FORM 10-K

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
( ) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the fiscal year ended August 31, 2008.

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

For the transition period from January 1 to August 31, 2008.

Commission file number: None

SYNERGY RESOURCES CORPORATION
-------- ------------------------------
(Exact name of registrant as specified in its charter)

COLORADO 20-2835920
------------------------------- -------------------
(State or other jurisdiction of (I.R.S.Employer
incorporation or organization) Identification No.)

20203 Highway 60
Platteville, CO 80651
-------------------------------- -----------
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (970) 737-1073
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act. [ ]

Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act. [ ]

Indicate by check mark whether the registrant (1) has filed all reports 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 [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [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
the definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.

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 [X] No

The aggregate market value of the voting stock held by non-affiliates of the
registrant, based upon the closing sale price of the registrant's common stock
on February 29, 2008, as quoted on the OTC Bulletin Board, was approximately
$1,867,000.

As of January 23, 2009, the Registrant had 10,183,334 issued and outstanding
shares of common stock.

Documents Incorporated by Reference: None

PART I

Cautionary Statement Concerning Forward-Looking Statements

This report contains "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995. These statements are
subject to risks and uncertainties and are based on the beliefs and assumptions
of management and information currently available to management. The use of
words such as "believes", "expects", "anticipates", "intends", "plans",
"estimates", "should", "likely" or similar expressions, indicates a
forward-looking statement.

The identification in this report of factors that may affect future
performance and the accuracy of forward-looking statements is meant to be
illustrative and by no means exhaustive. All forward-looking statements should
be evaluated with the understanding of their inherent uncertainty.

Factors that could cause actual results to differ materially from those
expressed or implied by forward-looking statements include, but are not limited
to:

o The success of our exploration and development efforts;
o The price of oil and gas;
o The worldwide economic situation;
o Any change in interest rates or inflation;
o The willingness and ability of third parties to honor their
contractual commitments;
o The Company's ability to raise additional capital, as it may be
affected by current conditions in the stock market and competition in
the oil and gas industry for risk capital;
o The Company's capital costs, as they may be affected by delays or cost
overruns;
o The Company's costs of production;
o Environmental and other regulations, as the same presently exist or
may later be amended;
o The Company's ability to identify, finance and integrate any future
acquisitions; and
o The volatility of the Company's stock price.

ITEM 1. BUSINESS

The Company was incorporated in Colorado in May 2005 under the name Blue
Star Energy, Inc. In December 2007 the Company changed its name to Brishlin
Resources, Inc. Since its formation the Company has been relatively inactive.
The Company has never generated any revenue and prior to the acquisition of
Synergy Resources Corporation the Company's only material asset was one shut-in
oil well.

On September 10, 2008 the Company acquired approximately 89% of the
outstanding shares of Synergy Resources Corporation in exchange for 8,882,500
shares of its common stock and 1,042,500 Series A warrants.

In contemplation of the acquisition, the shareholders of the Company, at a
special meeting held on September 8, 2008, approved a 10-for-1 reverse split of
the Company's common stock and approved a resolution to change the Company's
name to Synergy Resources Corporation. As a result of the reverse stock split,
the Company had 1,038,000 outstanding shares of common stock at the time of the
acquisition of Synergy.

The reverse stock split and name change became effective on the OTC
Bulletin Board on September 22, 2008.

Each shareholder of the Company at the close of business on September 9,
2008 will receive one Series A warrant for each post-split share which they
owned in the Company on that date. However, the warrants will not be issued
until a registration statement covering the warrants, as well as the shares
issuable upon the exercise of the warrants, has been filed and declared
effective by the Securities and Exchange Commission.

On December 19, 2008 the Company acquired the remaining shares of Synergy
for 1,077,500 shares of the Company's common stock. As part of this transaction,
the Company issued 1,017,500 Series A warrants in exchange for a like number of
Series A warrants held by the Synergy shareholders.

Each Series A Warrant entitles the holder to purchase one share of the
Company's common stock at a price of $6.00 per share. The Series A Warrants
expire on the earlier of December 31, 2012 or twenty days following written
notification from the Company that its common stock had a closing bid price at
or above $7.00 for any ten of twenty consecutive trading days.

Synergy Resources was incorporated in Colorado in December 2007. As of the
date of its acquisition by the Company, Synergy's only asset was approximately
$2.2 million in cash that it raised from private investors.

Unless otherwise indicated all references to the Company include the
operations of Synergy.

The Company plans to evaluate undeveloped oil and gas prospects and
participate in drilling activities on those prospects which, in the opinion of
management, are favorable for the production of oil or gas. If, through its
review, a geographical area indicates geological and economic potential, the
Company will attempt to acquire leases or other interests in the area. The
Company may then attempt to sell portions of its leasehold interests in a
prospect to third parties, thus sharing the risks and rewards of the exploration
and development of the prospect with the other owners. One or more wells may be
drilled on a prospect, and if the results indicate the presence of sufficient
oil and gas reserves, additional wells may be drilled on the prospect.

The Company may also:

o acquire a working interest in one or more prospects from others and
participate with the other working interest owners in drilling, and if
warranted, completing oil or gas wells on a prospect, or
o purchase producing oil or gas properties.

The Company's activities will primarily be dependent upon available
financing.

Title to properties which may be acquired by the Company will be subject
to royalty, overriding royalty, carried, net profits, working and other similar
interests and contractual arrangements customary in the oil and gas industry, to
liens for current taxes not yet due and to other encumbrances. As is customary
in the industry, in the case of undeveloped properties little investigation of
record title will be made at the time of acquisition (other than a preliminary
review of local records). However, drilling title opinions may be obtained
before commencement of drilling operations.

The Company's two officers, Ed Holloway and William Scaff, Jr., are
currently involved in oil and gas exploration and development. Mr. Holloway and
Mr. Scaff, or their affiliates, may present the Company with opportunities to
acquire leases or to participate in drilling oil or gas wells.

Any transaction between the Company and Ed Holloway and William E. Scaff,
Jr., or any of their affiliates (collectively the "Holloway/Scaff parties") must
be approved by a majority of the Company's disinterested directors. In the event
the Holloway/Scaff parties are presented with or become aware of any potential
transaction which they believe would be of interest to the Company, they are
required to provide the Company with the right to participate in the
transaction. The Holloway/Scaff parties are required to disclose any interest
they have in the potential transaction as well as any interest they have in any
property which could benefit from the Company's participation in the
transaction, such as by the Company drilling an exploratory well on a lease
which is in proximity to leases in which the Holloway/Scaff parties have an
interest. Without the consent of the Company, the Holloway/Scaff parties may
participate up to 25% in a potential transaction on terms which are no different
than those offered to the Company.

The Company has a letter agreement with Petroleum Management, LLC, and
Petroleum Exploration and Management, LLC, firms controlled by Ed Holloway and
William E. Scaff, Jr., which provides the Company with the option to acquire
working interests in oil and gas leases owned by these firms and covering lands
on the Denver-Julesburg ("D-J") basin in northeast Colorado. The oil and gas
leases cover 640 acres in Weld County, Colorado and, subject to certain
conditions, will be transferred to the Company for payment of $1,000 per net
mineral acre. The working interests in the leases vary but the net revenue
interest in the leases, if acquired by the Company, will not be less than 75%.
The option requires an initial payment of $100,000, which will be applied
against any leases acquired by the Company. As of January 23, 2009 this $100,000
had not yet been paid.

Pursuant to the option agreement described above, the Company recently
participated in two wells drilled by Kerr-McGee Oil & Gas Onshore LP (KM). Both
the Gray #25-16 well and the Zabka State #33-15 well hit productive formations
at a depth of approximately 7,500 feet. The Company has been informed by KM that
they intend to complete the wells and commence production during the first
calendar quarter of 2009. The Company has a 37.5% working interest (28.125% net
revenue interest) in each well and expects that its costs of drilling and
completing these wells will be approximately $570,000.

In November 2008, the Company participated in an auction of leases
conducted by the State of Colorado. The Company was awarded leases to 1,600
acres for total consideration of $113,600. The leases have terms of ten years.

In November 2008, the Company purchased a lease covering 2,560 acres for
cash of approximately $51,000. The lease has a term of five years.

During the year ended December 31, 2007, and the eight-month transition
period ended August 31, 2008, the Company did not drill or participate in the
drilling of any oil or gas wells.

Since its inception in May 2005, the Company has not produced or sold any
oil or gas.

The following table shows, as of January 23, 2009, by state, the Company's
producing wells, Developed Acreage, and Undeveloped Acreage, excluding service
(injection and disposal) wells:

Productive Wells (1) Developed Acreage Undeveloped Acreage (1)
State Gross Net Gross Net Gross Net
----- ----- --- ----- --- ----- ---

Colorado -- -- 480 (2) 155 1,834 1,834
Nebraska -- -- -- -- 2,560 2,560

(1) "Undeveloped Acreage" includes leasehold interests on which wells have not
been drilled or completed to the point that would permit the production of
commercial quantities of natural gas and oil regardless of whether the
leasehold interest is classified as containing proved undeveloped reserves.
(2) Includes 160 acres associated with a shut-in gas well.

The following table shows, as of January 23, 2009 the status of Company's
gross acreage.

State Held by Production Not Held by Production
----- ------------------ ----------------------

Colorado 320 1,994
Nebraska -- 2,560

Acres Held By Production remain in force so long as oil or gas is produced
from the well on the particular lease. Leased acres which are not Held By
Production require annual rental payments to maintain the lease until the first

to occur of the following: the expiration of the lease or the time oil or gas is
produced from one or more wells drilled on the lease acreage. At the time oil or
gas is produced from wells drilled on the leased acreage the lease is considered
to be Held By Production.

The Company does not own any Overriding Royalty Interests.

The Company plans to file an application to become an oil and gas operator
in Colorado.

GOVERNMENT REGULATION

Various state and federal agencies regulate the production and sale of oil
and natural gas. All states in which the Company plans to operate impose
restrictions on the drilling, production, transportation and sale of oil and
natural gas.

The Federal Energy Regulatory Commission (the "FERC") regulates the
interstate transportation and the sale in interstate commerce for resale of
natural gas. The FERC's jurisdiction over interstate natural gas sales has been
substantially modified by the Natural Gas Policy Act under which the FERC
continued to regulate the maximum selling prices of certain categories of gas
sold in "first sales" in interstate and intrastate commerce.

