SAXON CAPITAL GROUP INC - Quarter Report: 2008 May (Form 10-Q)

form10q_052008.htm

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

333-117114

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Commission File number

USA SUPERIOR ENERGY HOLDINGS, INC.

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(Exact name of registrant as specified in its charter)

NEVADA 30-0220588

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(State or other jurisdiction of incorporation) (IRS Employer Identification No.)

1726 Augusta Drive, Suite 105, Houston, Texas 77057

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(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: 832-251-3000

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Securities Registered pursuant to Section 12(b) of the Exchange Act:

Common Stock, $.001 par value Over The Counter Bulletin Board

(Title of Class) (Name of exchange on which registered)

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 | _| No | X |

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 definitions of "large accelerated filer," "accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer |_| Accelerated filer |_|

Non-accelerated filer |_| (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 Act). Yes |_| No |X|

Contrary to the rules of the SEC, the Company's consolidated financial statements included in this filing have not been reviewed by an independent public accountant in accordance with professional standards for conducting such reviews.

INDEX TO FINANCIAL STATEMENTS

Consolidated Balance Sheets as of March 31, 2008 and December 31, 2007 (unaudited)	F-1

Consolidated Statements of Operations for the three months ended March 31, 2008 and 2007 (unaudited)	F-2

Consolidated Statement of Stockholders’ Equity for the three months ended March 31, 2008 (unaudited)	F-3

Consolidated Statements of Cash Flows for three months ended March 31, 2008 and 2007 (unaudited)	F-4

Notes to the Consolidated Financial Statements – March 31, 2008 (unaudited)	F-5

USA SUPERIOR ENERGY HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS

As of March 31, 2008 and December 31, 2007

(Unaudited)

ASSETS	March 31, 2007			December 31, 2007
Current assets
Cash and cash equivalents	$	41,625		$	256,943
Restricted cash		50,000			50,000
Accounts receivable		2,500			-
Prepaid expenses		1,092,519			24,699
Total current assets		1,186,644			331,642

Oil and gas properties, including $348,086 of unproved properties, net of accumulated depletion, depreciation and amortization of $52,257 and $36,991, respectively – using full cost method of accounting		1,553,023			1,568,289
Office equipment, net of depreciation of $14,839 and $9,391, respectively		28,294			34,372
Other assets		750			750

Total assets	$	2,768,711		$	1,935,053

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities
Accounts payable and accrued liabilities	$	352,895		$	326,730
Convertible demand note, net of unamortized discount of $ 242,207 and $244,154, respectively		36,936			27,000
Current portion of notes payable		372,403			347,762
Advances payable – related party		109,259			114,259
Total current liabilities		871,493			815,751

Convertible debenture, net of unamortized discount of $248,084 and $257,316, respectively		236,715			215,947
Notes payable		363,957			363,957
Asset retirement obligations		116,050			115,520
Total liabilities		1,588,215			1,511,175

STOCKHOLDERS’ EQUITY
Common shares, $0.001 par value, 150,000,000 shares authorized, 56,160,000 and 55,760,000 shares issued and outstanding, respectively		56,160			55,760
Additional paid-in capital		9,364,470			7,924,850
Stock subscription receivable		(130,000	)		-
Accumulated deficit		(8,110,134	)		(7,556,732	)
Total stockholders’ equity		1,180,496			423,878

Total liabilities and stockholders’ equity	$	2,768,711		$	1,935,053

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

USA SUPERIOR ENERGY HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

For the three months ended March 31, 2008 and 2007

(Unaudited)

	2008			2007

Revenue	$	115,563		$	15,443

Operating expenses
Lease operating expenses		89,495			18,763
General and administrative, including stock based compensation of $217,501 and $3,020,000, respectively		516,505			3,375,085
Depreciation, depletion and amortization		21,243			1,069
Total operating expenses		627,243			3,394,917
Operating loss		(511,680	)		(3,379,474	)

Other income (expense)
Interest expense		(41,722	)		-
Total other expense		(41,722	)		-

Net loss		(553,402	)		(3,379,474	)


Net loss per share:
Basic and diluted	$	(0.01	)	$	(0.09	)

Weighted average shares outstanding:
Basic and diluted		56,064,348			35,666,630

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

USA SUPERIOR ENERGY HOLDINGS, INC.

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

For the years three months ended March 31, 2008

(Unaudited)

	Common Shares		Par Amount		Additional Paid-In Capital		Stock Subscription Receivable			Accumulated Deficit			Total

Balance, December 31, 2007		55,760,000	$	55,760	$	7,924,850	$	-		$	(7,556,732	)	$	423,878

Shares issued in exchange for subscription receivable		400,000		400		299,600		(130,000)			-			170,000
Warrants issued for services		-		-		550,020		-			-			550,020
Shares transferred by CEO for services		-		-		590,000		-			-			590,000
Net loss		-		-		-		-			(553,402	)		(553,402	)

Balance, March 31, 2008		56,160,000	$	56,160	$	9,364,470	$	(130,000	)	$	(8,110,134	)	$	1,180,496

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

USA SUPERIOR ENERGY HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the three months ended March 31, 2008 and 2007

(Unaudited)

	2008			2007

CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(553,402	)	$	(3,379,474	)
Adjustments to reconcile net loss to cash used by operating activities:
Depreciation, depletion and amortization		21,243			1,069
Amortization of debt discount		11,179			-
Stock based compensation		217,501			3,020,000
Net change in operating assets and liabilities		158,161			(250,939	)
NET CASH USED BY OPERATING ACTIVITIES		(145,318	)		(609,344	)

