RADIANT OIL & GAS INC - FORM 8-K/A - EX-99 - EX-99.1 AUDITED FINANCIAL STATEMENTS

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8-K/A - FORM 8K/A CURRENT REPORT - RADIANT OIL & GAS INC	radiant8ka092310.htm
EX-99 - EX-99.2 AUDITED PRO FORMA FINANCIAL STATEMENTS - RADIANT OIL & GAS INC	radiant8ka092310ex992.htm

Exhibit 99.1

JURASIN OIL AND GAS, INC.

Index to Consolidated Financial Statements

TABLE OF CONTENTS


Report of Independent Registered Public Accounting Firm	F-2

Consolidated Balance Sheets as of December 31, 2009 and 2008 (Restated)	F-3

Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2009 and 2008 (Restated)	F-4

Consolidated Statements of Stockholder’s Deficit for the years ended December 31, 2009 and 2008 (Restated)	F-5

Consolidated Statements of Cash Flows for the years ended December 31, 2009 and 2008 (Restated)	F-6

Notes to Consolidated Financial Statements	F-7

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors

Jurasin Oil and Gas, Inc.

Houston, Texas

We have audited the accompanying consolidated balance sheets of Jurasin Oil and Gas, Inc. as of December 31, 2009 and 2008 and the related consolidated statements of operations and comprehensive loss, changes in stockholder’s deficit, and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Jurasin Oil and Gas, Inc. at December 31, 2009 and 2008 and the consolidated results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

As discussed in Note 2, the accompanying consolidated financial statements have been restated. The restatement relates to an error in applying the full-cost rules.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3, the Company has recurring losses from operations and has a working capital deficit. These factors raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ MaloneBailey, LLP

Houston, Texas

May 27, 2010, except for Note 2 and Note 14, which is September 24, 2010

F-2

JURASIN OIL AND GAS, INC.

CONSOLIDATED BALANCE SHEETS


		December 31,
		2009		2008
		(Restated)		(Restated)
Assets
Current assets
Cash and cash equivalents	$	198,854	$	1,557,137
Investments		246,203		144,427
Accounts receivable, net		55,784		94,237
Other current assets		8,967		870,268
Deferred finance charges		19,205		136,958
Due from related party		139,193		—
Total current assets		668,206		2,803,027

Property and equipment, net of accumulated depreciation of $172,093 and $153,371, respectively		10,365		29,087
Evaluated property, accounted for using the full cost method of accounting, net of accumulated depletion of $41,546 and $20,847, respectively		3,181,376		3,560,283

Total Assets	$	3,859,947	$	6,392,397

Liabilities and Stockholder’s Deficit
Current liabilities
Accounts payable and accrued expenses	$	1,291,529	$	2,395,857
Notes payable, net of unamortized discount of $6,608 and $22,688, respectively		3,375,684		4,189,133
Accrued interest		475,831		274,158
Deposit		127,500		—
Due to related party		—		36,089
Total current liabilities		5,270,544		6,895,237

Deferred gain		333,535		—
Asset retirement obligations		138,323		173,605
Total liabilities		5,742,402		7,068,842

Stockholder’s deficit:
Common stock, no par value; authorized 10,000 shares; issued and outstanding 100 shares		38,974		38,974
Accumulated other comprehensive income (loss)		28,764		(40,024)
Accumulated deficit		(1,950,193)		(675,395)
Total stockholder’s deficit		(1,882,455)		(676,445)

Total liabilities and stockholder’s deficit	$	3,859,947	$	6,392,397

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

F-3

JURASIN OIL AND GAS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPRENSIVE LOSS


		Years Ended
		December 31,
		2009		2008
		(Restated)		(Restated)

Revenues
Oil and gas	$	106,502	$	519,183

Operating expenses
Lease operating expense		278,383		210,865
Depreciation, depletion, and amortization		34,413		38,014
Accretion		14,589		11,073
General and administrative expense		515,897		630,584
Total operating expenses		843,282		890,536

Loss from operations		(736,780)		(371,353)

Net realized loss from sale of investments		(21,926)		(81,570)
Interest income		6,910		18,661
Interest expense		(523,002)		(501,995)
Total other expenses		(538,018)		(564,904)

Net loss		(1,274,798)		(936,257)

Other comprehensive gain (loss), net of tax:
Unrealized (loss) gains on available for sale securities		68,788		(36,113)

Comprehensive loss	$	(1,206,010)	$	(972,370)

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

F-4

JURASIN OIL AND GAS, INC.

STATEMENT OF CHANGES IN STOCKHOLDER’S DEFICIT

(Restated)


	Common Stock				Accumulated Other Comprehensive Income (Loss)		Retained Earnings (Accumulated Deficit)		Total
	Shares		Amount		Accumulated Other Comprehensive Income (Loss)		Retained Earnings (Accumulated Deficit)		Total

Balance at December 31, 2007	100	$	38,974	$	(3,911)	$	260,862	$	295,925

Unrealized (loss) on available for sale securities	—		—		(36,113)		—		(36,113)

Net loss	—		—		—		(936,257)		(936,257)

Balance at December 31, 2008 – Restated	100		38,974		(40,024)		(675,395)		(676,445)

Unrealized (loss) on available for sale securities	—		—		68,788		—		68,788

Net loss	—		—		—		(1,274,798)		(1,274,798)

Balance at December 31, 2009 - Restated	100	$	38,974	$	28,764	$	(1,950,193)	$	(1,882,455)

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

F-5

JURASIN OIL AND GAS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Restated)


	Years Ended
	December 31,
		2009		2008
		(Restated)		(Restated)
Cash Flows From Operating Activities
Net loss	$	(1,274,798)	$	(936,257)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation, depletion and amortization		34,413		38,014
Accretion		14,589		11,073
Realized loss on sale of investments		21,926		81,570
Amortization of deferred finance charge		92,828		104,692
Amortization of debt discount		16,904		12,969
Changes in operating assets and liabilities:
Accounts receivable		38,453		(11,329)
Due from related party		(210,863)		119,076
Accounts payable and accrued expenses		(899,849)		148,125
Other assets		861,301		(861,041)
Net cash used in operating activities		(1,305,096)		(1,293,108)

Cash Flows From Investing Activities
Purchases of oil and gas properties		(252,568)		(2,182,809)
Proceeds from sale of oil and gas properties		127,500		2,355,918
Purchases of fixed assets		—		(15,681)
Purchases of investments		(79,920)		(86,122)
Proceeds from sale of investments		25,006		80,575
Net cash provided by (used in) investment activities		(179,982)		151,881

Cash Flows From Financing Activities
Proceeds from notes payable		126,795		2,184,567
Payments on notes payable		—		(42,623)
Deferred financing costs incurred		—		(51,557)
Net cash provided by financing activities		126,795		2,090,387

Net increase (decrease) in cash		(1,358,283)		949,160
Cash at beginning of period		1,557,137		607,977
Cash at end of period	$	198,854	$	1,557,137


Supplemental Disclosures:
Interest paid in cash	$	87,253	$	136,059
Income taxes paid in cash		—		—

Non-cash investing and financing
Accounts payable for oil and gas assets	$	—	$	2,186,207
Asset retirement obligation incurred and changes in estimates		11,709		162,532
Unrealized gain or (loss) on investments		68,788		(36,113)
Adjustment of basis in subsidiary		338,543		—

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

F-6

JURASIN OIL AND GAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 – Description of Business and Summary of Significant Accounting Policies

Description of business and basis of presentation

Jurasin Oil and Gas, Inc. (“Jurasin") is an independent oil and gas exploration and production company that operates in the Gulf Coast region of the United States of America, specifically, onshore and the state waters of Louisiana, USA and the federal waters offshore Texas in the Gulf of Mexico. Jurasin is a Louisiana Corporation chartered in 1994. Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

Restatement

These consolidated financial statements have been restated as more fully discussed in Note 2 – Restatement.

Principles of Consolidation

We consolidate all investments in which we have exclusive control. The accompanying consolidated financial statements include the accounts of Jurasin Oil and Gas, Inc., our wholly owned subsidiary, Rampant Lion Energy, LLC (“Rampant”), and Jurasin Oil and Gas Operating Company (“JOGop”), a company under common control.

In accordance with established practice in the oil and gas industry, our financial statements include our pro-rata share of assets, liabilities, income and lease operating and general and administrative costs and expenses of a limited liability company, Amber Energy, LLC in which we have an interest. We owned a 75% interest in Amber through October 9, 2009 and 51% after that date. Our net interest is referred to as “Amber”

Use of Estimates

The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities, if any, at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the respective reporting periods. We base our estimates and judgments on historical experience and on various other assumptions and information that are believed to be reasonable under the circumstances. Estimates and assumptions about future events and their effects cannot be perceived with certainty and, accordingly, these estimates may change as new events occur, as more experience is acquired, as additional information is obtained and as our operating environment changes. Our estimates include oil and natural gas proved reserve quantities which form the basis for the calculation of amortization of oil and natural gas properties. Management emphasizes that reserve estimates are inherently imprecise and that estimates of more recent reserve discoveries are more imprecise than those for properties with long production histories. Actual results may differ from the estimates and assumptions used in the preparation of our consolidated financial statements.

Cash and Cash Equivalents

Cash and cash equivalents are all highly liquid investments with an original maturity of three months or less at the time of purchase and are recorded at cost, which approximates fair value.

Concentrations

Our operations are concentrated in Louisiana and Texas. We are heavily dependent on the sale of natural gas, which accounted for 73% and 91% for each of the years ended December 31, 2009 and 2008, respectively. If the oil and natural gas exploration and production industry in general and the natural gas industry in particular were adversely affected, we would experience adverse effects.

In 2009, we had an individual purchaser which accounted for in excess of 75% of our sales. In 2008, that purchaser represented over 90% of our sales. This purchaser is the operator of our currently producing property.

We are the non-operator on our proved properties. As such, we have a concentration risk associated with the business success of our operators. If our operators are not successful in operating our properties, we could experience material adverse effects.

F-7

Financial instruments which potentially subject us to concentrations of credit risk consist of cash. We periodically evaluate the credit worthiness of financial institutions, and maintain cash accounts only with major financial institutions thereby minimizing exposure for deposits in excess of federally insured amounts. At December 31, 2009 and 2008, respectively, we had approximately $0 and $1,200,000 held in banks in excess of federally insured limits. We believe that credit risk associated with cash is remote.

We have over 90% of our debt placed with one entity, as described more fully in Note 5 – Notes Payable.

Investments

We classify our marketable securities as trading, available-for-sale, or held-to-maturity. The appropriate classification of its marketable securities is determined at the time of purchase and reevaluated at each balance sheet date. As of December 31, 2009 and 2008, respectively, we owned no investments that were considered to be held-to-maturity or trading. Available for sale securities are marked to market based on the fair values of the securities, with unrealized gains or losses, net of tax, reported as a component of accumulated other comprehensive income (loss). We owned securities with a fair value of $246,203 and $144,427 at December 31, 2009 and 2008, respectively, which were classified as available for sale. Fair value is determined using quoted prices in active markets for the identical asset; total fair value is the market price per share multiplied by the number of shares owned without consideration of transaction costs (level 1 input). When available-for-sale securities are sold, unrealized gain or loss included in accumulated other comprehensive income is reclassified into earnings and included in the realized gain or loss on sale of the security.

Accounts receivable and allowance for doubtful accounts

Accounts receivable are reflected at net realizable value. We establish provisions for losses on accounts receivable if we determine that we will not collect all or part of the outstanding balance. We regularly review collectability and establish or adjust the allowance as necessary using the specific identification method. There is no significant allowance for doubtful accounts at December 31, 2009 or 2008.

Deferred Finance Charges

Deferred finance charges consist of legal fees incurred in connection with the issuance of our notes payable were capitalized and are separately shown in the consolidated balance sheets. The charges are being amortized on a straight-line basis over three years, the term of the notes.

Property and Equipment

Property and equipment are stated at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the related asset: furniture and fixtures, 7 years; vehicles, 5 years; computer equipment and software 3 - 5 years. Fully depreciated assets are retained in property and accumulated depreciation accounts until they are removed from service. We perform ongoing evaluations of the estimated useful lives of the property and equipment for depreciation purposes. Maintenance and repairs are expensed as incurred.

Impairment of Long-Lived Assets

We periodically review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. We recognize an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value and its book value. We recorded no impairment during the years ended December 31, 2009 and 2008.

Oil and Natural Gas Properties

We account for our oil and natural gas producing activities using the full cost method of accounting as prescribed by the United States Securities and Exchange Commission (SEC). Under this method, subject to a limitation based on estimated value, all costs incurred in the acquisition, exploration, and development of proved oil and natural gas properties, including internal costs directly associated with acquisition, exploration, and development activities, the costs of abandoned properties, dry holes, geophysical costs, and annual lease rentals are capitalized within a cost center. Costs of production and general and administrative corporate costs unrelated to acquisition, exploration, and development activities are expensed as incurred.

Costs associated with unevaluated properties are capitalized as oil and natural gas properties but are excluded from the amortization base during the evaluation period. When we determine whether the property has proved recoverable reserves or not, or if there is an impairment, the costs are transferred into the amortization base and thereby become subject to amortization. We evaluate unevaluated properties for inclusion in the amortization base at least annually.

F-8

Capitalized costs included in the amortization base are depleted using the units of production method based on proved reserves. Depletion is calculated using the capitalized costs included in the amortization base, including estimated asset retirement costs, plus the estimated future expenditures to be incurred in developing proved reserves, net of estimated salvage values.

We include our pro rata share of assets and proved reserves associated with an investment that is accounted for on a proportional consolidation basis with assets and proved reserves that we directly own in the appropriate cost center. We calculate the depletion and net book value of the assets based on the cost center’s aggregated values. Accordingly, the ratio of production to reserves, depletion and impairment associated with a proportionally consolidated investment does not represent a pro rata share of the depletion, proved reserves, and impairment of the proportionally consolidated venture.

The net book value of all capitalized oil and natural gas properties within a cost center, less related deferred income taxes, is subject to a full cost ceiling limitation which is calculated quarterly. Under the ceiling limitation, costs may not exceed an aggregate of the present value of future net revenues attributable to proved oil and natural gas reserves discounted at 10 percent using current prices, plus the lower of cost or market value of unproved properties included in the amortization base, plus the cost of unevaluated properties, less any associated tax effects. Any excess of the net book value, less related deferred tax benefits, over the ceiling is written off as expense. Impairment expense recorded in one period may not be reversed in a subsequent period even though higher oil and gas prices may have increased the ceiling applicable to the subsequent period.

Sales or other dispositions of oil and natural gas properties are accounted for as adjustments to capitalized costs, with no gain or loss recorded unless the ratio of cost to proved reserves would significantly change.