FERC has pursued policy initiatives that have affected natural gas
marketing. Most notable are (1) the large-scale divestiture of interstate
pipeline-owned gas gathering facilities to affiliated or non-affiliated
companies; (2) further development of rules governing the relationship of the
pipelines with their marketing affiliates; (3) the publication of standards
relating to the use of electronic bulletin boards and electronic data exchange
by the pipelines to make available transportation information on a timely basis
and to enable transactions to occur on a purely electronic basis; (4) further
review of the role of the secondary market for released pipeline capacity and
its relationship to open access service in the primary market; and (5)
development of policy and promulgation of orders pertaining to its authorization
of market-based rates (rather than traditional cost-of-service based rates) for
transportation or transportation-related services upon the pipeline's
demonstration of lack of market control in the relevant service market. The
Company does not know what effect the FERC's other activities will have on the
access to markets, the fostering of competition and the cost of doing business.

The Company's sales of oil and natural gas liquids will not be regulated
and will be at market prices. The price received from the sale of these products
will be affected by the cost of transporting the products to market. Much of
that transportation is through interstate common carrier pipelines.

Federal, state, and local agencies have promulgated extensive rules and
regulations applicable to The Company's oil and natural gas exploration,
production and related operations. Most states require permits for drilling
operations, drilling bonds and the filing of reports concerning operations and
impose other requirements relating to the exploration of oil and natural gas.
Many states also have statutes or regulations addressing conservation matters
including provisions for the unitization or pooling of oil and natural gas
properties, the establishment of maximum rates of production from oil and

natural gas wells and the regulation of spacing, plugging and abandonment of
such wells. The statutes and regulations of some states limit the rate at which
oil and natural gas is produced from the Company's properties. The federal and
state regulatory burden on the oil and natural gas industry increases the
Company's cost of doing business and affects its profitability. Because these
rules and regulations are amended or reinterpreted frequently, the Company is
unable to predict the future cost or impact of complying with those laws.

COMPETITION AND MARKETING

The Company will be faced with strong competition from many other
companies and individuals engaged in the oil and gas business, many are very
large, well established energy companies with substantial capabilities and
established earnings records. The Company may be at a competitive disadvantage
in acquiring oil and gas prospects since it must compete with these individuals
and companies, many of which have greater financial resources and larger
technical staffs. It is nearly impossible to estimate the number of competitors;
however, it is known that there are a large number of companies and individuals
in the oil and gas business.

Exploration for and production of oil and gas are affected by the
availability of pipe, casing and other tubular goods and certain other oil field
equipment including drilling rigs and tools. The Company will depend upon
independent drilling contractors to furnish rigs, equipment and tools to drill
its wells. Higher prices for oil and gas may result in competition among
operators for drilling equipment, tubular goods and drilling crews which may
affect the Company's ability expeditiously to drill, complete, recomplete and
work-over wells.

The market for oil and gas is dependent upon a number of factors beyond
the Company's control, which at times cannot be accurately predicted. These
factors include the proximity of wells to, and the capacity of, natural gas
pipelines, the extent of competitive domestic production and imports of oil and
gas, the availability of other sources of energy, fluctuations in seasonal
supply and demand, and governmental regulation. In addition, there is always the
possibility that new legislation may be enacted which would impose price
controls or additional excise taxes upon crude oil or natural gas, or both.
Oversupplies of natural gas can be expected to recur from time to time and may
result in the gas producing wells being shut-in. Imports of natural gas may
adversely affect the market for domestic natural gas.

The market price for crude oil is significantly affected by policies
adopted by the member nations of Organization of Petroleum Exporting Countries
("OPEC"). Members of OPEC establish prices and production quotas among
themselves for petroleum products from time to time with the intent of
controlling the current global supply and consequently price levels. The Company
is unable to predict the effect, if any, that OPEC or other countries will have
on the amount of, or the prices received for, crude oil and natural gas.

Gas prices, which were once effectively determined by government
regulations, are now largely influenced by competition. Competitors in this
market include producers, gas pipelines and their affiliated marketing
companies, independent marketers, and providers of alternate energy supplies,
such as residual fuel oil. Changes in government regulations relating to the

production, transportation and marketing of natural gas have also resulted in
significant changes in the historical marketing patterns of the industry.
Generally, these changes have resulted in the abandonment by many pipelines of
long-term contracts for the purchase of natural gas, the development by gas
producers of their own marketing programs to take advantage of new regulations
requiring pipelines to transport gas for regulated fees, and an increasing
tendency to rely on short-term contracts priced at spot market prices.

General
- --------

As of January 23, 2009 the Company's only employees were its two officers
and one landman.

The Company's website is www.synergyresourcescorporation.com.

ITEM 1A. RISK FACTORS
------------

Not applicable

ITEM 1B. UNRESOLVED STAFF COMMENTS
-------------------------

Not applicable

ITEM 2. PROPERTIES
----------

See Item 1 of this report for information concerning the Company's oil and
gas properties.

The Company's offices are located at 20203 Highway 60, Platteville, CO
80651. The Platteville office telephone number is (970) 737-1073 and its fax
number is (970) 737-1045. The Company also maintains an office at 1200 17th
Street, Suite 570, Denver, CO 80202. The Company's telephone number at its
Denver office is (303) 623-3966 and its fax number is (303) 534-0151.

The Platteville office and equipment yard is provided to the Company
pursuant to an Administrative Services Agreement with Petroleum Management, LLC,
a firm controlled by the Company's two officers. For more information, see Item
13 of this report.

Energy Capital, a consultant to the Company, has agreed to pay the rent
and all expenses associated with the Denver office. For more information, see
Item 13 of this report.

ITEM 3. LEGAL PROCEEDINGS
-----------------

None.

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

A special meeting of the Company's shareholders was held on September 8,
2008.

At the special meeting the following proposals were ratified by the
shareholders:

1. A 10-for-1 reverse split of the Company's common stock.

2. Changing the name of the Company to Synergy Resources Corporation.

The following is a tabulation of votes cast with respect to these
proposals:

Votes
------------------------------------- Broker
Proposal For Against Abstain Non-Votes
-------- --- ------- ------- ---------

1. 9,750,530 5,000 -- --
2. 9,755,530 -- -- --

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
AND ISSUER PURCHASES OF EQUITY
----------------------------------------------------------------------

On February 27, 2008, the Company's common stock began trading on the OTC
Bulletin Board under the symbol "BRSH." Prior to that date, there was no
established trading market for the Company's common stock. Between February 27,
2008 and September 22, 2008 less than 50,000 shares traded.

On September 22, 2008 the 10-for-1 reverse stock split, approved by the
Company's shareholders on September 8, 2008, became effective on the OTC
Bulletin Board and the Company's trading symbol was changed to "SYRG."

Shown below are the range of high and low closing prices for the Company's
common stock for the periods indicated as reported by the NASD. The market
quotations reflect inter-dealer prices, without retail mark-up, mark-down or
commissions and may not necessarily represent actual transactions. The market
quotations do not reflect the 10-for-1 reverse stock split referred to above.

Month Ended High Low

February 2008 $0.70 $0.35
March 2008 $0.50 $0.20
April 2008 $0.25 $0.20
May 2008 $0.25 $0.15
June 2008 $0.27 $0.25
July 2008 $0.34 $0.28
August 2008 $0.37 $0.30

On January 23, 2009 the closing price (post-split) of the Company's common
stock was $1.70 per share.

As of January 23, 2009, the Company had 10,183,334 outstanding shares of
common stock and 125 shareholders.

Holders of common stock are entitled to receive dividends as may be
declared by the Board of Directors. The Company's Board of Directors is not
restricted from paying any dividends but is not obligated to declare a dividend.
No dividends have ever been declared and it is not anticipated that dividends
will ever be paid.

The Company's Articles of Incorporation authorize its Board of Directors
to issue up to 10,000,000 shares of preferred stock. The provisions in the
Articles of Incorporation relating to the preferred stock allow the Company's
directors to issue preferred stock with multiple votes per share and dividend
rights which would have priority over any dividends paid with respect to the
holders of the Company's common stock. The issuance of preferred stock with
these rights may make the removal of management difficult even if the removal
would be considered beneficial to shareholders generally, and will have the
effect of limiting shareholder participation in certain transactions such as
mergers or tender offers if these transactions are not favored by the Company's
management.

During the eight months ended August 31, 2008 the Company did not purchase
any of its securities. During this same period no person affiliated with the
Company purchased any of the Company's securities on behalf of the Company.

Other Shares Which May Be Issued
- --------------------------------

The following table lists additional shares of the Company's common stock
which may be issued.

Number of Note
Shares Reference
--------- ---------
Shares sold in a private offering including shares
issuable upon exercise of warrants. (92,667 Units) 370,668 A

Series A Warrants to be issued to those persons
owning shares of the Company's common stock prior
to the acquisition of Synergy. 1,038,000 B

Shares issuable upon exercise of Series A Warrants
sold in prior offerings. 2,060,000 C

Shares issuable upon exercise of options held by the
Company's officers and employees. 4,100,000 D

A. Between October 30, 2008 and January 23, 2009 the Company sold 92,667 Units
in a private offering. Each Unit was sold at a price of $3.00 and consisted of
two shares of the Company's common stock, one Series A Warrant and one Series B
Warrant. Each Series A Warrant entitles the holder to purchase one share of the
Company's common stock at a price of $6.00 per share. Each Series B Warrant
entitles the holder to purchase one share of the Company's common stock at a
price of $10.00 per share.

The Company has agreed to pay the sales agents for the private offering a
commission of up to 10% of the amount the sales agent raise in this offering.
The Company has also agreed to issue to selected sales agents one warrant (the
"Sales Agent Warrants") for each five Units sold by selected sales agents. Each
Sales Agent Warrant will entitle the holder to purchase one share of the
Company's common stock at a price of $3.60 per share. The Sales Agent Warrants
will expire on the earlier of December 31, 2012 or twenty days following written
notification from the Company that its common stock had a closing bid price at
or above $7.00 per share for any ten of twenty consecutive trading days.

