ZULU ENERGY CORP. (Form: 10-Q, Received: 05/20/2008 14:15:42)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended March 31, 2008

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

For the transition period from: ______ to ________

Commission File Number 000-52272

ZULU ENERGY CORP.

(Exact name of registrant as specified in its charter)

Colorado		20-3281304
State or other jurisdiction of		(I.R.S. Employer
incorporation or organization		Identification No.)

122 N. Main Street, Sheridan, Wyoming 82801

(Address of principal Executive Offices) (Zip Code)

(307) 673-0800

(Registrant’s Telephone Number, Including Area Code)

N/A

(Former Name, Former Address and Former Fiscal Year,

if Changed Since Last Report)

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.:

Large accelerated filer o	Accelerated filer o

Non-accelerated filer o (Do not check if a smaller reporting company)	Smaller reporting company x

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

The number of shares of the registrant’s common stock outstanding as of May 15, 2008: 96,000,000 shares.

TABLE OF CONTENTS

FORM 10-Q QUARTERLY REPORT

ZULU ENERGY CORP.

PART I – FINANCIAL INFORMATION		3

ITEM 1.	FINANCIAL STATEMENTS	3

ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	20

ITEM 4T.	CONTROLS AND PROCEDURES	27

PART II – OTHER INFORMATION		29

ITEM 1.	LEGAL PROCEEDINGS	29

ITEM 2.	UNREGISTERED SALE OF EQUITY SECURITIES AND USE OF PROCEEDS	29

ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	29

ITEM 4.	SUBMISSION OF MATTERS TO THE VOTE OF SECURITY HOLDERS	29

ITEM 5.	OTHER INFORMATION	29

ITEM 6.	EXHIBITS	30

SIGNATURES

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ZULU ENERGY CORP. & SUBSIDIARIES

(Formerly Global Sunrise, Inc.)

(An Exploration Stage Company)

UNAUDITED CONSOLIDATED BALANCE SHEETS AS AT

	March 31,			December 31,
	2008			2007
ASSETS
Current Assets
Cash and cash equivalents	$	90,572		$	17,598
Deposit		1,500			-
Prepaid Expenses		13,930			5,468
Total Current Assets		106,002			23,066

Fixed Assets, net		198			216
Oil and Gas Properties		27,472			29,575
Prospecting Licenses		3,000,000			3,000,000

Total Assets	$	3,133,672		$	3,052,857

LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current Liabilities
Accounts Payables	$	556,672		$	266,380
Accrued Expenses		35,000			63,333
Loan payable to shareholder		255,754			252,083
Liability - acquisition of prospecting licenses rights		3,000,000			3,000,000
Liabilities to Government of Botswana		4,237,043			4,561,393
Total Current Liabilities	$	8,084,469		$	8,143,189

Stockholders’ Deficit:
Preferred Stock, $.001 par value; authorized 10,000,000 shares, none issued		-			-
Common stock 100,000,000 shares authorized at $0.001 par value, 82,000,000 shares issued and outstanding at 03/31/2008 and 12/31/2007 respectively.		82,000			82,000
Additional paid-in capital		(411,724	)		(411,724	)
Deficit accumulated during the exploration stage		(5,034,529	)		(4,840,906	)
Subscription receivable		(98	)		(98	)
Accumulated other comprehensive income		413,554			80,396
Total Stockholders’ Deficit		(4,950,797	)		(5,090,332	)

Total Liabilities and Stockholders’ Deficit	$	3,133,672		$	3,052,857

The accompanying notes are an integral part of these financial statements

ZULU ENERGY CORP. & SUBSIDIARIES

(Formerly Global Sunrise, Inc.)

(An Exploration Stage Company)

UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED

MARCH 31, 2008 AND 2007 AND THE PERIOD FROM AUGUST 11, 2005 (INCEPTION) TO MARCH 31, 2008

	THREE MONTHS ENDED MARCH 31, 2008			THREE MONTHS ENDED MARCH 31, 2007			FOR THE PERIOD FROM AUGUST 11, 2005 (INCEPTION) TO MARCH 31, 2008
Revenue	$	-		$	-		$	-
Operating expenses		193,623			16,775			4,973,558
Loss from operations before Minority Interest		(193,623	)		(16,775	)		(4,973,558	)
Minority Interest		0			1,549			2,303,022
Taxes		-			-			-
Loss for the period	$	(193,623	)	$	( 15,226	)	$	(2,670,536	)
Other Comprehensive Income: Foreign currency translation		333,158			-			413,554
Total Comprehensive Income (Loss)	$	139,535		$	(15,226	)	$	(2,256,982	)


Comprehensive Income (Loss) per Share:
Primary	$	0.00		$	(0.03	)
Weighted Average Shares Outstanding		82,000,000			600,000

The accompanying notes are an integral part of these financial statements

ZULU ENERGY CORP. & SUBSIDIARIES

(Formerly Global Sunrise, Inc.)

(An Exploration Stage Company)

UNAUDITED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT

for the period from August 11, 2005 (Date of Inception) to March 31, 2008

										Deficit
										Accumulated
	Common Stock				Additional			Other		During the						Total
	Number				Paid In			Comprehensive		Exploration			Subscription			Stockholders
	Shares		Amount		Capital			Income		Stage			Receivable			(Deficiency)

Balance on Date of Inception		-	$	-	$	-		$	-	$	-					$	-
Issuance of common stock-Aug. 11, 2005		600,000		600		(598	)		-		-						2

Net loss for the year 2005		-		-		-			-		(7,087	)		-			(7,087	)
Balance, December 31, 2005		600,000		600		(598	)		-		(7,087	)					(7,085	)

Net loss for the year 2006		-		-		-			-		(24,018	)		-			(24,018	)
Balance, December 31, 2006		600,000		600		(598	)		-		(31,105	)					(31,103	)

Net Loss for the year ended Dec 31, 2007		-		-		-			80,396		(2,445,808	)		-			(2,365,412	)
Shares Issued – Subscription receivable		29,400,000		29,400		(29,302	)		-		-			(98	)		-
Issuance of common stock Dec 20, 2007 for Net Assets of Zulu Energy Corp.		52,000,000		52,000		(381,824	)		-		-			-			(329,824	)
Minority Interest Acquired		-		-		-					(2,363,993	)		-			(2,363,993	)
Balance, December 31, 2007		82,000,000		82000		(411,724	)		80,396		(4,840,906	)		(98	)		(5,090,332	)
Net Comprehensive Income for Three months ended March 31, 2008		-		-		-			333,158		(193,623	)		-			139,535
Balance, March 31, 2008		82,000,000		82000		(411,724	)		413,554		(5,034,529	)		(98	)		(4,950,797	)

The accompanying notes are an integral part of these financial statements

ZULU ENERGY CORP. & SUBSIDIARIES

(Formerly Global Sunrise, Inc.)

(An Exploration Stage Company)

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE

THREE MONTHS ENDED MARCH 31, 2008 AND 2007 AND FOR THE PERIOD FROM AUGUST 11, 2005

(DATE OF INCEPTION) TO MARCH 31, 2008

	Three months Ended			Three months Ended			For the Period From August 11, 2005 (Inception) to
	March 31,			March 31,			March 31,
	2008			2007			2008

Cash Flows from Operating Activities :
Net loss for the period	$	(193,623	)	$	(16,775	)	$	(2,670,536	)
Adjustments to reconcile net income to net cash provided (used) by operating activities:
Depreciation		18			-			100
Changes in working capital balances:
Deposit		(1,500	)					(1,500	)
Prepaid expenses		(8,462	)		-			(13,930	)
Other liabilities, net of minority interest		-			-			2,197,400
Accounts payable and accrued expenses		261,959			-			297,407
Net cash provided (used) by operating activities		58,392			(16,775	)		(191,059	)

Cash Flows used in Investing Activities:
Cash acquired upon investment in subsidiary		-			-			17,452
Fixed Assets		-						(298	)
Oil and gas properties		-			-			(29,575	)
Net cash used by investing activities		-			-			(12,421	)

Cash Flows from Financing Activities:
Issuance of common stock		-			-			2
Increase in shareholder loan		3,671			16,775			202,743
Net cash provided by financing activities		3,671			16,775			202,745

Effects of exchange rates on cash		10,911			-			91,307

Increase in cash and cash equivalents		72,974			-			90,572
Cash and cash equivalents, beginning of period		17,598			-			-

Cash and cash equivalents, end of the period	$	90,572		$	0		$	90,572

Supplemental Disclosures:

The Company did not pay any interest or taxes during the above periods.

Zulu Energy Corp. & Subsidiaries

(An Exploration Stage Company)

Notes to the Unaudited Consolidated Financial Statements

For the Period from August 11, 2005 (inception) to March 31, 2008

Note 1

Significant Accounting Policies

Condensed Consolidated Financial Statements

The accompanying unaudited condensed consolidated financial statements of Zulu Energy Corp. and its subsidiaries (the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the rules and regulations for reporting on Form 10-QSB. Accordingly, they do not include certain information and disclosures required for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included and are of a normal recurring nature. Operating results for the three months ended March 31, 2008 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2008.

These statements should be read in conjunction with the consolidated financial statements and footnotes included in the Company’s Annual Report on Form 10-KSB for the year ended December 31, 2007.

Basis of Presentation

These consolidated financial statements include the accounts of Zulu Energy Corp. (“Zulu Energy”) and its wholly owned subsidiaries, Nyati Mauritius Limited (“Mauritius”), Nyati Resources Limited (“Resources”), and Nyati Resources Botswana (Proprietary) Limited (“Nyati Botswana”). Collectively, the consolidated entities are referred to herein as the (“Company”). All significant inter-company transactions have been eliminated.

Going Concern

The Company’s financial statements have been prepared on a going concern basis which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. The Company’s net loss from operations for the three months ended March 31, 2008 totaled $193,623, net working capital deficit and total stockholders’ deficit through March 31, 2008 totaled $7,978,467 and $4,950,797, respectively.

The Company’s ability to continue as a going concern will be dependent upon its ability to obtain sufficient financing to pay its existing creditors, cover its operating overhead, and fund oil and gas exploration and production projects. Other market factors such as the price of oil, gas and other natural resources upon extraction at prices sufficient to generate profitable operations may impact the Company’s ability to continue as a going concern.

The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Exploration Stage Company

The Company is in the exploration stage. The Company is in the process of acquiring oil and gas licenses and drilling rights located in Botswana, Africa. The recoverability of the cost of capitalized oil and gas properties are dependent upon the discovery of recoverable reserves, the Company’s ability to obtain the necessary funding to extract the reserves andthe sale of production at profitable market prices.

Zulu Energy Corp. & Subsidiaries

(An Exploration Stage Company)

Notes to the Unaudited Consolidated Financial Statements

For the Period from August 11, 2005 (inception) to March 31, 2008

The Company complies with Financial Accounting Standards Board Statement No.7 and SEC Guide 7 for its characterization of the Company as exploration stage.

Cash and Cash Equivalents

The Company considers all investments purchased with a maturity of three months or less to be cash equivalents.

Concentration of Credit Risk

Financial instruments which potentially subject the Company to credit risk consist principally of cash. The Company maintains its cash with a quality financial institution. The Company did not maintain a balance in excess of the FDIC insured amount of $100,000 at any time during the three months ended March 31, 2008.

Oil and Gas Activities - Successful Efforts Method of Accounting

On April 4, 2005, the FASB adopted FASB Staff Position FSP FAS 19-1 that amends Statement of Financial Accounting Standards No. 19 (FAS 19), Financial Accounting and Reporting by Oil and Gas Producing Companies, to permit the continued capitalization of exploratory well costs beyond one year if (a) the well found a sufficient quantity of reserves to justify its completion as a producing well and (b) the entity is making sufficient progress assessing the reserves and the economic and operating viability of the project.