Asset Retirement Obligation

We record the fair value of an asset retirement cost, and corresponding liability as part of the cost of the related long-lived asset and the cost is subsequently allocated to expense using a systematic and rational method. We record an asset retirement obligation to reflect our legal obligations related to future plugging and abandonment of our oil and natural gas wells and gas gathering systems. We estimate the expected cash flow associated with the obligation and discount the amount using a credit-adjusted, risk-free interest rate. At least annually, we reassess the obligation to determine whether a change in the estimated obligation is necessary. We evaluate whether there are indicators that suggest the estimated cash flows underlying the obligation have materially changed. Should those indicators suggest the estimated obligation may have materially changed on an interim basis (quarterly), we will accordingly update our assessment. Additional retirement obligations increase the liability associated with new oil and natural gas wells and gas gathering systems as these obligations are incurred.

Revenue Recognition

We recognize revenue when persuasive evidence of an arrangement exists, services have been rendered, the sales price is fixed or determinable, and collectability is reasonably assured. We follow the “sales method” of accounting for oil and natural gas revenue, so we recognize revenue on all natural gas or crude oil sold to purchasers, regardless of whether the sales are proportionate to our ownership in the property. A receivable or liability is recognized only to the extent that we have an imbalance on a specific property greater than the expected remaining proved reserves.

Income Taxes

We account for income taxes using the asset and liability method. Under this method, deferred income tax assets and liabilities are determined based on differences between the financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to be recovered or settled. Deferred tax assets are reduced by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

Fair Value

Accounting standards regarding fair value of financial instruments define fair value, establish a three-level hierarchy which prioritizes and defines the types of inputs used to measure fair value, and establish disclosure requirements for assets and liabilities presented at fair value on the consolidated balance sheets.

Fair value is the amount that would be received from the sale of an asset or paid for the transfer of a liability in an orderly transaction between market participants. A liability is quantified at the price it would take to transfer the liability to a new obligor, not at the amount that would be paid to settle the liability with the creditor.

F-9

The three-level hierarchy is as follows:

Level 1 inputs consist of unadjusted quoted prices for identical instruments in active markets.

Level 2 inputs consist of quoted prices for similar instruments.

Level 3 valuations are derived from inputs which are significant and unobservable and have the lowest priority.

As of December 31, 2009 and December 31, 2008, we had investments of $246,203 and 144,427, respectively, measured at fair value using level 1 inputs. The carrying amounts reported in the balance sheet for cash and accounts payable and accrued expenses approximate their fair market value based on the short-term maturity of these instruments.

Recent Accounting Pronouncements

In August 2009, the FASB issued Accounting Standards Update (ASU) No. 2009-05, Fair Value Measurements and Disclosures (ASU 2009-05). ASU 2009-05 amends Subtopic 820-10, Fair Value Measurements and Disclosures , to provide guidance on the fair value measurement of liabilities. ASU 2009-05 provides clarification for circumstances in which a quoted price in an active market for the identical liability is not available. ASU 2009-05 is effective for interim and annual periods beginning after August 26, 2009. We adopted the provisions of ASU 2009-05 for the period ended December 31, 2009. There was no impact on our operating results, financial position or cash flows.

In June 2009, the FASB issued ASU No. 2009-01, Generally Accepted Accounting Principles (ASU 2009-01). ASU 2009-01 establishes “The FASB Accounting Standards Codification,” or Codification, which became the source of authoritative GAAP recognized by the FASB to be applied by nongovernmental entities. On the effective date, the Codification superseded all then-existing non-SEC accounting and reporting standards. All other non-grandfathered non-SEC accounting literature not included in the Codification will become non-authoritative. ASU 2009-01 is effective for interim and annual periods ending after September 15, 2009. We adopted the provisions of ASU 2009-01 for the period ended September 30, 2009. There was no impact on our operating results, financial position or cash flows.

In May 2009, the FASB issued SFAS No. 165, Subsequent Events (ASC 855) to establish general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. ASC 855 is effective for interim and annual reporting periods ending after June 15, 2009. We adopted the provisions of ASC 855 for the period ended June 30, 2009. There was no impact on our operating results, financial position or cash flows.

In April 2009, the FASB issued FASB Staff Position (FSP) No. FAS 107-1 and Accounting Principles Board (APB) 28-1, Interim Disclosures about Fair Value of Financial Instruments (ASC 825-10-65) to change the reporting requirements on certain fair value disclosures of financial instruments to include interim reporting periods. We adopted ASC 825-10-65 in the second quarter of 2009. There was no impact on our operating results, financial position or cash flows.

In April 2009, the FASB issued FSP No. FAS 115-2 and FAS 124-2, Recognition and Presentation of Other-Than-Temporary Impairments, (ASC 320-10-65), to expand other-than-temporary impairment guidance for debt securities to enhance the application of the guidance and improve the presentation and disclosure of other-than temporary impairments on debt and equity securities within the financial statements. The adoption of ASC 320-10-65 in the second quarter of 2009 did not have a significant impact on our operating results, financial position or cash flows.

In April 2009, the FASB issued FSP No. FAS 157-4, Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly, (ASC 820-10-65) to provide additional guidance for estimating fair value when the volume and level of activity for an asset or liability has significantly decreased. In addition, ASC 820-10-65 includes guidance on identifying circumstances that indicate a transaction is not orderly. The adoption of ASC 820-10-65 in the second quarter of 2009 did not have a significant impact on our operating results, financial position or cash flows.

In December 2008, the SEC issued Release No. 33-8995, Modernization of Oil and Gas Reporting (ASC 2010-3), which amends the oil and gas disclosures for oil and gas producers contained in Regulations S-K and S-X, as well as adding a section to Regulation S-K (Subpart 1200) to codify the revised disclosure requirements in Securities Act Industry Guide 2, which is being eliminated. The goal of Release No. 33-8995 is to provide investors with a more meaningful and comprehensive understanding of oil and gas reserves. Energy companies affected by Release No. 33-8995 are now required to price proved oil and gas reserves using the un-weighted arithmetic average of the price on the first day of each month within the 12-month period prior to the end of the reporting period, unless prices are defined by contractual arrangements, excluding escalations based on future conditions. SEC Release No. 33-8995 is effective beginning for financial statements for fiscal years ending on or after December 31, 2009.

F-10

In January 2010, the FASB issued FASB Accounting Standards Update (ASU) No. 2010-03 Oil and Gas Estimations and Disclosures (ASU 2010-03). This update aligns the current oil and natural gas reserve estimation and disclosure requirements of the Extractive Industries Oil and Gas topic of the FASB Accounting Standards Codification (ASC Topic 932) with the changes required by the SEC final rule ASC 2010-3, as discussed above, ASU 2010-03 expands the disclosures required for equity method investments, revises the definition of oil- and natural gas-producing activities to include nontraditional resources in reserves unless not intended to be upgraded into synthetic oil or natural gas, amends the definition of proved oil and natural gas reserves to require 12-month average pricing in estimating reserves, amends and adds definitions in the Master Glossary that is used in estimating proved oil and natural gas quantities and provides guidance on geographic area with respect to disclosure of information about significant reserves. ASU 2010-03 must be applied prospectively as a change in accounting principle that is inseparable from a change in accounting estimate and is effective for entities with annual reporting periods ending on or after a change in accounting estimate and is effective for entities with annual reporting periods ending on or after December 31, 2009. We adopted ASU 2010-03 effective December 31, 2009.

In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities—an amendment of FASB Statement No. 133 (ASC 815-10-65). ASC 815-10-65 requires entities that utilize derivative contracts to provide qualitative disclosures about their objectives and strategies for using such instruments, as well as any details of credit-risk-related contingent features contained within derivatives. ASC 815-10-65 also requires entities to disclose additional information about the amounts and location of derivatives located within the financial statements, how the provisions of ASC 815 have been applied, and the impact that hedges have on an entity’s operating results, financial position or cash flows. We adopted ASC 815-10-65 on January 1, 2009. There was no impact on our operating results, financial position or cash flows.

In December 2007, the FASB issued SFAS No. 141 (Revised 2007), Business Combinations (ASC 805), and SFAS No. 160, Accounting and Reporting of Non-controlling Interest in Consolidated Financial Statements, an amendment of ARB No. 51 (ASC 810-10-65). ASC 805 and ASC 810-10-65 changed the accounting for and reporting of business combination transactions and non-controlling interests within the financial statements. ASC 805 provides additional definitions and improvements in the application of how the acquisition method is applied. ASC 810-65 requires non-controlling interest to be classified as a component of equity. We adopted ASC 805 and ASC 810-10-65 on January 1, 2009. There was no impact on our operating results, financial position or cash flows; however if the we enters into future business combinations, certain transaction related expenses may be recorded within our operating results which could reduce our current period net income or increase our net loss. Additionally, valuation of certain assets may be different than under the old accounting standards.

Effective January 1, 2009, We adopted FSP No. FAS 157-2, Effective Date of FASB Statement No. 157 (ASC 820-10-55). ASC 820-10-55 delayed the effective date of ASC 820 for all non-financial assets and non-financial liabilities, except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually), until the beginning of the first quarter of fiscal 2009. These include goodwill and other non-amortizable intangible assets. The adoption of ASC 820-10-55 did not have a significant impact on our operating results, financial position or cash flows.

In June 2008, the FASB issued Emerging Issues Task Force (EITF) 03-6-1, Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities (ASC 260). ASC 260 clarifies that share-based payment awards that entitle their holders to receive non-forfeitable dividends or dividend equivalents before vesting should be considered participating securities. The adoption of ASC 260 on January 1, 2009 did not have a significant impact on our operating results, financial position or cash flows.

In January 2010, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2010-06, Improving Disclosures about Fair Value Measurements (ASU 2010-06). This update provides amendments to Subtopic 820-10 and requires new disclosures for 1) significant transfers in and out of Level 1 and Level 2 and the reasons for such transfers and 2) activity in Level 3 fair value measurements to show separate information about purchases, sales, issuances and settlements. In addition, this update amends Subtopic 820-10 to clarify existing disclosures around the disaggregation level of fair value measurements and disclosures for the valuation techniques and inputs utilized (for Level 2 and Level 3 fair value measurements). The provisions in ASU

2010-06 are applicable to interim and annual reporting periods beginning subsequent to December 15, 2009, with the exception of Level 3 disclosures of purchases, sales, issuances and settlements, which will be required in reporting periods beginning after December 15, 2010. The adoption of ASU 2010-06 did not have a significant impact on our operating results, financial position or cash flows.

In February 2010, FASB issued ASU No. 2010-09, Amendments to Certain Recognition and Disclosure Requirements (ASU 2010-09). This update amends Subtopic 855-10 and gives a definition to SEC filer, and requires SEC filers to assess for subsequent events through the issuance date of the financial statements. This amendment states that an SEC filer is not required to disclose the date through which subsequent events have been evaluated for a reporting period. ASU 2010-09 becomes effective upon issuance of the final update. We adopted the provisions of ASU 2010-09 for the period ended March 31, 2010.

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In April 2010, the FASB issued ASU No. 2010-12, Accounting for Certain Tax Effects of the 2010 Health Care Reform Acts (ASU 2010-12). This update clarifies questions surrounding the accounting implications of the different signing dates of the Health Care and Education Reconciliation Act (signed March 30, 2010) and the Patient Protection and Affordable Care Act (signed March 23, 2010). ASU 2010-12 states that the FASB and the Office of the Chief Accountant at the SEC would not be opposed to view the two Acts together for accounting purposes. We are currently assessing the impact, if any, the adoption of ASU 2010-12 will have on our disclosures, operating results, financial position and cash flows.

Note 2 - Restatement

Subsequent to issuing the report for the years ended December 31, 2009 and 2008, we discovered an error that impacted the balance sheets, statements of operations and comprehensive loss, and statements of cash flows. Specifically, these adjustments reflect the following errors:

Oil and gas properties, accounted for using the full cost method of accounting: cost centers were established based on a unit other than by country; specifically, there were three cost centers, one for each subsidiary and one for the parent. The restated amounts include all oil and gas properties owned by the consolidated entity, which were all located in the USA, which is considered one cost center pursuant to the full cost rules. The restatement increased oil and gas properties by $1,117,951 and $74,781, reduced depletion expense by $49,212 and $74,781, and reduced impairment expense by $993,958 and $0 in 2009 and 2008, respectively.

Oil and gas properties, accounted for using the full cost method of accounting: interest was improperly capitalized on projects included in a cost center that had production. The restatement decreased oil and gas properties by $274,550 and $164,263, increased deferred gain by $110,041 and $0, and increased interest expense by $220,328 and $164,263 in 2009 and 2008, respectively.

The results of the restatements are summarized as follows:

Consolidated Balance Sheet as of December 31, 2009:



		As reported	Adjustment (1)	Adjustment (2)	As restated

Evaluated property, net of depletion and impairment	$	2,337,975	1,117,951	(274,550)	3,181,376
TOTAL ASSETS		3,016,546	1,117,951	(274,550)	3,859,947

Deferred Gain	$	223,494	—	110,041	335,535
TOTAL LIABILITIES		5,632,351	—	110,041	335,535

Accumulated deficit		(2,683,553)	1,117,951	(384,591)	(1,950,193)
Total stockholder's deficit		(2,615,815)	1,117,951	(384,591)	(1,822,455)

TOTAL LIABILITIES AND STOCKHOLDER’S DEFICIT	$	3,016,546	1,117,951	(274,550)	4,134,497

Consolidated Statement of Operations and Comprehensive Loss for the year ended December 31, 2009:


		As reported		Adjustment (1)		Adjustment (2)		As restated

Depreciation, depletion, and amortization	$	83,625	$	(49,212)	$		$	34,413
Impairment		993,958		(993,958)		—		-
Total operating expenses		1,886,452		(1,043,170)		—		843,282

Loss from operations		(1,779,950)		1,043,170		—		(736,780)

Interest Expense		(302,674)		—		(220,328)		(523,002)
Total Other Expenses		(317,690)		—		(220,328)		(538,018)

Net Loss		(2,097,640)		1,043,170		(220,328)		(1,274,798)

Comprehensive loss	$	(2,028,852)	$	1,043,170	$	(220,328)	$	(1,206,010)

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Consolidated Statement of Cash Flows for the year ended December 31, 2009:


		As reported		Adjustment (1)		Adjustment (2)		As restated
Net loss	$	(2,097,640)	$	1,043,170	$	(220,328)	$	(1,274,798)
Depreciation, depletion, and amortization		83,625		(49,212)		—		34,413
Impairment		993,958		(993,958)		—		-

Changes in accounts payable	$	(1,120,177)	$	—	$	220,328	$	(899,849)

Consolidated Balance Sheet as of December 31, 2008:


		As reported		Adjustment (1)		Adjustment (2)		As restated

Evaluated property, net of depletion and impairment	$	3,649,765	$	74,781	$	(164,263)	$	3,560,283
TOTAL ASSETS		6,481,879		74,781		(164,263)		6,392,397

Accumulated deficit		(585,913)		74,781		(164,263)		(675,395)
Total stockholder's deficit		(586,963)		74,781		(164,263)		(676,455)

TOTAL LIABILITIES AND STOCKHOLDER’S DEFICIT	$	6,481,879	$	74,781	$	(164,263)	$	6,392,397


		As reported		Adjustment (1)		Adjustment (2)		As restated

Depreciation, depletion, and amortization	$	112,795	$	(74,781)	$	—	$	38,014
Total operating expenses		965,317		(74,781)		—		843,282

Loss from operations		(446,134)		74,781		—		(371,353)

Interest Expense		(337,732)		—		(164,263)		(501,995)
Total Other Expenses		(400,461)		—		(164,263)		(564,724)

Net Loss		(846,775)		74,781		(164,263)		(936,257)

Comprehensive loss	$	(882,888)	$	74,781	$	(164,263)	$	(972,370)

Consolidated Statement of Cash Flows for the year ended December 31, 2008:


		As reported		Adjustment (1)		Adjustment (2)		As restated
Net loss	$	(846,775)	$	74,781	$	(164,263)	$	(936,257)
Depreciation, depletion, and amortization		112,795		(74,781)		—		38,014
Changes in accounts payable	$	(16,138)	$	—	$	164,263	$	148,125

Note 3 – Going Concern

As reflected in the accompanying financial statements, we had a working capital deficit of $4,602,338 and an accumulated deficit of $1,950,193 (restated), as of December 31, 2009, which raise substantial doubt about our ability to continue as a going concern. Management plans to raise funds through the issuance of debt, the sale of common stock, merger with another company or the sale of partial interests in our projects to other industry participants.