In order to raise additional capital the Company may sell additional
shares of its common stock or other securities. There is no assurance that the
Company will be successful in raising additional capital.

B. Each shareholder of the Company on the close of business on September 9, 2008
will receive one Series A warrant for each post-split share which they owned in
the Company on that date. However, the warrants will not be issued until a
registration statement covering the warrants, as well as the shares issuable
upon the exercise of the warrants, has been filed and declared effective by the
Securities and Exchange Commission. The Series A warrants to be issued to these
shareholders are identical to those referred to in Note A above.

C. Prior to August 31, 2008, Synergy sold 2,060,000 Units to a group of private
investors. Each Unit consisted of one share of Synergy's common stock and one
Series A warrant. In connection with the acquisition of Synergy, these Series A
warrants were exchanged for 2,060,000 Series A warrants of the Company. The
Series A warrants are identical to the Series A warrants referred to in Note A
above.

D. See Item 11 of this report for information concerning the terms of these
options.

ITEM 6. SELECTED FINANCIAL DATA
-----------------------

Not applicable.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

The Company was incorporated in Colorado on May 11, 2005. Since its
formation the Company has been relatively inactive. The Company has never
generated any revenue and prior to the acquisition of Synergy Resources
Corporation the Company's only material asset was one shut-in oil well.

On December 19, 2008 the Company acquired the remaining shares of Synergy
for 1,077,500 shares of the Company's common stock. As part of this transaction
the Company issued 1,017,500 Series A warrants to the remaining Synergy
shareholders in exchange for a like number of Series A warrants held by the
Synergy shareholders.

Synergy was incorporated in Colorado in December 2007. As of the date of
the acquisition by the Company, Synergy's only material asset was approximately
$2.2 million in cash that it raised from private investors.

Contingent upon the amount of capital available, the Company plans to
explore for oil and gas. The Company expects that its first wells will be
drilled in the Denver - Julesburg ("D-J") Basin in northeast Colorado.

The Company's plan of operation is disclosed in Item 1 of this report. The
Company's future plans will be dependent upon the amount the Company is able to
raise.

As of January 23, 2009, the Company was not generating any revenue.

RESULTS OF OPERATIONS

Although from a legal standpoint the Company, on September 10, 2008,
acquired a controlling interest in Synergy, for financial reporting purposes,
the acquisition of Synergy constituted a recapitalization, and the acquisition
was accounted for as a reverse merger whereby Synergy was deemed to have
acquired the Company. As a result, all financial statements filed in subsequent
10-K or 10-Q reports will reflect the historical operations of Synergy for the
period of Synergy's inception (December 28, 2007) through September 10, 2008 and
the combined operations of the Company and Synergy after that date.

Subsequent to the Synergy acquisition, the Company changed its fiscal year
end from December 31st to August 31st. Since the acquisition of Synergy took
place after August 31, 2008, the financial statements included with this report
reflect the operating results of the Company prior to the September 10, 2008
acquisition of Synergy.

For information concerning Synergy's financial condition as of August 31,
2008, and Synergy's results of operations from the date of its inception
(December 28, 2007) to August 31, 2008, refer to the Company's report on Form

8-K filed with the Securities and Exchange Commission on November 26, 2008

As a result of the change in the Company's fiscal year end, the Company's
most current statement of operations in this report is for the eight-month
period ended August 31, 2008. Accordingly, any comparison of the Company's
operations for the eight months ended August 31, 2008 with the Company's
operations for the twelve months ended December 31, 2007 would not be
meaningful.

The factors that will most significantly affect the Company's results of
operations will be (i) the sale prices of crude oil and natural gas, (ii) the
amount of production from oil or gas wells in which the Company has an interest,
and (iii) and lease operating expenses. The Company's revenues will also be
significantly impacted by its ability to maintain or increase oil or gas
production through exploration and development activities.

Other than the foregoing, the Company does not know of any trends, events
or uncertainties that will have had or are reasonably expected to have a
material impact on its sales, revenues or expenses.

LIQUIDITY AND CAPITAL RESOURCES

The Company's sources and (uses) of funds for the eight months ended
August 31, 2008 and the year ended December 31, 2007 are shown below:

Eight Months Ended Year Ended
August 31, 2008 December 31, 2007
------------------- -----------------

Cash used in operating activities $(162,871) $(255,419)

Proceeds from sale of oil and
gas property -- 23,922

Proceeds from sale of common stock 150,000 235,000

Net change in cash balance (12,871) 3,503

The Company's material future capital requirements are (i) approximately
$2,700,000 for exploration and development; (ii) approximately $125,000 per
month for operating expenses, including salaries and other corporate overhead;
and (iii) approximately $30,000 per month for consulting services relating to
raising capital.

It is expected that the Company's principal source of cash flow will be
from the production and sale of crude oil and natural gas reserves which are
depleting assets. Cash flow from the sale of oil and gas production depends upon
the quantity of production and the price obtained for the production. An
increase in prices will permit the Company to finance its operations to a
greater extent with internally generated funds, may allow the Company to obtain

equity financing more easily or on better terms, and lessens the difficulty of
obtaining financing. However, price increases heighten the competition for oil
and gas prospects, increase the costs of exploration and development, and,
because of potential price declines, increase the risks associated with the
purchase of producing properties during times that prices are at higher levels.

A decline in oil and gas prices (i) will reduce the cash flow internally
generated by the Company which in turn will reduce the funds available for
exploring for and replacing oil and gas reserves, (ii) will increase the
difficulty of obtaining equity and debt financing and worsen the terms on which
such financing may be obtained, (iii) will reduce the number of oil and gas
prospects which have reasonable economic terms, (iv) may cause the Company to
permit leases to expire based upon the value of potential oil and gas reserves
in relation to the costs of exploration, (v) may result in marginally productive
oil and gas wells being abandoned as non-commercial, and (vi) may increase the
difficulty of obtaining financing. However, price declines reduce the
competition for oil and gas properties and correspondingly reduce the prices
paid for leases and prospects.

The Company plans to generate profits by drilling productive oil or gas
wells. However, the Company will need to raise the funds required to drill new
wells through the sale of its securities, from loans from third parties or from
third parties willing to pay the Company's share of drilling and completing the
wells. The Company does not have any commitments or arrangements from any person
to provide the Company with any additional capital. If additional financing is
not available when needed, the Company may need to cease operations. The Company
may not be successful in raising the capital needed to drill oil or gas wells.
Any wells which may be drilled by the Company may not be productive of oil or
gas.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISKS

Not applicable.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

See the financial statements and accompanying notes included with this
report.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

Not applicable

ITEM 9A AND 9A(T). CONTROLS AND PROCEDURES

The Company maintains disclosure controls and procedures that are designed
to ensure that information required to be disclosed in its periodic reports to
the SEC is recorded, processed, summarized and reported within the time periods
specified in the SEC's rules and regulations, and that such information is
accumulated and communicated to the Company's management, including its

principal executive officer and principal financial officer, as appropriate, to
allow timely decisions regarding required disclosure. The Company's disclosure
controls and procedures are designed to provide a reasonable level of assurance
of reaching its desired disclosure control objectives.

Management's Report on Internal Control Over Financial Reporting

The Company's management is responsible for establishing and maintaining
adequate internal control over financial reporting and for the assessment of the
effectiveness of internal control over financial reporting. As defined by the
Securities and Exchange Commission, internal control over financial reporting is
a process designed by, or under the supervision of the Company's principal
executive officer and principal financial officer and implemented by the
Company's Board of Directors, management and other personnel, to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of the Company's financial statements in accordance with U.S.
generally accepted accounting principles.

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 the policies or procedures may deteriorate.

Ed Holloway, the Company's Principal Executive Officer and Frank L.
Jennings, the Company's Principal Financial Officer, evaluated the effectiveness
of the Company's disclosure controls and procedures as of August 31, 2008 based
on criteria established in Internal Control - Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission, or the COSO
Framework. Management's assessment included an evaluation of the design of the
Company's internal control over financial reporting and testing of the
operational effectiveness of those controls.

Based on this evaluation, management concluded that the Company's internal
control over financial reporting was effective as of August 31, 2008.

There was no change in the Company's internal control over financial
reporting that occurred during the period covered by this report that has
materially affected, or is reasonably likely to materially affect, the Company's
internal control over financial reporting.

This report does not include an attestation report of the Company's
independent registered public accounting firm regarding internal control over
financial reporting. Management's report was not subject to attestation by the
Company's independent registered public accounting firm pursuant to temporary
rules of the SEC that permit the Company to provide only management's report on
internal control in this report.

ITEM 9B. OTHER INFORMATION
-----------------

None.

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
------------------------------------------------------

Officers and Directors

Name Age Position
- ---- --- --------

Edward Holloway 56 President, Chief Executive Officer and a Director
William E. Scaff, Jr. 51 Vice President, Secretary, Treasurer and a Director
Frank L. Jennings 57 Principal Financial and Accounting Officer
Benjamin J. Barton 44 Director
Rick A. Wilber 61 Director
Raymond E. McElhaney 52 Director
Bill M. Conrad 52 Director

The principal occupations of the Company's officers, directors and consultants,
during the past several years are as follows:

Edward Holloway - Mr. Holloway has been an officer and director of the Company
since September 2008. Mr. Holloway has been an officer and director of Synergy
since June 2008. Mr. Holloway co-founded Cache Exploration Inc., an oil and gas
exploration and development company that drilled over 350 wells. In 1987 Mr.
Holloway sold the assets of Cache Exploraton to LYCO Energy Corporation. He
rebuilt Cache Exploration and sold the entire company to Southwest Energy a
decade later. In 1997 Mr. Holloway co-founded, and since that date has
co-managed, Petroleum Management, LLC, a company engaged in the exploration,
operations, production and distribution of oil and natural gas. In 2001 Mr.
Holloway co-founded, and since that date has co-managed, Petroleum Exploration
and Management, LLC, a company engaged in the acquisition of oil and gas leases
and the production and sale of oil and natural gas. Mr. Holloway holds a degree
in Business Finance from the University of Northern Colorado and is a past
president of the Colorado Oil & Gas Association.