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment		-			(41,528	)
Investment in oil and gas properties		-			(400,000	)
CASH FLOWS USED IN INVESTING ACTIVITIES		-			(441,528	)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of short-term debt		-			25,000
Proceeds from sale of units		-			1,000,000
Capital contributions from shareholder		-			161,976
Repayments of notes payable		(70,000	)		-
CASH FLOWS USED BY FINANCING ACTIVITIES		(70,000	)		1,186,976

NET INCREASE(DECREASE) IN CASH AND CASH EQUIVALENTS		(215,318	)		136,104
Cash and cash equivalents, beginning of period		256,943			297
Cash and cash equivalents, end of period	$	41,625		$	136,401

		2007		2006
Cash paid for:
Interest	$	1,001	$	-
Income taxes	$	-	$	-

Supplemental Schedule of Non-cash Investing and Financing Activities:
Purchase oil and gas properties through issuance of notes payable	$	750,097	$	-
Recapitalization		18,360		-
Asset retirement obligation incurred		-		88,066

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

USA SUPERIOR ENERGY HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2008

NOTE 1 – ORGANIZATION AND BUSINESS OPERATIONS

USA Superior Energy Holdings, Inc. (the “Company” or “USA Superior”), a Nevada corporation, was originally formed on November 12, 2003 as Comlink Communications Company (“Comlink”). In fiscal the fiscal year ended 2006, Comlink was essentially dormant with no operating business, having discontinued all prior operations in the first quarter of 2006. Prior operations consisted of an attempt to market two-way radio communication equipment over the internet. The Company had no capital and no prospects to raise capital to carry out the prior business plan.

The current business of the Company is to develop, own and operate prospects and energy projects in East and Southwest Texas. The Company primarily focuses on properties with a potential for enhanced secondary or tertiary recovery using modern state-of-the-art workover and stimulation techniques.

On January 16, 2007, USA Superior and Comlink Communications Company (“Comlink”) consummated a merger that was effected through a reverse merger in which the shareholders of USA Superior agreed to receive 34,000,000 shares of common stock of Comlink in exchange for 100% of the issued and outstanding shares of USA Superior. Concurrent with the merger, USA Superior’s executive management and directors assumed control and responsibility for Comlink’s activities and its strategic direction. The merger effected a change in control of Comlink and immediately following the merger, USA Superior’s former stockholders held approximately 59% of Comlink’s issued and outstanding common shares. After the merger, Comlink’s name was changed to USA Superior Energy Holdings, Inc., and the stock symbol was changed to OTCBB: USSU.

For Securities and Exchange Commission (“SEC”) reporting purposes, the merger between USA Superior and Comlink was treated as a reverse merger with USA Superior being the “accounting acquirer” and, accordingly, it assumed Comlink’s reporting obligations with the SEC. In accordance with SEC requirements, the historical financial statements and related disclosures presented herein for the period prior to the date of merger (i.e., January 16, 2007) are those of USA Superior. The assets and liabilities of Comlink were recorded, as of completion of the merger, at fair value, which is considered to approximate historical cost, and added to those of USA Superior.

In accordance with the terms of the merger agreement, each outstanding share of USA Superior prior to the reverse merger was converted into 309.8 common shares in USA Superior (post reverse merger) with a total of 30,980,000 common shares issued to the former USA Superior stockholders. Of the 63,360,000 shares of Comlink outstanding at the time of the merger, 45,000,000 shares were cancelled concurrent with the closing of the merger.

In conjunction with the merger, USA Superior issued 3,020,000 shares of common stock. In accordance with EITF 95-8, USA Superior determined that these were shares issued for services and not additional transaction costs due to the fact that Comlink’s cash balance was minimal prior to the merger. These shares had a market value of $3,020,000 on the date of the reverse merger. Of the total shares issued for services, 2,720,000 shares were issued to employees of USA Superior. Immediately following the merger, a total of 52,360,000 shares of common stock were issued and outstanding.

Since its inception, USA Superior has funded its oil and gas activities through a combination of equity and debt securities and the contribution of funds and services by its principal shareholders and management.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Interim Financial Statements

The accompanying interim financial statements have been prepared based on accounting principles generally accepted in the United States of America. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to financial statements which would substantially duplicate disclosure contained in the audit consolidated financial statements for the most recent fiscal year, found in the Company’s Form 10-K, have been omitted.

Basis of presentation

USA Superior’s unaudited consolidated balance sheets as of March 31, 2008 and December 31, 2008 and related consolidated statements of operations, stockholders’ equity and cash flow for the three months ended March 31, 2008 and 2007 are presented in U.S. dollars and have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the rules of the Securities and Exchange Commission.

Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could materially differ from those estimates.

Management believes that it is reasonably possible the following material estimates affecting the financial statements could significantly change in the coming year: (1) estimates of proved oil and gas reserves, and (2) forecast forward price curves for natural gas and crude oil. The oil and gas industry in the United States has historically experienced substantial commodity price volatility, and such volatility is expected to continue in the future. Commodity prices affect the level of reserves that are considered commercially recoverable; significantly influence USA Superior’s current and future expected cash flows; and impact the PV10 derivation of proved reserves presented in USA Superior’s supplemental oil and gas reserve disclosures made herein.

Principles of consolidation

The financial statements include the accounts of its 100% owned subsidiaries USA Superior Energy, Inc. and Superior Energy, LLC and its 80% interest in the subsidiary Skyrider Energy, LLC.