The Company accounts for its crude oil development and natural gas development activities utilizing the successful efforts method of accounting. Under this method, costs of productive exploratory wells, development dry holes and productive wells and undeveloped leases are capitalized. Oil and gas lease acquisition costs are also capitalized. Exploration costs, including personnel costs, certain geological and geophysical expenses and daily rentals for oil and gas leases, are charged to expense as incurred. Exploratory drilling costs are initially capitalized, but charged to expense if and when the well is determined not to have found reserves in commercial quantities. The sale of a partial interest in a proved property is accounted for as a cost recovery and no gain or loss is recognized as long as this treatment does not significantly affect the unit-of-production amortization rate. A gain or loss is recognized for all other sales of producing properties.

The application of the successful efforts method of accounting requires managerial judgment to determine that proper classification of wells designated as developmental or exploratory which will ultimately determine the proper accounting treatment of the costs incurred. The results from a drilling operation can take considerable time to analyze and the determination that commercial reserves have been discovered requires both judgment and industry experience. Wells may be completed that are assumed to be productive and actually deliver oil and gas in quantities insufficient to be economic, which may result in the abandonment of the wells at a later date. Wells are drilled that have targeted geologic structures that are both developmental and exploratory in nature and an allocation of costs is required to properly account for the results. Delineation seismic incurred to select development locations within an oil and gas field is typically considered a development cost and capitalized, but often these seismic programs extend beyond the reserve area considered proved and management must estimate the portion of the seismic costs to expense. The evaluation of oil and gas leasehold acquisition costs requires managerial judgment to estimate the fair value of these costs with reference to drilling activity in a given area. Drilling activities in an area by other companies may also effectively condemn leasehold positions.

Zulu Energy Corp. & Subsidiaries

(An Exploration Stage Company)

Notes to the Unaudited Consolidated Financial Statements

For the Period from August 11, 2005 (inception) to March 31, 2008

Revenue Recognition

The Company has not earned any revenues since its inception. Oil and gas revenues will be recorded at such time as the Company has delivered and transferred title to a purchaser of its product and the price has been reasonably determined.

Asset Retirement Obligations

The Corporation recognizes the value of a liability for an asset retirement obligation in the year in which a reasonable estimate of value can be made.

Changes in the liability for an asset retirement obligation due to the passage of time will be measured by applying an interest method of allocation. The amount will be recognized as an increase in the liability and an accretion expense in the statement of operations. Changes resulting from revisions to the timing or the amount of the original estimate of undiscounted cash flows are recognized as an increase or a decrease in the carrying amount of the liability for an asset retirement obligation and the related asset retirement cost capitalized as part of the carrying amount of the related long-lived asset. As at March 31, 2008 the value of the oil and gas property’s site restoration costs is insignificant.

Environmental Costs

Environmental expenditures that relate to current operations are expensed or capitalized as appropriate. Expenditures that relate to an existing condition caused by past operations, and which do not contribute to current or future revenue generation, are expensed. Liabilities are recorded when environmental assessments and/or remedial efforts are probable, and the cost can be reasonably estimated. Generally, the timing of these accruals coincides with the earlier of completion of a feasibility study or the Company’s commitments to plan of action based on the then known facts.

Goodwill and Intangible Assets

The Company has adopted the provisions of the FAS No. 142, “Goodwill and Intangible Assets”. Under FAS No. 142, goodwill and intangible assets with indefinite lives are not amortized but are annually tested for impairment. The determination of any impairment includes a comparison of the estimated future operating cash flows anticipated during the remaining life for the net carrying value of the asset as well as a comparison of the fair value to the book value of the Company or the reporting unit to which the goodwill can be attributed.

Zulu Energy Corp. & Subsidiaries

(An Exploration Stage Company)

Notes to the Unaudited Consolidated Financial Statements

For the Period from August 11, 2005 (inception) to March 31, 2008

Stock-based Compensation

In December 2004, the Financial Accounting Standards Board issued FAS 123R “Share-Based Payment”, a revision to FAS 123. FAS 123R replaces existing requirements under FAS 123 and APB 25, and requires public companies to recognize the cost of employee services received in exchange for equity instruments, based on the grant-date fair value of those instruments, with limited exceptions. FAS 123R also affects the pattern in which compensation cost is recognized, the accounting for employee share purchase plans, and the accounting for income tax effects of share-based payment transactions. The Company adopted FAS 123R on November 1, 2006.

Income Taxes

The Company accounts for income taxes by the asset and liability method as mandated by Statement of Financial Standards Number 109. Under this method, current income taxes are recognized for the estimated income taxes payable for the current year. Future income tax assets and liabilities are recognized in the current year for temporary differences between the tax and accounting basis of assets and liabilities as well as for the benefit of losses available to be carried forward to future years for tax purposes that are likely to be realized. The Company is subject to income taxes in the Country of Mauritius.

Financial Instruments

The carrying values of cash, accounts payable and accrued liabilities and due to related parties approximate their fair value because of the short maturity of these instruments. It is management’s opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments.

Basic and Diluted Loss Per Share

The Company reports basic loss per share in accordance with the FAS No. 128, “Earnings per Share”. Basic loss per share is computed using the weighted average number of shares outstanding during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the year including stock options, using the treasury stock method. The diluted EPS computation uses the average stock price for the year to determine the number of shares assumed to be purchased from the exercise of stock options or warrants. As at March 31, 2008 the Company has sustained operating losses and, accordingly, any dilutive potential common shares would not have an anti-dilutive effect and are therefore not considered in computing diluted EPS.

Foreign Currency Translation

The accounts of the Company are translated in accordance with Statement of Financial Accounting Standard No. 52, which requires that foreign currency assets and liabilities be translated using the exchange rates in effect at the balance sheet date. Results of operations are translated using the average rates prevailing throughout the period. The effects of unrealized exchange rate fluctuations on translating foreign currency assets and liabilities into U.S. dollars are accumulated as the accumulated other comprehensive adjustment in shareholders’ equity.

Zulu Energy Corp. & Subsidiaries

(An Exploration Stage Company)

Notes to the Unaudited Consolidated Financial Statements

For the Period from August 11, 2005 (inception) to March 31, 2008

Accounting for Derivative Instruments and Hedging Activities

We have adopted SFAS No. 133 “Accounting for Derivative and Hedging Activities”, which requires companies to recognize all derivative contracts as either assets or liabilities in the balance sheet and to measure them at fair value. If certain conditions are met, a derivative may be specifically designated as a hedge, the objective of which is to match the timing of gain and loss recognition on the hedging derivative with the recognition of (i) the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk or (ii) the earnings effect of the hedged forecasted transaction. For a derivative not designated as a hedging instrument, the gain or loss is recognized in income in the period of change. We have not entered into derivative contracts either to hedge existing risks or for speculative purposes, but we plan to use derivative contracts in the future solely for hedging prices on production.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make assumptions and estimates that effect the reported amounts of assets and liabilities and the disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenue and expenses during the reporting period. Actual results may differ from those estimates.

Recent Accounting Pronouncements

In July 2006, the FASB issued Interpretation No. 48, Accounting for Uncertainty in Income Taxes-an interpretation of FASB Statement No. 109 (“FIN 48”). This interpretation clarifies the application of SFAS 109 by defining the criterion that an individual tax position must meet for any part of the benefit of that position to be recognized in an enterprise’s financial statements and also provides guidance on measurement, de-recognition, classification, interest and penalties, accounting in interim periods and disclosure. FIN 48 is effective for our fiscal year commencing November 1, 2007. The adoption of FIN 48 is not expected to have an impact on our results of operations or financial condition.

In November 2007, the FASB issued SFAS No. 141 (revised 2007), Business Combination (FAS 141(R)) and SFAS No. 160, Non-controlling Interests in Consolidated Financial Statements, an amendment of ARB No. 51 (FAS 160). FAS 141(R) will change how business acquisitions are accounted for and will impact financial statements both on the acquisition date and in subsequent periods. FAS 160 will change the accounting and reporting for minority interests, which will be re-characterized as non-controlling interests and classified as a component of equity. FAS 141(R) and FAS 160 are effective for both public and private companies for fiscal years beginning on or after December 15, 2008 (fiscal 2010 for the Company). FAS 141(R) will be applied prospectively. FAS160 requires retroactive adoption of the presentation and disclosure requirements for existing minority interests. All other requirements of FAS 160 will be applied prospectively. Early adoption is prohibited for both standards. Management is currently evaluating the requirements of FAS 141(R) and FAS 160 and has not yet determined the impact on its financial statements.

In December, 2007 the FASB issued FSAS No.157, Fair Value Measurements. This Statement does not require any new fair value measurements, but rather, it provides enhanced guidance to other pronouncements that require or permit assets or liabilities to be measured at fair value. However, the application of this Statement may change how fair value is determined. The Statement is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. As of December 1, 2007 the FASB has proposed a one-year deferral for the implementation of the Statement for nonfinancial assets and nonfinancial liabilities that are recognized or disclosed at fair value in the financial statements on a nonrecurring basis. Management is currently evaluating the requirements of FAS 157 and has not yet determined the impact on its financial statements.

Zulu Energy Corp. & Subsidiaries

(An Exploration Stage Company)

Notes to the Unaudited Consolidated Financial Statements

For the Period from August 11, 2005 (inception) to March 31, 2008

In December, 2007 the FASB issued FSAS No.159, The Fair Value Option for Financial Assets and Financial Liabilities - Including an amendment of FASB Statement No. 115 . This Statement provides all entities with an option to report selected financial assets and liabilities at fair value. The Statement is effective as of the beginning of an entity’s first fiscal year beginning after November 15, 2007, with early adoption available in certain circumstances. Management is currently evaluating the requirements of FAS 159 and has not yet determined the impact on its financial statements.

Note 2

Nature and Continuance of Operations

Zulu Energy Corp.

Zulu Energy Corp. (“Zulu Energy”) was incorporated under the laws of the State of Colorado on May 6, 2005 under the name of Global Sunrise, Inc. On January 16, 2007 Zulu Energy changed its name to Zulu Energy Corp. Prior to the share exchange agreement dated December 20, 2007, as more fully explained below, Zulu Energy utilized a June 30 fiscal year-end. Zulu Energy changed its year-end to December 31 as a result of the merger with Nyati Mauritius Limited (Mauritius). The focus of Zulu Energy’s business plan is the acquisition of oil and gas properties and leasing rights and their exploration, development and production.

Effective December 20, 2007, Zulu Energy acquired 100% of the outstanding common stock of Mauritius (including the subsidiary of Mauritius named Resources) in exchange for 30,000,000 common shares of Zulu Energy. Zulu Energy’s acquisition of Mauritius (an operating company) and its subsidiary has been recorded as a recapitalization of Zulu Energy because Zulu Energy was a “shell” company, accordingly, Mauritius is deemed to be the accounting acquirer. The 30,000,000 common shares issued have been recorded as if issued by Mauritius for the net monetary assets of Zulu Energy. The statement of stockholder’s deficit reflects the accumulated deficit of Mauritius from its inception and that of Zulu Energy from December 21, 2007 through March 31, 2008 and has been restated to reflect the 10 to 1 forward stock split of January 8, 2007 (see below) as if it had occurred at inception. The prior year comparative financial statements presented are those of Mauritius and its subsidiary.