William E. Scaff, Jr. - Mr. Scaff has been an officer and director of the
Company since September 2008. Mr. Scaff has been an officer and director of
Synergy since June 2008. Between 1980 and 1990 Mr. Scaff oversaw financial and
credit transactions for Dresser Industries, a Fortune 50 oilfield equipment
company. Immediately after serving as an executive with TOTAL Petroleum between
1990 and 1997, Mr. Scaff co-founded, and since that date co-managed, Petroleum
Management, LLC, a company engaged in the exploration, operations, production
and distribution of oil and natural gas. In 2001 Mr. Scaff co-founded, and since
that date has co-managed, Petroleum Exploration and Management, LLC, a company
engaged in the acquisition of oil and gas leases and the production and sale of
oil and natural gas. Mr. Scaff holds a degree in Finance from the University of
Colorado.

Frank L. Jennings - Mr. Jennings has been the Company's Principal Financial and
Accounting Officer since June 2007. Since 2001 Mr. Jennings has been an
independent consultant providing managing and financial services, primarily to
smaller public companies. From 2000 to 2005, he served as the Chief Financial
Officer and a director of Global Casinos, Inc., a publicly traded corporation,
and from 2001 to 2005, he served as Chief Financial Officer and a director of

OnSource Corporation, now known as Ceragenix Pharmaceuticals, Inc., also a
publicly traded corporation.

Benjamin J. Barton - Mr. Barton has been a director of the Company since
September 2008. Mr. Barton has been a director of Synergy since June 2008.
Between 2003 and 2005 Mr. Barton was a private wealth manager with Merrill
Lynch. Since 1986 Mr. Barton has been active in all aspects of venture capital
and public stock offerings. Since 2005 Mr. Barton has been the Managing Director
of Strategic Capital Partners, LLC, a private investment company specializing in
energy companies. Prior to earning an MBA in Finance from UCLA, Mr. Barton
received his Bachelor of Science degree in Political Science from Arizona State
University.

Rick A. Wilber - Mr. Wilber became a director of the Company in September 2008.
Since 1984 Mr. Wilber has been a private investor in, and a consultant to,
numerous development state companies. In 1974 Mr. Wilber was co-founder of
Champs Sporting Goods, a retail sporting goods chain, and served as its
President from 1974-1984. He has been a Director of Ultimate Software Group Inc.
since October 2002 and serves as a member of its audit and compensation
committees. Mr. Wilber was a director of Ultimate Software Group between October
1997 and May 2000. He served as a director of Royce Laboratories, Inc., a
pharmaceutical concern, from 1990 until it was sold to Watson Pharmaceuticals,
Inc. in April 1997 and was a member of its compensation committee.

Raymond E. McElhaney - Mr. McElhaney has been a director of the Company since
May 2005, and prior to the acquisition of Synergy was the Company's President
and Chief Executive Officer. Mr. McElhaney began his career in the oil and gas
industry in 1983 as founder and President of Spartan Petroleum and Exploration,
Inc. Mr. McElhaney also served as a chairman and secretary of Wyoming Oil &
Minerals, Inc., a publicly traded corporation, from February 2002 until 2005.
From 2000 to 2003 he served as vice president and secretary of New Frontier
Energy, Inc., a publicly traded corporation. McElhaney is a co-founder of MCM
Capital Management Inc., a privately held financial management and consulting
company formed in 1990, and has served as its president of that company since
inception.

Bill M. Conrad - Mr. Conrad has been a director of the Company since May 2005,
and prior to the acquisition of Synergy was the Company's Vice President and
Secretary. Mr. Conrad has been involved in several aspects of the oil & gas
industry over the past 20 years. From February 2002 until June 2005, Mr. Conrad
served as president and a director of Wyoming Oil & Minerals, Inc., and from
2000 until April 2003, he served as vice president and a director of New
Frontier Energy, Inc. Since June 2006, Mr. Conrad has served as a director of
Gold Resource Corporation, a publicly traded corporation engaged in the mining
industry. In 1990, Mr. Conrad co-founded MCM Capital Management Inc. and has
served as its vice president since that time.

The Company does not have a compensation committee. The Company's Board of
Directors serves as its Audit Committee. None of the Company's directors are
independent as that term is defined Section 803.A of the American Stock
Exchange. William E. Scaff, Jr. acts as the financial expert for the Board of
Directors.

The Company has adopted a Code of Ethics applicable to its senior
executive and financial officers. A copy of the Code of Ethics is filed as
Exhibit 14 to this report.

ITEM 11. EXECUTIVE COMPENSATION

The following table shows the compensation paid or accrued to the
Company's Principal Executive and Financial officers during the eight months
ended August 31, 2008 and the years ended December 31, 2007 and 2006. During the
periods shown no officer of the Company received compensation in excess of
$100,000.

Stock Option All Other
Name and Principal Salary Bonus Awards Awards Compensation
Position Period (1) (2) (3) (4) (5) Total
- ------------------ ------ ------- ----- ------ ------ ------------ -----

Ray McElhaney, 2008 $ 5,000 -- $25,000 -- -- $30,000
Principal Executive 2007 $60,000 -- -- -- -- $60,000
Officer 2006 $60,000 -- -- -- -- $60,000

Frank L. Jennings, 2008 -- -- -- -- $ 6,778 $ 6,778
Principal Financial 2007 -- -- -- -- $ 9,900 $ 9,900
Officer 2006 -- -- -- -- -- --

(1) The dollar value of base salary (cash and non-cash) earned.
(2) The dollar value of bonus (cash and non-cash) earned.
(3) The fair value of stock issued for services computed in accordance with FAS
123R on the date of grant.
(4) The fair value of options granted computed in accordance with FAS 123R on
the date of grant.
(5) All other compensation received that the Company could not properly report
in any other column of the table.

The compensation to be paid to the Company's two executive officers is
based upon their employment agreements, which are described below. All material
elements of the compensation paid to these officers is discussed below.

The Company has employee agreements with Ed Holloway and William E. Scaff
Jr. Each employment agreement provides that the employee will be paid a monthly
salary of $12,500 and requires the Employee to devote approximately 80% of his
time to the Company's business. The employment agreements expire on June 11,
2010 but may be terminated sooner by the Company as a result of the employee's
disability or for cause. For purposes of the employment agreements, "cause" is
defined as:

(i) the conviction of the employee of any crime or offense involving
the Company, or of fraud or moral turpitude, which significantly
harms the Company;
(ii) the refusal of the employee to follow the lawful directions of
the Company's Board of Directors;
(iii) the employee's negligence which shows a reckless or willful
disregard for reasonable business practices and significantly
harms the Company; or

(iv) a breach of the employment agreement by the employee.

The Company has a consulting agreement with Ray McElhaney and Bill Conrad
which provides that Mr. McElhaney and Mr. Conrad will provide to the Company, on
a part-time basis, consulting services pertaining to corporate acquisitions and
development. For these services, Mr. McElhaney and Mr. Conrad are paid a monthly
consulting fee of $5,000. The consulting agreement expires on August 15, 2009.

Long-Term Incentive Plans. The Company does not provide its officers or
employees with pension, stock appreciation rights, long-term incentive or other
plans and has no intention of implementing any of these plans for the
foreseeable future.

Employee Pension, Profit Sharing or other Retirement Plans. The Company
does not have a defined benefit, pension plan, profit sharing or other
retirement plan, although it may adopt one or more of such plans in the future.

Compensation of Directors During the Eight Months Ended August 31, 2008
and the Year Ended December 31, 2007. The Company did not compensate any person
for acting as a director during the eight months ended August 31, 2008 or the
year ended December 31, 2007.

Stock Option and Bonus Plan
- ---------------------------

The Company has adopted a stock option and stock bonus plan. A summary
description of the plan follows.

Non-Qualified Stock Option Plan. The Company's Non-Qualified Stock Option
Plan authorizes the issuance of shares of its common stock to persons that
exercise options granted pursuant to the Plans. The Company's employees,
directors, officers, consultants and advisors are eligible to be granted options
pursuant to the Plans, provided however that bona fide services must be rendered
by such consultants or advisors and such services must not be in connection with
promoting the Company's stock or the sale of securities in a capital-raising
transaction. The option exercise price is determined by the Company's directors.

Stock Bonus Plan. The Company's Stock Bonus Plan allows for the issuance
of shares of common stock to it's employees, directors, officers, consultants
and advisors. However, bona fide services must be rendered by the consultants or
advisors and such services must not be in connection with promoting the
Company's stock or the sale of securities in a capital-raising transaction.

Summary. The following is a summary of options granted or shares issued
pursuant to the Plans as of January 23, 2009. Each option represents the right
to purchase one share of the Company's common stock.

Total Shares
Shares Reserved for Shares Remaining
Reserved Outstanding Issued as Options/Shares
Name of Plan Under Plans Options Stock Bonus Under Plans
- ------------ ----------- ------------ ----------- --------------

Non-Qualified Stock
Option Plan 2,000,000 100,000 N/A 1,900,000
Stock Bonus Plan 500,000 N/A -- 500,000

Options
- -------

In connection with the acquisition of Synergy, the Company issued options
to the persons shown below in exchange for options previously issued by Synergy.
The terms of the options issued by the Company are identical to the terms of the
Synergy options. The options were not granted pursuant to the Company's
Non-Qualified Stock Option Plan. As of January 23, 2009 none of these options
have been exercised.

Grant Shares Issuable Upon Exercise Expiration
Name Date Exercise of Options Price Date
- ---- ------- ---------------------- -------- ----------

Ed Holloway (1) 9-10-08 1,000,000 $ 1.00 6-11-13
William E. Scaff, Jr. (2) 9-10-08 1,000,000 $ 1.00 6-11-13
Ed Holloway (1) 9-10-08 1,000,000 $10.00 6-11-13
William E. Scaff, Jr. (2) 9-10-08 1,000,000 $10.00 6-11-13

(1) Options are held of record by a limited liability company controlled by Mr.
Holloway.
(2) Options are held of record by a limited liability company controlled by Mr.
Scaff.

The following table shows information concerning the Company's outstanding
options as of January 23, 2009. None of the Company's officers or directors held
any options as of August 31, 2008.

