Per      share amount                    |   | $                            | (0.38      | ) |   | $ | 0.34 |   |   | $ | 0.35 |   |
|                                                             |   |                         |       |   |   |   |   |   |   |   |   |   |
| Diluted      earnings (loss) per common share:                   |   |                         |       |   |   |   |   |   |   |   |   |   |
|                                                             |   |                         |       |   |   |   |   |   |   |   |   |   |
|     Weighted      average shares outstanding |   |                         | 23,409,458 |   |   |   | 23,291,669 |   |   |   | 23,030,283 |   |
|                                                             |   |                         |       |   |   |   |   |   |   |   |   |   |
|     Per      share amount                    |   | $                            | (0.38      | ) |   | $ | 0.33 |   |   | $ | 0.34 |   |

|                                                                                      |   | Year      ended December 31, |       |
|-------------------------------------------------------------------------------------------|--------|------------------------------|------------|
|                                                                                      |   | 2008                         |       |   | 2007 |   |   | 2006 |   |
| Weighted      average shares-denominator  basic      computation                |   |                         | 23,409,458 |   |   |   | 22,895,394 |   |   |   | 22,804,567 |   |
| Effect      of dilutive stock options                                                     |   |                         | -          |   |   |   | 396,275 |   |   |   | 225,716 |   |
| Weighted      average shares, as adjusted  denominator      diluted computation |   |                         | 23,409,458 |   |   |   | 23,291,669 |   |   |   | 23,030,283 |   |

----

|                     |   | Year      Ended December 31, 2008 |   |
|--------------------------|--------|-----------------------------------|--------|
|                     |   | FirstQuarter                      |   |   | SecondQuarter |   |   | ThirdQuarter |   |   | FourthQuarter |   |   | Total |   |
|                     |   |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Revenues                 |   | $                                 | 31,234 |   |   | $ | 42,611 |   |   | $ | 47,742 |   |   | $ | 33,043 |   |   | $ | 154,630 |   |
| Gross      profit (loss) |   |                              | 4,878  |   |   |   | 6,846 |   |   |   | (9,110 | ) |   |   | (7,211 | ) |   |   | (4,597 | ) |
| Net      income (loss)   |   |                              | 1,416  |   |   |   | 3,172 |   |   |   | (6,931 | ) |   |   | (6,532 | ) |   |   | (8,875 | ) |
| Basic      EPS           |   | $                                 | 0.06   |   |   | $ | 0.14 |   |   | $ | (0.30 | ) |   | $ | (0.28 | ) |   | $ | (0.38 | ) |
| Diluted      EPS         |   | $                                 | 0.06   |   |   | $ | 0.13 |   |   | $ | (0.30 | ) |   | $ | (      0.28 | ) |   | $ | (0.38 | ) |

|              | Year      Ended December 31, 2007 |
|-------------------|-----------------------------------|
|              | FirstQuarter                      | SecondQuarter | ThirdQuarter | FourthQuarter | Total |
|              |                              |   |   |   |   |
| Revenues          | $23,663                           | $      27,141 | $      28,038 | $      29,796 | $108,638 |
| Gross      profit | 9,065                             | 4,970 | 2,243 | 2,706 | 18,984 |
| Net      income   | 4,641                             | 2,172 | 382 | 576 | 7,771 |
| Basic      EPS    | $    0.20     | $    0.10 | $    0.02 | $    0.02 | $    0.34 |
| Diluted      EPS  | $    0.20     | $    0.09 | $    0.02 | $    0.02 | $    0.33 |

----

|   | NOTE      20 – DERIVATIVE INSTRUMENTS |
|--------|---------------------------------------------|

----

|   | NOTE      20 – DERIVATIVE INSTRUMENTS -continued |
|--------|--------------------------------------------------------|

----

----

----

| Description                                 |   | Beginningbalance |      |   | Charged(credited)to earnings |   |     | Deductions(a) |   |   | Endingbalance |   |
|---------------------------------------------|--------|------------------|-----------|--------|------------------------------|--------|----------|---------------|--------|--------|---------------|--------|
| ALLOWANCE FOR DEFERRED  TAX ASSET |   |             |      |   |                         |   |     |          |   |   |          |   |
|                                        |   |             |      |   |                         |   |     |          |   |   |          |   |
| December      31, 2006                      |   |             | 1,336,451 |   |                         |   | -        |          |   |   | -             |   |   |   | 1,336,451 |   |
| December      31, 2007                      |   |             | 1,336,451 |   |                         |   | (108,361 | )             |   |   | -             |   |   |   | 1,228,090 |   |
| December      31, 2008                      |   |             | 1,228,090 |   |                         |   | -        |          |   |   | -             |   |   |   | 1,228,090 |   |

| Description                                |   | Beginningbalance |   |   | Chargedto earnings |   |    | Deductions |   |   | Endingbalance |   |
|--------------------------------------------|--------|------------------|--------|--------|--------------------|--------|---------|------------|--------|--------|---------------|--------|
| ALLOWANCE FOR DOUBTFUL  ACCOUNTS |   |             |   |   |               |   |    |       |   |   |          |   |
|                                       |   |             |   |   |               |   |    |       |   |   |          |   |
| December      31, 2006                     |   |             | -      |   |               |   | 190,829 |       |   |   | (155,829      | )      |   |   | 35,000 |   |
| December      31, 2007                     |   |             | 35,000 |   |               |   | -       |       |   |   | -             |   |   |   | 35,000 |   |
| December      31, 2008                     |   |             | 35,000 |   |               |   | 465,000 |       |   |   | -             |   |   |   | 500,000 |   |

----