Utah
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87-0233535
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(State
or other jurisdiction of incorporation or organization)
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(I.R.S.
Employer Identification No.)
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9903 Santa
Monica Blvd, Suite 287, Beverly Hills,
California
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90212
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(Address
of principal executive offices)
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(Zip
Code)
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Large
accelerated filer o Accelerated
filer o Non-accelerated
filer o Smaller
reporting company x
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Page
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Number
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PART
I - FINANCIAL INFORMATION
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Item
1. Financial Statements.
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3 –
8
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Item
2. Management’s Discussion and Analysis of Financial Condition and Results
of Operations.
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9
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Item
3. Quantitative and Qualitative Disclosures About Market
Risk.
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11
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Item
4. Controls and Procedures.
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12
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PART
II - OTHER INFORMATION
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Item
2. Unregistered Sales of Equity Securities and Use of
Proceeds.
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12
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Item
5. Other Information.
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12
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Item
6. Exhibits.
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12
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Signatures
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13
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Certifications
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Attached
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June
30, 2008 (Unaudited)
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December
31, 2007
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|||||||
ASSETS
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||||||||
CURRENT
ASSETS
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||||||||
Cash
and cash equivalents
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$ | 121,603 | $ | 408,634 | ||||
Accounts
receivable
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- | 86,730 | ||||||
TOTAL
CURRENT ASSETS
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121,613 | 495,364 | ||||||
TOTAL
ASSETS
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$ | 121,613 | $ | 495,364 | ||||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
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||||||||
LIABILITIES
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||||||||
Accounts
payable
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$ | 12,433 | $ | 7,159 | ||||
Dividends
payable
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32,076 | - | ||||||
Accrued
liabilities
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- | 70,667 | ||||||
TOTAL
LIABILITIES
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$ | 44,509 | $ | 77,826 | ||||
STOCKHOLDERS’
EQUITY
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||||||||
Class
A Preferred stock; no par value
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||||||||
Authorized
– 10,000,000 shares
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||||||||
Issued
and outstanding – 0 shares
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$ | - | $ | - | ||||
Common
stock, par value $0.10 per share
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||||||||
Authorized
– 50,000,000 shares
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||||||||
Issued
and outstanding – 1,120,743 and 620,743, respectively
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112,064 | 62,064 | ||||||
Additional
paid-in capital
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639,615 | 439,615 | ||||||
Treasury
stock, at cost – 102,644 and 69,399 shares, respectively
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(154,364 | ) | (107,794 | ) | ||||
Retained
(deficit) earnings
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(520,211 | ) | 23,653 | |||||
TOTAL
STOCKHOLDERS’ EQUITY
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77,104 | 417,538 | ||||||
TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY
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$ | 121,613 | $ | 495,364 |
Three
Months
Ended
June
30, 2008
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Three
Months
Ended
June
30, 2007
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Six
Months
Ended
June
30, 2008
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Six
Months
Ended
June
30, 2007
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|||||||||||||
(as
restated)
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(as
restated)
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|||||||||||||||
EXPENSES
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||||||||||||||||
General
and administrative
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$ | 55,453 | $ | 21,030 | $ | 90,575 | $ | 40,773 | ||||||||
Consulting
fees, non-cash compensation
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250,000 | - | 250,000 | - | ||||||||||||
TOTAL
EXPENSES
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305,453 | 21,030 | 340,575 | 40,773 | ||||||||||||
(LOSS)
FROM OPERATIONS
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(305,453 | ) | (21,030 | ) | (340,575 | ) | (40,773 | ) | ||||||||
OTHER
INCOME (EXPENSE)
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||||||||||||||||
Interest
income
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988 | 11,279 | 3,429 | 22,428 | ||||||||||||
OTHER
INCOME (EXPENSE)
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988 | 11,279 | 3,429 | 22,428 | ||||||||||||
(LOSS)
FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
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(304,465 | ) | (9,751 | ) | (337,146 | ) | (18,345 | ) | ||||||||
Provision
for income taxes
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- | - | - | - | ||||||||||||
(LOSS)
FROM CONTINUING OPERATIONS
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(304,465 | ) | (9,571 | ) | (337,146 | ) | (18,345 | ) | ||||||||
DISCONTINUED
OPERATIONS
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||||||||||||||||
Income
discontinued operations
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- | 105,197 | - | 190,163 | ||||||||||||
Provision
for income taxes
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- | 30,000 | - | 52,000 | ||||||||||||
INCOME
FROM DISCONTINUED OPERATIONS
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- | 75,197 | - | 138,163 | ||||||||||||
NET
(LOSS)
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$ | (304,465 | ) | $ | 65,626 | $ | (337,146 | ) | $ | 119,818 | ||||||
NET
(LOSS) INCOME PER COMMON SHARE
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||||||||||||||||
Basic
and diluted:
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||||||||||||||||
Continuing
operations
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$ | (1.54 | ) | $ | (0.02 | ) | $ | (1.66 | ) | $ | (0.03 | ) | ||||
Discontinued
operations