Revenue and cost recognition

USA Superior uses the sales method to account for sales of crude oil and natural gas. Under this method, revenues are recognized based on actual volumes of oil and gas sold to purchasers. The volumes sold may differ from the volumes to which USA Superior is entitled based on our interest in the properties. These differences create imbalances which are recognized as a liability only when the imbalance exceeds the estimate of remaining reserves. USA Superior had no imbalances as of March 31, 2008 and December 31, 2007. Costs associated with production are expensed in the period incurred.

New Accounting Pronouncements

USA Superior does not expect the adoption of recently issued accounting pronouncements to have a significant impact on their results of operations, financial position or cash flows

NOTE 3 – GOING CONCERN

USA Superior has raised limited financing and has incurred operating losses since its inception in October 2005. These factors raise substantial doubt about USA Superior’s ability to continue as a going concern. USA Superior’s ability to achieve and maintain profitability and positive cash flow is dependent on its ability to secure sufficient financing to fund the acquisition, drilling and development of profitable oil and gas properties. Management is seeking financing that it believes would allow USA Superior to establish and sustain commercial production. There are no assurances that USA Superior will be able to obtain additional financing from investors or private lenders and, if available, such financing may not be on commercial terms acceptable to USA Superior or its stockholders. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

NOTE 4 – NOTES PAYABLE AND CONVERTIBLE DEBENTURES

Notes Payable – Bastrop and Caldwell County, Texas Leases

As a portion of the consideration for the purchase of the Bastrop and Caldwell County, Texas leases, USA Superior issued a $350,000 note payable to the seller. The note bears interest at 5% and requires monthly payments of $15,000 plus interest. As of December 31, 2007, USA Superior was in default on the payments of the note. On April 11, 2008, USA Superior paid the lender $50,000 for attorney fees and a partial payment on the note and entered into a Renewal and Extension Promissory Note which settled the default. Under the terms of the new note, USA Superior must make monthly payments of $15,000 plus 8% interest beginning May 15, 2008. All unpaid principal and interest is due October 15, 2008. This note is secured by 500,000 shares of USA Superior’s common stock which were pledged by the Company’s CEO and USA Superior’s interest in the Bastrop County leases.

As additional consideration for the purchase of the Bastrop County, Texas leases, USA Superior agreed to assume the seller’s noninterest bearing liability to a third party in the total amount of $440,000. This note requires payments of 25 percent of the net revenue from the production of the leases, with minimum payments of $7,500 per month and $120,000 per year. This note was recorded at the present value of the future cash payments of $400,097. Management used an interest rate of 5% to discount this rate, because it was the same as the rate on the note payable to the seller described above. USA Superior is currently in default on the note due to the fact that all required payments have not been made on the note.

NOTE 5 – STOCKHOLDERS’ EQUITY

Issuance of Common Shares and Warrants

On March 1, 2008, as amended April 22, 2008, USA Superior entered into an agreement with a third party for financial advisory services for the period from March 1, 2008 through February 28, 2010. Under the terms of the contract USA Superior will make monthly payments of $5,000 for a total of 23 months. In addition, USA Superior has issued a warrant to purchase 1,000,000 shares of common stock for a period of five years at an exercise price of $0.17 and USA Superior’s CEO will pay the third-party 1,250,000 shares of the common stock owned by him. The warrants were valued at $550,020 using the Black-Scholes model with the following assumptions:

	Assumption
Exercise price	$ 0.17
Stock price on the issuance date	$ 0.59
Term (years)	5
Risk free interest rate	2.50 %
Volatility	130 %

The stock transferred by the CEO of USA Superior was valued at $590,000 based on its trading price on the issuance date. These amounts have been recorded as a prepaid asset and are being amortized over the two year term of the agreement.

Issuance of Common Stock for Subscription Agreement

In January 2008, USA Superior issued 400,000 shares of stock to an employee of the company in exchange for a stock subscription receivable in the amount of $130,000. The shares were valued at $300,000 on the date of issuances. USA Superior recognized $170,000 of compensation expense related to the difference in the market value of the shares and the cash to be received from the employee.

PART I- FINANCIAL INFORMATION

Item 1. Financial Statements

IMPORTANT DISCLOSURE

INDEX TO FINANCIAL STATEMENTS

Consolidated Balance Sheets as of March 31, 2008 and December 31, 2007 (unaudited)	F-1

Consolidated Statements of Operations for the three months ended March 31, 2008 and 2007 (unaudited)	F-2

Consolidated Statement of Stockholders’ Equity for the three months ended March 31, 2008 (unaudited)	F-3

Consolidated Statements of Cash Flows for three months ended March 31, 2008 and 2007 (unaudited)	F-4

Notes to the Consolidated Financial Statements – March 31, 2008 (unaudited)	F-5

USA SUPERIOR ENERGY HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS

As of March 31, 2008 and December 31, 2007

(Unaudited)

ASSETS	March 31, 2007			December 31, 2007
Current assets
Cash and cash equivalents	$	41,625		$	256,943
Restricted cash		50,000			50,000
Accounts receivable		2,500			-
Prepaid expenses		1,092,519			24,699
Total current assets		1,186,644			331,642

Oil and gas properties, including $348,086 of unproved properties, net of accumulated depletion, depreciation and amortization of $52,257 and $36,991, respectively – using full cost method of accounting		1,553,023			1,568,289
Office equipment, net of depreciation of $14,839 and $9,391, respectively		28,294			34,372
Other assets		750			750

Total assets	$	2,768,711		$	1,935,053

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities
Accounts payable and accrued liabilities	$	352,895		$	326,730
Convertible demand note, net of unamortized discount of $ 242,207 and $244,154, respectively		36,936			27,000
Current portion of notes payable		372,403			347,762
Advances payable – related party		109,259			114,259
Total current liabilities		871,493			815,751