Nyati Mauritius Limited

The Company was incorporated under the laws of the country of Mauritius on August 11, 2005 as Nyati Mauritius Limited.

The Company’s share capital is comprised of authorized common stock of 50,000 shares at $1 par value. The common shareholders have a right to one vote per share held.

Zulu Energy Corp. & Subsidiaries

(An Exploration Stage Company)

Notes to the Unaudited Consolidated Financial Statements

For the Period from August 11, 2005 (inception) to March 31, 2008

At inception, the company issued 2 shares at $1 par value to the subscribers of the company.

Nyati Resources Limited acquired a controlling stake (90%) in a company called Nyati Resources Botswana (Proprietary) Limited (“Nyati Botswana”), when 90 shares of Nyati Botswana were issued to Nyati Resources on February 14, 2007 at par value i.e. Pula 1 per share. Nyati Botswana is an oil and gas (exploration stage) company. As on this date, the other 10% shares of Nyati Botswana were held by Swansi Holdings Corp.

On March 2, 2007 Swansi Holdings Corp. had entered into a call options agreement to buy 40 shares of Nyati Botswana from Nyati Resources Limited at $1 per share. On June 6, 2007 Nyati Resources Limited sold 40 shares of Nyati Botswana to Swansi Holdings Corp. pursuant to their exercising the call options agreement mentioned above, thus reducing the ownership of Nyati Resources Limited in Nyati Botswana from 90% to 50%. As of December 31, 2007 the Company’s shareholding in Nyati Botswana was 50%. Prior to the December 20, 2007 share exchange agreement referred to below, the remaining 50% stock ownership interest in Nyati Botswana was held by Swansi Holdings Corp.

The Company issued 98 shares to its holding company LMA Hughes, LLP on July 2, 2007 at par value, thus bringing the total shares issued and outstanding of the Company to 100 shares. All shares of the Company were acquired by Zulu Energy on December 20, 2007.

Entry into a Material Definitive Agreement

On December 20, 2007, Zulu Energy entered into a Share Exchange Agreement and Plan of Reorganization (the “Exchange Agreement”), dated as of December 19, 2007, with Nyati Mauritius Limited (“Nyati Mauritius”) and LMA Hughes LLLP (“LMA Hughes”). Nyati Mauritius is the parent entity of Nyati Resources Limited, which holds 50% of the issued and outstanding capital stock of Nyati Resources Botswana (Proprietary) Limited (“Nyati Botswana”), which holds certain exploration licenses issued by the government of the Republic of Botswana. On December 20, 2007, Zulu Energy also entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”), dated as of December 19, 2007, with Swansi Holdings Corp. (“Swansi”) to acquire the remaining 50% of the issued and outstanding common stock of Nyati Botswana. The transactions contemplated by the Exchange Agreement and the Stock Purchase agreement were consummated and all closing conditions were met on December 20, 2007. As a result of the transactions contemplated by the Exchange Agreement and Stock Purchase Agreement, Nyati Mauritius and Nyati Botswana became the wholly-owned subsidiaries of Zulu Energy Corp.

Pursuant to the terms of the Exchange Agreement, Zulu Energy Corp. issued 30,000,000 shares of its common stock to LMA Hughes, which was the sole shareholder of Nyati Mauritius prior to the closing, in exchange for all of the issued and outstanding shares of common stock of Nyati Mauritius. As a result of the foregoing issuance, LMA Hughes became the largest shareholder of Zulu Energy. Zulu Energy also granted LMA Hughes a 10% over-riding royalty interest in any properties that the Companies acquire from LMA Hughes in the future and the Company agreed to reimburse LMA Hughes for certain expenses it incurred as part of this transaction.

Pursuant to the terms of the Stock Purchase Agreement, the Company is obligated to pay Swansi $3 million in the aggregate in two tranches of $1.5 million each. The first tranche is payable within thirty business days of the December 20, 2007 closing date and the second tranche is payable nine months following the closing date. The initial tranche period expired without the payment of the $1.5 million term amount. On March 26, 2008, Swansi transferred their 50% interest in Nyati Botswana to the Company. Upon the completion of a private placement and payment to Swansi of the initial $1.5 million tranche, the Company is obligated to issue to Swansi 15,000,000 common stock warrants expiring five years from issuance at an exercise price of $1.50 per share.

Zulu Energy Corp. & Subsidiaries

(An Exploration Stage Company)

Notes to the Unaudited Consolidated Financial Statements

For the Period from August 11, 2005 (inception) to March 31, 2008

The issuances of the common stock to LMA Hughes was made pursuant to Rule 506 of Regulation D and Section 4(2) of the Securities Act of 1933, as amended, as, among other things, each transaction did not involve a public offering, the investor was an accredited investor, the investor had access to information about the company and their investment, the investor took the securities for investment and not resale, and the Company took appropriate measures to restrict the transfer of the common stock.

Note 3

Common Stock

The Company issued 600,000 shares of its common stock on August 11, 2005 to its founders for $2.

The Company issued 29,400,000 shares of its common stock on July 2, 2007 for a subscription receivable of $98.

The Company issued 52,000,000 shares of its common stock on December 20, 2007 for the net monetary assets of Zulu Energy.

On January 8, 2007, the Board of Directors of the Company authorized a ten to one (10 - 1) forward split of the Company’s issued and outstanding shares of common stock.

Note 4

Fixed Assets

All fixed assets are recorded at cost. Depreciation is provided for using the straight-line method as follows:

	March 31,						December 31,
	2008						2007
			Accumulated
Asset Class	Cost		Depreciation		Net		Net
Property, Plant & Equipment	$	298	$	100	$	198	$	216

Total	$	298	$	100	$	198	$	216

Estimate for the life of property, plant and equipment is 10 years and a 10% rate of depreciation is assumed fair.

Zulu Energy Corp. & Subsidiaries

(An Exploration Stage Company)

Notes to the Unaudited Consolidated Financial Statements

For the Period from August 11, 2005 (inception) to March 31, 2008

Note 5

Oil and Gas Properties

The Company has acquired nine leases in unproved oil and gas properties located in Botswana. Under the terms of the lease agreements the Company is required to pay its share of royalties and other obligations. The Company paid $7,579 and $7,996 for the lease years ended September 30, 2007 and 2006, respectively to the Government of Botswana under such lease agreements. Such leases expire in September 30, 2008. There is no assurance that the leases will be extended by the government.

Pursuant to such contracts, as at March 31, 2008 the Company was obligated to pay $5,684 to maintain the leases. This amount does not contemplate funds required for exploration.

Pursuant to the lease agreements the Company was required to expend the following amounts during the lease period:

Lease Period Ended	Description		Amount in Pulas
9/30/06		Study of Data, Bore hole to 300m and complete a desorption study for 6 months		1,150,000
9/30/07		Data interpretation, Permeability study, Drill production Bore hole, Test CBM produced		2,000,000
9/30/08		Full feasibility Study, Production and marketing Study		3,000,000

As of March 31, 2008 the Company has not expended the amounts required during the lease periods. Amounts that were to be spent on exploration are due to the government by Botswana law. As of March 31, 2008 and based on Botswana law, management is of the opinion that the Company will not be able to renew 50% of the lease acreage and, accordingly, the financial statements reflect a liability of $4,237,043 (P 27,675,000 converted at $.1531) to the government of Botswana representing the aggregate minimum required prospecting expenditures over the three year lease term. The Company plans to accelerate the exploration activity on the properties and is of the opinion that such activity will be sufficient to enable the renewal of the remaining 50%. There is no assurance that the government will renew any of the leases.

The company has capitalized $27,472 spent since inception exploration activities as oil and gas properties.

In addition to the over-riding royalty interests granted by Nyati Botswana disclosed in Note 6 below, in February 2007 Nyati Botswana granted a 2.5% over-riding royalty interest to Paul Tromp in the oil and gas properties it has leased from the government of Botswana.

Note 6

Related Party Transactions

Amounts due to related parties consist of loan in the amount of $255,754 from LMA Hughes, which is an affiliate of a shareholder of the company. As of March 31, 2008 these loans remain payable to LMA Hughes, and are unsecured, non-interest bearing and without specific terms for repayment.

Zulu Energy Corp. & Subsidiaries

(An Exploration Stage Company)

Notes to the Unaudited Consolidated Financial Statements

For the Period from August 11, 2005 (inception) to March 31, 2008

Pursuant to the Exchange Agreement described in Note 2 above, the Zulu Energy is obligated to reimburse LMA Hughes for its expenses incurred as part of the transactions contemplated by the Exchange Agreement up to $250,000. Pursuant to the Exchange Agreement, Zulu Energy granted LMA Hughes a 10% over-riding royalty interest in any properties that the Companies acquire from LMA Hughes in the future.

In July 2007, Nyati Botswana granted a 6.5% over-riding royalty interest to LMA Hughes in the oil & gas properties it has leased from the government of Botswana further described in Note 5 above. In February 2007, Nyati Botswana granted a 1% over-riding royalty interest to Tafilani Machacha, who is a member of the board of directors of Nyati Botswana, in the oil & gas properties it has leased from the government of Botswana further described in Note 5 above.

Note 7

Accounts Payable

Accounts payable includes $450,000 of working capital advanced to the company by First Capital Investment Corp., which is unsecured and without specific terms of repayment.

Note 8

Stock-based Compensation

We have adopted SFAS No. 123 “Accounting for Stock Based Compensation” as amended by SFAS No. 148 "Accounting for Stock-based Compensation - Transition and Disclosure”. We recognize stock-based compensation expense using a fair value based method. We do not have a qualified stock option plan in place as of the reporting date.

On September 24, 2007, the Company granted 3,000,000 stock options exercisable at $1.81 until September 24, 2012. All these options were fully vested vest on the date of the grant. These options were subsequently cancelled in April 2008 in conjunction with execution of a new employment agreement with Mr. Stroud as more fully described below under “Subsequent Events”.

The fair value of these share purchase options was determined using the Company’s historical stock prices and the Black-Scholes option-pricing model with the following assumptions:

Risk free rate	3.875%
Dividend yield	0%
Weighted average expected volatility	90%
Weighted average expected option life	5 yrs
Weighted average fair value of options	$ 1.292
Total options outstanding	3,000,000
Total fair value of options outstanding	$ 3,876,000

These options were granted by the legal parent who is the accounting acquiree for financial reporting purposes. Accordingly, due to the vesting of the stock options prior to the December 20, 2007 stock exchange agreement the year 2007 statement of operations did not reflect the effect of this transaction.

Zulu Energy Corp. & Subsidiaries

(An Exploration Stage Company)

Notes to the Unaudited Consolidated Financial Statements

For the Period from August 11, 2005 (inception) to March 31, 2008

Note 9

Accrued Expenses

Accrued salary payable to the employees of the Company for $35,000 has been recorded as accrued expenses as on March 31, 2008.

Note 10

Commitments and Contingencies

The Company is obligated to spend Pula (“P”) 6,150,000 or approximately $942,000 US as of March 31, 2008 per lease over the term of the lease (three years). If such expenditures do not occur then such amounts are payable to the government of Botswana. The total expenditure committed as of March 31, 2008 is approximately $8,500,000 US for nine leases. The Company believes that it will be able to perform sufficient work on the leaseholds so that the maximum amount it will owe the government is 50% of the $8,500,000 as of March 31, 2008.