Shares underlying unexercised
Option which are:
-----------------------------
Exercise Expiration
Name Exercisable Unexercisable Price Date
- ---- ----------- ------------- -------- ----------

Ed Holloway 1,000,000 -- $ 1.00 6-11-13
William E. Scaff, Jr. 1,000,000 -- $ 1.00 6-11-13
Ed Holloway 1,000,000 -- $10.00 6-11-13
William E. Scaff, Jr. 1,000,000 -- $10.00 6-11-13
Employee -- 100,000 $ 3.00 12-31-18

The following table shows the weighted average exercise price of the
outstanding options granted pursuant to the Company's Non-Qualified Stock Option
Plan as of August 31, 2008. The Company's Non-Qualified Stock Option Plan has
been approved by the Company's shareholders.

Number of Securities
Number Remaining Available
of Securities For Future Issuance
to be Issued Weighted-Average Under Equity
Upon Exercise Exercise Price of Compensation Plans,
of Outstanding of Outstanding Excluding Securities
Plan category Options (a) Options Reflected in Column (a)
- -------------------------------------------------------------------------------------------

Non-Qualified Stock Option Plan -- -- 2,500,000

Sales of Unregistered Securities
- --------------------------------

Prior to its acquisition by the Company, Synergy made the following sales
of its securities:

Name Shares Series A Warrants Consideration
- ---- ------ ----------------- -------------

Ed Holloway (1) 2,070,000 $2,070
William E. Scaff, Jr. (1) 2,070,000 $2,070
Benjamin Barton (1) 600,000 $ 600
John Staiano (1) 600,000 $ 600
Synergy Energy Trust 1,900,000 $1,900
Third Parties 660,000 $ 660
Private Investors 1,000,000 1,000,000 $1.00 per Unit (2)
Private Investors 1,060,000 1,060,000 $1.50 per Unit (2)
----------- -----------
9,960,000 2,060,000
=========== ===========

(1) Shares are held of record by entities controlled by this person.
(2) Shares and Warrants were sold as Units, with each Unit consisting of one
share of the Company's common stock and one Series A Warrant.

In connection with the acquisition of Synergy, the 9,960,000 shares of
Synergy, plus the 2,060,000 Series A warrants, were exchanged for 9,960,000
shares of the Company's common stock, plus 2,060,000 Series A warrants.

Each Series A warrant entitles the holder to purchase one share of the
Company's common stock at a price of $6.00 per share. The Series A Warrants
expire on the earlier of December 31, 2012 or twenty days following written
notification from the Company that its common stock had a closing bid price at
or above $7.00 for any ten of twenty consecutive trading days.

Mr. McElhaney and Mr. Conrad, due to their share ownership in the Company
immediately prior to the acquisition of Synergy, will receive 271,000 and
247,000 Series A warrants, respectively.

Between October 30, 2008 and January 23, 2009 the Company sold 92,667
Units at a price of $3.00 per Unit. Each Unit consists of two shares of the
Company's common stock, one Series A Warrant and one Series B Warrant. Each
Series A Warrant entitles the holder to purchase one share of the Company's
common stock at a price of $6.00 per share. The Series A Warrants expire on the
earlier of December 31, 2012 or twenty days following written notification from
the Company that its common stock had a closing bid price at or above $7.00 for
any ten of twenty consecutive trading days. Each Series B Warrant entitles the
holder to purchase one share of the Company's common stock at a price of $10.00
per share. The Series B Warrants expire on the earlier of December 31, 2012 or
twenty days following written notification from the Company that its common
stock had a closing bid price at or above $12.00 for any ten of twenty
consecutive trading days.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS

The following table shows, as of January 23, 2009, information with
respect to those persons owning beneficially 5% or more of the Company's common
stock and the number and percentage of outstanding shares owned by each director
and officer of the Company and by all the officers and directors as a group.
Unless otherwise indicated, each owner has sole voting and investment powers
over his shares of common stock.

Number Percent
Name of Shares (1) of Class
- ---- ------------- --------

Ed Holloway 4,070,000 (2) 33.4%
William E. Scaff, Jr. 4,070,000 (3) 33.4%
Frank L. Jennings 4,000 Nil
Benjamin Barton 600,000 (4) 5.9%
Rick A. Wilber 376,429 3.7%
Raymond E. McElhaney 270,000 2.7%
Bill M. Conrad 247,000 2.4%
John Staiano 600,000 (5) 5.9%
Synergy Energy Trust 900,000 (6) 8.8%
All officers and directors
as a group (7 persons). 9,637,429 67.9%

(1) Share ownership includes shares issuable upon the exercise of options held
by the persons listed below.

Share Issuable Option
Upon Exercise Exercise Expiration
Name of Options Price Date
---- -------------- --------- ----------

Ed Holloway 1,000,000 $1.00 6-11-13
Ed Hollway 1,000,000 $10.00 6-11-13
William E. Scaff, Jr. 1,000,000 $1.00 6-11-13
William E. Scaff, Jr. 1,000,000 $10.00 6-11-13

(2) Shares are held of record by various trusts and limited liability companies
controlled by Mr. Holloway. If Mr. Holloway resigns or is removed for cause
as an officer of this Company prior to June 11, 2009, then his 2,070,000
shares and his options will be forfeited, returned to the Company and
cancelled. However, if the Employment Agreement with Mr. Holloway is
terminated prior to June 11, 2009 due to Mr. Holloway's disability, only
1,035,000 shares and 1,035,000 options will be forfeited. If Mr. Holloway
resigns due to the Company's intentional interference with his duties, the
resignation will not result in any forfeiture of his shares.
(3) Shares are held of record by various trusts and limited liability companies
controlled by Mr. Scaff. If Mr. Scaff resigns or is removed for cause as an
officer of this Company prior to June 11, 2009, then his 2,070,000 shares
and his options will be forfeited, returned to the Company and cancelled.
However, if the Employment Agreement with Mr. Scaff is terminated prior to
June 11, 2009 due to Mr. Scaff's disability, only 1,035,000 shares and
1,035,000 options will be forfeited. If Mr. Scaff resigns due to the
Company's intentional interference with his duties, the resignation will
not result in any forfeiture of his shares.
(4) Shares are held of record by a partnership controlled by Mr. Barton. (5)
Shares are held of record by a trust and a limited liability company
controlled by Mr.
Staiano.
(6) The shares held by the Synergy Energy Trust may be issued at the discretion
of John Barton, the trustee. Effective December 1, 2008 the Company
purchased 1,000,000 shares of its common stock from the Trust for $1,000,
which was the price at which the shares were sold to the Trust. The share
ownership of the Trust reflects the sale of these shares.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The Company has a consulting agreement with Energy Capital, LLC, a firm
controlled by John Barton and Benjamin J. Barton. The Company has agreed to pay
Energy Capital $30,000 per month for assisting the Company with raising capital
and establishing a public market for the Company's common stock. Energy Capital
will also pay the rent for the Company's Denver office. The consulting agreement
ends on May 31, 2009. However, if the Company's capital, paid-in capital and
additional paid-in capital accounts do not exceed $7,500,000 by March 1, 2009
the Company may terminate the consulting agreement prior to May 31, 2009.

Pursuant to the terms of an Administrative Services Agreement between the
Company and Petroleum Management, LLC, Petroleum Management provides the Company
with office space and equipment storage in Platteville, Colorado, as well as
secretarial, word processing, telephone, fax, email and related services for a
fee of $20,000 per month. Either party may terminate the Administrative Service
Agreement upon 30-days notice. Petroleum Management is controlled by Ed Holloway
and William E. Scaff, Jr.

See Item 1 of this report for information concerning:

o an agreement between the Company, Ed Holloway and William E. Scaff,
Jr. concerning potential conflicts of interest concerning the
acquisition of oil and gas properties; and
o an agreement between the Company and Petroleum Management, LLC
regarding the potential acquisition of oil and gas properties.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
--------------------------------------

Stark Winter Schenkein & Co., LLP served as the Company's auditors for the
year ended December 31, 2007 and the eight month transition period ended August
31, 2008. The following table shows the aggregate fees billed to the Company for
these periods by Stark Winter Schenkein and Co., LLP:

Eight-Month
Period Ended Year Ended
August 31, 2008 December 31,2007
--------------- ----------------

Audit Fees $18,500 $17,300
Audit-Related Fees -- --
Tax Fees $ 2,100 $1,500
All Other Fees -- --

Audit fees represent amounts billed for professional services rendered for
the audit of the Company's annual financial statements and the reviews of the
financials statements included in the Company's 10-Q reports for the fiscal year
and all regulatory filings. Before Stark Winter Schenkein was engaged by the
Company to render audit or non-audit services, the engagement was approved by
the Company's directors. The Company's Directors are of the opinion that any
Audit Related Fees charged by Stark Winter Schenkein are consistent with Stark
Winter Schenkein maintaining its independence from the Company.

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
---------------------------------------

Exhibits Page Number

3.1.1 Articles of Incorporation (1)

3.1.2 Amendment to Articles of Incorporation

3.1.2 Bylaws (1)

10.1 Employment Agreement with Ed Holloway

10.2 Employment Agreement with William E.
Scaff, Jr.

10.3 Administrative Services Agreement

10.4 Agreement regarding Conflicting Interest
Transactions

10.5 Letter agreement regarding acquisition of
oil and gas properties from Petroleum
Management

10.6 Agreement with Energy Capital, LLC

14. Code of Ethics

31 Rule 13a-14(a) Certifications

32 Section 1350 Certifications

(1) Incorporated by reference to the same exhibit filed with the Company's
registration statement on Form SB-2, File #333-146561.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
-------------------------------------------

Index to Financial Statements: 1

Report of Independent Registered Public Accounting Firm 2

Balance Sheets at August 31, 2008 and December 31, 2007 3

Statements of Operations for the eight months ended
August 31, 2008, the year ended December 31, 2007, and
for the period from Inception (May 11, 2005) to August 31, 2008 4

Statements of Changes in Shareholders' Equity for the
period from Inception (May 11, 2005) to August 31, 2008 5

Statements of Cash Flows for the eight months ended
August 31, 2008, the year ended December 31, 2007, and
for the period from Inception (May 11, 2005) to August 31, 2008 6

Notes to Financial Statements 7

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Shareholders and Board of Directors
Synergy Resources Corporation, formerly Brishlin Resources, Inc.