Convertible debenture, net of unamortized discount of $248,084 and $257,316, respectively		236,715			215,947
Notes payable		363,957			363,957
Asset retirement obligations		116,050			115,520
Total liabilities		1,588,215			1,511,175

STOCKHOLDERS’ EQUITY
Common shares, $0.001 par value, 150,000,000 shares authorized, 56,160,000 and 55,760,000 shares issued and outstanding, respectively		56,160			55,760
Additional paid-in capital		9,364,470			7,924,850
Stock subscription receivable		(130,000	)		-
Accumulated deficit		(8,110,134	)		(7,556,732	)
Total stockholders’ equity		1,180,496			423,878

Total liabilities and stockholders’ equity	$	2,768,711		$	1,935,053

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

USA SUPERIOR ENERGY HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

For the three months ended March 31, 2008 and 2007

(Unaudited)

	2008			2007

Revenue	$	115,563		$	15,443

Operating expenses
Lease operating expenses		89,495			18,763
General and administrative, including stock based compensation of $217,501 and $3,020,000, respectively		516,505			3,375,085
Depreciation, depletion and amortization		21,243			1,069
Total operating expenses		627,243			3,394,917
Operating loss		(511,680	)		(3,379,474	)

Other income (expense)
Interest expense		(41,722	)		-
Total other expense		(41,722	)		-

Net loss		(553,402	)		(3,379,474	)


Net loss per share:
Basic and diluted	$	(0.01	)	$	(0.09	)

Weighted average shares outstanding:
Basic and diluted		56,064,348			35,666,630

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

USA SUPERIOR ENERGY HOLDINGS, INC.

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

For the years three months ended March 31, 2008

(Unaudited)

	Common Shares		Par Amount		Additional Paid-In Capital		Stock Subscription Receivable			Accumulated Deficit			Total

Balance, December 31, 2007		55,760,000	$	55,760	$	7,924,850	$	-		$	(7,556,732	)	$	423,878

Shares issued in exchange for subscription receivable		400,000		400		299,600		(130,000)			-			170,000
Warrants issued for services		-		-		550,020		-			-			550,020
Shares transferred by CEO for services		-		-		590,000		-			-			590,000
Net loss		-		-		-		-			(553,402	)		(553,402	)

Balance, March 31, 2008		56,160,000	$	56,160	$	9,364,470	$	(130,000	)	$	(8,110,134	)	$	1,180,496

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

USA SUPERIOR ENERGY HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the three months ended March 31, 2008 and 2007

(Unaudited)

	2008			2007

CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(553,402	)	$	(3,379,474	)
Adjustments to reconcile net loss to cash used by operating activities:
Depreciation, depletion and amortization		21,243			1,069
Amortization of debt discount		11,179			-
Stock based compensation		217,501			3,020,000
Net change in operating assets and liabilities		158,161			(250,939	)
NET CASH USED BY OPERATING ACTIVITIES		(145,318	)		(609,344	)

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment		-			(41,528	)
Investment in oil and gas properties		-			(400,000	)
CASH FLOWS USED IN INVESTING ACTIVITIES		-			(441,528	)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of short-term debt		-			25,000
Proceeds from sale of units		-			1,000,000
Capital contributions from shareholder		-			161,976
Repayments of notes payable		(70,000	)		-
CASH FLOWS USED BY FINANCING ACTIVITIES		(70,000	)		1,186,976

NET INCREASE(DECREASE) IN CASH AND CASH EQUIVALENTS		(215,318	)		136,104
Cash and cash equivalents, beginning of period		256,943			297
Cash and cash equivalents, end of period	$	41,625		$	136,401

		2007		2006
Cash paid for:
Interest	$	1,001	$	-
Income taxes	$	-	$	-

Supplemental Schedule of Non-cash Investing and Financing Activities:
Purchase oil and gas properties through issuance of notes payable	$	750,097	$	-
Recapitalization		18,360		-
Asset retirement obligation incurred		-		88,066

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

USA SUPERIOR ENERGY HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2008

NOTE 1 – ORGANIZATION AND BUSINESS OPERATIONS

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Interim Financial Statements

Basis of presentation

Use of estimates

Principles of consolidation

The financial statements include the accounts of its 100% owned subsidiaries USA Superior Energy, Inc. and Superior Energy, LLC and its 80% interest in the subsidiary Skyrider Energy, LLC.

Revenue and cost recognition

New Accounting Pronouncements

USA Superior does not expect the adoption of recently issued accounting pronouncements to have a significant impact on their results of operations, financial position or cash flows

NOTE 3 – GOING CONCERN

NOTE 4 – NOTES PAYABLE AND CONVERTIBLE DEBENTURES

Notes Payable – Bastrop and Caldwell County, Texas Leases

NOTE 5 – STOCKHOLDERS’ EQUITY

Issuance of Common Shares and Warrants

	Assumption
Exercise price	$ 0.17
Stock price on the issuance date	$ 0.59
Term (years)	5
Risk free interest rate	2.50 %
Volatility	130 %

Issuance of Common Stock for Subscription Agreement

Item 2. Management’s Discussion Analysis of Financial Condition and Results of Operations

The following discussion will assist you in understanding our financial position, liquidity, and results of operations. The information below should be read in conjunction with the consolidated financial statements, and the related notes to consolidated financial statements. Our discussion contains both historical and forward-looking information. We assess the risks and uncertainties about our business, long-term strategy, and financial condition before we make any forward-looking statements, but we cannot guarantee that our assessment is accurate or that our goals and projections can or will be met. Statements concerning results of future exploration, exploitation, development, and acquisition expenditures as well as expense and reserve levels are forward-looking statements. We make assumptions about commodity prices, drilling results, production costs, administrative expenses, and interest costs that we believe are reasonable based on currently available information.