Note 12

Subsequent Events

Private Placement

On May 7, 2008, Zulu Energy sold 8,000,000 shares of its common stock, together with warrants to purchase up to 8,000,000 shares of common stock, to certain investors in a private placement, also referred to as the Offering. Zulu Energy received $8,000,000 in aggregate gross proceeds in the Offering. The warrants have an exercise price of $1.50 per share and are exercisable for 3 years. The warrants are not exercisable until such time as Zulu Energy's shareholders approve an amendment to Zulu Energy's articles of incorporation to increase Zulu Energy's authorized shares of common stock.

Pursuant to the Subscription Agreements entered into as part of the Offering, in the event Zulu Energy, in a subsequent financing, sells any of its equity securities and receives gross proceeds of $5,000,000 or more within 120 days following the closing of the Offering, the investors in the Offering have the right for 30 days following notice by Zulu Energy to them of the subsequent financing to participate in and receive the same terms as the investors in the subsequent financing. If an investor in the Offering elects to participate in the subsequent financing, (i) the subscription funds provided to Zulu Energy as part of the Offering will be allocated to the purchase price or purchase consideration, as applicable, for the securities offered in the subsequent financing, (ii) the investor will surrender to Zulu Energy for cancellation the stock certificates representing the shares of common stock and the warrant received in the Offering, and (iii) the investor will enter into the operative documents prepared in conjunction with the subsequent financing.

Pursuant to the Swansi Stock Purchase Agreement, on May 7, 2008 we issued to Swansi Holdings Corp. a warrant to acquire 15,000,000 shares of our common stock at an exercise price of $1.50 per share, which is exercisable for a period of 5 years. The warrant is not exercisable until such time as Zulu Energy's shareholders approve an amendment in Zulu Energy's articles of incorporation to increase Zulu Energy's authorized shares of common stock. The issuance of the warrant described in this paragraph is exempt from registration under the Securities Act of 1933 pursuant to Section 4(2) and Rule 506 of Regulation D premulgated thereunder. An accredited investor received the warrant and Zulu Energy did not engage in any general solicitation or advertising to market the warrant.

Zulu Energy Corp. & Subsidiaries

(An Exploration Stage Company)

Notes to the Unaudited Consolidated Financial Statements

For the Period from August 11, 2005 (inception) to March 31, 2008

In conjunction with the Offering, the Company issued a 3 year warrant to exercise 800,000 shares of common stock at $1.50 as a placement fee for the Offering.

Employment Agreement with Mr. Paul Stroud

On April 15, 2008, Zulu Energy’s Board of Directors approved an employment agreement with Paul Stroud, Zulu Energy's Chief Executive Officer, to be effective March 1, 2008 that supersedes and replaces the employment agreement entered into between Zulu Energy and Mr. Stroud on September 24, 2007.

Under Mr. Stroud's new employment agreement, Mr. Stroud will receive an annual salary based on certain financings achieved by Zulu Energy. If Zulu Energy consummates a financing less than $5 million, he will receive an annual salary of $180,000. If Zulu Energy consummates a financing between $5 million and $10 million, Mr. Stroud's annual salary will be $240,000. If Zulu Energy consummates a financing in excess of $10 million, Mr. Stroud's annual salary will be $300,000. Mr. Stroud will receive a signing bonus of $100,000 following the consummation by Zulu Energy of a $5 million financing. Mr. Stroud is also eligible to receive an annual bonus at the discretion of the Board. Mr. Stroud was also granted stock options to purchase 1,500,000 shares of common stock with an exercise price of $1.00 per share. Mr. Stroud may exchange these stock options for incentive stock options following the implementation of a stock option plan by Zulu Energy. Pursuant to his employment agreement, the Board also approved the grant to Mr. Stroud of 2,000,000 shares of common stock and subsequently approved a grant of 50,000 shares of restricted stock that are be subject to restrictions outlined in a restricted stock agreement and will vest as follows: 820,000 shares (40%) on January 1, 2009 so long as Mr. Stroud still is in service with the Company and the Company has successfully drilled three stratigraphic test wells before that date; 615,000 shares (30%) on January 1, 2010 so long as Mr. Stroud still is in service with the Company and the Company shall have successfully located and tested a potentially viable hydrocarbon reservoir prior to that date and the remaining 615,000 shares (30%) on January 1, 2011 so long as Mr. Stroud still is in service with the Company. In addition, Mr. Stroud is entitled to the coverage or benefits under any and all employee benefits plans maintained by Zulu Energy.

Employment Agreement with Mr. James Hostetler

On April 15, 2008, the Board appointed James Hostetler as Executive Vice President of Zulu Energy and approved an employment agreement with Mr. Hostetler, to be effective March 1, 2008. Under Mr. Hostetler's employment agreement, he will receive an annual salary equal to $180,000. Mr. Hostetler is also eligible to receive an annual bonus at the discretion of the Board. Mr. Hostetler was also granted stock options to purchase 1,500,000 shares of common stock with an exercise price of $1.00 per share. Mr. Hostetler may exchange these stock options for incentive stock options following the implementation of a stock option plan by Zulu Energy. Pursuant to his employment agreement, the Board also approved the grant to Mr. Hostetler of 1,900,000 shares of common stock that are be subject to restrictions outlined in a restricted stock agreement and will vest as follows: 760,000 shares (40%) on January 1, 2009 so long as Mr. Hostetler still is in service with the Company and the Company has successfully drilled three stratigraphic test wells before that date; 570,000 shares (30%) on January 1, 2010 so long as Mr. Hostetler still is in service with the Company and the Company shall have successfully located and tested a potentially viable hydrocarbon reservoir prior to that date and the remaining 570,000 shares (30%) on January 1, 2011 so long as Mr. Hostetler still is in service with the Company. In addition, Mr. Hostetler is entitled to the coverage or benefits under any and all employee benefits plans maintained by Zulu Energy.

Zulu Energy Corp. & Subsidiaries

(An Exploration Stage Company)

Notes to the Unaudited Consolidated Financial Statements

For the Period from August 11, 2005 (inception) to March 31, 2008

Employment Agreement with Mr. Keith Reeves

On April 15, 2008, the Board appointed Keith Reeves as Vice President, Exploration of Zulu Energy and approved an employment agreement with Mr. Reeves, to be effective March 1, 2008. Under Mr. Reeves's employment agreement, he will receive an annual salary based on certain financings achieved by Zulu Energy. If Zulu Energy consummates a financing less than $5 million, Mr. Reeves will receive an annual salary of $180,000. If Zulu Energy consummates a financing between $5 million and $10 million, Mr. Reeves' annual salary will be $240,000. If Zulu Energy consummates a financing in excess of $10 million, Mr. Reeves' annual salary will be $300,000. Mr. Reeves will receive a signing bonus of $100,000 following the consummation by Zulu Energy of a $5 million financing. Mr. Reeves is also eligible to receive an annual bonus at the discretion of the Board. Mr. Reeves was also granted stock options to purchase 1,500,000 shares of common stock with an exercise price of $1.00 per share. Mr. Reeves may exchange these stock options for incentive stock options following the implementation of a stock option plan by Zulu Energy. Pursuant to his employment agreement, the Board also approved the grant to Mr. Reeves of 2,050,000 shares of common stock that that are be subject to restrictions outlined in a restricted stock agreement and will vest as follows: 820,000 shares (40%) on January 1, 2009 so long as Mr. Reeves still is in service with the Company and the Company has successfully drilled three stratigraphic test wells before that date; 615,000 shares (30%) on January 1, 2010 so long as Mr. Reeves still is in service with the Company and the Company shall have successfully located and tested a potentially viable hydrocarbon reservoir prior to that date and the remaining 615,000 shares (30%) on January 1, 2011 so long as Mr. Reeves still is in service with the Company. In addition, Mr. Reeves is entitled to the coverage or benefits under any and all employee benefits plans maintained by Zulu Energy.

Termination

Under each of the foregoing employment agreements, each of Messrs. Stroud, Hostetler and Reeves may terminate their employment agreements with the Company upon thirty days’ notice. Upon such termination any unvested common stock or options to purchase common stock become immediately vested. The foregoing employees are also eligible to receive twelve months severance, full vesting of any unvested options or stock and registration of any shares of common stock (if such shares have not been previously registered) granted under their respective employment agreement in the event the employee is terminated without cause. Additionally, any stock options held by the employee will be exercisable for three additional years following termination without cause. Each employment agreement also contains a restrictive covenant.

Employment Agreement with Mr. Satyen Deshpande

On May 14, 2008, Zulu Energy entered into an employment agreement with Satyendra Deshpande, Zulu Energy’s then Chief Financial Officer and then member of the Board of Directors. Mr. Desphande subsequently resigned as Zulu Energy’s Chief Financial Officer, Secretary, Treasurer and member of the Board on Friday, May 16, 2008.

Under Mr. Deshpande’s employment agreement, Mr. Desphande was to receive an annual salary of $150,000 per annum. Pursuant to the terms of the employment agreement, Mr. Deshpande was granted a stock option to purchase 1,000,000 shares of common stock with an exercise price of $1.00 per share pursuant to Zulu Energy’s 2008 Equity Incentive Plan. The options vest as follows: 500,000 shares on the date of grant; and 500,000 shares on January 1, 2009; provided, however, that no options may be exercised until Zulu Energy’s stockholders approve an increase in Zulu Energy’s authorized shares of common stock to at least 150,000,000 shares. As a result of Mr. Deshpande’s resignation from Zulu Energy, the unvested options terminated.

During his period of employment, Mr. Desphande was entitled to the coverage or benefits under any and all employee benefits plans maintained by Zulu Energy.

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with the consolidated financial statements and related notes included elsewhere in this Report on Form 10-Q. This discussion contains forward-looking statements reflecting our current expectations and estimates and assumptions concerning events and financial trends that may affect our future operating results or financial position. Actual results and the timing of events may differ materially from those contained in these forward-looking statements due to a number of factors, including those discussed in the section entitled “Forward-Looking Statements” set forth above.

We are a development stage independent oil and gas company focused on the exploration and development of oil and gas resources. We were incorporated on May 6, 2005. In December 2007, we acquired nine Prospecting Licenses for the exploration of coal bed methane in the Republic of Botswana in Southern Africa through our acquisition of Nyati Resources Botswana (Proprietary) Limited, which is more fully described in our Annual Report on Form 10-KSB, as amended, filed with the Securities and Exchange Commission on May 15, 2008 in “Description of Business.” Our business plan is focused on discovery and production of substantial commercial quantities of coalbed methane in the Pandamatenga area of Northeastern Botswana.

Paul Stroud is our Chief Executive Officer. He has worked in the energy industry for over 30 years including as an employee for Royal Dutch Shell and UNOCAL and as an independent consulting engineer. Mr. Stroud has been involved in the acquisition of leases, exploration and production. He has substantial experience with coalbed methane and is in the process of assembling our development and management team.

Our Prospecting Licenses allow us to explore for coalbed methane on approximately 2.2 million acres of land in the Pandamatenga area located in the northeast region of the Republic of Botswana on the southern African continent. We have previously granted overriding royalty interests in the land that is subject to the Prospecting Licenses equal to 10% in the aggregate.

Our goal is to discover and produce substantial commercial quantities of coalbed methane on the property under our Prospecting Licenses. No assurance can be given that commercial quantities of coalbed methane will be produced, if at all. The execution of our business plan will require additional capital which we do not now have on hand. The availability for such funding is also not assured.