Our ability to continue as a going concern is dependent on our ability to raise capital through the issuance of debt, the sale of common stock, the consummation of a merger or the sale of partial interests in our projects to other industry participants. If we do not raise capital sufficient to fund our business plan, Jurasin may not survive. The financial statements do not include any adjustments that might be necessary if we were unable to continue as a going concern.

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Note 4 - Investments

Our investments consist of holdings in mutual funds. The mutual funds are invested primarily in equity securities. The cost, unrealized gains and losses, and fair value of our available-for-sale securities at December 31, 2009 and 2008 were as follows:


		2009		2008

Cost	$	217,439	$	184,451
Unrealized gains (losses)		28,764		(40,024)
Fair Value	$	246,203	$	144,427

Balances related to our results of operations for the years ended December 31, 2009 and 2008 follow:


		2009		2008

Proceeds from sales of investments	$	25,006	$	80,575

Gross and net realized (losses)	$	(21,926)	$	(81,570)

The following table summarizes our marketable securities that have been in an unrealized loss position for less than 12 months and those that have been in an unrealized loss position for 12 months or more:


	Less than 12 months			12 months or more
	Fair value	Unrealized loss		Fair Value		Unrealized loss
Mutual funds	—	—	$	34,613	$	16,011

We have determined that the investments that have been in a loss position for 12 months or more are not other than temporarily impaired because we have the ability and intent to hold these investments until a recovery of fair value. We believe the investments, which consist of mutual funds invested primarily in growth equity securities, were affected by the recession of 2008 and will recover their value as the general economy recovers; they have been increasing in value since 2008.

Margin Account

We borrowed $125,495 on margin from our broker-dealer during 2009. We borrowed $42,623 from our broker-dealer and repaid $42,623 to our broker-dealer during 2008. We were indebted to the broker-dealer in the amount of $125,495 and $0 as of December 31, 2009 and 2008, respectively. The margin loan was secured by the securities and cash held within the account and interest was charged at market rates.

Interest expense paid to the broker-dealer totaled $666 and $402 in 2009 and 2008, respectively.

Average interest rates for 2009 and 2008 were 8 percent and 8.25 percent, respectively. The interest rate was 7.5 percent at December 31, 2009.

Note 5 – Oil and Gas Properties (Restated)

Oil and natural gas properties as of December 31, 2009 and 2008, consisted of the following:


		December 31,
		2009		2008

Costs subject to depletion	$	3,222,922	$	3,581,130
Depletion		(41,546)		(20,847)

Net oil and gas properties	$	3,181,376	$	3,560,283

F-14

Project descriptions

Aquamarine

We own interests in a lease located in the federal waters offshore Texas, which is referred to as the Aquamarine Project. There is currently one producing gas well in this lease area. There are proved producing and proved undeveloped reserves associated with this lease area.

Amber

Our Amber project consists of multiple leases, permits and permits with options to lease onshore Louisiana, USA. There are no proved reserves associated with the Amber prospect.

Ensminger

Our Ensminger Project is located onshore in Louisiana, USA. Currently, there are no producing wells in this area; however a well is currently being drilled. Our reserves associated with this area are proved undeveloped.

In February 2010, we sublet a portion of our interest in Ensminger, thus reducing our before payout working interest and net revenue interest to 6.375% and 4.62188%, respectively. In March 2010, we sold a 0.5% overriding royalty interest to an unaffiliated third party. In March 2010, we conveyed a 2.0% overriding royalty interest in Ensminger to a related party entity owned by John Jurasin, who was then the sole shareholder of Jurasin. (See Note 14, Subsequent Events)

Coral/Ruby/Diamond

We own a contractual interest in certain oil and gas leases located in the state waters of Louisiana. Under an agreement with the leasehold owners and another party, we will receive 30% of any promote that is acquired when the deal is sold. A 35% interest has been sold to a third party the agreement for which provides for a 25% working interest after payout. (See Note 14, Subsequent Events)

Baldwin

We have entered into an Area of Mutual Interest with a third party covering certain lands located in St. Mary Parish, Louisiana. Under the terms of the agreement, the other party shall pay 100% of the lease acquisition costs plus all of our 12.5% interest in the initial well. Upon payout, our interest will increase to 15%. We also have the option to participate in the project for an additional 10% by paying that percentage share of lease acquisition and well costs. No costs had been incurred on this project as of December 31, 2009. (See Note 14, Subsequent Events)

Our interests in projects for which there were proved reserves, as of December 31, 2009, were as follows:


Project name	Before payout working interest	Net revenue interest
Aquamarine	11.25%	9.5125%
Ensminger	25.5%	20.9875%

Adjustment of interest in investee

The company agreement governing our subsidiary, Amber and Amber’s secured credit facility provided that if the outstanding amount on the facility as of October 9, 2009 exceeded $2,000,000 24% of the membership of Amber would be transferred to an affiliate of our lender. The provisions of the note are more fully discussed in Note 5 – Notes Payable. On October 9, 2009, the outstanding balance exceeded $2,000,000. Thus, our proportional interest in Amber reduced from 75% to 51%. Accordingly, our pro rata share of our ownership in Amber’s oil and gas properties and reserves were reduced by 24%. This resulted in a reduction of our cost basis in the Amber and Ensminger projects of approximately $650,000.

Cost recovery

During the year ended December 31, 2008, we sold a portion of our working interest in the Amber project for proceeds of $1,500,000 and a portion of our working interest in Ensminger for proceeds of $562,500. The proceeds received in these transactions were treated as a reduction of capitalized costs in accordance with rules governing full cost companies.

F-15

During 2008, we also sold a portion of our working interest of Ruby/Diamond and received proceeds of $293,418. The proceeds received in these transactions were treated as a reduction of capitalized costs in accordance with rules governing full cost companies. (See Note 14, Subsequent Events)

Impairment

Beginning December 31, 2009, full cost companies use the un-weighted arithmetic average first day of the month price for oil and natural gas for the 12-month period preceding the calculation date. Prior to December 31, 2009, companies used the price in effect at the end of each accounting period and had the option, under certain circumstances, to elect to use subsequent commodity prices if they increased after the end of the accounting quarter.

We assess all items classified as unevaluated property on at least an annual basis for inclusion in the amortization base. We assess properties on an individual basis or as a group if properties are individually insignificant. The assessment includes consideration of the following factors, among others: intent to drill; remaining lease term; geological and geophysical evaluations; drilling results and activity; the assignment of proved reserves; and the economic viability of development if proved reserves are assigned. During any period in which these factors indicate that there would be impairment, or if proved reserves are assigned to a property, the cumulative costs incurred to date for such property are transferred to the amortizable base and are then subject to amortization.

At December 31, 2009 the ceiling test value of our reserves was calculated based on the first day average of the 12-months ended December 31, 2009 of the West Texas Intermediate (WTI) posted price of $61.18 per barrel, and the first day average of the 12-months ended December 31, 2009 of the Henry Hub price of $3.87 per MMbtu. Changes in production rates, levels of reserves, future development costs, and other factors will determine our actual ceiling test calculation and impairment analyses in future periods.

At December 31, 2008, the ceiling test value of our reserves was calculated based on the December 31, 2008 West Texas Intermediate posted price of $44.60 per barrel, and the December 31, 2008 Henry Hub spot market price of $5.71 per million British thermal unit (MMbtu).

At December 31, 2009 and 2008, our net book value of oil and gas properties did not exceed the ceiling amount and thus, there was no impairment.

Note 6 – Notes Payable

Notes payable as of December 31, 2009 and 2008 consisted of the following:


		December 31,
		2009		2008

Senior credit facility (Rampant)	$	1,223,310	$	1,223,310
Senior credit facility (Amber)		2,025,579		2,965,823
Margin loan and bank line of credit		126,795		—

	$	3,375,684	$	4,189,133

F-16

Senior credit facility (Rampant)

In September 2006, Rampant entered into a Senior Credit Facility with Macquarie Bank Limited (MBL) for up to $25 million. The note is collateralized by substantially all of the assets of Rampant. In addition, Jurasin has pledged its ownership interest in Rampant and has executed a parent company guarantee to pay up to $500,000 of the outstanding indebtedness as additional security. During the year ended December 31, 2006, we incurred legal costs associated with the note of $228,751. These costs were capitalized as deferred finance charges and are amortized straight-line over three years, the life of the facility.

MBL has opted not to advance any further funds on the $25 million facility. The note was scheduled to mature in September 2009 and carries an interest rate of prime + 4%. The Senior Credit Facility contains certain restrictive covenants, several of which MBL has declared in default. As a result, the note is subject to a default interest rate (an additional 4%). We are working with the lender to resolve the default.

In February 2010, we entered into a supplemental agreement that cross-collateralized the note with the assets of Amber and extended the maturity date of the note to March 14, 2011. Because the note continues to be deemed in default, the debt is presented as a short-term liability.

Senior Credit Facility (Amber)

In October 2007, Amber entered into a Senior Credit Facility with MBL for up to $10 million. The note is collateralized by substantially all assets of Amber. The agreement provides that Macquarie Americas Corp. (“MAC”), an affiliate of MBL, would receive up to 49% of Amber, 25% at the inception of the note and an additional 24% on October 9, 2009 if the balance on the note exceeded $1,500,000. Jurasin contributed certain lease interests to Amber. Amber’s company agreement provides for board representation for MBL and joint consent is required for certain transactions. Because of the shared control of Amber and in accordance with established practice in the oil and gas industry, we proportionately consolidate Amber. Our financial statements include our pro-rata share of assets, liabilities, income and lease operating and general and administrative costs and expenses of Amber.

We measured the fair value of the debt proceeds and the equity interest conferred on the date of inception of the facility and allocated the proceeds of the note based on the relative fair values of the debt and equity. We used the proceeds of the first tranche of the debt as the fair value of the debt. Because there were no proved reserves on the lease interests owned by Amber and no objectively determinable fair value, we used the accumulated historical costs of the lease interests to approximate the fair value of the equity interest. The fair value of the investment was allocated between the note and equity interest as follows:


Equity	$	38,899
Debt		448,392
Total	$	487,291

The discount arising from this transaction was recorded at the inception of the note and is amortized straight-line over the life of the credit facility, 36 months. In addition, during the year ended December 31, 2008, we incurred legal costs associated with the note which were capitalized as deferred finance charges of $51,390 and which are amortized straight-line over the life of the facility.

In April 2008, the note was modified to accommodate Jurasin’s contribution of the Ensminger project to Amber. Modifications included increasing the threshold for the step up of MBL’s equity interest to 49% from $1,500,000 to $2,000,000 and reclassifying tranches available within the facility. Because of the structure of the note, the modification was evaluated by comparing the borrowing capacity prior to the modification to the borrowing capacity after the modification. The borrowing capacity of the facility was unchanged. Thus, the only change to the accounting for the note is that additional deferred financing charges of $38,668 were recorded and are amortized over the remaining life of the credit facility, 18 months.

The note was received in a series of advances which mature, along with accrued interest, in October 2010. Each advance carries a fixed interest rate computed as WSJ prime, as determined on the date the advance was received. The Senior Credit Facility contains certain restrictive covenants, several of which MBL has declared in default. As a result, Amber is subject to a default interest rate (an additional 4%) and the debt is presented as a short-term liability. We are working with the lender to resolve the default.

MBL has opted not to advance any further funds on the $10M facility. The principal balance due MBL exceeded $2M on 9 October 2009 and MAC’s ownership automatically increased from 25% to 49%.

F-17

The activity on the facility was as follows:


		2009		2008
Note payable:
Note balance, beginning of period	$	2,988,511	$	846,567
Additions		—		2,141,944
Adjustment of equity interest in investee		(956,324)		—
Note balance, end of period		2,032,187		2,988,511
Discount		(6,608)		(22,688)
Net note payable	$	2,025,579	$	2,965,823

In addition, $186,150 is obligated as collateral for a letter of credit supporting a bond related to the plug, abandon, and restoration obligations on the Ensminger Project.

In February 2010, we entered into a supplementary agreement with MBL under which, they effected a partial release of mortgage in certain assets in order to facilitate the sub-lease of a portion of our working interest in the Ensminger project; the bulk of the proceeds of the sub-lease are committed to repayment of principal and interest on the note.

Margin Loan and line of credit

We have a line of credit available from our bank for up to $25,000 that carries 7% annual percentage rate and a margin loan facility from our broker-dealer that carries a variable rate as discussed in Note 4. As of December 31, 2009, we are obligated to pay $125,495 to our broker-dealer in conjunction with the margin loan and $1,300 to our bank for the outstanding amount on this line of credit. There were no amounts outstanding on these loans as of December 31, 2008.