Critical Estimates and Accounting Policies

We prepare our consolidated financial statements in this report using accounting principles that are generally accepted in the United States (“GAAP”). GAAP represents a comprehensive set of accounting and disclosure rules and requirements. We must make judgments, estimates, and in certain circumstances, choices between acceptable GAAP alternatives as we apply these rules and requirements, which may affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.

The most critical estimate we use is the engineering estimate of proved oil and gas reserves. This estimate affects the application of the full cost method of accounting, the calculation of depreciation and depletion of oil and gas properties and the estimate of the impairment of our oil and gas properties. It also affects the estimated lives of our assets used to determine asset retirement obligations.

Full Cost Method Accounting

We use the full cost method of accounting for oil and gas producing activities. Our costs incurred in connection with the acquisition, exploration for and development of petroleum and natural gas reserves are capitalized. Such costs include lease acquisition, geological and geophysical activities, rentals on non-producing leases, drilling, completing and equipping of oil and gas wells and administrative costs directly attributable to those activities and asset retirement costs.

Sales of Oil and Gas Properties

Proceeds from the sale of properties are applied against capitalized costs, without any gain or loss being recognized, unless such a sale would significantly alter the rate of depletion and depreciation.

Depreciation and Depletion of Oil and Gas Properties

Depletion of exploration and development costs and depreciation of production equipment is provided using the unit-of-production method based upon estimated proven oil and gas reserves. The costs of significant unevaluated properties are excluded from costs subject to depletion. For depletion and depreciation purposes, relative volumes of oil and gas production and reserves are converted at the equivalent conversion based upon relative energy content.

Ceiling Test

In applying the full cost method, we perform an annual ceiling test whereby the carrying value of oil and gas properties and production equipment, net of recorded future income taxes and the accumulated provision for site restoration and abandonment costs, is compared annually to an estimate of future net cash flow from the production of proven reserves. Costs related to undeveloped oil and gas properties are excluded from the ceiling tests. Discounted net cash flow, utilizing a 10% discount rate, is estimated using year end prices, less estimated future general and administrative expenses, financing costs and income taxes. Should this comparison indicate an excess carrying value, the excess is charged against earnings. For the years ended December 31, 2007 and 2006, no impairment of oil and gas properties was indicated.

Asset Retirement Obligations

We record a liability for legal obligations associated with the retirement of tangible long-lived assets in the period in which they are incurred in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 143 “Accounting for Asset Retirement Obligations.” Under this method, when liabilities for dismantlement and abandonment costs (ARO) are initially recorded, the carrying amount of the related oil and natural gas properties are increased. Accretion of the liability is recognized each period using the interest method of allocation, and the capitalized cost is depleted over the useful life of the related asset. Revisions to such estimates are recorded as adjustments to the ARO, capitalized asset retirement costs and charges to operations during the periods in which they become known. At the time the abandonment cost is incurred, we will be required to recognize a gain or loss if the actual costs do not equal the estimated costs included in ARO.

Concentrations of Credit Risk

We sold all of our oil and natural gas production to two customers in 2007.

We maintain our cash in bank deposit accounts which, at times, may exceed federally insured limits. Accounts are guaranteed by the Federal Deposit Insurance Corporation (“FDIC”) up to $100,000. At March 31, 2007 all of our cash deposits were within FDIC insured limits. We have not experienced any losses in such accounts.

Revenue and Cost Recognition

We use the sales method to account for sales of crude oil and natural gas. Under this method, revenues are recognized based on actual volumes of oil and gas sold to purchasers. The volumes sold may differ from the volumes to which we are entitled based on our interest in the properties. These differences create imbalances which are recognized as a liability only when the imbalance exceeds the estimate of remaining reserves. We had no imbalances as of December 31, 2007 and March 31, 2008. Costs associated with production are expensed in the period incurred.

Cash and cash equivalents

Cash and cash equivalents include cash in banks and liquid deposit with maturities of three months or less.

Fair Value of Financial Instruments

The carrying value of cash and cash equivalents, accounts payable and accrued expenses and other liabilities approximates fair value due to the short term maturity of these instruments. The carrying value of the notes payable, convertible notes and convertible debentures approximate their fair value as December 31, 2007 and 2006.

Property and Equipment

Property and equipment are stated at cost. Depreciation is computed on a straight-line basis over the estimated useful lives of three to five years.

Stock-based compensation

On January 1, 2006, we adopted SFAS No. 123(R), “Share-Based Payment”. SFAS 123(R) replaced SFAS No. 123 and supersedes APB Opinion No. 25. SFAS 123(R) requires all stock-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values.

Loss per share

Basic net loss per common share is computed by dividing net loss by the weighted-average number of common shares outstanding during the period. Diluted net loss per common share is determined using the weighted-average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents. In periods when losses are reported, the weighted-average number of common shares outstanding excludes common stock equivalents, because their inclusion would be anti-dilutive.

Standardized measure of discounted future net cash flows

The standardized measure of discounted future net cash flows relies on these estimates of oil and gas reserves using commodity prices and costs which existed at year-end. In our 2007 year-end reserve report, we used the December 31, 2007 WTI Cushing spot price of $96.01 per Bbl and Henry Hub spot natural gas price of $7.465 per MMbtu, adjusted by property for energy content, quality, transportation fees, and regional price differentials. The weighted average price over the lives of the properties was $88.45 per Bbl for oil and $6.00 per Mcf for gas. While we believe that future operating costs can be reasonably estimated, future prices are difficult to estimate since market prices are influenced by events beyond our control. Future global economic and political events will most likely result in significant fluctuations in future oil prices, while future U.S. natural gas prices will continue to be influenced by primarily domestic market factors, including supply and demand, weather patterns and public policy.