Our business plan involves three phases. During the first phase we plan to drill approximately nine exploration wells to confirm the coal deposit, identify the absorption rates and gas content of the coal and identify production pilot locations. We anticipate that this initial exploration phase will last approximately six months. We plan to begin test drilling and initiate this first phase as soon as practicable after we have received funding. We expect that approximately $7 million of capital will be necessary for the first phase. Assuming we are successful in locating coalbed methane and raising the required capital, the second phase will likely involve the drilling of approximately 16 production test wells with the intent of demonstrating production and commercial viability or commercial volumes of coalbed methane. This phase will also likely include the dewatering of the coal and gas production and is expected to last approximately six months. The third phase will likely involve adding more wells to the pilot wells drilled in the second phase, expand our then existing well footprint and increase production. We anticipate that phase three will last approximately nine months. Costs for the second and third phase are estimated at $20 million. The initiation and completion of each of the three contemplated phases will require us to raise sufficient capital. As further described below, on May 7, 2008, we raised $8 million in a private placement of shares of our common stock. At this time we have no commitments or agreements for the raising of capital.

If we conclude, based on our exploration and testing, that commercial quantities of coalbed methane can be extracted from the area to which we hold licenses we will need substantially more capital to construct required infrastructure to distribute the methane or otherwise bring the methane to market. Such financings could lie with development banks that are focused on this part of Southern Africa, including the United States Trade & Development Agency and the World Bank, or large institutional investors, but we have no commitments or arrangements in place for these financings.

Our current cash position is not sufficient to fund our cash requirements during the next twelve months, including operations and capital expenditures. We intend to seek equity and/or debt financing to support our proposed coalbed methane operations and capital expenditures. We cannot assure that continued funding will be available or available on terms acceptable to us.

Our future financial results will depend primarily on (1) our ability to discover and produce commercial quantities of coalbed methane; (2) the market price for oil and gas; and (3) our ability to fully implement our exploration and development program with respect to these and other matters. We cannot assure that we will be successful in any of these activities or that the prices of oil and gas prevailing at the time of production will be at a level allowing for profitable production.

We have not entered into commodity swap arrangements or hedging transactions. Although we have no current plans to do so, we may enter into commodity swap and/or hedging transactions in the future in conjunction with oil and gas production.

As of March 31, 2008, we had $90,572 in available cash. As of March 31, 2008, we had $591,672 in accrued expenses and accounts payables. On March 31, 2008, we had $27,472 in capitalized oil and gas properties as expenses incurred towards exploration activities since inception. We did not have any accounts payables or capitalized oil and gas properties on March 31, 2007. Investment in fixed assets during the quarter ended March 31, 2008 stood at $298 as compared to $0 during the quarter ended March 31, 2007.

We intend to seek joint ventures and/or to obtain equity and/or debt financing to support our current and proposed operations and capital expenditures. We cannot assure that any such funding will be available. The included financial statements do not include any adjustments to the amount and classification of assets and liabilities that may be necessary should we be unable to continue as a going concern.

Required Expenditures Concerning our Oil & Gas Properties

We own nine Prospecting Licenses or leases in unproved oil and gas properties located in the Republic of Botswana. Under the terms of the lease agreements we are required to pay its share of royalties and other obligations. We paid $7,579 and $7,996 for the lease years ended September 30, 2007 and 2006, respectively to the Government of Botswana under such lease agreements. Our leases expire in September 30, 2008 and there is no assurance that the leases will be extended by the government.

Pursuant to the terms of the leases, as of March 31, 2008 we were obligated to pay the government of Botswana $5,684 to maintain the leases. This amount does not contemplate funds required for exploration.

Under the leases we were required to expend the following amounts during the respective lease period reflected below:

Lease Period Ended	Description		Amount in Pulas
9/30/06		Study of Data, Bore hole to 300m and complete a desorption study for 6 months		1,150,000
9/30/07		Data interpretation, Permeability study, Drill production Bore hole, Test CBM produced		2,000,000
9/30/08		Full feasibility Study, Production and marketing Study		3,000,000

As of March 31, 2008, we had not expended the amounts required during the lease periods. Amounts that were to be spent on exploration are due to the government by Botswana law. As of March 31, 2008 and based on Botswana law, management is of the opinion that we will not be able to renew 50% of the lease acreage and, accordingly, the financial statements reflect a liability of $4,561,393 (P 27,675,000 converted at $.16482) to the government of Botswana representing the aggregate minimum required prospecting expenditures over the three year lease term. We plan to accelerate the exploration activity on the properties and management is of the opinion that such activity will be sufficient to enable the renewal of the remaining 50%. There is, however, no assurance that the government will renew any of the leases.

On May 7, 2008, we sold 8,000,000 shares of our common stock, together with warrants to purchase up to 8,000,000 shares of common stock, to certain investors in a private placement, also referred to as the Offering. We received $8,000,000 in aggregate gross proceeds in the Offering. The warrants have an exercise price of $1.50 per share and are exercisable for 3 years. The warrants are not exercisable until such time as our shareholders approve an amendment to our articles of incorporation to increase our authorized shares of common stock.

Pursuant to the Subscription Agreements entered into as part of the Offering, in the event we, in a subsequent financing, sell any of its equity securities and receives gross proceeds of $5,000,000 or more within 120 days following the closing of the Offering, the investors in the Offering have the right for 30 days following notice by us to them of the subsequent financing to participate in and receive the same terms as the investors in the subsequent financing. If an investor in the Offering elects to participate in the subsequent financing, (i) the subscription funds provided to us as part of the Offering will be allocated to the purchase price or purchase consideration, as applicable, for the securities offered in the subsequent financing, (ii) the investor will surrender to us for cancellation the stock certificates representing the shares of common stock and the warrant received in the Offering, and (iii) the investor will enter into the operative documents prepared in conjunction with the subsequent financing.

We will require additional financing in order to complete our stated plan of operations for the next twelve months. We estimate that we will need approximately $20,000,000 to $25,000,000 for working capital and to carry out our intended objectives in Botswana during the next twelve months. There can be no assurance, however, that such financing will be available or, if it is available, that we will be able to structure such financing on terms acceptable to us and that it will be sufficient to fund our cash requirements until we can reach a level of profitable operations and positive cash flows. If we are unable to obtain the financing necessary to support our operations, we may be unable to continue as a going concern. We currently have no firm commitments for any additional capital.

The trading price of our shares of common stock and the downturn in the United States stock and debt markets could make it more difficult to obtain financing through the issuance of equity or debt securities. Even if we are able to raise the funds required, it is possible that we could incur unexpected costs and expenses, fail to collect significant amounts owed to us, or experience unexpected cash requirements that would force us to seek alternative financing. Further, if we issue additional equity or debt securities, stockholders may experience additional dilution or the new equity securities may have rights, preferences or privileges senior to those of existing holders of our shares of common stock. If additional financing is not available or is not available on acceptable terms, we will have to curtail our operations.

Revenues . For the quarterly period ended March 31, 2008 and March 31, 2007 there were no revenues from operating or any other activities.

Operating Expenses . As of March 31, 2008 and based on Botswana law, management is of the opinion that the Company will not be able to renew 50% of the lease acreage and, accordingly, the financial statements reflect a liability of $4,237,043 (Pula 27,675,000 converted at $.1531) to the government of Botswana representing the aggregate minimum required prospecting expenditures over the three year lease term. The Company plans to accelerate the exploration activity on the properties and is of the opinion that such activity will be sufficient to enable the renewal of the remaining 50%. There is no assurance that the government will renew any of the leases.

For the three months ended March 31, 2008, operating expenses of $193,623 consisted primarily of general and administrative expenses. For the three months ended March 31, 2007, operating expenses of $16,775 consisted of general and administrative expenses.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Summary of Significant Accounting Policies

Basis of Presentation

The consolidated financial statements include the accounts of Zulu Energy and its wholly owned subsidiaries, Nyati Mauritius Limited (“Mauritius”), Nyati Resources Limited (“Resources”), and Nyati Botswana (“Proprietary”) Limited (Botswana). Collectively, the consolidated entities are referred to herein as the “Company”. All significant inter-company transactions have been eliminated.

The Company’s financial statements have been prepared on a going concern basis which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. The Company’s net loss for the year ended December 31, 2007 totaled $2,365,412 and accumulated losses through December 31, 2007 totaled $4,760,510. As of December 31, 2007 the Company’s working capital deficiency totaled $8,120,123 and its shareholder deficit totaled $5,090,332. The net loss for the quarter ended March 31, 2008 was $193,623. These factors raise substantial doubt the Company’s ability to continue as a going concern.

The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Exploration Stage Company

The Company is in the exploration stage. In December 2008, the Company acquired oil and gas licenses and drilling rights located in Botswana, Africa. The recoverability of the cost of capitalized oil and gas properties are dependent upon the discovery of recoverable reserves, the Company’s ability to obtain the necessary funding to extract the reserves and the sale of production at profitable market prices.

The Company complies with Financial Accounting Standards Board Statement No.7 and SEC Guide 7 for its characterization of the Company as exploration stage.

Cash and Cash Equivalents

The Company considers all investments purchased with a maturity of three months or less to be cash equivalents.

Concentration of Credit Risk

Oil and Gas Activities - Successful Efforts Method of Accounting

Asset Retirement Obligations

The Corporation recognizes the value of a liability for an asset retirement obligation in the year in which a reasonable estimate of value can be made.

Changes in the liability for an asset retirement obligation due to the passage of time will be measured by applying an interest method of allocation. The amount will be recognized as an increase in the liability and an accretion expense in the statement of operations. Changes resulting from revisions to the timing or the amount of the original estimate of undiscounted cash flows are recognized as an increase or a decrease in the carrying amount of the liability for an asset retirement obligation and the related asset retirement cost capitalized as part of the carrying amount of the related long-lived asset. As at December 31, 2007 the value of the oil and gas property’s site restoration costs is insignificant.

Goodwill and Intangible Assets

Stock-based Compensation

Financial Instruments

Basic and Diluted Loss Per Share

The Company reports basic loss per share in accordance with the FAS No. 128, “Earnings per Share”. Basic loss per share is computed using the weighted average number of shares outstanding during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the year including stock options, using the treasury stock method. The diluted EPS computation uses the average stock price for the year to determine the number of shares assumed to be purchased from the exercise of stock options or warrants. As at March 31, 2008 the Company has sustained operating losses and, accordingly, any dilutive potential common shares would have an anti-dilutive effect and are therefore not considered in computing diluted EPS.

Foreign Currency Translation

Recent Accounting Pronouncements

In November 2007, the FASB issued SFAS No. 141 (revised 2007), Business Combination (FAS 141(R)) and SFAS No. 160, Non-controlling Interests in Consolidated Financial Statements, an amendment of ARB No. 51 (FAS 160). FAS 141(R) will change how business acquisitions are accounted for and will impact financial statements both on the acquisition date and in subsequent periods. FAS 160 will change the accounting and reporting for minority interests, which will be recharacterized as non-controlling interests and classified as a component of equity. FAS 141(R) and FAS 160 are effective for both public and private companies for fiscal years beginning on or after December 15, 2008 (fiscal 2010 for the Company). FAS 141(R) will be applied prospectively. FAS 160 requires retroactive adoption of the presentation and disclosure requirements for existing minority interests. All other requirements of FAS 160 will be applied prospectively. Early adoption is prohibited for both standards. Management is currently evaluating the requirements of FAS 141(R) and FAS 160 and has not yet determined the impact on its financial statements.

In December 2007, the FASB issued FSAS No.157, Fair Value Measurements. This Statement does not require any new fair value measurements, but rather, it provides enhanced guidance to other pronouncements that require or permit assets or liabilities to be measured at fair value. However, the application of this Statement may change how fair value is determined. The Statement is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. As of December 1, 2007 the FASB has proposed a one-year deferral for the implementation of the Statement for nonfinancial assets and nonfinancial liabilities that are recognized or disclosed at fair value in the financial statements on a nonrecurring basis. Management is currently evaluating the requirements of FAS 157 and has not yet determined the impact on its financial statements.