The following table reflects information about interest expense and the deferred finance charge related to our notes payable as of December 31, 2009 and 2008:


		2009		2008
Interest expense	$	302,674	$	337,732
Capitalized interest		162,851		164,263

Deferred finance charge balance	$	19,205	$	136,958

Note 7 – Deferred Gain (Restated)

In 2007, Jurasin created Amber and entered into a credit facility with MBL (See Note 6). In connection with the credit facility, MAC received a 25% ownership interest in Amber. In addition, when the outstanding loan exceeded a set amount, MAC received an additional 24% ownership. In April 2008, Jurasin contributed assets with a historical cost of $189,670 to Amber. MAC’s pro rata share of the assets, $47,417, is reflected as a basis adjustment in the underlying asset and was recorded as a deferred item in oil and gas properties. Similarly, during 2009, MAC received the additional 24% ownership in Amber, which resulted in an additional basis difference of $57,994. This amount, along with the remaining balance of the $47,417 amount recorded in 2008, was netted against the deferred gain (see below).

On October 9, 2009, our interest in our subsidiary, Amber, reduced from 75% to 51% in accordance with certain terms of the company agreement as discussed in Note 6. At the time of the change in ownership percentage, Amber’s equity was a deficit because the aggregate liabilities exceeded the aggregate assets. The reduction in ownership percentage triggered a basis difference between Jurasin’s investment and the underlying net liability. As a result, we recorded a deferred gain, net of the unamortized basis difference noted above, and is amortizing the net balance into income over the life of the oil and gas assets. The difference in basis as of October 9, 2009 was $443,954, which equates to 24% of the accumulated losses in Amber through that date. The net deferred gain of $338,543 will be recovered over 17 years, the useful life of Amber’s underlying oil and gas assets as indicated in our reserve report, as a reduction of depletion. We recovered $5,008 during the year ended December 31, 2009, resulting in a carrying value of $333,535.

F-18

Note 8 – Asset Retirement Obligation

The following is a reconciliation of our asset retirement obligation liability as of December 31, 2009 and 2008:


		2009		2008
Liability for asset retirement obligation, beginning of period	$	173,605	$	—
Additions		—		162,532
Liabilities transferred in conjunction with adjustment of interest in subsidiary		(38,162)		—
Revisions in estimated cash flows		(11,709)		—
Accretion		14,589		11,073
Liability for asset retirement obligation, end of period	$	138,323	$	173,605

Note 9 - Stockholder’s Deficit

We have 100 shares of no par value common stock issued and outstanding. The sole stockholder contributed $100 as consideration for the stock.

Common Stock – no par

In October 2007, when Amber, our subsidiary, was formed, we contributed $100 and the other member, MBL, contributed $51,865. In our statement of stockholder’s equity, we reflected MBL’s pro rata share of our contribution, $25, as a capital distribution to MBL and our pro rata share of their contribution, $38,899, as an increase in capital.

In October 2009, in accordance with the company agreement, as more fully discussed in Note 6 – Notes Payable, MBL’s equity interest in Amber increased from 25% to 49%. This resulted in a further reduction of our investment in the underlying oil and gas assets contributed to Amber. See Note 7.

Note 10 – Related Party Transactions

Related parties include John Jurasin, the sole stockholder of Jurasin, and MAC, the owner of 49% equity interest in Amber. Transactions involving related parties are as follows:

MBL/MAC

Amber Energy is partially owned by MAC, which is otherwise an unrelated party, and Jurasin uses the proportionate consolidation method to consolidate Amber. Jurasin pays for goods and services on behalf of Amber and passes those charges on to Amber through intercompany billings. Periodically, Amber will reimburse Jurasin for these expenses or potentially pay for goods and services on behalf of Jurasin. These transactions are recorded as a due to / from Amber in Jurasin’s records and as a due to / from Jurasin in Amber’s records. Due to the fact that Jurasin only consolidates its proportionate share of balance sheet and income statement amounts, the portion of the due from Amber related to the other interest owner does not eliminate and is carried as a due from Amber until the balance is settled through a cash payment. Due from related party was $139,193 as of December 31, 2009 and we owed our affiliate $36,089 as of December 31, 2008.

MAC received a 25% equity interest in Amber when the company was formed and an affiliate of MBL is also is a lender to Amber. The terms of the note payable to MBL and the Amber company agreement provided for an automatic increase in MAC’s interest in Amber if the outstanding debt on October 9, 2009 exceeded a threshold amount. This threshold amount was exceeded as of October 9, 2009 and MAC’s ownership interest in Amber increased by 24% to 49%. Our ownership interest decreased from 75% to 51% on that date. Thus, our pro rata share of the assets, liabilities, capital, and accumulated deficit was reduced by 24% on October 9, 2009.

John Jurasin

Effective March 2010, Jurasin assigned its contractual rights to overriding royalties and working interests in various projects, including the Baldwin AMI, the Coral, Ruby and Diamond Project and the Ensminger Project to a related party entity owned by John Jurasin, the sole stockholder of Jurasin.

Note 11 - Income Taxes (Restated)

As of December 31, 2009, we had approximately $1,500,000 of U.S. federal and state net operating loss carry-forward available to offset future taxable income, which begins expiring in 2022, if not utilized.

F-19

Our deferred income taxes reflect the net tax effects of operating loss and tax credit carry forwards and temporary differences between carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences representing net future deductible amounts become deductible.

Components of deferred tax assets as of December 31, 2009 and 2008 are as follows:


		December 31,
		2009		2008
Net operating loss carry-forward	$	1,620,000	$	1,250,000
Valuation allowance for deferred tax assets		(1,620,000)		(1,250,000)
	$	—	$	—

The deferred tax asset generated by the loss carry-forward has been fully reserved due to the uncertainty we will be able to realize the benefit from it.

The reconciliation of income tax provision at the statutory rate to the reported income tax expense is as follows:


	December 31,
	2009	2008
US statutory federal rate	34%	34%
State income tax rate	8%	8%

Net operating loss for which no tax benefit is currently available	(42)%	(42)%
	—%	—%

The valuation allowance is evaluated at the end of each year, considering positive and negative evidence about whether the deferred tax asset will be realized. At that time, the allowance will either be increased or reduced; reduction could result in the complete elimination of the allowance if positive evidence indicates that the value of the deferred tax assets is no longer impaired and the allowance is no longer required.

We have no positions for which it is reasonable that the total amounts of unrecognized tax benefits at December 31, 2009 will significantly increase or decrease within 12 months.

Generally, our income tax years 2006 through 2009 remain open and subject to examination by Federal tax authorities or the tax authorities in Louisiana and Texas which are the jurisdictions where we have our principal operations. In certain jurisdictions we operate through more than one legal entity, each of which may have different open years subject to examination. No material amounts of the unrecognized income tax benefits have been identified to date that would impact our effective income tax rate.

Note 12 - Commitments and Contingencies

Contingencies

From time to time, we may be a plaintiff or defendant in a pending or threatened legal proceeding arising in the normal course of its business. All known liabilities are accrued based on our best estimate of the potential loss. While the outcome and impact of currently pending legal proceedings cannot be predicted with certainty, our management and legal counsel believe that the resolution of these proceedings through settlement or adverse judgment will not have a material adverse effect on our consolidated operating results, financial position or cash flows.

Jurasin, as an owner or lessee and operator of oil and gas properties, is subject to various federal, state and local laws and regulations relating to discharge of materials into, and protection of, the environment. These laws and regulations may, among other things, impose liability on the lessee under an oil and gas lease for the cost of pollution clean-up resulting from operations and subject the lessee to liability for pollution damages. In some instances, we may be directed to suspend or cease operations in the affected area. We maintain insurance coverage, which we believe is customary in the industry, although we are not fully insured against all environmental risks.

F-20

In March 2010, the Company received the results of an audit conducted by the non-operator regarding the drilling of the CasKids Operating #2 Ensminger well. During the period under audit, the Company was the operator under the Operating Agreement for this well. The non-operator asserts that it is owed a refund of $340,317 based on the results of that audit. The Company does not believe that this claim has merit and intends to challenge the audit results. As of December 31, 2009 and March 31, 2010, $4,727 was accrued in connection with this contingency.

Commitments

In conjunction with our acquisition of the Ensminger Project, we assumed the obligation to plug the Ensminger #1 well, which includes providing a bond in the amount of $186,150, which we obtained by collateralizing our assets under the letter of credit available pursuant to the Amber Credit Facility. This bond will be reduced to $55,845 upon completion of the Ensminger #2 well as a successful well when third parties will assume their proportionate share of the obligation.

We lease office space in Houston, Texas. Our office lease is due to expire in October 2010, with options for renewal for up to 3 years at specified rates. Lease expense for the years ended December 31, 2009 and 2008 was $85,868 and $64,215, respectively.

Note 13 – Additional Financial Statement Information

Other current assets


		At December 31,
		2009		2008
Prepaid expenses	$	8,967	$	9,619
Insurance recovery		—		856,593
Tax refund		—		4,056
Total Other current assets	$	8,967	$	870,268

In the wake of Hurricanes Gustav and Ike, we incurred underground damage to one of our wells. The well was eventually controlled, but was incapable of being completed. As a result, the well was plugged and abandoned. In February 2009, we received an insurance recovery of $856,593, which related to the costs to control of the well, as well as some compensation for payments made for loss of 3rd Party downhole equipment. At December 31, 2008, a receivable of $856,593 was recorded, as the payment amount was known and receipt was probable.

Property and Equipment

Property and equipment consisted of the following:


			at December 31,
	Approximate Life		2009		2008
Furniture and fixtures	7 years	$	68,549	$	68,549
Computer equipment and software	3 - 5 years		46,411		46,411
Vehicles	5 years		67,498		67,498
Total property and equipment			182,458		182,458
Less accumulated depreciation			(172,093)		(153,371)
Net book value		$	10,365	$	29,087

Depreciation expense was $18,722 and $17,167 for the years ended December 31, 2009 and 2008, respectively.

Deposit

In December 2009, Amber received an advance payment of $127,500 towards a purchase of a partial working interest in Ensminger. In February 2010, Jurasin conveyed an overriding ownership interest it owned in Ensminger to the counterparty. There were no deposits as of December 31, 2008.

F-21

Accounts payable and accrued expenses

Accounts payable and accrued expenses consist of the following:


		2009		2008
Accounts payable	$	252,868	$	1,462,300
Accrued payroll obligations		3,907		34,327
Accrued taxes		23,733		18,733
Other payables		1,011,021		880,497
Accounts payable and accrued expenses	$	1,291,529	$	2,395,857

Other payables relate to our Aquamarine Project and consist of AFE overruns and a penalty for our non-consent to a workover procedure. In accordance with the joint operating agreement, the amounts billed will be recovered by offsetting the revenue from the property against the payable.

The following is a reconciliation of our liability for other payables as of December 31, 2009 and 2008:


		2009		2008
Liability for other payables, beginning of period	$	880,497	$	—
Additions		201,376		1,376,953
Revenue offset		(70,852)		(496,456)
Liability for other payables, end of period	$	1,011,021	$	880,497

Note 14 – Subsequent Events

In March 2010, Amber entered into an Exploration and Ratification and Joinder Agreement, effective February 1, 2010, by which Amber sub-let its leases in the Ensminger Project for the drilling of the Energy XXI #2 Ensminger well. Under this agreement, the other parties will pay 100% of Amber’s costs to drill and complete the well. Amber also received $149,175. In return, Amber’s interest is reduced to 6.375% before payout of the #2 Ensminger well and 7.65% after payout of the well. In addition, Energy XXI became the operator of the wells in the project. The #2 well was spud in April 2010 and is currently temporarily abandoned pending evaluation of further operations.

In March 2010, pursuant to a letter agreement, we assigned to a third party a 0.5% overriding royalty interest in the Ensminger Project for $250,000. The funds had been paid to Amber in December 2009 and are reflected as of that date as a deposit of $127,500, our pro rata share of the liability.

In January 2010, Jurasin entered into an Area of Mutual Interest Agreement with a third party covering certain lands located in St. Mary Parish, Louisiana. Under the terms of the agreement, the third party will pay 100% of the lease acquisition costs, a fee to Jurasin of $50,000, pay Jurasin’s share of the cost of the first well, and assign to Jurasin an overriding royalty of a maximum of 2.5%. Jurasin would not be due any overriding royalty on any leases that are acquired with a landowner’s royalty of 27.5% or more. Jurasin will have a 12.5% interest before payout and a 15% interest after payout of the first well. Jurasin has the option to participate for an additional 10% by paying that percentage of the leases and well costs.

Effective March 2010, Jurasin assigned certain overriding royalty interests and its contractual rights to overriding royalties and working interests in various projects, including the Baldwin AMI, the Coral, Ruby and Diamond Project and the Ensminger Project to a related party entity owned by John M. Jurasin.

In February 2010, Rampant Lion entered into a supplemental agreement with its lender, Macquarie Bank Limited, which extends the Maturity Date of the credit facility to March 14, 2011 and calls for the cross-collateralization of the Rampant Lion debt with that of Amber.

In April 2010, we terminated a contract with our former CFO. The termination agreement provides that, after we have closed a reverse merger with Radiant, we will pay him $150,000 on the earlier of the closing of a funding in excess of $2,000,000 or December 31, 2010.

In May 2010, Jurasin Oil and Gas, Inc. (“we”, “us”, “Jurasin”) issued 20 shares of our common stock to employees contingent upon the closing of a reverse acquisition transaction. The shares vest 1/3 on the closing date, 1/3 on the first anniversary of the closing date, and 1/3 on the second anniversary of the closing date. The shares were ascribed a nominal value due to Jurasin’s negative net worth on the grant date. The shares award includes 5.3 shares of common stock that were issued to John Jurasin, our President and majority shareholder.

F-22

In August 2010, we completed a reverse acquisition transaction through an Reorganization Agreement with Radiant Oil and Gas, Inc. (“Radiant”) whereby Radiant acquired 100% of our issued and outstanding capital stock in exchange for 5,000,000 shares of Radiant’s common stock. The agreement provides for the issuance of up to an additional 1,000,000 shares of Radiant common stock upon the satisfaction of certain performance conditions. As a result of the reverse acquisition, we became Radiant’s wholly-owned subsidiary and our former stockholders became the controlling stockholders of Radiant. The share exchange with Radiant was treated as a reverse acquisition, with Jurasin as the accounting acquirer and Radiant as the acquired party.