Income taxes

Income taxes are accounted for using the asset/liability method of income tax allocation. Future income taxes are recognized for the future income tax consequences attributable to differences between the carrying values of assets and liabilities and their respective income tax bases. Future income tax assets and liabilities are measured using income tax rates expected to apply to taxable income in the years in which temporary differences are expected to be recovered or settled. The effect on future income tax assets and liabilities of a change in income tax rates is included in earnings in the period that such change in income tax rates is enacted. Future income tax assets are recorded in the financial statements if realization is considered more likely than not.

Business Strategy

USA Superior Energy Holdings, Inc. (the “Company”) is focused on acquiring, owning, operating and applying enhanced oil recovery (“EOR”) techniques to existing shallow fields of oil and gas. The Company performs complete workover and stimulation services in these existing fields to restart or substantially increase production. It utilizes state-of-the-art workover and shallow-well drilling techniques in these fields including new and innovative technologies under development by the Company. These new technologies include specialized shallow-well cased hole horizontal drilling (“CHHD”) and nitrogen (“N2”) injection which will be utilized to increase production volumes and reserve recoverability from the Company’s projects. Currently, the Company is involved in developing, owning and operating energy projects and prospects in East, Central and South Texas and currently has active projects and prospects in Bastrop, Caldwell, Navarro and Zavalla counties. These fields are known as the Bateman Project in Bastrop and Caldwell Counties (comprised of the Bateman Field and part of the adjacent Dale McBride Field), the Benton Field in Navarro County and the Del Monte Prospect in Zavalla County.

Going Concern

The report of our independent registered public accounting firm on the financial statements for the year ended December 31, 2007, includes an explanatory paragraph indicating substantial doubt as to our ability to continue as a going concern. We incurred a net loss of $553,402 for the quarter ended March 31, 2008 and have a working capital deficit of $777,368 at March 31, 2008, excluding prepaid expenses relating primarily to services paid for with common stock. We require significant additional funding to sustain our operations and satisfy our contractual obligations for our planned oil and gas exploration and development operations. Our ability to establish the Company as a going concern is dependent upon our ability to obtain additional financing, in order to fund our planned operations and ultimately, to achieve profitable operations.

Liquidity and Capital Resources

Our main sources of liquidity and capital resources for the quarter ended March 31, 2008 were cash flows from operations and draw down of our cash balances. During the quarter, we entered into a financing arrangement with our oil purchasing customers which allows for immediate payment on barrels delivered. While this may reduce the price we might otherwise receive for our production, we have been able to accelerate cash flow from revenues to enhance or liquidity by receiving cash upon the delivery of our barrels.

During the quarter ended March 31, 2008, net cash flow used by operating activities increased by $[541,000] to $[687,000], as compared to $[146,000] for our [2006 fiscal year], primarily because of our increased operating and general and administrative expenses only partially offset by increased revenues received during the year. We expect our cash flow provided by operations to continue to increase during 2008, mainly due to increased oil and natural production resulting from our existing properties. The Bastrop and Caldwell County properties were acquired in 2007 and were shut in for a portion of that year. We expect to receive a full year of revenue from these wells in 2008.

Excluding the effects of significant unforeseen expenses or other income, our cash flow from operations fluctuates primarily because of variations in oil and gas production rates and in commodity prices. In addition, our oil and gas production from either of our properties may be curtailed due to weather-related factors beyond our control. In addition, maintenance activities on, or damage to, major pipelines or processing facilities can also cause us to shut-in production for undetermined lengths of time.

Our realized oil and gas prices vary significantly due to world political events, supply and demand for products, product storage levels, and weather patterns, among other factors. We sell 100% of our production at spot market prices. Accordingly, product price volatility will affect our cash flow from operations.

We incurred capital expenditures totaling approximately $[442,000] during the quarter ended March 31, 2008. The capital expenditures primarily related to capitalizable costs associated with the Bateman Project. We anticipate making additional capital expenditures of approximately $4,000,000 over the next several years to drill additional wells on our existing properties. The remainder of our 2008 capital budget will be funded from a combination of our cash flow from operations, our cash and cash equivalents and the proceeds from offerings of debt and/or equity securities.

The required principal payments on our notes and debentures are as follows as of December 31, 2007:

2008	$ 618,000
2009	$ 237,000
2010	$ 558,000
2011	$ 37,000
	$ 1,450,000

Changes in our working capital accounts from 2007 to 2008 include an increase in Accounts payable and accrued liabilities by $[169,000] to $[327,000] at March 31, 2008 due to the increase in operating activities. Current notes payable increased to $372,403 from a $347,762 at December 31, 2007 due to accrual on our various borrowings.

On March 31, 2008, our current liabilities exceeded our current assets by $777,368, excluding prepaid expenses relating primarily to services paid for with common stock. While we expect to achieve positive cash flow from operations during 2008, we will require additional funding in order to complete our plans to develop additional wells on existing properties.

Results of Operations

Revenue

We produced [3,854] barrels of oil and recognized revenue of $115,563 during the quarter ended March 31, 2008, an increase of _____ barrels and $100,120 over 2007, primarily because we had a full quarter of production from the Bateman Project which was acquired in late in the first quarter of 2007 and because we realized significantly higher prices for our production.