In December 2007, the FASB issued FSAS No.159, The Fair Value Option for Financial Assets and Financial Liabilities - Including an amendment of FASB Statement No. 115 . This Statement provides all entities with an option to report selected financial assets and liabilities at fair value. The Statement is effective as of the beginning of an entity’s first fiscal year beginning after November 15, 2007, with early adoption available in certain circumstances. Management is currently evaluating the requirements of FAS 159 and has not yet determined the impact on its financial statements.

Item 4T.

CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) and pursuant to Rules 13a-15(b) and 15d-15(b) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as of March 31, 2008. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Based on our evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures are designed at a reasonable assurance level and were fully effective as of March 31, 2008 in providing reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in internal control over financial reporting.

We regularly review our system of internal control over financial reporting and make changes to our processes and systems to improve controls and increase efficiency, while ensuring that we maintain an effective internal control environment. Changes may include such activities as implementing new, more efficient systems, consolidating activities, and migrating processes.

There were no changes in our internal controls over financial reporting (as such term is defined under Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the period covered by this report on Form 10-Q that has materially affected, or is reasonably likely to materially affect our internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

ITEM 2. UNREGISTERED SALE OF EQUITY SECURITIES AND USE OF PROCEEDS

As further described in Item 5 of this Quarterly Report on Form 10-Q, we granted Satyendra Deshpande, our then Chief Financial Officer, pursuant to an employment agreement we entered into with Mr. Deshpande on May 14, 2008, options to purchase 1,000,000 shares of our common stock with an exercise price of $1.00 per share pursuant to our 2008 Equity Incentive Plan. Mr. Deshpande resigned from the Company on May 16, 2008. The options were to vest under the agreement as follows: 500,000 shares on the date of grant; and 500,000 shares on January 1, 2009; provided, however, that no options may be exercised until our stockholders approve an increase in our authorized shares of common stock to at least 150,000,000 shares. As a result of Mr. Deshpande’s resignation from the Company, the unvested options terminated. The above grant of stock options made by us to Mr. Deshpande was made pursuant to the exemption from registration set forth in Section 4(2) of the Securities Act of 1933, as amended.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

ITEM 4. SUBMISSION OF MATTERS TO THE VOTE OF SECURITY HOLDERS

ITEM 5. OTHER INFORMATION

On May 14, 2008, we entered into an employment agreement with Satyendra Deshpande, our then Chief Financial Officer, Secretary and Treasurer and then member of the Board of Directors (or Board). Mr. Desphande subsequently resigned as our Chief Financial Officer, Secretary, Treasurer and member of the Board on May 16, 2008.

Under Mr. Deshpande’s employment agreement, Mr. Desphande was to receive an annual salary of $150,000 per annum. Pursuant to the terms of the employment agreement, Mr. Deshpande was granted a stock option to purchase 1,000,000 shares of common stock with an exercise price of $1.00 per share pursuant to our 2008 Equity Incentive Plan. The options were to vest under the agreement as follows: 500,000 shares on the date of grant; and 500,000 shares on January 1, 2009; provided, however, that no options may be exercised until our stockholders approve an increase in our authorized shares of common stock to at least 150,000,000 shares. As a result of Mr. Deshpande’s resignation from the Company, the unvested options terminated.

During his period of employment, Mr. Desphande was entitled to the coverage or benefits under any and all employee benefits plans maintained by the Company.

On May 19, 2008, the Board appointed James Hostetler, our Executive Vice President, as Chief Financial Officer, Secretary, Treasurer, and Principal Accounting Officer of the Company. The information concerning Mr. Hostetler’s employment agreement, biographical information and work experience and related disclosure is available in the Company’s Form 10-KSB/A filed with the Securities and Exchange Commission on April 29, 2008.

ITEM 6. EXHIBITS

Exhibit
Number		Description

2.1		Stock Exchange Agreement and Plan of Reorganization among Zulu Energy Corp, Nyati Mauritius Limited and LMA Hughes LLLP dated December 19, 2007 ¹

3.1		Articles of Incorporation ²

3.2		Articles of Amendment ^*

3.3		Statement of Correction*

3.4		Form of Amended and Restated Articles of Incorporation ^4†

3.5		Amended and Restated Bylaws ⁵

10.2		Stock Purchase Agreement between Zulu Energy Corp. and Swansi Holdings Corp. dated as of December 19, 2007 ¹

10.3		Tax Indemnification Letter Agreement between Zulu Energy Corp. and LMA Hughes LLLP dated December 19, 2007 ¹

10.4		Employment Agreement, dated effective March 1, 2008, by and between Zulu Energy Corp. and Paul Stroud ⁴

10.5		Employment Agreement, dated effective March 1, 2008, by and between Zulu Energy Corp. and James Hostetler ³

10.6		Employment Agreement, dated effective March 1, 2008, by and between Zulu Energy Corp. and Kevin Reeves ³

10.7		Form of Option Holder Letter Agreement ³

10.8		Letter Agreement dated April 25, 2008 between Zulu Energy Corp. and Swansi Holdings Corp. ³

10.9		Zulu Energy Corp. 2008 Equity Incentive Plan ^3†

10.10		Form of Restricted Stock Agreement ⁵

10.11		Form of Stock Option Agreement ⁵

10.12		Form of Common Stock Purchase Warrant ⁶

10.13		Form of Subscription Agreement ⁶

10.14		Form of Registration Rights Agreement ⁶

10.15		Employment Agreement, dated effective May 14, 2008, by and between Zulu Energy Corp. and Satyendra Deshpande*

31.1*		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2*		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1*

Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

^1.	Incorporated by reference to the Company’s Current Report on Form 8-K filed with the Commission on December 27, 2007, File No. 000-52272.

^2.	Incorporated by reference to the Company’s Registration Statement on Form SB-2 filed with the Commission on September 1, 2006, File No. 333-137076.

^3.	Incorporated by reference to the Company’s Current Report on Form 8-K filed with the Commission on April 21, 2008, File No. 000-52272.

^4.	Incorporated by reference to the Company’s Annual Report on Form 10-KSB/A filed with the Commission on April 29, 2008, File No. 000-52272.

^5.	Incorporated by reference to the Company’s Current Report on Form 8-K filed with the Commission on May 2, 2008, File No. 000-52272.

^6.	Incorporated by reference to the Company’s Current Report on Form 8-K filed with the Commission on May 9, 2008, File No. 000-52272.

^†	The form of Amended and Restated Articles of Incorporation and 2008 Equity Incentive Plan were approved by the Board of Directors of Zulu Energy Corp. on April 28, 2008 and will be presented to shareholders for approval as part of the 2008 Annual Meeting of Shareholders.

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

	ZULU ENERGY CORP.

Date: May 20, 2008	By:	/s/ Paul Stroud
		Paul Stroud, President and Chief Executive Officer

Date: May 20, 2008	By:	/s/ James Hostetler
		James Hostetler, Secretary, Treasurer, Chief Financial Officer and Principal Accounting Officer.

Exhibit
Number		Description

2.1		Stock Exchange Agreement and Plan of Reorganization among Zulu Energy Corp, Nyati Mauritius Limited and LMA Hughes LLLP dated December 19, 2007 ¹

3.1		Articles of Incorporation ²

3.2		Articles of Amendment ^*

3.3		Statement of Correction*

3.4		Form of Amended and Restated Articles of Incorporation ^4†

3.5		Amended and Restated Bylaws ⁵

10.2		Stock Purchase Agreement between Zulu Energy Corp. and Swansi Holdings Corp. dated as of December 19, 2007 ¹

10.3		Tax Indemnification Letter Agreement between Zulu Energy Corp. and LMA Hughes LLLP dated December 19, 2007 ¹

10.4		Employment Agreement, dated effective March 1, 2008, by and between Zulu Energy Corp. and Paul Stroud ⁴

10.5		Employment Agreement, dated effective March 1, 2008, by and between Zulu Energy Corp. and James Hostetler ³

10.6		Employment Agreement, dated effective March 1, 2008, by and between Zulu Energy Corp. and Kevin Reeves ³

10.7		Form of Option Holder Letter Agreement ³

10.8		Letter Agreement dated April 25, 2008 between Zulu Energy Corp. and Swansi Holdings Corp. ³

10.9		Zulu Energy Corp. 2008 Equity Incentive Plan ^3†

10.10		Form of Restricted Stock Agreement ⁵

10.11		Form of Stock Option Agreement ⁵

10.12		Form of Common Stock Purchase Warrant ⁶

10.13		Form of Subscription Agreement ⁶

10.14		Form of Registration Rights Agreement ⁶

10.15		Employment Agreement, dated effective May 14, 2008, by and between Zulu Energy Corp. and Satyendra Deshpande*

31.1*		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2*		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1*

Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

^1.	Incorporated by reference to the Company’s Current Report on Form 8-K filed with the Commission on December 27, 2007, File No. 000-52272.

^2.	Incorporated by reference to the Company’s Registration Statement on Form SB-2 filed with the Commission on September 1, 2006, File No. 333-137076.

^3.	Incorporated by reference to the Company’s Current Report on Form 8-K filed with the Commission on April 21, 2008, File No. 000-52272.

^4.	Incorporated by reference to the Company’s Annual Report on Form 10-KSB/A filed with the Commission on April 29, 2008, File No. 000-52272.

^5.	Incorporated by reference to the Company’s Current Report on Form 8-K filed with the Commission on May 2, 2008, File No. 000-52272.

^6.	Incorporated by reference to the Company’s Current Report on Form 8-K filed with the Commission on May 9, 2008, File No. 000-52272.

^†	The form of Amended and Restated Articles of Incorporation and 2008 Equity Incentive Plan were approved by the Board of Directors of Zulu Energy Corp. on April 28, 2008 and will be presented to shareholders for approval as part of the 2008 Annual Meeting of Shareholders.

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into on May 14, 2008 (the “Effective Date”) by and between Zulu Energy Corp., a Colorado corporation, with an office located at 122 N. Main Street, Sheridan, Wyoming 82801 (“Company”) and Satyendra Deshpande, an individual with an address of 3358 Daley Center Drive, #1406, San Diego, CA 92123 (“Deshpande”).

WHEREAS, the Company desires to retain the services of Deshpande and Deshpande is willing to be employed by the Company.

NOW, THEREFORE, in consideration of the mutual covenants contained herein, the parties agree as follows:

1. Employment; Term . Deshpande is hereby employed and engaged to provide the Company with accounting and financial services with such titles as the Company shall specify from time to time, and Deshpande does hereby accept and agrees to such engagement and employment. Deshpande’s title at the commencement of the term shall be Chief Financial Officer. The term of this Agreement shall be ongoing unless terminated pursuant to Section 13 hereof; provided, that, the term shall not extend past April 30, 2011 (the “Employment Term”).

2. Duties . Deshpande’s duties and responsibilities shall be related primarily to accounting and financial services as the Company shall specify from time to time. Deshpande shall have such authority, discretion, power and responsibility, and shall be entitled to office, secretarial and other facilities and conditions of employment, as are customary or appropriate to his position. Deshpande shall diligently and faithfully execute and perform such duties and responsibilities, subject to the general supervision and control of the Company’s Chief Executive Officer. Deshpande shall be responsible and report to the Company’s Chief Executive Officer, or another officer(s) designated by the Company’s Board of Directors. Deshpande shall devote his reasonable time, attention, energy, and skill to the business and affairs of the Company and as shall be necessary to satisfy the duties of a full time accounting officer of the Company.. Deshpande shall be permitted to engage in other business activities that do not directly compete with the Company only as permitted below.