Simultaneously with the closing of the Reorganization Agreement, we entered into a modification of the Amber and Rampant Credit Facilities under which:

The maturity date of our Amber Credit Facility was extended to March 20, 2011;

We agreed to make monthly interest payments on the Rampant credit facility and mandatory principal reduction payments on both the Credit Facilities on August 20, 2010 and September 20, 2010 in the amount of $100,000 and on the 20^th of each month from October through March 2011 of $250,000 each. We shall also pay amounts equal to 1/6^th of the gross proceeds we raise through the subsequent equity raised, any proceeds from the sale of collateral, and any insurance proceeds received, which amounts shall be credited against the monthly mandatory principal reduction payments;

We cross-collateralized the Rampant and Amber Credit Facilities and Amber and Rampant each executed an unconditional guarantee of payment of the obligations under both Credit Facilities;

Radiant executed a limited guarantee of payment of up to $500,000 for the obligations under both Credit Facilities;

MBL agreed to convert $510,000 of the Credit Facility into shares of Radiant common stock at a conversion price of $4.00 per share (subject to downward adjustment depending upon pricing of subsequent Company equity financings) in increments of $255,000 corresponding to principal reductions made us during and after July 2010, provided that upon each such conversion there is (i) no event of default in the Credit Facility and (ii) $500,000 and $1,000,000, respectively, of aggregate mandatory principal payments on the Credit Facility have been paid, of which $300,000 has been paid to date; and

Our lender agreed to reconvey to Jurasin all interests in real property and membership interests conveyed to its affiliate Macquarie Americas Corp (“MAC”) in connection with the Amber Credit Facility, provided that all obligations under the Amber Credit Facility, Rampant Lion Credit Facility, and all letters of credit shall have been paid in cash prior to March 15, 2011.

In connection with the Reorganization, we assumed Radiant’s outstanding liabilities as of the closing date, which totaled approximately $228,000.

Common stock issued by Radiant

Prior to the closing of the Reorganization Agreement, Radiant issued common stock to consultants as follows:

50,000 shares of common stock to a former officer of Radiant as consideration associated with his entering into an agreement to serve as one of our directors. The shares were valued at $60,000, or $1.20 per share, the most recent quoted market closing price for Radiant common stock. 50,000 additional shares will vest one year from the Reorganization Agreement closing date.

543,205 shares of Radiant common stock to an investment relation/public relations firm for services. The shares are fully vested and non-forfeitable at the time of issuance. The shares were valued at $651,845, or $1.20 per share, the most recent quoted market closing price for Radiant common stock.

3,000,000 shares of Radiant common stock as consideration for an investment banking agreement. The shares are fully vested and non-forfeitable at the time of issuance. The shares were valued at $3,600,000, or $1.20 per share, the most recent quoted market closing price for Radiant common stock. .

The investment banking firm will be the placement agent for a series of private offerings for up to $14,500,000 on a best efforts basis. The fee paid is reflected as a reduction of additional paid in capital as a deferred offering cost, which will offset the gross proceeds received from equity offerings. The investment banking agreement provides for the placement of debt instruments. As debt offerings are closed, the pro rata portion of the deferred offering costs associated with the debt will be reclassified from equity to deferred finance charge.

F-23

In the event that the investment banking firm places equity or equity equivalent offerings, it will receive a cash placement agent fee of 10% of the gross proceeds of any offerings and cash expense reimbursement of 3% of the gross proceeds of any offerings, except that the fees are waived for the first $2,000,000 of proceeds. The investment banking firm will also receive up to $75,000 of expense reimbursement after the first $2,000,000 of gross proceeds have closed. At the closing of each equity offering, the firm will receive warrants to purchase one share of common stock for each ten shares sold with an exercise price of 105% of the offering price of the stock.

The agreement requires Radiant to file a registration statement with the Securities and Exchange Commission within 30 days of the closing of the offering and to use its best efforts to have the registration statement declared effective within 120 days from the filing of the registration statement. The penalty for noncompliance is 2% of the issued and outstanding common stock, up to a cap of 6%, for each 30 day period of delay.

In the event that the investment firm places debt financing, the firm will receive a cash placement fee as follows: 5% of the first $10 million, 4% of the next $10 million, 3% of the next $10 million, 2% of the next $10 million, and 1% of any amounts raised over $40 million. If Jurasin’s current lender enters into additional financing with Radiant, the firm will receive 2% of the cash proceeds.

During August 2010, the agreement was modified as follows:

The investment banking firm will receive a placement agent fee of 8% of the gross proceeds raised for the first $2,000,000 (inclusive of the $600,000 raised in August 2010, thus an additional $1,400,000 of proceeds are subject to these terms) raised;

The investment banking firm will forfeit 4,000,000 of the 6,000,000 shares received at the signing of the original agreement if, within 12 months after a registration statement has been filed and declared effective, $10,000,000 has not been raised pursuant to the agreement; and

Radiant will pay a consulting fee of $8,000 in cash per month for one year after the first $2,000,000 has been raised.

Issuance of debentures by Radiant

Prior to the closing of the Reorganization Agreement, Radiant sold 4.75 units consisting of $475,000 of debentures and warrants to purchase 237,500 shares of Radiant common stock to three investors. The debentures have an 18% per annum stated interest rate, an effective interest rate of 71%, and mature on July 31, 2011. The warrants have an exercise price of $1.00 per share and a term of up to 4 years. The proceeds of the debentures were allocated between the debentures and the warrants based on their relative fair market values. The fair market value of the warrants was determined using the black-sholes option pricing model with the following assumptions:


Risk-free interest rate	1.22%
Dividend yield	0%
Volatility factor	232%
Expected life (years)	4 years

We allocated the proceeds, which were collected prior to the close of the Reorganization Agreement and which totaled $475,000, between the warrants and the debentures based on the relative fair values as follows:



Relative fair value of warrants	$176,097
Relative fair value of debenture	$298,903
Gross proceeds	$475,000

The relative fair value of the warrants is reflected as a discount from the debt. The discount will be amortized using the effective interest method over the life of the debenture, one year.

Prior to the closing of the Reorganization Agreement, Radiant sold 1.25 units consisting of debentures with a face amount of $125,000 and warrants to purchase 62,500 shares of Radiant common stock to a related party of Radiant. The debentures have an 18% per annum stated interest rate, an effective interest rate of 71%, and mature on July 31, 2011. The warrants have an exercise price of $1.00 per share and a term of up to 4 years. The proceeds of the debentures were allocated between the debentures and the warrants based on their relative fair market values. The fair market value of the warrants were determined using the black-sholes option pricing model with the following assumptions:


Risk-free interest rate	1.22%
Dividend yield	0%
Volatility factor	232%
Expected life (years)	4 years

We allocated the proceeds between the warrants and the debentures based on the relative fair values as follows:



Relative fair value of warrants	$ 46,342
Relative fair value of debenture	$ 78,658
Gross proceeds	$125,000

The relative fair value of the warrants is reflected as a discount from the debt. The discount will be amortized using the effective interest method over the life of the debenture, one year.

The proceeds from the sale of these debentures were used to pay $100,000 of Jurasin’s existing notes payable and provided $25,000 in cash to Radiant.

The investment agreement described in above provides that $600,000 of the debentures sold apply against the offerings to raise up to $14,500,000. Accordingly, the pro rata portion of the offering costs associated with the $600,000 funding, $152,069, will be reflected as a deferred finance charge. The deferred finance charge will be amortized over the life of the debentures, one year.

Note payable to related party

In connection with the Reorganization, we issued Mr. John Jurasin, the Majority Shareholder of Jurasin, a note in the principal amount of $884,000, which accrues interest at 4% per annum and is payable in three years. The Jurasin note shall be prepaid upon the Company raising at least $10,000,000 and subject to payment in full of the Credit Facility. Also in connection with the Reorganization, an additional $165,000, which has no formal repayment terms, is also due to Mr. Jurasin. The note and payable were treated as a deemed dividend to Mr. Jurasin.

Commitments

In connection with the Reorganization Agreement, we entered into the following agreements:

An employment agreement with John M. Jurasin, who will continue as President and Chief Executive Officer of the surviving entity, under which he will receive $200,000 per year as base salary. The base salary will increase to $250,000 after $10,000,000 in debt or equity funding is raised and $300,000 after we become cash flow positive;

Employment agreements and a director’s agreement under which we are obligated to pay $581,000 in the first year, $569,000 in the second year, and $145,000 in the third year after the closing of the Reorganization agreement;

An indemnity agreement with a director under which he will be paid $25,000 prior to the payment of any cash bonus to one of our employees, directors, or officers;

Employment and consulting agreements that provide for contingent payments of $35,000 if we raise $3,600,000 in equity or debt funding and a payment of $25,000 if we raise an additional $3,000,000 in equity or debt funding; and

An indemnity agreement with a related party under which they will receive $250,000 if we raise $10,000,000 in debt or equity funding.

Immediately subsequent to the reorganization, we granted options to purchase 694,122 shares of Radiant common stock with an exercise price of $1.00 per share and a term of 10 years to Jurasin employees and an option to purchase 93,000 shares of common stock with an exercise price of $1.00 per share and a term of 10 years to a Jurasin consultant. The options vest 1/3 on the first anniversary of the grant, 1/3 on the second anniversary of the grant, and 1/3 on the third anniversary of the grant. The fair value of the options issued to employees, $ 829,403, was based on the quoted market price of Radiant's stock on the date of grant and estimated using the Black-Sholes option pricing model. It will be recorded as compensation expense over the vesting period in accordance with financial accounting standards. The fair value of the option issued to the consultant, $111,135, was based on the quoted market price of Radiant's stock on the date of grant and estimated using the Black-Sholes option pricing model and will be recorded as compensation expense over the vesting period in accordance with financial accounting standards. The following assumptions were used in the Black-Sholes option pricing model:


Risk-free interest rate	2.00%
Dividend yield	0%
Volatility factor	229%
Expected life (years)*	6 years

F-25

the expected term. The volatility was determined by referring to the average historical volatility of a peer group of public companies because we do not have sufficient trading history to determine our historical volatility.

Stock split

Radiant effected a 2 for 1 reverse stock split effective September 9, 2010. These financial statements reflect the effects of the stock split.

Note 15 – Supplemental Oil and Gas Information (Unaudited) (Restated)

The following supplemental information regarding our oil and gas activities is presented pursuant to the disclosure requirements promulgated by the SEC and ASC 932, Extractive Activities —Oil and Gas, (ASC 932).

Users of this information should be aware that the process of estimating quantities of “proved” and “proved developed” oil and natural gas reserves is very complex, requiring significant subjective decisions in the evaluation of all available geological, engineering and economic data for each reservoir. The data for a given reservoir may also change substantially over time as a result of numerous factors including, but not limited to, additional development activity, evolving production history and continual reassessment of the viability of production under varying economic conditions. As a result, revisions to existing reserve estimates may occur from time to time. Although every reasonable effort is made to ensure reserve estimates reported represent the most accurate assessments possible, the subjective decisions and variances in available data for various reservoirs make these estimates generally less precise than other estimates included in the financial statement disclosures.

Proved reserves represent estimated quantities of natural gas, crude oil and condensate that geological and engineering data demonstrate, with reasonable certainty, to be recoverable in future years from known reservoirs under economic and operating conditions in effect when the estimates were made. Proved developed reserves are proved reserves expected to be recovered through wells and equipment in place and under operating methods used when the estimates were made.

In the following table, natural gas liquids are included in natural gas reserves. The oil and natural gas liquids price as of December 31, 2009 is based on the 12-month unweighted average of the first of the month prices of the West Texas Intermediate posted price which equates to $61.18 per barrel. Oil and natural gas liquids prices as of December 31, 2008 and 2007 are based on the respective year-end West Texas Intermediate posted price of $44.60 per barrel and $85.52 per barrel. The gas price as of December 31, 2009 is based on the 12-month unweighted average of the first of the month prices of the Henry Hub spot price which equates to $3.87 per MMbtu. Gas prices as of December 31, 2008 and 2007 are based on the respective year-end Henry Hub spot market price of $5.71 per MMbtu and $6.80 per MMbtu . All prices are held constant in accordance with SEC guidelines. All proved reserves are located in the United States; specifically, in on-shore Louisiana and off-shore Texas.

The following table illustrates our estimated net proved reserves, including changes, and proved developed reserves for the periods indicated, as estimated by third party reservoir engineers.

Proved Reserves


	Oil (Barrels)	Gas (MCF)		Total (MCFE)
Balance – December 31, 2007	157,853	11,343,916	12,291,032
Revisions of previous estimates	—	—	—
Production	(23)	(33,912)	(34,050)
Purchase (sales) of minerals in place	(97,950)	(6,529,984)	(7,117,682)

Balance – December 31, 2008	59,880	4,780,020	5,139,300
Revisions of previous estimates	(17)	(228,588)	(228,692)
Production	(453)	(20,322)	(23,038)
Purchase (sales) of minerals in place	(18,806)	(1,253,757)	(1,366,595)

Balance – December 31, 2009	40,604	3,277,353	3,520,975

F-26


	Proved Developed Reserves
	Oil (bbls)	Gas (Mcf)	Equivalent (Mcfe)
December 31, 2009	640	613,120	616,960
December 31, 2008	1,100	862,030	868,690


	Proved Undeveloped Reserves
	Oil (Mbbls)	Gas (Mcf)	Equivalent (Mcfe)
December 31, 2009	39,964	2,664,233	2,904,015
December 31, 2008	58,770	3,917,990	4,270,610

Noteworthy amounts included in the categories of proved reserve changes for the years 2009, 2008, and 2007 in the above tables include:

•

Revisions of Previous Estimates — Proved reserves must be estimated using the assumption that prices and costs remain constant for the duration of the reservoir life. Due to significantly lower average first-day of the month gas prices calculated for the 12 months ended December 31, 2009 compared to prices as of December 31, 2008, certain of our proved reserves were no longer economically producible.

•

Sales of minerals in place — reflects an adjustment of our interest in a project from 100% to 75% due to the contribution of the project to Amber in the year ended December 31, 2008, sale of 50% working interest to unaffiliated third parties in the project during the year ended December 31, 2008, and a change in our proportional ownership of Amber, from 75% to 51% during the year ended December 31, 2009, as discussed in Note 4 – Oil and Gas Properties.

The SEC amended its definitions of oil and natural gas reserves effective December 31, 2009. Previous periods were not restated for the new rules. Key revisions include a change in pricing used to prepare reserve estimates to a 12-month un-weighted average of the first-day-of-the-month prices, the inclusion of non-traditional resources in reserves, definitional changes, and allowing the application of reliable technologies in determining proved reserves, and other new disclosures (Revised SEC rules). The Revised SEC rules did not affect the quantities of our proved reserves.

The reserves in this report have been estimated using deterministic methods. For wells classified as proved developed producing where sufficient production history existed, reserves were based on individual well performance evaluation and production decline curve extrapolation techniques. For undeveloped locations and wells that lacked sufficient production history, reserves were based on analogy to producing wells within the same area exhibiting similar geologic and reservoir characteristics, combined with volumetric methods. The volumetric estimates were based on geologic maps and rock and fluid properties derived from well logs, core data, pressure measurements, and fluid samples. Well spacing was determined from drainage patterns derived from a combination of performance-based recoveries and volumetric estimates for each area or field. Proved undeveloped locations were limited to areas of uniformly high quality reservoir properties, between existing commercial producers.

Capitalized Costs Related to Oil and Gas Activities (Restated)

The following table illustrates the total amount of capitalized costs relating to oil and natural gas producing activities and the total amount of related accumulated depreciation, depletion and amortization. All oil and gas properties are located in the United States of America.