We have audited the accompanying balance sheets of Synergy Resources
Corporation, formerly Brishlin Resources, Inc. (an Exploration Stage Company) as
of August 31, 2008 and December 31, 2007, and the related statements of
operations, changes in shareholders' equity, and cash flows for the eight months
ended August 31, 2008, the year ended December 31, 2007, and the period from
inception (May 11, 2005) to August 31, 2008. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States.) Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates by management, as well as evaluating
the overall financial statement presentation. We believe that our audits provide
a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Synergy Resources Corporation,
formerly Brishlin Resources, Inc. (an Exploration Stage Company) as of August
31, 2008 and December 31, 2007, and the results of its operations and cash flows
for the eight months ended August 31, 2008, the year ended December 31, 2007,
and the period from inception (May 11, 2005) to August 31, 2008, in conformity
with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company has suffered recurring losses from operations
and has no revenue generating operations. These factors raise substantial doubt
about the Company's ability to continue as a going concern. Management's plans
in regard to these matters are also discussed in Note 2. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.

/s/ Stark Winter Schenkein & Co., LLP
Denver, Colorado
January 23, 2009

SYNERGY RESOURCES CORPORATION
(Formerly Brishlin Resources, Inc.)
(An Exploration Stage Company)
BALANCE SHEETS

August 31, December 31,
2008 2007
---------- ------------
ASSETS

Current assets:
Cash and cash equivalents $ 7,569 $ 20,440
Prepaid expenses 1,428 -
---------- ----------
Total current assets 8,997 20,440
---------- ----------

Oil and gas properties, at cost, using full
cost method
Oil and gas properties, net 39,125 39,125

Other assets 1,328 1,265
---------- ----------
Total assets $ 49,450 $ 60,830
========== ==========

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
Accounts payable and accrued expenses $ 44,906 $ 26,395
Accrued salaries, benefits, and taxes 3,604 33,855
---------- ----------
Total current liabilities 48,510 60,250
---------- ----------
Shareholders' equity:
Preferred stock - $0.01 par value, 10,000,000
shares authorized:
no shares issued and outstanding - -
Common stock - $0.001 par value, 100,000,000
shares authorized:
1,038,000 and 978,000 shares issued and
outstanding at August 31, 2008 and December
31, 2007, respectively 1,038 978
Additional paid-in capital 1,015,262 815,322
(Deficit) accumulated during the exploration stage (1,015,360) (815,720)
---------- ----------
Total shareholders' equity 940 580
---------- ----------
Total liabilities and shareholders' equity $ 49,450 $ 60,830
========== ==========

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

SYNERGY RESOURCES CORPORATION
(Formerly Brishlin Resources, Inc.)
(An Exploration Stage Company)
STATEMENTS OF OPERATIONS
for the eight months ended August 31, 2008,
the year ended December 31, 2007,
and for the period from Inception (May 11, 2005) to August 31, 2008

Eight Months Inception
Ended Year Ended (May 11, 2005) to
August 31, 2008 December 31, 2007 August 31, 2008
--------------- ----------------- -----------------

Revenues $ - $ - $ -
------------- ------------- -------------
Expenses:
Oil and gas lease expense 5,000 - 13,325
Impairment of oil and gas
properties - - 223,738
General and administrative 194,730 282,641 785,240
------------- ------------- -------------
Total expenses 199,730 282,641 1,022,303
------------- ------------- -------------
Operating (loss) (199,730) (282,641) (1,022,303)

Other income (expense):
Interest income 90 1,280 6,943
------------- ------------- -------------
(Loss) before taxes (199,640) (281,361) (1,015,360)

Provision for income taxes - - -
------------- ------------- -------------

Net (loss) $ (199,640) $ (281,361) $ (1,015,360)
============= ============= =============
Net (loss) per common share:
Basic and Diluted $ (0.20) $ (0.29)
============= =============
Weighted average shares
outstanding:
Basic and Diluted 1,005,869 962,422
============= =============

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

SYNERGY RESOURCES CORPORATION
(Formerly Brishlin Resources, Inc.)
(An Exploration Stage Company)
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIT)
for the period from Inception (May 11, 2005) to August 31, 2008

(Deficit)
Accumulated
Common Stock Additional During Total
------------------- Paid-in Exploration Shareholders'
Number Amount Capital Stage Equity
------ ------ ---------- ------------ -------------

Balance at Inception,
May 11, 2005 - $ - $ - $ - $ -

Shares issued for cash
at $0.01 630,000 630 5,670 - 6,300
Shares issued for cash
at $0.20 25,000 25 4,975 - 5,000
Shares issued in
exchange for oil
and gas properties 6,000 6 5,994 - 6,000
Shares issued for cash
at $2.00 117,500 118 234,882 - 235,000
Net (loss) - - - (111,759) (111,759)
---------- ---------- ---------- ---------- ----------
Balance, December 31,
2005 778,500 779 251,521 (111,759) 140,541

Shares issued for cash
at $2.00 94,500 94 188,906 - 189,000
Shares issued in
exchange for oil
and gas properties 60,000 60 149,940 - 150,000
Net (loss) - - - (422,600) (422,600)
---------- ---------- ---------- ---------- ----------
Balance, December 31,
2006 933,000 933 590,367 (534,359) 56,941

Shares issued for cash
at $5.00 45,000 45 224,955 - 225,000
Net (loss) - - - (281,361) (281,361)
---------- ---------- ---------- ---------- ----------
Balance, December 31,
2007 978,000 978 815,322 (815,720) 580

Shares issued for cash
at $5.00 30,000 30 149,970 - 150,000
Shares issued for
accrued Compensation
at $1.67 30,000 30 49,970 - 50,000
Net (loss) - - - (199,640) (199,640)
---------- ---------- ---------- ---------- ----------
Balance, August 31,
2008 1,038,000 $ 1,038 $1,015,262 $(1,015,360) $ 940
=========== ========== ========== ============ ==========

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

SYNERGY RESOURCES CORPORATION
(Formerly Brishlin Resources, Inc.)
(An Exploration Stage Company)
STATEMENTS OF CASH FLOWS
for the eight months ended August 31, 2008,
the year ended December 31, 2007,
and for the period from Inception (May 11, 2005) to August 31, 2008

Eight Months Inception
Ended Year Ended (May 11, 2005
August 31, December 31, August 31,
2008 2007 2008
------------ ------------ ------------
Cash flows from operating activities:
Net (loss) $(199,640) $ (281,361) $(1,015,360)
Adjustments to reconcile net (loss)
to net cash used by operating activities:
Impairment of oil and gas properties - - 223,738
Changes in operating assets and liabilities:
Prepaid expenses and other assets (1,491) - (2,756)
Accounts payable and accrued expenses 38,260 25,942 91,350
--------- ---------- -----------
Total adjustments 36,769 25,942 312,332
--------- ---------- -----------
Net cash (used in) operating
activities (162,871) (255,419) (703,028)
--------- ---------- -----------

Cash flows from investing activities:
Proceeds from sale of oil and gas
properties - 23,922 23,922
Investment in oil and gas properties - - (123,625)
--------- ---------- -----------
Net cash provided by (used in)
investing activities - 23,922 (99,703)
--------- ---------- -----------

Cash flows from financing activities:
Common stock subscription receivable - 10,000 -
Cash proceeds from sale of stock 150,000 225,000 810,300
--------- ---------- -----------
Net cash provided by financing
activities 150,000 235,000 810,300
--------- ---------- -----------

Net increase (decrease) in cash and
equivalents (12,871) 3,503 7,569
Cash and equivalents at beginning of
period 20,440 16,937 -
--------- ---------- -----------
Cash and equivalents at end of period $ 7,569 $ 20,440 $ 7,569
========= ========== ===========
Supplemental Cash Flow Information
Interest paid $ - $ - $ 370
========= ========== ===========
Income taxes paid $ - $ - $ -
========= ========== ===========

Non-cash investing and financing activities:
Shares issued in exchange for oil and
gas properties $ - $ - $ 156,000
========= ========== ===========
Liabilities assumed in exchange for
oil and gas properties $ - $ - $ 7,160
========= ========== ===========
Common stock issued for
accrued compensation $ 50,000 $ - $ 50,000
========= ========== ===========

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

SYNERGY RESOURCES CORPORATION
(formerly Brishlin Resources, Inc.)
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
August 31, 2008

1. Summary of Significant Accounting Policies

Basis of Presentation: Synergy Resources Corporation (formerly Brishlin
Resources, Inc.) (the "Company") was organized under the laws of the State of
Colorado on May 11, 2005. The Company plans to engage in oil, gas and mineral
acquisitions, exploration, development and production service activities,
primarily in the western region of the United States. The Company is in its
exploration stage and has not yet generated any revenues from operations.

Reverse Stock Split: On September 8, 2008, Brishlin shareholders approved a
reverse stock split of the outstanding shares of common stock, pursuant to which
each ten shares of the Company's pre-split common stock issued and outstanding
was exchanged for one share of the Company's post-split common stock. After
giving effect to the reverse stock split, there were 1,038,000 shares of
Brishlin common stock issued and outstanding. All share and per share amounts
presented in this report have been retroactively adjusted to reflect the reverse
stock split.

Cash and Cash Equivalents: The Company considers cash in banks, deposits in
transit, and highly liquid debt instruments purchased with original maturities
of three months or less to be cash and cash equivalents.

Oil and Gas Properties: The Company uses the full cost method of accounting for
costs related to its oil and natural gas properties. All of the properties
acquired by the Company since inception are currently undergoing evaluation and
are not yet included in the depletion, depreciation, and amortization
calculation. After the properties are evaluated, the capitalized costs included
in the full cost pool will be depleted on an aggregate basis using the
units-of-production method. A change in proved reserves without a corresponding
change in capitalized costs will cause the depletion rate to increase or
decrease.

Both the volume of proved reserves and any estimated future expenditures to be
used for the depletion calculation will be based on estimates such as those
described under "Oil and Gas Reserves" below.

The capitalized costs in the full cost pool will be subject to a ceiling test
that limits such pooled costs to the aggregate of the present value of future
net revenues attributable to proved oil and natural gas reserves discounted at
10 percent plus the lower of cost or market value of unproved properties less
any associated tax effects. If such capitalized costs exceed the ceiling, the
Company will record a write-down to the extent of such excess as a non-cash
charge to earnings. Any such write-down will reduce earnings in the period of
occurrence and result in lower depreciation and depletion in future periods. A
write-down may not be reversed in future periods, even though higher oil and
natural gas prices or increased reserves may subsequently increase the ceiling.