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- | 0.14 | - | 0.25 | ||||||||||||
Net
(loss) income
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$ | (1.54 | ) | $ | 0.12 | $ | (1.66 | ) | $ | 0.22 | ||||||
WEIGHTED
AVERAGE NUMBER OF
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||||||||||||||||
COMMON
SHARES OUTSTANDING
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||||||||||||||||
Basic
and diluted
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686,677 | 551,224 | 653,710 | 551,224 |
Common
Stock
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Additional
Paid-in
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Treasury
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Retained
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|||||||||||||||||||||
Shares
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Amount
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Capital
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Stock
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Deficit
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Total
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|||||||||||||||||||
Balance,
December 31, 2007
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620,743 | $ | 62,064 | $ | 439,615 | $ | (107,794 | ) | $ | 23,653 | $ | 417,538 | ||||||||||||
Issuance
of common stock for
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||||||||||||||||||||||||
deferred
consulting fees
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500,000 | 50,000 | 200,000 | - | - | 250,000 | ||||||||||||||||||
Purchase
of treasury stock
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- | - | - | (46,570 | ) | - | (46,570 | ) | ||||||||||||||||
Dividend
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- | - | - | - | (206,718 | ) | (206,718 | ) | ||||||||||||||||
Net
(loss) for the six months
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||||||||||||||||||||||||
Ended
June 30, 2008
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- | - | - | - | (337,146 | ) | (337,146 | ) | ||||||||||||||||
Balance,
June 30, 2008
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1,120,743 | $ | 112,064 | $ | 639,615 | $ | (154,364 | ) | $ | (520,211 | ) | $ | 77,104 |
Six
Months
Ended
June
30, 2008
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Six
Months
Ended
June
30, 2007
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|||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
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||||||||
Net
(loss) from continuing operations
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$ | (337,146 | ) | $ | (18,345 | ) | ||
Adjustments
to reconcile net (loss) to net cash
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||||||||
(used)
by operating activities:
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||||||||
Income
from discontinued operations
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- | 138,163 | ||||||
Depletion,
depreciation and accretion
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- | 28,227 | ||||||
Consulting
fees, non-cash compensation
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250,000 | - | ||||||
Changes
in operating assets and liabilities:
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||||||||
Accounts
receivable
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86,730 | 5,711 | ||||||
Accounts
payable
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5,274 | (24,617 | ) | |||||
Accrued
liabilities
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(70,667 | ) | (41,094 | ) | ||||
NET
CASH (USED) PROVIDED BY OPERATING ACTIVITIES
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(65,809 | ) | 88,045 | |||||
CASH
FLOWS FROM INVESTING ACTIVITIES:
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||||||||
Acquisition
of property leases and improvements
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- | (22,845 | ) | |||||
NET
CASH (USED) PROVIDED BY INVESTING ACTIVITIES
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- | (22,845 | ) | |||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
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Dividends
paid
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(174,642 | ) | - | |||||
Purchase
of treasury stock
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(46,570 | ) | - | |||||
NET
CASH (USED) BY FINANCING ACTIVITIES
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(221,212 | ) | - | |||||
NET
INCREASE (DECREASE) IN CASH
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||||||||
AND
CASH EQUIVALENTS
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(287,021 | ) | 65,200 | |||||
CASH
AND CASH EQUIVALENTS
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||||||||
AT
THE BEGINNING OF
THE
PERIOD
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408,634 | 985,729 | ||||||
CASH
AND CASH EQUIVALENTS
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||||||||
AT
THE END OF THE PERIOD
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$ | 121,613 | $ | 1,050,929 |
Revenues:
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||||
Oil
and natural gas sales
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$
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422,121
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Other
income
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2,760
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$
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424,881
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|||
Expenses:
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||||
Lease
operating expense including production taxes
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138,423
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|||
General
and administrative
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68,068
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|||
Accretion
expense
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3,227
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|||
Depletion
and depreciation
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25,000
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|||
234,718
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||||
Income
from discontinued operations
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190,163
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|||
Provision
for income taxes
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52,000
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Net
income from discontinued operations
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$
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138,163
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10
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Share
Issuance Agreement between the Company and Terrace Lane LLC dated as of
June 18, 2008.
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31
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Rule
13a-14(a)/15d-14(a) Certification.
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32
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Section
1350 Certification.
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Dated:
August 8, 2008
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CROFF
ENTERPRISES, INC.
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By:/s/ GREGORY R. WOODHILL | |
Gregory R. Woodhill, President and | |
Chief Financial Officer |
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Exhibit
Number
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Description
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10 | Share Issuance Agreement between the Company and Terrace Lane LLC dated as of June 18, 2008. | |
31 | Rule 13a-14(a)/15d-14(a) Certification. | |
32 | Section 1350 Certification. |