Nothing in this Agreement shall preclude Deshpande from devoting reasonable periods required for:

(a)

serving as a director or member of a committee of any organization or corporation involving no conflict of interest with the interests of the Company;

(b)

serving as a panelist in his area of expertise (in areas other than in connection with the business of the Company), on government or academic panels where it does not conflict with the interests of the Company; and

(c)

managing his personal investments, including investing in a non-competing business;

provided that such activities do not materially interfere with the regular performance of his duties and responsibilities under this Agreement as reasonably determined in good faith by the Company’s Chief Executive Officer.

3. Best Efforts of Deshpande . During his employment hereunder, Deshpande shall, subject to the direction and supervision of the Company’s Chief Executive Officer or another officer(s) designated by the Company’s Board of Directors, use his best commercially reasonable efforts, business judgment, skill, and knowledge to the advancement of the Company’s interests and to the discharge of his duties and responsibilities hereunder. Nothing herein shall be construed as preventing Deshpande from investing his assets in any business, so long as his investments do not conflict with the restrictions noted in Section 2.

4. Compensation of Deshpande .

(a)

Base Compensation . As compensation for the services provided by Deshpande under this Agreement, the Company shall pay Deshpande an annual salary of One Hundred Fifty Thousand Dollars ($150,000). The compensation of Deshpande under this Section shall be paid in accordance with the Company’s usual payroll procedures.

(b)

Stock Options . Upon execution of this Agreement by both the Company and Deshpande, the Company shall grant Deshpande options to purchase 1,000,000 shares of the Company’s common stock with an exercise price equal to $1.00 per share. The options will vest as follows: 500,000 shares on the date of grant; and 500,000 shares on January 1, 2009; provided, however, that no options may be exercised until the Company’s stockholders approve an increase in the Company’s authorized shares of common stock to at least 150,000,000 shares.

In the event of a conflict between the above grant and either the shareholder approved stock option plan or corresponding board resolution, the covenants of the approved plan and board resolution take precedence.

( c)

Bonus . In addition to the base compensation in Section 4(a), Deshpande shall be eligible to receive an annual bonus determined by the Board of Directors based on the performance of the Company and Deshpande.

5. Benefits . Deshpande shall also be entitled to participate in any and all Company benefit plans, from time to time, in effect for employees of the Company, including, but not limited to, health, dental and vision insurance plans, and 401(k) plans available to the Company’s senior management executives and their dependents. Such participation shall be subject to the terms of the applicable plan documents and generally applicable Company policies.

6. Vacation, Sick Leave and Holidays . Deshpande shall be entitled to four (4) weeks of paid vacation, with such vacation to be scheduled and taken in accordance with the Company’s standard vacation policies. Two (2) weeks of unused, accrued vacation can be carried into the next year. Remaining unused, accrued vacation time will be paid during the first quarter of the following year. In addition, Deshpande shall be entitled to such sick leave and holidays at full pay in accordance with the Company’s policies established and in effect from time to time.

7. Business Expenses . The Company shall promptly reimburse Deshpande for all reasonable out-of-pocket business expenses incurred in performing Deshpande’s duties and responsibilities hereunder in accordance with the Company’s policies, provided Deshpande promptly furnishes to the Company adequate records of each such business expense. Such expenses shall be reimbursed in accordance with the Company’s regular reimbursement practices.

8. Location of Deshpande’s Activities . Deshpande’s principal place of business in the performance of his duties and obligations under this Agreement shall be San Diego, California. The company will bear the travel expense between San Diego, CA and any other location and provide Deshpande with accommodations and meal reimbursement at such other location.

9. Confidential Information/Inventions .

(a)

Confidential Information . Deshpande shall not, in any manner, for any reasons, either directly or indirectly, divulge or communicate to any person, firm or corporation, any confidential information concerning any matters not generally known or otherwise made public by Company which affects or relates to the Company’s business, finances, marketing and/or operations, research, development, inventions, products, designs, plans, procedures, or other data (collectively, “Confidential Information”) except in the ordinary course of business, as necessary to joint venture partners or as required by applicable law for a period of one year. Without regard to whether any item of Confidential Information is deemed or considered confidential, material, or important, the parties hereto stipulate that as between them, to the extent such item is not generally known in the oil and gas industry, such item is important, material, and confidential and affects the successful conduct of the Company’s business and goodwill, and that any breach of the terms of this Section 9 shall be a material and incurable breach of this Agreement. Confidential Information shall not include: (i) information obtained or which became known to Deshpande other than through his employment by the Company; (ii) information in the public domain at the time of the disclosure of such information by Deshpande; (iii) information that Deshpande can document was independently developed by Deshpande; (iv) information that is disclosed by Deshpande with the prior written consent of the Company and (v) information that is disclosed by Deshpande as required by law, governmental regulation or court order.

(b)

Documents . Deshpande further agrees that all documents and materials furnished to Deshpande by the Company and relating to the Company’s business or prospective business are and shall remain the exclusive property of the Company. Deshpande shall deliver all such documents and materials, not copied, to the Company upon demand therefore and in any event upon expiration or earlier termination of this Agreement. Any payment of sums due and owing to Deshpande by the Company upon such expiration or earlier termination shall be conditioned upon returning all such documents and materials, and Deshpande expressly authorizes the Company to withhold any payments due and owing pending return of such documents and materials.

(c)

Inventions . All ideas, inventions, and other developments or improvements conceived or reduced to practice by Deshpande, alone or with others, during the Term of this Agreement, during working hours, that are within the scope of the business of the Company or that relate to or result from any of Deshpande’s work or projects or the services provided by Deshpande to the Company pursuant to this Agreement, shall be the exclusive property of the Company. Deshpande agrees to assist the Company, at the Company’s expense, to obtain patents and copyrights on any such ideas, inventions, writings, and other developments, and agrees to execute all documents necessary to obtain such patents and copyrights in the name of the Company. This clause excludes all intellectual property work initiated prior to the execution of this agreement.

(d)

Disclosure . During the Term, Deshpande will promptly disclose to the Board of Directors full information concerning any interest, direct or indirect, of Deshpande (as owner, shareholder, partner, lender or other investor, director, officer, employee, consultant or otherwise) or any member of his immediate family in any business that is reasonably known to Employee to purchase or otherwise obtain services or products from, or to sell or otherwise provide services or products to, the Company or to any of its suppliers or customers.

10. Non-Compete . Except as expressly permitted herein, during the Term of this Agreement, Deshpande shall not engage in any of the following competitive activities: (a) engaging directly or indirectly in any business or activity substantially similar to any business or activity engaged in (or proposed to be engaged in) by the Company in North America; (b) engaging directly or indirectly in any business or activity competitive with any business or activity engaged in (or proposed to be engaged in) by the Company in Africa; (c) soliciting or taking away any employee, agent, representative, contractor, supplier, vendor, customer, franchisee, lender or investor of the Company, or attempting to so solicit or take away; (d) interfering with any contractual or other relationship between the Company and any employee, agent, representative, contractor, supplier, vendor, customer, franchisee, lender or investor; or (e) using, for the benefit of any person or entity other than the Company, any Confidential Information of the Company. The foregoing covenant prohibiting competitive activities shall survive the termination of this Agreement and shall extend, and shall remain enforceable against Deshpande, for the period of the lesser of (6) six months or the duration of termination pay as described in paragraph 13 below, following the date this Agreement is terminated. In addition, during the one-year period following such expiration or earlier termination, except as required by law, neither Deshpande nor the Company shall make any negative statement of any kind concerning the Company or its affiliates, or their directors, officers or agents or Deshpande.

11. Injunctive Relief . Deshpande acknowledges and agrees that the covenants and obligations of Deshpande set forth in Sections 9 and 10 with respect to non-competition, non-solicitation, confidentiality and the Company’s property relate to special, unique and extraordinary matters and that a violation of any of the terms of such covenants and obligations will cause the Company irreparable injury for which adequate remedies are not available at law. Therefore, Deshpande agrees that the Company shall be entitled to an injunction, restraining order or such other equitable relief (without the requirement to post bond) as a court of competent jurisdiction may deem necessary or appropriate to restrain Deshpande from committing any violation of the covenants and obligations referred to in this Section 11. These injunctive remedies are cumulative and in addition to any other rights and remedies the Company may have at law or in equity.

12. Survival . Deshpande agrees that the provisions of Sections 9, 10 and 11 shall survive expiration or earlier termination of this Agreement for any reasons, whether voluntary or involuntary, with or without cause, and shall remain in full force and effect thereafter. Notwithstanding the foregoing, if this Agreement is terminated upon the dissolution of the Company, the filing of a petition in bankruptcy by the Company or upon an assignment for the benefit of creditors of the assets of the Company, Sections 9, 10 and 11 shall be of no further force or effect.

13. Termination . Deshpande’s employment with the Company will be “at will”, meaning that either Desphande or the Company will be entitled to terminate your employment at any time and for any reason, with or without cause, after thirty (30) days written notice is given. Notwithstanding any other provisions hereof to the contrary, Deshpande’s employment hereunder shall terminate under the following circumstances:

(a)

Voluntary Termination by Deshpande . Deshpande shall have the right to voluntarily terminate this Agreement and his employment hereunder at any time during the Employment Term.

(b)

Voluntary Termination by the Company . The Company shall have the right to voluntarily terminate this Agreement and Deshpande’s employment hereunder at any time. If the Company initiates an “at will” termination of Desphande’s employment as described above the Company agrees to pay Deshpande a lump-sum separation fee at the time of termination equal to six (6) months salary plus benefits.

(c)

Termination for Cause . The Company shall have the right to terminate this Agreement and Deshpande’s employment hereunder at any time for cause. For purposes of this Agreement, the term “cause” for termination by the Company shall be (a) a conviction of or plea of guilty or nolo contendere by Deshpande to a felony, or any crime involving fraud or embezzlement; (b) the refusal by Deshpande to perform his material duties and obligations hereunder; (c) Deshpande’s willful and intentional misconduct in the performance of his material duties and obligations; or (d) if Deshpande or any member of his family makes any personal profit arising out of or in connection with a transaction to which the Company is a party or with which it is associated without making disclosure to and obtaining the prior written consent of the Board of Directors. The written notice given hereunder by the Company to Deshpande shall specify in reasonable detail the cause for termination. For purposes of this Agreement, “family” shall mean Deshpande’s spouse and/or children. In the case of a termination for the causes described in (a) and (d) above, such termination shall be effective upon receipt of the written notice. In the case of the causes described in (b) and (c) above, such termination notice shall not be effective until ten (10) days after Deshpande’s receipt of such notice, during which time Deshpande shall have the right to respond to the Company’s notice and cure the breach or other event giving rise to the termination.

(d)

Event of Sale, Merger or Change of Control . In the event of the sale, merger or change of control of the Company during the Employment Term, the Company or its successor(s) agree to immediately vest all unvested stock options and offer you employment under the terms given above, for a period of at least (6) six months after the sale or merger closing date. If this extension is not given by the Company or its successor(s) and accepted by you, then the Company or its successor(s) agree to pay to you a lump-sum separation fee equivalent to (6) six months of salary plus benefits. Employment “at will” provisions described above cannot be applied by the Company from 120 days before the date of the agreement to sell or merge the Company to the closing date. If an “at will” action to terminate your employment is taken by the Company during this time period, or if you are asked to voluntarily end your employment by the Company during this time period, you will be entitled to immediate vesting of all unvested stock and options and a lump-sum payment of the equivalent of your salary and benefits for (6) six months, to be paid on or before the sale or merger closing date.