Lease operating expense and production taxes

Our production costs totaled $89,495 during the quarter ended March 31, 2008, an increase of $70,732 over 2007, primarily because we had a full quarter of production from the Bateman Project which was acquired in late in the first quarter of 2007.

Accretion of asset retirement obligation

Accretion expense for the quarter ended March 31, 2008 was $[8,000], as compared to $[1,000] for same quarter in 2007. This reflects our acquisition of the Bastrop and Caldwell County properties during the first quarter of 2007.

Depletion, depreciation and amortization (DD&A) For our quarter ended March 31, 2008, we recorded DD&A expense of $21,243, after having recorded only $1,069 of DD&A expense during the first quarter of 2007. Virtually all of this expense was attributable to depletion of our oil and gas properties, which were acquired during the first quarter of 2007.

General and administrative expense (G&A expense)

General and administrative expense for the quarter ended March, 31 2008 decreased $2,858,580 from the comparable 2007 period to $516,505. The largest portion of the reduction came from a decrease in stock based compensation of $[5,680,000] from the same period in 2007 which related to the reverse merger and compensation of key employees and consultants. The other major component of general and administrative costs for the quarter ended March 31, 2008 included salaries of $[361,000].

Other income (expense)

Other income (expense) for the quarter ended March 31, 2008 was incurred interest expense of $41,722 during the quarter. We incurred no interest expense during the same quarter in 2007 because the acquisition of the Bateman project and related financing occurred at the end of the first quarter of 2007.

Net loss

For the quarter ended March 31, 2008, our net loss decreased to $553,402, compared to our same quarter 2007 net loss of $3,379,474. The major components of the first quarter 2008 loss were general and administrative expenses of $516,505 including stock based compensation of $[5,680,000].

New Accounting Pronouncements

USA Superior does not expect the adoption of recently issued accounting pronouncements to have a significant impact on their results of operations, financial position or cash flows

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Item 4. Controls and Procedures

Disclosure Controls and Procedures

Disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) are controls and other procedures that are designed to ensure that the information that we are required to disclose in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s 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.

In connection with the preparation of this Annual Report on Form 10-K, our management has evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2007. The disclosure controls and procedures are not effective and during the second quarter of fiscal 2008 management will be implementing effective disclosure controls and procedures.

Management’s Report on Internal Control Over Financial Reporting

Our management, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined in Rules 13a-15(f) under the Exchange Act. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with existing policies or procedures may deteriorate.

Under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, during the second quarter of the current fiscal year, our management will implement an assessment of our internal control over financial reporting, based on the criteria established in Internal Control — Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). It is the opinion of our management that our internal control over financial reporting is currently not effective.

PART II- OTHER INFORMATION

Item 1. Legal Proceedings

On March 6, 2007, the Company entered into an Agreement of Sale and Purchase with Orbis Operating, LLC (“Orbis”), in which it agreed to purchase a substantial portion of the property Orbis acquired under a previous R&S Sale Agreement. Part of the purchase price included a Promissory Note in the amount of $350,000.00. After alleged numerous defaults by the Company, Orbis filed suit on March 10, 2008 in United States District Court in Bastrop County, Texas (Cause No. 26,952). The parties then entered into negotiations and reached agreement through a Loan Workout and Security Agreement on April 11, 2008. Orbis filed a Rule 11 Agreement with the Bastrop County court whereby it shall dismiss the suit with prejudice upon the full performance of USA Superior.

The terms of the settlement included:

·	The Company paying $50,000 cash, in which all was allocated towards Orbis’ legal fees

·	Principal Balance = $310,000

·	The Company is to make monthly payments on the 15th day in the amount of $15,000 plus accrued interest, (6 payments for May-Oct)

·	The Company is to make a final payment of entire Principal ($202,000) on October 15, 2008

·	Once the Company fulfills obligation to plug the Gabriel wells it assumed (must be done by July 31, 2008), it will be given a $60,000 credit towards final Principal payment

Outside of the Orbis settlement disclosures above, the Company knows of no material, active or pending legal proceedings against the Company nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any directors, officers, or affiliates, or any registered or beneficial shareholder, is an adverse party or has material interest adverse to the Company’s interest.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Item 3. Defaults Upon Senior Securities

Cheatham Note?

Item 4. Submission of Matters to a Vote of Security Holders.

NONE

Item 5. Other Information

Item 6. Exhibits

INDEX TO FINANCIAL STATEMENTS

Consolidated Balance Sheets as of March 31, 2008 and December 31, 2007 (unaudited)	F-1

Consolidated Statements of Operations for the three months ended March 31, 2008 and 2007 (unaudited)	F-2

Consolidated Statement of Stockholders’ Equity for the three months ended March 31, 2008 (unaudited)	F-3

Consolidated Statements of Cash Flows for three months ended March 31, 2008 and 2007 (unaudited)	F-4

Notes to the Consolidated Financial Statements – March 31, 2008 (unaudited)	F-5

USA SUPERIOR ENERGY HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS

As of March 31, 2008 and December 31, 2007

(Unaudited)

ASSETS	March 31, 2007			December 31, 2007
Current assets
Cash and cash equivalents	$	41,625		$	256,943
Restricted cash		50,000			50,000
Accounts receivable		2,500			-
Prepaid expenses		1,092,519			24,699
Total current assets		1,186,644			331,642

Oil and gas properties, including $348,086 of unproved properties, net of accumulated depletion, depreciation and amortization of $52,257 and $36,991, respectively – using full cost method of accounting		1,553,023			1,568,289
Office equipment, net of depreciation of $14,839 and $9,391, respectively		28,294			34,372
Other assets		750			750