December 31, 2009		Total
Evaluated properties	$	4,918,840
Less cost recovery		(1,695,918)
Less depreciation, depletion, and amortization		(41,546)
Net capitalized cost	$	3,181,376

December 31, 2008
Evaluated properties	$	5,937,048
Less cost recovery		(2,355,918)
Less depreciation, depletion, and amortization		(20,847)
Net capitalized cost	$	3,560,283

F-27

Costs Incurred in Oil and Gas Activities

All costs incurred associated with oil and gas activities were incurred in the United States of America. Costs incurred in property acquisition, exploration and development activities were as follows:


December 31, 2009		United States
Property acquisition
Unproved	$	127,207
Proved		21,584
Exploration		52,846
Development		39,219
Adjustment of interest in investee		(599,067)
Total costs incurred	$	(358,211)


December 31, 2008		United States
Property Acquisition
Unproved	$	1,392,987
Proved		118,928
Exploration		145,208
Development		2,791,918
Cost recovery		(2,355,918)
Total costs incurred	$	2,093,123

Standardized Measure of Discounted Future Net Cash Flows Relating to Proved Oil and Natural Gas Reserves

The following Standardized Measure of Discounted Future Net Cash Flow information has been developed utilizing ASC 932, Extractive Activities —Oil and Gas, (ASC 932) procedures and based on estimated oil and natural gas reserve and production volumes. It can be used for some comparisons, but should not be the only method used to evaluate us or our performance. Further, the information in the following table may not represent realistic assessments of future cash flows, nor should the Standardized Measure of Discounted Future Net Cash Flow be viewed as representative of our current value.

We believe that the following factors should be taken into account when reviewing the following information:

•

future costs and selling prices will probably differ from those required to be used in these calculations;

•

due to future market conditions and governmental regulations, actual rates of production in future years may vary significantly from the rate of production assumed in the calculations;

•

a 10% discount rate may not be reasonable as a measure of the relative risk inherent in realizing future net oil and natural gas revenues; and

•

future net revenues may be subject to different rates of income taxation.

Under the Standardized Measure, for the year ended December 31, 2008 the future cash inflows were estimated by applying year-end oil and natural gas prices to the estimated future production of year-end proved reserves. Estimates of future income taxes are computed using current statutory income tax rates including consideration for estimated future statutory depletion and tax credits. The resulting net cash flows are reduced to present value amounts by applying a 10% discount factor. Use of a 10% discount rate and year-end prices were required. At December 31, 2009, as specified by the SEC, the prices for oil and natural gas used in this calculation were the un-weighted 12-month average of the first day of the month (12-month un-weighted average) cash price quotes, except for volumes subject to fixed price contracts.

F-28

The Standardized Measure is as follows:


		2009		2008
Future cash inflows	$	15,111,729	$	29,612,086
Future production costs		1,248,748		1,602,831
Future development costs		2,030,055		3,780,375
Future income tax expenses		—		—

Future net cash flows		11,832,926		24,228,880
10% annual discount for estimated timing of cash flows		4,818,104		10,354,318

Future net cash flows at end of year	$	7,014,822	$	13,874,562

Changes in Standardized Measure of Discounted Future Net Cash Flows Relating to Proved Oil and Natural Gas Reserves

The following is a summary of the changes in the Standardized Measure of discounted future net cash flows for our proved oil and natural gas reserves during each of the years in the two year period ended December 31, 2009:


			2009		2008
Standardized measure of discounted future net cash flows at beginning of year	$	13,874,562		$	46,395,971
Net changes in prices and production costs		(6,957,255)			(24,269,352)
Sales of oil and gas produced, net of production costs		(77,423)			(160,526)
Purchases (sales) of minerals in place		(4,592,711)			(33,555,826)
Revisions of previous quantity estimates		(768,565)			—
Net change in income taxes		—			—
Accretion of discount		5,536,214			25,464,295
Standardized measure of discounted future net cash flows at year end	$	7,014,822		$	13,874,562

The following schedule includes only the revenues from the production and sale of gas, oil, condensate and NGLs. The income tax expense is calculated by applying the current statutory tax rates to the revenues after deducting costs, which include DD&A allowances, after giving effect to permanent differences. Due to net operating loss carryforwards related to producing activities, income taxes have not been provided at December 31, 2009. The results of operations exclude general office overhead and interest expense attributable to oil and gas activities.

Results of Operations for Producing Activities (Restated)


		2009			2008
Net revenues from production	$	106,502	$	519,183

Expenses
Oil and gas operating		278,383		210,865
Accretion		14,589		11,073
Operating expenses		292,972		221,938

Depreciation, depletion and amortization		15,691		20,847
Total expenses		308,663		242,785

Loss before income tax		(202,161)		276,398
Income tax expenses		—		—
Results of operations	$	(202,161)	$	276,398

Depreciation, depletion and amortization rate per net equivalent MCFE	$	.68	$	.61

F-29

JURASIN OIL AND GAS, INC.

Index to Consolidated Financial Statements

TABLE OF CONTENTS


Consolidated Balance Sheets as of March 31, 2010 and December 31, 2009 (Unaudited)	F-31
Consolidated Statements of Operations and Comprehensive Loss for the three months ended March 31, 2010 and 2009 (Unaudited)	F-32
Consolidated Statements of Cash Flows for the three months ended March 31, 2010 and 2009 (Unaudited)	F-33
Notes to Consolidated Financial Statements	F-34

F-30

JURASIN OIL AND GAS, INC.

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)


		March 31,		December 31,
		2010		2009
Assets		(Restated)		(Restated)
Current assets
Cash and cash equivalents	$	214,845	$	198,854

Marketable securities		256,042		246,203
Accounts receivable, net		73,230		55,784
Other current assets		9,328		8,967
Deferred finance charges		12,803		19,205
Due from related party		224,834		139,193
Total current assets		791,082		668,206

Property and equipment, net of accumulated depreciation of $173,581 and $172,093, respectively		8,877		10,365
Evaluated oil and gas property, accounted for using the full cost method of accounting, net of depletion of $59,580 and $41,546, respectively		2,758,896		3,181,376

Total Assets	$	3,558,855	$	3,859,947

Liabilities and Stockholder’s Deficit
Current liabilities
Accounts payable and accrued expenses	$	1,259,510	$	1,291,529
Notes payable, net of unamortized discount of $4,405 and $6,608, respectively		3,417,875		3,375,684
Accrued interest		561,216		475,831
Deposit		—		127,500
Total current liabilities		5,238,601		5,270,544

Deferred gain		328,528		333,535
Asset retirement obligations		92,225		138,323
Total liabilities		5,659,354		5,742,402

Commitments and Contingencies

Stockholder’s deficit:
Common stock, no par value; authorized 10,000 shares; issued and outstanding 100 shares		15,528		38,974
Accumulated other comprehensive income		37,694		28,764
Accumulated deficit		(2,153,721)		(1,950,193)
Total stockholder’s deficit		(2,100,499)		(1,882,455)

Total liabilities and stockholder’s deficit	$	3,558,855	$	3,859,947

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

F-31

JURASIN OIL AND GAS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPRESSIVE LOSS

(UNAUDITED)


		Three Months Ended March 31,
		2010		2009
		(Restated)		(Restated)
Revenues
Oil and gas	$	44,854	$	11,762

Operating expenses
Lease operating expense		22,169		216,888
Depreciation, depletion, and amortization		14,515		10,315
Accretion		2,513		3,827
General and administrative expense		113,803		165,677
Total operating expenses		153,000		396,707

Loss from operations		(108,146)		(384,945)

Net realized loss from sale of investments		—		(21,876)
Interest expense, net		(95,382)		(134,635)
Total other expenses		(95,382)		(156,511)

Net loss		(203,528)		(541,456)

Other comprehensive gain (loss):
Unrealized gains on available for sale securities		8,930		7,875

Comprehensive loss	$	(194,598)	$	(533,581)

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

F-32

JURASIN OIL AND GAS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)


	Three Months Ended March 31,
		2010		2009
		(Restated)		(Restated)
Cash Flows From Operating Activities
Net loss	$	(203,528)	$	(541,456)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation, depletion and amortization		14,514		10,315
Accretion		2,513		3,827
Realized loss on sale of investments		—		21,876
Amortization of discount and deferred finance charge		8,605		23,784
Changes in operating assets and liabilities:
Accounts receivable		(17,446)		63,243
Due from related party		(85,641)		(6,292)
Accounts payable and accrued expenses		53,366		(1,043,193)
Other assets		(361)		858,774
Net cash used in operating activities		(227,978)		(609,122)

Cash Flows From Investing Activities
Purchases of oil and gas properties		(66,785)		(124,267)
Proceeds from sale of oil and gas properties		271,675		—
Purchases of investments		(909)		(25,188)
Proceeds from sale of investments		—		25,006
Net cash provided by (used in) investment activities		203,981		(124,449)

Cash Flows From Financing Activities
Proceeds from notes payable		41,288		—
Payments on notes payable		(1,300)		—
Net cash provided used in financing activities		39,988		-

Net increase (decrease) in cash		15,991		(733,571)
Cash at beginning of period		198,854		1,557,137
Cash at end of period	$	214,845	$	823,566


Supplemental Disclosures:
Interest paid in cash	$	7	$	30,761
Income taxes paid in cash		—		—

Non-cash investing and financing
Asset retirement obligation - changes in estimate		—		2,417
Asset retirement obligation sold		48,611		—
Oil and gas interest transferred to related party		23,446		—
Unrealized gain on investments		8,930		7,875

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

F-33

JURASIN OIL AND GAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Note 1 – Basis of Presentation and Summary of Significant Accounting Policies

Basis of presentation

The accompanying unaudited interim consolidated financial statements of Jurasin Oil and Gas, Inc. (Jurasin) have been prepared in accordance with accounting principles generally accepted in the United States of America, and should be read in conjunction with the audited consolidated financial statements and notes thereto contained in our Annual Financial Statements, as restated, found elsewhere in this Form 8-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosure contained in the audited financial statements for the most recent fiscal year ended December 31, 2009 (Restated), as reported elsewhere in this Form 8-K, have been omitted.

Restatement

These consolidated financial statements have been restated as more fully discussed in Note 2 – Restatement.

Cash and Cash Equivalents

Cash and cash equivalents include a joint bank account with a lender. Disbursements from this account are subject to the pre-approval of our lender. As of March 31, 2010 and December 31, 2009, the amount in this account totaled $86,324 and $727.

Due from Related Party Jurasin bills its partly owned subsidiary for goods and services provided on its behalf, Jurasin consolidates its proportionate share of balance sheet and income statement amounts, the portion of the due from Amber related to the other interest owner does not eliminate and is carried as a due from Amber until the balance is settled through a cash payment. Due from related party was $ 224,834 and $139,193 as of March 31, 2010 and December 31, 2009, respectively.

Recent Accounting Pronouncements

We do not expect the adoption of recently issued accounting pronouncements to have a significant impact on our results of operations, financial position or cash flow.

Note 2 - Restatement

Subsequent to issuing the report for the three months ended March 31, 2010 and 2009, we discovered an error that impacted the balance sheets, statements of operations and comprehensive loss, and statements of cash flows. Specifically, these adjustments reflect the following error:

Oil and gas properties, accounted for using the full cost method of accounting: interest was improperly capitalized on projects included in a cost center that had production. The restatement decreased oil and gas properties by $318,223 and $224,135, increased deferred gain by $110,042 and increased interest expense by $43,674 in 2010 and 2009, respectively.

The principal results of the restatements are summarized as follows:

F-34

Consolidated Balance Sheet as of March 31, 2010


		As reported		Adjustment		As restated

Evaluated property, net of depletion and impairment	$	3,077,119	$	(318,223)	$	2,758,896
TOTAL ASSETS		3,877,078		(318,223)		3,558,855

Deferred Gain		218,486		110,042		358,528
TOTAL LIABILITIES		5,549,312		110,042		5,659,354

Accumulated deficit		(1,725,456)		(428,265)		(2,153,721)
Total stockholder's deficit		(1,672,234)		(428,265)		(2,100,499)

TOTAL LIABILITIES AND STOCKHOLDER’S DEFICIT	$	3,877,078	$	(318,223)	$	3,558,855

Consolidated Statement of Operations and Comprehensive Loss for the three months ended March 31, 2010


		As reported		Adjustment		As restated
Interest Expense	$	(51,708)	$	(43,674)	$	(95,382)
Total Other Expenses		(51,708)		(43,674)		(95,382)

Net Loss		(159,854)		(43,674)		(203,528)

Comprehensive loss	$	(150,924)	$	(43,674)	$	(194,598)

Consolidated Statement of Cash Flows for the three months ended March 31, 2010


		As reported		Adjustment		As restated
Net loss	$	(159,854)	$	(43,674)	$	(203,528)

Changes in accounts payable	$	9,692	$	43,674	$	53,366

Consolidated Statement of Operations and Comprehensive Loss for the three months ended March 31, 2009


		As reported		Adjustment		As restated
Interest Expense	$	(74,763)	$	(59,872)	$	(134,635)
Total Other Expenses		(96,639)		(59,872)		(156,511)

Net Loss		(481,584)		(59,872)		(541,456)

Comprehensive loss	$	(473,709)	$	(59,872)	$	(533,581)

Consolidated Statement of Cash Flows for the three months ended March 31, 2009


		As reported		Adjustment		As restated

Net loss	$	(481,584)	$	(59,872)	$	(541,456)
Changes in accounts payable	$	(1,103,065)	$	59,872	$	(1,043,193)

Note 3 – Going Concern

As reflected in the accompanying financial statements, we had a working capital deficit of $4,447,519 and an accumulated deficit of $2,153,721 as of March 31, 2010 which raise substantial doubt about our ability to continue as a going concern. Management plans to raise funds through the issuance of debt, the sale of common stock, merger with another company or the sale of partial interests in our projects to other industry participants.

F-35

Note 4 – Oil and Gas Properties

Oil and natural gas properties as of March 31, 2010 and December 31, 2009, consisted of the following:


		March 31,		December 31,
		2010		2009

Costs subject to depletion	$	2,818,476	$	3,222,922
Depletion		(59,580)		(41,546)

Net oil and gas properties	$	2,758,896	$	3,181,376

In February 2010, we sub-let a portion of our interest in Ensminger, thus reducing our before payout working interest and net revenue interest to 6.375% and 4.62188%, respectively. We received cash net proceeds of $149,175. In addition, the sub-letting parties assumed responsibility for their pro rata share of the asset retirement obligation on the property, which were $48,611 at the time of the transfer. The proceeds and the assumption of the asset retirement obligation were treated as a reduction of capitalized costs in accordance with rules governing full cost companies.