(e)

Termination Upon Death . If Deshpande dies during the Employment Term, this Agreement shall terminate, except that Deshpande’s legal representatives shall be entitled to receive any earned but unpaid compensation or expense reimbursement due hereunder through the date of death.

(f)

Termination Upon Disability . If, during the Employment Term, Deshpande suffers and continues to suffer from a “Disability” (as defined below), then the Company may terminate this Agreement by delivering to Deshpande 30 calendar days’ prior written notice of termination based on such Disability, setting forth with specificity the nature of such Disability and the determination of Disability by the Company. For the purposes of this Agreement, “Disability” means Deshpande’s inability, with reasonable accommodation, to substantially perform Deshpande’s duties, services and obligations under this Agreement due to physical or mental illness or other disability for a continuous, uninterrupted period of 150 calendar days or two hundred and 180 days during any twelve month period. Upon any such termination for Disability, Deshpande shall be entitled to receive any earned but unpaid compensation or expense reimbursement due hereunder through the date of termination.

(g)

Effect of Termination .

(i)

In the event that this Agreement and Deshpande’s employment is voluntarily terminated by Deshpande pursuant to Section 13(a), or in the event the Company terminates this Agreement for cause pursuant to Section 13(c), all obligations of the Company and all duties, responsibilities and obligations of Deshpande under this Agreement shall cease. Upon such termination, the Company shall (i) pay Deshpande a cash lump sum equal to all accrued base salary through the date of termination plus all accrued vacation pay and bonuses, if any; and (ii) any common stock options granted to Deshpande by the Company which have not vested pursuant to Section 4 hereof shall be terminated. Any common stock options granted to Deshpande by the Company pursuant to Section 4 that have vested at time of termination shall be exercisable for the life of the options.

(ii)

In the event that this Agreement and Deshpande’s employment is voluntarily terminated by the Company pursuant to Section 13(b), all obligations of the Company and all duties, responsibilities and obligations of Deshpande under this Agreement shall cease. Upon such termination, the Company shall pay Deshpande a cash lump sum equal to all accrued base salary through the date of termination plus all accrued vacation pay and bonuses, if any; (ii) the separation fee; and (iii) any common stock options granted to Deshpande by the Company pursuant to Section 4 hereof shall become immediately vested and Deshpande shall have right of option exercise for the life of the options.

(iii)

In the event this Agreement is terminated upon the death of Deshpande pursuant to Sections 11(e), Deshpande’s estate shall be entitled to all cash compensation pursuant to Sections 4 and benefits pursuant to section 5 for the period of 6 months after his death. Upon termination of this agreement as a result of death any common stock options granted to Deshpande by the Company pursuant to Section 4 hereof shall become immediately vested and Deshpande’s estate shall have right of option exercise for the life of the options. Payment will be made to Deshpande’s estate. In the event of a merger, consolidation, sale, or change of control, the Company’s rights hereunder shall be assigned to the surviving or resulting company, which company shall then honor this Agreement with Deshpande and his estate.

(iv)

In the event that this Agreement and Deshpande’s employment is terminated by disability pursuant to Section 11(f), all obligations of the Company and all duties, responsibilities and obligations of Deshpande under this Agreement shall cease. Upon such termination, the Company shall pay Deshpande a cash lump sum equal to all accrued base salary through the date of termination plus all accrued vacation pay and bonuses, if any; (ii) the separation fee; and (iii) any common stock options granted to Deshpande by the Company pursuant to Section 4 hereof shall become immediately vested and Deshpande shall have right of option exercise for the life of the options.

All obligations of the Company to pay separation pay in this Agreement are subject to the condition that Employee enter into a standard, full and complete release and separation agreement confirming that he is not entitled to any additional monies and that he will not bring any actions against the Company or its affiliates for any reason.

14. Resignation as Officer . In the event that Deshpande’s employment with the Company is terminated for any reason whatsoever, Deshpande agrees to immediately resign as an Officer and/or Director of the Company and any related entities. For the purposes of this Section 14, the term the “Company” shall be deemed to include subsidiaries, parents, and affiliates of the Company.

15. Governing Law, Jurisdiction and Venue . This Agreement shall be governed by and construed in accordance with the laws of the State of Colorado without giving effect to any applicable conflicts of law provisions.

16. Independent Legal Advice . The Company has obtained legal advice concerning this Agreement and has requested that Deshpande obtain independent legal advice with respect to same before executing this Agreement. Deshpande, in executing this Agreement, represents and warrants to the Company that he has been so advised to obtain independent legal advice, and that prior to the execution of this Agreement he has so obtained independent legal advice, or has, in his discretion, knowingly and willingly elected not to do so.

17. Business Opportunities . During the Employment Term Deshpande agrees to bring to the attention of the Company’s Chief Executive Officer and the Company’s Board of Directors all written business proposals that come to Deshpande’s attention and all business or investment opportunities of whatever nature that are created or devised by Deshpande and that relate to areas in which the Company currently conducts business or reasonably expects to conduct business.

18. Employee’s Representations and Warranties . Deshpande hereby represents and warrants that he is not under any contractual obligation to any other company, entity or individual that would prohibit or impede Deshpande from performing his duties and responsibilities under this Agreement and that he is free to enter into and perform the duties and responsibilities required by this Agreement.

19. Indemnification .

(a)

The Company agrees that if Deshpande is made a party, or is threatened to be made a party, to any action, suit or proceeding, whether civil, criminal, administrative or investigative (a “Proceeding”), by reason of the fact that he is or was a director, officer or employee of the Company or is or was serving at the request of the Company as a director, officer, member, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, whether or not the basis of such Proceeding is Deshpande’s alleged action in an official capacity while serving as a director, officer, member, employee or agent, Deshpande shall be indemnified and held harmless by the Company to the fullest extent permitted or authorized by the Company’s certificate of incorporation or bylaws or, if greater, by the laws of the State of Colorado, against all cost, expense, liability and loss (including, without limitation, attorney’s fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered by Deshpande in connection therewith, and such indemnification shall continue as to Deshpande even if he has ceased to be a director, member, employee or agent of the Company or other entity and shall inure to the benefit of Deshpande’s heirs, executors and administrators. The Company shall advance to Deshpande to the extent permitted by law all reasonable costs and expenses incurred by his in connection with a Proceeding within 20 days after receipt by the Company of a written request, with appropriate documentation, for such advance. Such request shall include an undertaking by Deshpande to repay the amount of such advance if it shall ultimately be determined that he is not entitled to be indemnified against such costs and expenses.

(b)

Neither the failure of the Company (including its Board of Directors, independent legal counsel or stockholders) to have made a determination prior to the commencement of any proceeding concerning payment of amounts claimed by Deshpande that indemnification of Deshpande is proper because he has met the applicable standard of conduct, nor a determination by the Company (including its Board of Directors, independent legal counselor stockholders) that Deshpande has not met such applicable standard of conduct, shall create a presumption that Deshpande has not met the applicable standard of conduct.

(c)

The Company agrees to continue and maintain a liability insurance policy covering Deshpande to the extent the Company provides such coverage for its other executives and officers.

(d)

Promptly after receipt by Deshpande of notice of any claim or the commencement of any action or proceeding with respect to which Deshpande is entitled to indemnity hereunder, Deshpande shall notify the Company in writing of such claim or the commencement of such action or proceeding, and the Company shall (i) assume the defense of such action or proceeding, (ii) employ counsel reasonably satisfactory to Deshpande, and (iii) pay the reasonable fees and expenses of such counsel. Notwithstanding the preceding sentence, Deshpande shall be entitled to employ counsel separate from counsel for the Company and from any other party in such action if Deshpande reasonably determines that a conflict of interest exists which makes representation by counsel chosen by the Company not advisable. In such event, the reasonable fees and disbursements of such separate counsel for Deshpande shall be paid by the Company to the extent permitted by law.

(e)

After the termination of this Agreement and upon the request of Deshpande, the Company agrees to reimburse Deshpande for all reasonable travel, legal and other out-of-pocket expenses related to assisting the Company to prepare for or defend against any action, suit, proceeding or claim brought or threatened to be brought against the Company or to prepare for or institute any action, suit, proceeding or claim to be brought or threatened to be brought against a third party arising out of or based upon the transactions contemplated herein and in providing evidence, producing documents or otherwise participating in any such action, suit, proceeding or claim. In the event Deshpande is required to appear after termination of this Agreement at a judicial or regulatory hearing in connection with Deshpande’s employment hereunder, or Deshpande’s role in connection therewith, the Company agrees to pay Deshpande a sum, to be mutually agreed upon by Deshpande and the Company, a daily fee and reasonable expenses for each day of his appearance and each day of preparation therefor.

20. Notices . All demands, notices, and other communications to be given hereunder, if any, shall be in writing and shall be sufficient for all purposes if personally delivered, sent by facsimile or sent by United States mail to the address below or such other address or addresses as such party may hereafter designate in writing to the other party as herein provided.

Company:	Deshpande:
Zulu Energy Corp.	3358 Daley Center Drive
122 N. Main Street	#1406
Sheridan, WY 82801	San Diego, CA 92123

21. Entire Agreement; Miscellaneous Provisions . This Agreement contains the entire agreement of the parties and there are no other promises or conditions in any other agreement, whether oral or written. This Agreement supersedes any prior written or oral agreements between the parties. This Agreement may be modified or amended, if the amendment is made in writing and is signed by both parties. This Agreement is for the unique personal services of Deshpande and is not assignable or delegable, in whole or in part, by Deshpande. This Agreement may be assigned or delegated, in whole or in part, by the Company and, in such case, shall be assumed by and become binding upon the person, firm, company, corporation or business organization or entity to which this Agreement is assigned, subject to the provisions of section 13 (d). The headings contained in this Agreement are for reference only and shall not in any way affect the meaning or interpretation of this Agreement. If any provision of this Agreement shall be held to be invalid or unenforceable for any reason, the remaining provisions shall continue to be valid and enforceable. The failure of either party to enforce any provision of this Agreement shall not be construed as a waiver or limitation of that party’s right to subsequently enforce and compel strict compliance with every provision of this Agreement. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument and, in pleading or proving any provision of this Agreement, it shall not be necessary to produce more than one of such counterparts.

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.

ZULU ENERGY CORP.		SATYENDRA DESHPANDE

By:	/s/ PAUL STROUD	/s/ SATYENDRA DESHPANDE
Name:	PAUL STROUD
Title:	PRESIDENT AND CEO

I, Paul Stroud, certify that:

I have reviewed this Quarterly Report on Form 10-Q of Zulu Energy Corp;

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 20, 2008	/s/ Paul Stroud
	Paul Stroud, Chief Executive Officer

I, James Hostetler, certify that:

I have reviewed this Quarterly Report on Form 10-Q of Zulu Energy Corp.;

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 20, 2008	/s/ James Hostetler
	James Hostetler, Secretary, Treasurer, Chief Financial Officer and Principal Accounting Officer.

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q (the “Report”) of Zulu Energy Corp. (the “Company”) for the period ended March 31, 2008, each of the undersigned Paul Stroud, the Chief Executive Officer, and James Hostetler , the Chief Financial Officer, of the Company, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of each of the undersigned’s knowledge and belief:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: May 20, 2008	/s/ Paul Stroud
	Paul Stroud, President and Chief Executive Officer

Dated: May 20, 2008	/s/ James Hostetler
	James Hostetler, Secretary, Treasurer, Chief Financial Officer and Principal Accounting Officer.