Total assets	$	2,768,711		$	1,935,053

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities
Accounts payable and accrued liabilities	$	352,895		$	326,730
Convertible demand note, net of unamortized discount of $ 242,207 and $244,154, respectively		36,936			27,000
Current portion of notes payable		372,403			347,762
Advances payable – related party		109,259			114,259
Total current liabilities		871,493			815,751

Convertible debenture, net of unamortized discount of $248,084 and $257,316, respectively		236,715			215,947
Notes payable		363,957			363,957
Asset retirement obligations		116,050			115,520
Total liabilities		1,588,215			1,511,175

STOCKHOLDERS’ EQUITY
Common shares, $0.001 par value, 150,000,000 shares authorized, 56,160,000 and 55,760,000 shares issued and outstanding, respectively		56,160			55,760
Additional paid-in capital		9,364,470			7,924,850
Stock subscription receivable		(130,000	)		-
Accumulated deficit		(8,110,134	)		(7,556,732	)
Total stockholders’ equity		1,180,496			423,878

Total liabilities and stockholders’ equity	$	2,768,711		$	1,935,053

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

USA SUPERIOR ENERGY HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

For the three months ended March 31, 2008 and 2007

(Unaudited)

	2008			2007

Revenue	$	115,563		$	15,443

Operating expenses
Lease operating expenses		89,495			18,763
General and administrative, including stock based compensation of $217,501 and $3,020,000, respectively		516,505			3,375,085
Depreciation, depletion and amortization		21,243			1,069
Total operating expenses		627,243			3,394,917
Operating loss		(511,680	)		(3,379,474	)

Other income (expense)
Interest expense		(41,722	)		-
Total other expense		(41,722	)		-

Net loss		(553,402	)		(3,379,474	)


Net loss per share:
Basic and diluted	$	(0.01	)	$	(0.09	)

Weighted average shares outstanding:
Basic and diluted		56,064,348			35,666,630

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

USA SUPERIOR ENERGY HOLDINGS, INC.

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

For the years three months ended March 31, 2008

(Unaudited)

	Common Shares		Par Amount		Additional Paid-In Capital		Stock Subscription Receivable			Accumulated Deficit			Total

Balance, December 31, 2007		55,760,000	$	55,760	$	7,924,850	$	-		$	(7,556,732	)	$	423,878

Shares issued in exchange for subscription receivable		400,000		400		299,600		(130,000)			-			170,000
Warrants issued for services		-		-		550,020		-			-			550,020
Shares transferred by CEO for services		-		-		590,000		-			-			590,000
Net loss		-		-		-		-			(553,402	)		(553,402	)

Balance, March 31, 2008		56,160,000	$	56,160	$	9,364,470	$	(130,000	)	$	(8,110,134	)	$	1,180,496

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

USA SUPERIOR ENERGY HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the three months ended March 31, 2008 and 2007

(Unaudited)

	2008			2007

CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(553,402	)	$	(3,379,474	)
Adjustments to reconcile net loss to cash used by operating activities:
Depreciation, depletion and amortization		21,243			1,069
Amortization of debt discount		11,179			-
Stock based compensation		217,501			3,020,000
Net change in operating assets and liabilities		158,161			(250,939	)
NET CASH USED BY OPERATING ACTIVITIES		(145,318	)		(609,344	)

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment		-			(41,528	)
Investment in oil and gas properties		-			(400,000	)
CASH FLOWS USED IN INVESTING ACTIVITIES		-			(441,528	)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of short-term debt		-			25,000
Proceeds from sale of units		-			1,000,000
Capital contributions from shareholder		-			161,976
Repayments of notes payable		(70,000	)		-
CASH FLOWS USED BY FINANCING ACTIVITIES		(70,000	)		1,186,976

NET INCREASE(DECREASE) IN CASH AND CASH EQUIVALENTS		(215,318	)		136,104
Cash and cash equivalents, beginning of period		256,943			297
Cash and cash equivalents, end of period	$	41,625		$	136,401

		2007		2006
Cash paid for:
Interest	$	1,001	$	-
Income taxes	$	-	$	-

Supplemental Schedule of Non-cash Investing and Financing Activities:
Purchase oil and gas properties through issuance of notes payable	$	750,097	$	-
Recapitalization		18,360		-
Asset retirement obligation incurred		-		88,066

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

USA SUPERIOR ENERGY HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2008

NOTE 1 – ORGANIZATION AND BUSINESS OPERATIONS

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Interim Financial Statements

Basis of presentation

Use of estimates

Principles of consolidation

The financial statements include the accounts of its 100% owned subsidiaries USA Superior Energy, Inc. and Superior Energy, LLC and its 80% interest in the subsidiary Skyrider Energy, LLC.

Revenue and cost recognition

New Accounting Pronouncements

USA Superior does not expect the adoption of recently issued accounting pronouncements to have a significant impact on their results of operations, financial position or cash flows

NOTE 3 – GOING CONCERN

NOTE 4 – NOTES PAYABLE AND CONVERTIBLE DEBENTURES

Notes Payable – Bastrop and Caldwell County, Texas Leases

NOTE 5 – STOCKHOLDERS’ EQUITY

Issuance of Common Shares and Warrants

	Assumption
Exercise price	$ 0.17
Stock price on the issuance date	$ 0.59
Term (years)	5
Risk free interest rate	2.50 %
Volatility	130 %

Issuance of Common Stock for Subscription Agreement

SIGNATURES

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.

USA Superior Energy Holdings, Inc.

(the “Registrant”)

By: _/s/ G. Rowland Carey

G. Rowland Carey

President, Chief Executive Officer,

& Chief Financial Officer

Dated: May 20, 2008