SYNERGY RESOURCES CORPORATION
(formerly Brishlin Resources, Inc.)
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
August 31, 2008

Changes in oil and natural gas prices are expected to have the most significant
impact on the Company's ceiling test. In general, the ceiling is lower when
prices are lower. Even though oil and natural gas prices can be highly volatile
over weeks and even days, the ceiling calculation dictates that prices in effect
as of the last day of the test period be used and held constant. The resulting
valuation is a snapshot as of that day and, thus, is not necessarily indicative
of a true fair value that would be placed on the Company's reserves by the
Company or by an independent third party. Therefore, the future net revenues
associated with the estimated proved reserves are not based on the Company's
assessment of future prices or costs, but rather are based on prices and costs
in effect as of the end the test period.

Oil and Gas Reserves: The determination of depreciation and depletion expense as
well as ceiling test write-downs related to the recorded value of the Company's
oil and natural gas properties will be highly dependent on the estimates of the
proved oil and natural gas reserves. Oil and natural gas reserves include proved
reserves that represent estimated quantities of crude oil and natural gas which
geological and engineering data demonstrate with reasonable certainty to be
recoverable in future years from known reservoirs under existing economic and
operating conditions. There are numerous uncertainties inherent in estimating
oil and natural gas reserves and their values, including many factors beyond the
Company's control. Accordingly, reserve estimates are often different from the
quantities of oil and natural gas ultimately recovered and the corresponding
lifting costs associated with the recovery of these reserves

Property Retirement Obligation: The Company follows the guidelines of Statement
of Financial Accounting Standards No. 143 (SFAS 143), "Accounting for Asset
Retirement Obligations." SFAS 143 requires the fair value of a liability for an
asset retirement obligation to be recognized in the period that it is incurred
if a reasonable estimate of fair value can be made.

The associated asset retirement costs are capitalized as part of the carrying
amount of the long-lived asset. The Company has determined that it has no
material property retirement obligations as of August 31, 2008.

Stock Based Compensation: The Company's 2005 Non-Qualified Stock Option and
Stock Grant Plan (the "Plan") authorizes the granting of nonqualified options to
purchase shares of the Company's common stock. The Plan is administered by the
Board of Directors which determines the terms pursuant to which any option is
granted.

The Company accounts for this Plan in accordance with SFAS 123(R), "Share-Based
Payment," requiring the Company to record compensation costs for the Company's
stock option plans determined in accordance with the fair value based method
prescribed in SFAS 123(R). The Company estimates the fair value of stock option
at their grant date by using the Black-Scholes-Merton option pricing model and
provides for expense recognition over the service period, if any, of the stock
option. Since inception, the Company has not granted any options under the Plan,
and, accordingly, has not recognized any stock based compensation expense.

SYNERGY RESOURCES CORPORATION
(formerly Brishlin Resources, Inc.)
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
August 31, 2008

The Company accounts for common stock issued to employees for services based on
the fair value of the equity instruments issued, and accounts for common stock
issued to other than employees based on the fair value of the consideration
received or the fair value of the equity instruments, whichever is more reliably
measurable.

Per Share Amounts: SFAS 128, "Earnings Per Share," provides for the calculation
of "Basic" and "Diluted" earnings per share. Basic earnings per share includes
no dilution and is computed by dividing net income (or loss) by the
weighted-average number of shares outstanding during the period. Diluted
earnings per share reflect the potential dilution of securities that could share
in the earnings of the Company, assuming the issuance of an equivalent number of
common shares pursuant to options, warrants, or convertible debt arrangements.
Diluted earnings per share does not include dilutive common stock equivalents
for periods in which the Company incurs a loss because they would be
anti-dilutive.

Income Taxes: Deferred income taxes are reported for timing differences between
items of income or expense reported in the financial statements and those
reported for income tax purposes in accordance with SFAS 109, "Accounting for
Income Taxes", which requires the use of the asset/liability method of
accounting for income taxes. Deferred income taxes and tax benefits are
recognized for the future tax consequences attributable to differences between
the financial statement carrying amounts of existing assets and liabilities and
their respective tax bases, and for tax loss and credit carry-forwards. Deferred
tax assets and liabilities are measured using enacted tax rates expected to
apply to taxable income in the years in which those temporary differences are
expected to be recovered or settled. The Company provides for deferred taxes for
the estimated future tax effects attributable to temporary differences and
carry-forwards when realization is more likely than not.

Use of Estimates: The preparation of financial statements in conformity with
accounting principles generally accepted in the United States (US GAAP) requires
management to make estimates and assumptions that affect the reported amount 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 period. Management routinely makes judgments and
estimates about the effects of matters that are inherently uncertain. Estimates
that are critical to the accompanying financial statements include the
identification and valuation of proved and probable reserves, treatment of
exploration and development costs as either an asset or an expense, valuation of
deferred tax assets, and the likelihood of loss contingencies Management bases
its estimates and judgements on historical experience and on various other
factors that are believed to be reasonable under the circumstances, the results
of which form the basis for making judgments about the carrying values of assets
and liabilities that are not readily apparent from other sources. Actual results
could differ from these estimates. Estimates and assumptions are revised
periodically and the effects of revisions are reflected in the financial
statements in the period it is determined to be necessary.

SYNERGY RESOURCES CORPORATION
(formerly Brishlin Resources, Inc.)
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
August 31, 2008

Business Risks: The Company continually reviews the exploration and political
risks it encounters in its operations. It mitigates the likelihood and potential
severity of these risks through the application of high operating standards. The
Company's operations have been and in the future may be, affected to various
degrees by changes in environmental regulations, including those for future site
restoration and reclamation costs. The Company's business is subject to
extensive licensing, permitting, governmental legislation, control and
regulations. The Company endeavors to be in compliance with these regulations at
all times.

Fair Value of Financial Instruments: SFAS 107, "Disclosures About Fair Value of
Financial Instruments," requires disclosure of fair value information about
financial instruments. Fair value estimates discussed herein are based upon
certain market assumptions and pertinent information available to management as
of August 31, 2008.

The respective carrying value of certain on-balance-sheet financial instruments
approximate their fair values. These financial instruments include cash, cash
equivalents, accounts payable and accrued expenses. Fair values were assumed to
approximate carrying values for these financial instruments since they are short
term in nature and their carrying amounts approximate fair value, or they are
receivable or payable on demand.

Concentration of Credit Risk: The Company's operating cash balances are
maintained in one primary financial institution and periodically exceed
federally insured limits. The Company believes that the financial strength of
these institutions mitigates the underlying risk of loss. To date, these
concentrations of credit risk have not had a significant impact on the Company's
financial position or results of operations.

Environmental Matters: Environmental costs are expensed or capitalized depending
on their future economic benefit. Costs that relate to an existing condition
caused by past operations with no future economic benefit are expensed.
Liabilities for future expenditures of a non-capital nature are recorded when
future environmental expenditures and/or remediation is deemed probable and the
costs can be reasonably estimated. Costs of future expenditures for
environmental remediation obligations are not discounted to their present value.

Recent Accounting Pronouncements: In March 2008, the Financial Accounting
Standards Board ("FASB") issued SFAS 161, Disclosures about Derivative
Instruments and Hedging Activities - an Amendment of FASB Statement No. 133
(SFAS 161), which becomes effective for financial statements issued for fiscal
years and interim periods beginning after November 15, 2008. This standard
changes the disclosure requirements for derivative instruments and hedging
activities. Entities are required to provide enhanced disclosures about (a) how
and why an entity uses derivative instruments, (b) how derivative instruments
and related hedged items are accounted for under SFAS 133 and its related
interpretations, and (c) how derivative instruments and related hedged items
affect an entity's financial position, financial performance, and cash flows.
Management is currently evaluating the impact of adopting this statement.

SYNERGY RESOURCES CORPORATION
(formerly Brishlin Resources, Inc.)
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
August 31, 2008

In May 2008, the FASB issued SFAS 162, The Hierarchy of Generally Accepted
Accounting Principles (SFAS 162), which becomes effective upon approval by the
SEC. This standard sets forth the sources of accounting principles and provides
entities with a framework for selecting the principles used in the preparation
of financial statements that are presented in conformity with GAAP. It is not
expected to change any of our current accounting principles or practices and
therefore, is not expected to have a material impact on our financial
statements.

There were various other accounting standards and interpretations issued during
2008, none of which are expected to a have a material impact on the Company's
financial position, operations or cash flows.

2. Going Concern

The Company's financial statements are prepared on a going concern basis, which
contemplates the realization of assets and satisfaction of obligations in the
normal course of business. The Company has no source of operating revenue and
has financed operations through the sale and exchange of equity. The Company has
incurred losses since its inception aggregating $1,015,360. These conditions
raise substantial doubt about the ability of the Company to continue as a going
concern.

The Company has raised total cash proceeds of $810,300 in sales of common stock
from inception through August 31, 2008. Management believes that these proceeds
will not be sufficient to fund its operating activity and other capital resource
demands during the next twelve months.

The Company's ability to continue as a going concern is contingent upon its
ability to raise funds through the sale of equity, joint venture or sale of its
assets, and attaining profitable operations. The financial statements do not
include any adjustments to the amount and classification of assets and
liabilities that may be necessary should the Company not continue as a going
concern.

3. Oil and Gas Properties

In June, 2005, the Company purchased a 2% interest in a shut-in well in Morgan
County, Colorado in exchange for 6,000 shares of the Company's restricted common
stock, valued at $6,000. In January, 2006, the Company purchased from a related
party an additional 7.875% interest in the same property for the sum of $23,625.
The well's primary producing zones are the D-Sand, J-Sand and a variety of
shallower sands, such as the Niobrara and the Greenhorn. The Morgan County well
holds 160 acres of surrounding leasehold interest and is shut-in awaiting a
pipeline for delivery.