During the year ended December 31, 2009, we received a deposit of $127,500 related to a sub-let of Ensminger. In March 2010, we completed the transfer its 0.5% overriding royalty and received total proceeds of $250,000. The proceeds were treated as a reduction of capitalized costs in accordance with rules governing full cost companies.

Effective March 2010, Jurasin assigned certain minor legacy overriding royalty interests in various projects, including the Baldwin AMI, the Coral, Ruby and Diamond Project, the Aquamarine Project, and the Ensminger Project to a related party entity owned by John M. Jurasin. Jurasin retained its working interests in these projects. Additionally, Jurasin assigned its working interest in a minor project, Charenton, to the related party entity. Jurasin did not receive any proceeds for the conveyances and, except for the Ensminger Project, the interests assigned had a historical cost basis of $0. The Ensminger Project had allocable costs of $23,446. The conveyance was accounted for as a transaction between entities under common control and the ORRI was recorded as a distribution to shareholder and transferred out of property at it historical cost.

Impairment

We evaluated our capitalized costs in each cost center using the full cost ceiling test as prescribed by the Securities and Exchange Commission at March 31, 2010 and December 31, 2009. At March 31, 2010 and December 31, 2009, our net book value of oil and gas properties did not exceed the ceiling amount and thus, there was no impairment.

Changes in production rates, levels of reserves, future development costs, and other factors will determine our actual ceiling test calculation and impairment analyses in future periods.

Note 5 – Notes Payable

Notes payable as of March 31, 2010 and December 31, 2009 consisted of the following:


		March 31,		December 31,
		2010		2009

Senior credit facility (Rampant)	$	1,223,310	$	1,223,310
Senior credit facility, (Amber)*		2,027,782		2,025,579
Margin loan		166,781		126,795

	$	3,417,875	$	3,375,684

* net of unamortized discount of $4,405 and 6,608

F-36

Senior credit facility (Rampant)

The Senior Credit Facility contains certain restrictive covenants, several of which our lender, Macquarie Bank Limited (MBL) has declared in default. As a result, the note is subject to a default interest rate (an additional 4%).

Senior Credit Facility (Amber)

The Senior Credit Facility contains certain restrictive covenants, several of which MBL has declared in default. As a result, Amber is subject to a default interest rate (an additional 4%) and the debt is presented as a short-term liability.

In addition to the outstanding note payable, $186,150 is obligated as collateral for a letter of credit supporting a bond related to the plug, abandon, and restoration obligations on the Ensminger Project.

Margin Loan and line of credit

We have a line of credit available from our bank for up to $25,000 that carries 7% annual percentage rate and a margin loan facility from our broker-dealer that carries a variable rate. As of March 31, 2010 and December 31, 2009, respectively, we are obligated to pay $166,781 and $125,495 to our broker-dealer in conjunction with the margin loan and $0 and $1,300 to our bank for the outstanding amount on this line of credit. As of April 30, 2010, the balance owed on the margin account was $167,823, which was secured by securities and cash with a fair value of $259,157.

Note 6 – Related Party Transactions

Related parties include John Jurasin, the sole stockholder of Jurasin, and MBL, the owner of 49% equity interest in Amber. Transactions involving related parties are as follows:

Macquarie Bank Limited

Amber Energy is partially owned by an affiliate of our lender, Macquarie Bank Limited, and Jurasin uses the proportionate consolidation method to consolidate Amber. Jurasin pays for goods and services on behalf of Amber and passes those charges on to Amber through intercompany billings. Periodically, Amber will reimburse Jurasin for these expenses or potentially pays for goods and services on behalf of Jurasin. These transactions are recorded as a due to / from Amber in Jurasin’s records and as a due to / from Jurasin in Amber’s records. Due to the fact that Jurasin only consolidates its proportionate share of balance sheet and income statement amounts, the portion of the due from Amber related to the other interest owner does not eliminate and is carried as a due from Amber until the balance is settled through a cash payment. Due from related party was $ 224,834 and $139,193 as of March 31, 2010 and December 31, 2009, respectively.

John Jurasin

F-37

Note 7 – Commitments and Contingencies

Note 8 – Subsequent Events

Simultaneously with the closing of the Reorganization Agreement, we entered into a modification of the Amber and Rampant Credit Facilities under which:

The maturity date of our Amber Credit Facility was extended to March 20, 2011;

We agreed to make monthly interest payments on the Rampant credit facility and mandatory principal reduction payments on both the Credit Facilities on August 20, 2010 and September 20, 2010 in the amount of $100,000 and on the 20^th of each month from October through March 2011 of $250,000 each. We shall also pay amounts equal to 1/6^th of the gross proceeds we raise through subsequent equity raises, any proceeds from the sale of collateral, and any insurance proceeds received, which amounts shall be credited against the monthly mandatory principal reduction payments;

We cross-collateralized the Rampant and Amber Credit Facilities and Amber and Rampant each executed an unconditional guarantee of payment of the obligations under both Credit Facilities;

Radiant executed a limited guarantee of payment of up to $500,000 for the obligations under both Credit Facilities;

In connection with the Reorganization, we assumed Radiant’s outstanding liabilities as of the closing date, which totaled approximately $228,000.

F-38

Common stock issued by Radiant

Prior to the closing of the Reorganization Agreement, Radiant issued common stock to consultants as follows:

In the event that the investment banking firm places equity or equity equivalent offerings, it will receive a cash placement agent fee of 10% of the gross proceeds of any offerings and cash expense reimbursement of 3% of the gross proceeds of any offerings, except that the fees and expense reimbursement are waived for the first $2,000,000 of proceeds. The investment banking firm will also receive $75,000 of legal expense reimbursement after the first $2,000,000 of gross proceeds have closed. At the closing of each equity offering, the firm will receive warrants to purchase one share of common stock for each ten shares sold with an exercise price of 105% of the offering price of the stock.

During August 2010, the agreement was modified as follows:

Radiant will pay a consulting fee of $8,000 in cash per month for one year after the first $2,000,000 has been raised.

F-39

Issuance of debentures by Radiant


Risk-free interest rate	1.22%
Dividend yield	0%
Volatility factor	232%
Expected life (years)	4 years


Relative fair value of warrants	$	176,097
Relative fair value of debenture	$	298,903
Gross proceeds	$	475,000

The relative fair value of the warrants is reflected as a discount from the debt. The discount will be amortized using the effective interest method over the life of the debenture, one year.


Risk-free interest rate	1.22%
Dividend yield	0%
Volatility factor	232%
Expected life (years)	4 years

We allocated the proceeds between the warrants and the debentures based on the relative fair values as follows:


Relative fair value of warrants	$	46,342
Relative fair value of debenture	$	78,658
Gross proceeds	$	125,000

The relative fair value of the warrants is reflected as a discount from the debt. The discount will be amortized using the effective interest method over the life of the debenture, one year.

The proceeds from the sale of these debentures were used to pay $100,000 of Jurasin’s existing notes payable and provided $25,000 in cash to Radiant.

Note payable to related party

F-40

Commitments

In connection with the Reorganization Agreement, we entered into the following agreements:

An indemnity agreement with a director under which he will be paid $25,000 prior to the payment of any cash bonus to one of our employees, directors, or officers;

An indemnity agreement with a related party under which they will receive $250,000 if we raise $10,000,000 in debt or equity funding.


Risk-free interest rate	2.00%
Dividend yield	0%
Volatility factor	229%
Expected life (years)*	6 years

The expected term of the options was computed using the “plain vanilla” method as prescribed by Securities and Exchange Commission Staff Accounting Bulletin 107 because we do not have sufficient data regarding employee exercise behavior to estimate the expected term. The volatility was determined by referring to the average historical volatility of a peer group of public companies because we do not have sufficient trading history to determine our historical volatility.

Stock split

Radiant effected a 2 for 1 reverse stock split effective September 9, 2010. These notes. pursuant to the Radiant shares issued in connection with the recapitalization transaction, have been retroactively stated to reflect the effects of the stock split.

F-41

JURASIN OIL AND GAS, INC.

Index to Consolidated Financial Statements

TABLE OF CONTENTS


Consolidated Balance Sheets as of June 30, 2010 and December 31, 2009 (Unaudited)	F-43
Consolidated Statements of Operations and Comprehensive Loss for the three and six months ended June 30, 2010 and 2009 (Unaudited)	F-44
Consolidated Statements of Cash Flows for the six months ended June 30, 2010 and 2009 (Unaudited)	F-45
Notes to Consolidated Financial Statements	F-46

F-42

JURASIN OIL AND GAS, INC.

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)


		June 30,		December 31,
		2010		2009
Assets				(Restated)
Current assets
Cash and cash equivalents	$	72,093	$	198,854
Marketable securities		234,650		246,203
Accounts receivable		28,025		55,784
Other current assets		13,252		8,967
Deferred finance charges		6,402		19,205
Due from related party		321,258		139,193
Total current assets		675,680		668,206

Property and equipment, net of accumulated depreciation of $174,611 and $172,093, respectively		7,847		10,365
Evaluated oil and gas property, accounted for using the full cost method of accounting, net of depletion of $72,842 and $41,546, respectively		2,800,411		3,181,376

Total Assets	$	3,483,938	$	3,859,947

Liabilities and Stockholder’s Deficit
Current liabilities
Accounts payable and accrued expenses	$	1,556,615	$	1,291,529
Notes payable, net of unamortized discount of $2,199 and $6,608, respectively		3,431,578		3,375,684
Accrued interest		643,833		475,831
Deposit		—		127,500
Due to stockholder		20,603		—
Total current liabilities		5,652,629		5,270,544

Deferred gain		328,262		333,535
Asset retirement obligations		94,083		138,323
Total liabilities		6,074,974		5,742,402

Commitments and Contingencies

Stockholder’s deficit:
Common stock, no par value; authorized 10,000 shares; issued and outstanding 100 shares		15,528		38,974
Accumulated other comprehensive income		15,107		28,764
Accumulated deficit		(2,621,671)		(1,950,193)
Total stockholder’s deficit		(2,591,036)		(1,882,455)

Total liabilities and stockholder’s deficit	$	3,483,938	$	3,859,947

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

F-43

JURASIN OIL AND GAS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPRESSIVE LOSS

(UNAUDITED)


		Three Months Ended June 30,				Six Months Ended June 30,
		2010		2009			2010	2009

Revenues
Oil and gas	$		48,905	$	3,553	$	93,759	$	15,315

Operating expenses
Lease operating expense			20,550		40,120		42,719		257,008
Depreciation, depletion, and amortization			14,026		4,216		28,541		14,531
Accretion			1,858		3,828		4,371		7,655
General and administrative expense			386,926		64,719		500,729		230,396
Total operating expenses			423,360		112,883		576,360		509,590

Loss from operations			(374,455)		(109,330)		(482,601)		(494,275)


Other expenses
Net realized loss from sale of marketable securities			—		(50)		—		(21,926)
Interest expense, net			(93,494)		(134,468)		(188,877)		(288,923)
Total other expenses			(93,494)		(134,518)		(188,877)		(310,849)

Net loss	$		(467,949)	$	(243,847)	$	(671,478)	$	(805,123)
Other comprehensive gain (loss):
Unrealized gains (losses) on available for sale securities			(22,587)		23,714		(13,657)		31,589
Comprehensive loss	$		(490,536)	$	(220,133)	$	(685,135)	$	(773,534)

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

F-44

JURASIN OIL AND GAS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)


	Six Months Ended June 30,
		2010		2009
Cash Flows From Operating Activities
Net loss	$	(671,478)	$	(805,124)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation, depletion and amortization		28,541		14,531
Accretion		4,371		7,655
Realized loss on sale of investments		—		21,926
Amortization of discount and deferred finance charge		17,212		72,734
Changes in operating assets and liabilities:
Accounts receivable		27,759		69,635
Due from related party		(182,065)		4,587
Accounts payable and accrued expenses		393,599		(998,481)
Other assets		(4,285)		859,260
Net cash used in operating activities		(386,346)		(753,277)

Cash Flows From Investing Activities
Purchases of oil and gas properties		(82,074)		(258,576)
Proceeds from sale of oil and gas properties		271,675		—
Purchases of investments		(2,104)		(75,853)
Proceeds from sale of investments		—		25,006
Net cash provided by (used in) investment activities		187,497		(309,423)

Cash Flows From Financing Activities
Loan from stockholder		20,603		—
Proceeds from notes payable		65,897		—
Payments on notes payable		(14,412)		—
Net cash provided used in financing activities		72,088		-

Net increase (decrease) in cash		(126,761)		(1,062,700)
Cash at beginning of period		198,854		1,557,137
Cash at end of period	$	72,093	$	494,437


Supplemental Disclosures:
Interest paid in cash	$	6,260	$	55,080
Income taxes paid in cash		—		—

Non-cash investing and financing
Asset retirement obligation - changes in estimate		—		2,417
Asset retirement obligation sold		48,611		—
Accounts payable for oil and gas assets		39,489		48,361
Oil and gas interest transferred to related party		23,446		—
Unrealized gain (loss) on investments		(13,657)		31,589

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

F-45

JURASIN OIL AND GAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Note 1 – Basis of Presentation and Summary of Significant Accounting Policies

Basis of presentation

The accompanying unaudited interim consolidated financial statements of Jurasin Oil and Gas, Inc. ”JOG” have been prepared in accordance with accounting principles generally accepted in the United States of America, and should be read in conjunction with the audited consolidated financial statements and notes thereto contained in our Annual Financial Statements, as restated, found elsewhere in our Form 8-K/A filed herewith. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosure contained in the audited financial statements for the most recent fiscal year ended December 31, 2009 (Restated), as reported elsewhere in our Form 8-K/A, filed herewith, have been omitted.

Cash and Cash Equivalents

Cash and cash equivalents include a joint bank account with a lender. Disbursements from this account are subject to the pre-approval of our lender. As of June 30, 2010 and December 31, 2009, respectively, the amount in this account totaled $67,467 and $727.

Due from Related Party JOG bills its partly owned subsidiary for goods and services provided on its behalf, JOG consolidates its proportionate share of balance sheet and income statement amounts, the portion of the due from Amber Energy, LLC “AE” related to the other interest owner does not eliminate and is carried as a due from AE until the balance is settled through a cash payment. Due from related party was $ 321,258 and $139,193 as of June 30, 2010 and December 31, 2009, respectively.

Due to Stockholder John M Jurasin, our sole stockholder, advanced us $20,603 and $0 as of June 30, 2010 and December 31, 2009, respectively. The funds were advanced to pay operating expenses and there are no formal repayment terms.

Recent Accounting Pronouncements

We do not expect the adoption of recently issued accounting pronouncements to have a significant impact on our results of operations, financial position or cash flow.