SYNERGY RESOURCES CORPORATION
(formerly Brishlin Resources, Inc.)
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
August 31, 2008

In May, 2006, the Company purchased an additional 11.875% working interest in
the Morgan County well outlined above. As part of the same transaction, the
Company purchased an 11.875% working interest in 2 wells and 1,160 leased acres
located in Logan County, Colorado in exchange for $250,000, of which $100,000
was paid in cash at closing, and the balance of $150,000 was paid in the form of
60,000 shares of the Company's restricted common stock.

None of the wells were in production and no depletion, depreciation or
amortization was recorded. As of December 31, 2006, the Company determined that
these properties may have been impaired. Accordingly, a valuation allowance of
$223,738 to reduce the carrying value of the properties to their estimated net
realizable value was recorded as of December 31, 2006.

Effective August 31, 2007, the Company sold its interests in certain oil and gas
properties located on Logan County, Colorado for net cash proceeds of $23,922.
The value of these properties had previously been adjusted to reflect estimated
fair market value and no additional loss was recognized in connection with the
sale transaction

The Company is evaluating its remaining property to determine the appropriate
future actions that should be taken. The Company may decide to commence
production or dispose of the property. Since the interest in this property is a
minority interest, the final decision with respect to the property will be
jointly decided with the other ownership interests.

4. Income Taxes

A reconciliation of the tax provision for 2008 and 2007 at statutory rates is
comprised of the following components:

2008 2007
---- ----

Tax expense (benefit) at statutory rates $(74,000) $ (95,000)
Increase in estimated tax rates (23,000) --
Valuation allowance 97,000 95,000
-------- ---------

Reported tax provision $ -- $ --
======== =========

SYNERGY RESOURCES CORPORATION
(formerly Brishlin Resources, Inc.)
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
August 31, 2008

Deferred tax assets and liabilities represent the future impact of temporary
differences between the financial statement and tax bases of assets and
liabilities. Those items consist of the following as of August 31, 2008 and
December 31, 2007:

2008 2007
---- ----
Deferred tax assets:
Net operating loss carryforwards $ 374,000 $ 277,000
Less valuation allowance (374,000) (277,000)
--------- ---------
Net deferred tax asset $ -- $ --
========= =========

Total deferred tax assets and the valuation allowance increased by approximately
$97,000 during 2008.

At August 31, 2008, the Company has tax loss carryforwards approximating
$1,012,000 that expire at various dates through 2028. At this time, the Company
is unable to determine if it will be able to benefit from its deferred tax
asset. There are limitations on the utilization of net operating loss
carryforwards, including a requirement that losses be offset against future
taxable income, if any. In addition, there are limitations imposed by certain
transactions which are deemed to be ownership changes. Accordingly, a valuation
allowance has been established for the entire deferred tax asset.

5. Shareholders' Equity

Preferred Stock: The Company has authorized 10,000,000 shares of preferred stock
with a par value of $0.01. These shares may be issued in series with such rights
and preferences as may be determined by the Board of Directors. Since inception,
the Company has not issued any preferred shares.

Common Stock: The Company has authorized 100,000,000 shares of $0.001 par value
common stock.

Reverse Stock Split: On September 8, 2008, Brishlin shareholders approved a
reverse stock split of the outstanding shares of common stock, pursuant to which
each ten shares of Brishlin's pre-split common stock issued and outstanding was
exchanged for one share of the Company's post-split common stock. After giving
effect to the reverse stock split, there were 1,038,000 shares of Brishlin
common stock issued and outstanding. All share and per share amounts presented
in this report have been retroactively adjusted to reflect the reverse stock
split.

At inception, the Company issued 630,000 common shares to its founders for cash
proceeds of $6,300.

SYNERGY RESOURCES CORPORATION
(formerly Brishlin Resources, Inc.)
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
August 31, 2008

On June 6, 2005, the Company issued 25,000 common shares to a private investor
for cash proceeds of $5,000.

During 2005, the Company issued 6,000 shares of common stock in exchange for a
2% working interest in the Stroh #1 lease. The shares were valued at $6,000. In
private transactions, the Company sold 117,500 shares of common stock at $2.00
per share for cash proceeds of $235,000.

During 2006, the Company issued 94,500 shares of common stock at $2.00 per share
for cash proceeds of $189,000. In addition, the Company issued 60,000 shares of
common stock in exchange for oil and gas properties including the Stroh #1,
Marostica #1, and Lutin #1. The shares were valued at $150,000, or $2.50 per
share, based upon the negotiated value between the seller and the buyer.

During the year ended December 31, 2007, the Company issued 45,000 shares of
common stock at $5.00 per share for cash proceeds of $225,000.

During the eight months ended August 31, 2008, the Company issued 30,000 shares
of common stock at $5.00 per share for cash proceeds of $150,000.

Effective June 16, 2008 the Company exchanged 30,000 restricted shares of common
stock, valued at $1.67 per share, based upon quoted market prices, for accrued
and unpaid compensation of $50,000 payable to officers.

6. Commitments and Contingencies

Effective October 1, 2007, the Company entered into a twelve month lease on
office space in Colorado Springs, Colorado. Rental payments approximate $1,328
per month. As of August 31, 2008, future minimum lease obligations consisted of
one month's rent, approximating $1,328. Rent expense approximated $10,624 for
the eight months ended August 31, 2008, and $15,400 for the year ended December
31, 2007.

Pursuant to employment agreements with its executive officers which were
effective from June 1, 2005 through June 30, 2008, the officers each earned
$5,000 per month. Effective June 16, 2008, the officers agreed to exchange
accrued and unpaid compensation of $50,000 for 30,000 restricted shares of the
Company's common stock, valued at a price of $1.67 per share, based on quoted
market prices. In anticipation of the business combination with Synergy
Resources Corporation (see Note 7), the employment agreements were terminated
effective June 30, 2008. Total compensation expense recorded under the
agreements was $60,000 for the eight months ended August 31, 2008, and $120,000
for the year ended December 31, 2007.

SYNERGY RESOURCES CORPORATION
(formerly Brishlin Resources, Inc.)
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
August 31, 2008

7. Subsequent Events

On September 10, 2008, the Company acquired approximately 89% of the outstanding
shares of Synergy Resources Corporation ("Synergy") pursuant to an Agreement to
Exchange Common Stock ("Share Exchange Agreement"). The Company acquired all the
remaining outstanding shares of Synergy in separate transactions. In total,
9,960,000 shares of common stock were issued in exchange for 9,960,000
outstanding shares of Synergy.

The Share Exchange Agreement further provides that the Company agree to issue
substitute Series A warrants to replace similar warrants held by certain
shareholders of Predecessor Synergy to purchase 2,060,000 shares of common stock
at $6.00 per share. Furthermore, the Company agreed to issue substitute options
to replace similar options outstanding prior to the merger transaction, which
options provide for the purchase of 2,000,000 shares of common stock at $1.00
per share and 2,000,000 shares of common stock at $10.00 per share. Using the
Black-Scholes-Merton option-pricing model, the Company estimated that the fair
value of the replacement options exceeded the fair value of the options
surrendered by $10,185,345. The assumptions used in the model were: expected
life of 2.5 years, stock price of $3.50 at date of grant, volatility of 166%,
dividend yield of 0%, and interest rate of 2.63%. The additional expense of
$10,185,345 will be pro-rated over the remaining vesting period.
..
In conjunction with the acquisition of Synergy, the majority of the shareholders
of the Company also voted to change its name to Synergy Resources Corporation.

On September 8, 2008, the Company's Board of Directors declared a dividend in
the form of one Series A Warrant to purchase one share of post-split common
stock for $6.00, exercisable upon issuance until the earlier of December 31,
2012, or twenty days following written notification from the Company that its
common stock had a closing price at or above $7.00 for any of twenty consecutive
trading days. Shareholders of record as of September 9, 2008, are entitled to
receive the dividend, which is payable only after receipt by the Company of an
effective date for a registration statement covering the warrants and underlying
common stock.

In connection with the merger, the Company entered into an agreement with two
directors to provide consulting services. The initial term of the agreement is
one year. Compensation under the agreement is $10,000 per month.

In October 2008, certain directors and former officers paid accrued legal fees
on behalf of the Company in the amount of $17,000, which was recorded as
contributed capital.

In December 2008, the Company commenced a private offering to sell shares of its
common stock and warrants. As of January 23, 2009, the Company had received cash
proceeds of $278,001 for the sale of 185,334 common shares and warrants.

SYNERGY RESOURCES CORPORATION
(formerly Brishlin Resources, Inc.)
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
August 31, 2008

Effective December 1, 2008, the Company purchased 1,000,000 shares of its common
stock from one of the original Predecessor Synergy shareholders for $1,000,
which was the price at which the shares were sold to the shareholder.

Effective December 31, 2008, the Company granted stock options to an employee to
purchase 100,000 shares of common stock at an exercise price of $3.00 and a term
of ten years. Using the Black-Scholes-Merton option-pricing model, the Company
estimates the fair value of the options to be approximately $186,000. The
assumptions used in the model were: expected life of 5 years, stock price of
$2.00 at date of grant, volatility of 166%, dividend yield of 0%, and interest
rate of 3.13%.

SIGNATURES

In accordance with Section 13 or 15(a) of the Exchange Act, the Registrant
has caused this Report to be signed on its behalf by the undersigned, thereunto
duly authorized on the 26th day of January, 2009.

SYNERGY RESOURCES CORPORATION

By: /s/ Ed Holloway
------------------------------------
Ed Holloway, President

By: /s/ Frank L. Jennings
------------------------------------
Frank L. Jennings, Principal Financial
and Accounting Officer

Pursuant to the requirements of the Securities Exchange Act of l934, this
Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.

Signature Title Date

/s/ Ed Holloway Director January 26, 2009
- ----------------------
Ed Holloway

/s/ William E. Scaff, Jr. Director January 26, 2009
- ----------------------
William E. Scaff, Jr.

/s/ Benjamin Barton Director January 26, 2009
- ----------------------
Benjamin Barton

/s/ Rick Wilber Director January 26, 2009
- ----------------------
Rick Wilber

/s/ Raymond E. McElhaney Director January 26, 2009
- ------------------------
Raymond E. McElhaney

/s/ Billl M. Conrad Director January 26, 2009
- ----------------------
Bill M. Conrad

SYNERGY RESOURCES CORPORATION

FORM 10-K

EXHIBITS