Note 2 – Going Concern

As reflected in the accompanying financial statements, we had a working capital deficit of $4,976,949 and an accumulated deficit of $2,621,671 as of June 30, 2010 which raise substantial doubt about our ability to continue as a going concern. Management plans to raise funds through the issuance of debt, the sale of common stock, merger with another company or the sale of partial interests in our projects to other industry participants.

Our ability to continue as a going concern is dependent on our ability to raise capital through the issuance of debt, the sale of common stock, the consummation of a merger or the sale of partial interests in our projects to other industry participants. If we do not raise capital sufficient to fund our business plan, JOG may not survive. The financial statements do not include any adjustments that might be necessary if we were unable to continue as a going concern.

Note 3 – Oil and Gas Properties

Oil and natural gas properties as of June 30, 2010 and December 31, 2009, consisted of the following:


		June 30,		December 31,
		2010		2009

Costs subject to depletion	$	2,873,253	$	3,222,922
Depletion		(72,842)		(41,546)

Net oil and gas properties	$	2,800,411	$	3,181,376

F-46

Effective March 2010, JOG assigned certain minor legacy overriding royalty interests in various projects, including the Baldwin AMI, the Coral, Ruby and Diamond Project, the Aquamarine Project, and the Ensminger Project to a related party entity owned by John M. Jurasin. JOG retained its working interests in these projects. Additionally, JOG assigned its working interest in a minor project, Charenton, to the related party entity. JOG did not receive any proceeds for the conveyances and, except for the Ensminger Project, the interests assigned had a historical cost basis of $0. The Ensminger Project had allocable costs of $23,446. The conveyance was accounted for as a transaction between entities under common control and the ORRI was recorded as a distribution to shareholder and transferred out of property at it historical cost.

Impairment

We evaluated our capitalized costs in each cost center using the full cost ceiling test as prescribed by the Securities and Exchange Commission at June 30, 2010 and December 31, 2009. At June 30, 2010 and December 31, 2009, our net book value of oil and gas properties did not exceed the ceiling amount and thus, there was no impairment.

Changes in production rates, levels of reserves, future development costs, and other factors will determine our actual ceiling test calculation and impairment analyses in future periods.

Note 4 – Notes Payable

Notes payable as of June 30, 2010 and December 31, 2009 consisted of the following:


		June 30,		December 31,
		2010		2009

Senior credit facility (RLE)	$	1,223,310	$	1,223,310
Senior credit facility, (AE)*		2,029,988		2,025,579
Margin loan		159,510		126,795
Line of credit		18,770		1,300

	$	3,431,578	$	3,375,684

* net of unamortized discount of $2,199 and 6,608

Senior credit facility (Rampant Lion Energy, LLC “RLE”)

In February 2010, we entered into a supplemental agreement that cross-collateralized the note with the assets of AE and extended the maturity date of the note to March 14, 2011. Because the note continues to be deemed in default, the debt is presented as a short-term liability.

Senior Credit Facility (Amber Energy LLC “AE”)

The Senior Credit Facility contains certain restrictive covenants, several of which MBL has declared in default. As a result, AE is subject to a default interest rate (an additional 4%) and the debt is presented as a short-term liability.

F-47

Margin Loan and line of credit

We have a line of credit available from our bank for up to $25,000 that carries 7% annual percentage rate and a margin loan facility from our broker-dealer that carries a variable rate. As of June 30, 2010 and December 31, 2009, respectively, we are obligated to pay $159,510 and $125,495 to our broker-dealer in conjunction with the margin loan and $18,770 and $1,300 to our bank for the outstanding amount on this line of credit. As of August 24, 2010, the balance owed on the margin loan was $0, and the broker-dealer account has been closed out.

Note 5 – Common Stock

In May 2010, we issued 20 shares of our common stock to employees contingent upon the closing of a reverse acquisition transaction. The shares vest 1/3 on the closing date, 1/3 on the first anniversary of the closing date, and 1/3 on the second anniversary of the closing date. The shares were ascribed a nominal value due to JOG’s negative net worth on the grant date. The shares award includes 5.3 shares of common stock that were issued to John Jurasin, our President and majority shareholder. We closed a reverse acquisition transaction in August 2010 (see Note 8).

Note 6 – Related Party Transactions

Related parties include John Jurasin, the sole stockholder of JOG, and Macquarie Americas Corp “MAC”, and affiliate of MBL and the owner of 49% equity interest in AE. Transactions involving related parties are as follows:

Macquarie Bank Limited

AE is partially owned by an affiliate of our lender, Macquarie Bank Limited, and JOG uses the proportionate consolidation method to consolidate AE. JOG pays for goods and services on behalf of AE and passes those charges on to AE through intercompany billings. Periodically, AE will reimburse JOG for these expenses or potentially pays for goods and services on behalf of JOG. These transactions are recorded as a due to / from AE in JOG’s records and as a due to / from JOG in AE’s records. Due to the fact that JOG only consolidates its proportionate share of balance sheet and income statement amounts, the portion of the due from AE related to the other interest owner does not eliminate and is carried as a due from AE until the balance is settled through a cash payment. Due from related party was $ 321,258 and $139,193 as of June 30, 2010 and December 31, 2009, respectively.

John Jurasin

John M Jurasin, our sole stockholder, advanced us $20,603 and $0 as of June 30, 2010 and December 31, 2009, respectively. The funds were advanced to pay operating expenses and there are no formal repayment terms.

Note 7 – Commitments and Contingencies

In March 2010, we received the results of an audit conducted by the non-operator regarding the drilling of the CasKids Operating #2 Ensminger well. During the period under audit, we were the operator under the Operating Agreement for this well. The non-operator asserts that it is owed a refund of $340,317 based on the results of that audit. We do not believe that this claim has merit and intend to challenge the audit results. As of December 31, 2009 and June 30, 2010, respectively, $4,727 and $44,215 was accrued in connection with this contingency.

In conjunction with our acquisition of the Ensminger Project in 2008, we assumed the obligation to plug the Ensminger #1 well, which includes providing a bond in the amount of $186,150, which we obtained by collateralizing our assets under the letter of credit available pursuant to the Amber Credit Facility. This bond will be reduced to $55,845 upon completion of the Ensminger #2 well as a successful well when third parties will assume their proportionate share of the obligation.

F-48

In April 2010, we terminated a contract with our former CFO. The termination agreement provides that, after we have closed a reverse merger with Radiant Oil and Gas, Inc. (see Note 8), we will pay him $150,000 on the earlier of the closing of a funding in excess of $2,000,000 or December 31, 2010.

Note 8 – Subsequent Events

On August 5, 2010, we completed a reverse acquisition transaction through an Reorganization Agreement with Radiant Oil and Gas, Inc. (“Radiant”) whereby Radiant acquired 100% of our issued and outstanding capital stock in exchange for 5,000,000 shares of Radiant’s common stock. The agreement provides for the issuance of up to an additional 1,000,000 shares of Radiant common stock upon the satisfaction of certain performance conditions. As a result of the reverse acquisition, we became Radiant’s wholly-owned subsidiary and our former stockholders became the controlling stockholders of Radiant. The share exchange with Radiant was treated as a reverse acquisition, with JOG as the accounting acquirer and Radiant as the acquired party.

Simultaneously with the closing of the Reorganization Agreement, we entered into a modification of the AE and RLE Credit Facilities under which:

The maturity date of our AE Credit Facility was extended to March 20, 2011;

We agreed to make monthly interest payments on the RLE credit facility and mandatory principal reduction payments on both the Credit Facilities on August 20, 2010 and September 20, 2010 in the amount of $100,000 and on the 20^th of each month from October through March 2011 of $250,000 each. We shall also pay amounts equal to 1/6^th of the gross proceeds we raise through the subsequent equity raised, any proceeds from the sale of collateral, and any insurance proceeds received, which amounts shall be credited against the monthly mandatory principal reduction payments;

We cross-collateralized the RLE and AE Credit Facilities and AE and RLE each executed an unconditional guarantee of payment of the obligations under both Credit Facilities;

Radiant executed a limited guarantee of payment of up to $500,000 for the obligations under both Credit Facilities;

Our lender agreed to reconvey to JOG all interests in real property and membership interests conveyed to its affiliate Macquarie Americas Corp (“MAC”) in connection with the AE Credit Facility, provided that all obligations under the AE Credit Facility, RLE Credit Facility, and all letters of credit shall have been paid in cash prior to March 15, 2011.

In connection with the Reorganization, we assumed Radiant’s outstanding liabilities as of the closing date, which totaled approximately $228,000.

Common stock issued by Radiant

Connected to the closing of the Reorganization Agreement, Radiant issued common stock to consultants as follows:

50,000 shares of common stock to a former officer of Radiant on August 5, 2010 as consideration associated with his entering into an agreement to serve as one of our directors. The shares were valued at $60,000, or $1.20 per share, the most recent quoted market closing price for Radiant common stock. 50,000 additional shares will vest one year from the Reorganization Agreement closing date.

543,205 shares of Radiant common stock to an investment relation/public relations firm on August 12, 2010 for services. The shares are fully vested and non-forfeitable at the time of issuance. The shares were valued at $651,845, or $1.20 per share, the most recent quoted market closing price for Radiant common stock.

3,000,000 shares of Radiant common stock as consideration for an investment banking agreement on August 23, 2010. The shares are fully vested and non-forfeitable at the time of issuance. The shares were valued at $3,600,000, or $1.20 per share, the most recent quoted market closing price for Radiant common stock. .

F-49

In the event that the investment banking firm places equity or equity equivalent offerings, it will receive a cash placement agent fee of 10% of the gross proceeds of any offerings and cash expense reimbursement of 3% of the gross proceeds of any offerings, except that the fees and expense reimbursements are waived for the first $2,000,000 of proceeds. The investment banking firm will also receive $75,000 of expense reimbursement after the first $2,000,000 of gross proceeds have closed. At the closing of each equity offering, the firm will receive warrants to purchase one share of common stock for each ten shares sold with an exercise price of 105% of the offering price of the stock.

During August 2010, the agreement was modified as follows:

The investment banking firm will forfeit 2,000,000 of the 3,000,000 shares received at the signing of the original agreement if, within 12 months after a registration statement has been filed and declared effective, $10,000,000 has not been raised pursuant to the agreement; and

Radiant will pay a consulting fee of $8,000 in cash per month for one year after the first $2,000,000 has been raised.

Issuance of debentures by Radiant

Simultaneously with the closing of the Reorganization Agreement, Radiant sold 4.75 units consisting of $475,000 of debentures and warrants to purchase 237,500 shares of Radiant common stock to three investors. The debentures have an 18% per annum stated interest rate, an effective interest rate of 71%, and mature on July 31, 2011. The warrants have an exercise price of $1.00 per share and a term of up to 4 years. The proceeds of the debentures were allocated between the debentures and the warrants based on their relative fair market values. The fair market value of the warrants was determined using the black-sholes option pricing model with the following assumptions:


Risk-free interest rate	1.22%
Dividend yield	0%
Volatility factor	232%
Expected life (years)	4 years


Relative fair value of warrants	$	176,097
Relative fair value of debenture	$	298,903
Gross proceeds	$	475,000

The relative fair value of the warrants is reflected as a discount from the debt. The discount will be amortized using the effective interest method over the life of the debenture, one year.

Prior to the closing of the Reorganization Agreement, on August 4, 2010, Radiant sold 1.25 units consisting of debentures with a face amount of $125,000 and warrants to purchase 62,500 shares of Radiant common stock to a related party of Radiant. The debentures have an 18% per annum stated interest rate, an effective interest rate of 71%, and mature on July 31, 2011. The warrants have an exercise price of $1.00 per share and a term of up to 4 years. The proceeds of the debentures were allocated between the debentures and the warrants based on their relative fair market values. The fair market value of the warrants were determined using the black-sholes option pricing model with the following assumptions:

F-50


Risk-free interest rate	1.22%
Dividend yield	0%
Volatility factor	232%
Expected life (years)	4 years

We allocated the proceeds between the warrants and the debentures based on the relative fair values as follows:


Relative fair value of warrants	$	46,342
Relative fair value of debenture	$	78,658
Gross proceeds	$	125,000

The relative fair value of the warrants is reflected as a discount from the debt. The discount will be amortized using the effective interest method over the life of the debenture, one year.

The proceeds from the sale of these debentures were used to pay $100,000 of JOG’s existing notes payable and provided $25,000 in cash to Radiant.

Note payable to related party

In connection with the Reorganization, Radiant issued the Majority Shareholder of JOG, a note in the principal amount of $884,000, which accrues interest at 4% per annum and is payable in three years. The note shall be prepaid upon the Radiant raising at least $10,000,000 and subject to payment in full of the Credit Facility. Also in connection with the Reorganization, an additional $165,000, which has no formal repayment terms, is also due to the Majority Shareholder. The note and payable were treated as a deemed dividends to the Majority Shareholder.

Commitments

Effective with the Close of the Reorganization Agreement, Radiant entered into the following agreements:

Employment agreements and a director’s agreement under which Radiant is obligated to pay $581,000 in the first year, $569,000 in the second year, and $145,000 in the third year after the closing of the Reorganization agreement;

An indemnity agreement with a director under which he will be paid $25,000 prior to the payment of any cash bonus to one of our employees, directors, or officers;

Employment and consulting agreements that provide for contingent payments of $35,000 if Radiant raises $3,600,000 in equity or debt funding and a payment of $25,000 if we raise an additional $3,000,000 in equity or debt funding; and

An indemnity agreement with a related party under which they will receive $250,000 if Radiant raises $10,000,000 in debt or equity funding.

Immediately subsequent to the reorganization, Radiant granted options to purchase 694,122 shares of Radiant common stock with an exercise price of $1.00 per share and a term of 10 years to JOG employees and an option to purchase 93,000 shares of common stock with an exercise price of $1.00 per share and a term of 10 years to a JOG consultant. The options vest 1/3 on the first anniversary of the grant, 1/3 on the second anniversary of the grant, and 1/3 on the third anniversary of the grant. The fair value of the options issued to employees, $ 829,403, was based on the quoted market price of Radiant's stock on the date of grant and estimated using the Black-Sholes option pricing model. It will be recorded as compensation expense over the vesting period in accordance with financial accounting standards. The fair value of the option issued to the consultant, $111,135, was based on the quoted market price of Radiant's stock on the date of grant and estimated using the Black-Sholes option pricing model and will be recorded as compensation expense over the vesting period in accordance with financial accounting standards. The following assumptions were used in the Black-Sholes option pricing model:

F-51


Risk-free interest rate	2.00%
Dividend yield	0%
Volatility factor	229%
Expected life (years)*	6 years

Stock split

F-52

RADIANT OIL & GAS INC - FORM 8-K/A - EX-99 - EX-99.1 AUDITED FINANCIAL STATEMENTS - September 24, 2010

Attached files

RADIANT OIL & GAS INC Reports