Epic Energy Resources/Inc · S-1/A · On 3/18/08

Filed On 3/18/08 1:10pm ET   ·   SEC File 333-148479   ·   Accession Number 1004878-8-89

Pre-Effective Amendment to Registration Statement (General Form)   ·   Form S-1
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: S-1/A       Pre-Effective Amendment to Registration Statement    144    440K 
                          (General Form)                                         
 2: EX-3        3.2 Amend Articles of Incorporation                    4     10K 
 3: EX-3        3.3 Bylaws                                             9     27K 
 4: EX-5        5                                                      2      5K 
 5: EX-10       10.5 Membership Purchase Interest Agree               49    151K 
 6: EX-21       Subsidiaries                                           2      4K 
 7: EX-23       23.1                                                   2      5K 
 8: EX-23       23.2                                                   4      7K 

S-1/A   ·   Pre-Effective Amendment to Registration Statement (General Form)
Document Table of Contents

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As filed with the Securities and Exchange Commission on ______, 2008            

                                              Commission File No. 333-148479

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM S-1/A
 Amendment No. 1

Registration Statement Under
THE SECURITIES ACT OF 1933

 EPIC ENERGY RESOURCES, INC.
------ ---------------------------- 
(Exact name of registrant as specified in charter)

  Colorado                       1311                 94-3363969
----------------------------  -------------------------  ---------------------  
(State or other jurisdiction  (Primary Standard Classi-     (IRS Employer       
of incorporation)           fication Code Number)        I.D. Number)   

10655 Six Pines, Suite 210
 The Woodlands, TX 77380
(281) 419-3742
----------------------------------
(Address and telephone number of principal executive offices) 

10655 Six Pines, Suite 210
 The Woodlands, TX 77380
(281) 419-3742
------------------------------------- 
(Address of principal place of business or intended principal place of business)

Rex P. Doyle
10655 Six Pines, Suite 210
 The Woodlands, TX 77380
(281) 419-3742
------------------------------------
(Name, address and telephone number of agent for service) 

 Copies of all communications, including all communications sent
to the agent for service, should be sent to:

 William T. Hart, Esq.
Hart & Trinen, LLP
1624 Washington Street
Denver, Colorado 80203
303-839-0061

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:

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     As  soon as  practicable  after  the  effective  date of this  Registration
Statement                                                                       

    If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act  
of 1933, other than securities offered only in connection with dividend or      
interest reinvestment plans, check the following box [X].                       

   If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier        
effective registration statement for the same offering. [ ]                     

    If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act   
registration statement number of the earlier effective registration statement   
for the same offering. [ ]                                                      

      If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]                                             

CALCULATION OF REGISTRATION FEE 

Title of each                        Proposed      Proposed                     
Class of                            Maximum       Maximum                     
Securities            Securities     Offering      Aggregate      Amount of     
to be                 to be       Price Per     Offering      Registration
Registered            Registered      Share (1)      Price            Fee       
----------            ----------     -----------   ----------    ------------   

Common Stock (2)    34,314,674         $1.10     $37,746,142        $1,484      

-----------------------------------------------------------------------------   

(1) Offering price computed in accordance with Rule 457 (c). (2) Shares of      
common stock offered by selling shareholders                                    

    The registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this Registration       
Statement shall thereafter become effective in accordance with Section 8(a) of  
the Securities Act of l933 or until the Registration Statement shall become     
effective on such date as the Commission, acting pursuant to said Section 8(a), 
may determine.                                                                  

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PROSPECTUS                                                                      

 EPIC ENERGY RESOURCES, INC.

Common Stock

By means of this prospectus a number of shareholders of Epic Energy 
Resources, Inc. are offering to sell 5,429,335 shares of Epic's common stock, as
well as up to 22,685,339 shares of common stock issuable upon the exercise of   
warrants. The actual number of shares issuable upon the exercise of the warrants
may increase as the result of future sales of Epic's common stock at prices     
below the warrant exercise price.                                               

   By means of this prospectus holders of promissory notes sold by Epic may also
sell up to 6,200,000 shares of common stock which Epic, at its option, may issue
to the holders of the notes as payment of principal. The actual number of shares
which may be issued as payment of principal will depend upon the amount, if any,
which Epic elects to pay with shares of its common stock and the future market  
price of Epic's common stock.                                                   

 See "Description of Securities" for information concerning the terms of the
notes and the warrants. The persons which, by means of this prospectus, are     
offering Epic's shares are sometimes referred to as the selling shareholders.   
The selling shareholders may be considered "underwriters" as that term is       
defined in the Securities Act of 1933.                                          

The shares offered by the selling shareholders may be sold in the   
over-the-counter market at prevailing market prices and terms then prevailing or
in negotiated transactions.                                                     

    Epic's common stock is quoted on the OTC Bulletin Board under the symbol
"EPCC." On February 29, 2008 the closing price for one share of the Epic's      
common stock was $1.07.                                                         

   Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the   
accuracy or adequacy of this prospectus. Any representation to the contrary is a
criminal offense.                                                               

     These securities are speculative and involve a high degree of risk. For a
description of certain important factors that should be considered by           
prospective investors, see "Risk Factors" beginning on page 3 of this           
Prospectus.                                                                     

The date of this prospectus is ____________ 2008

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The following information is qualified in its entirety by the detailed          
information appearing elsewhere in this prospectus.                             

Epic was incorporated in Colorado on June 6, 1989. Following its  
formation Epic was inactive until April 2006, when Epic changed management and  
began operating in the oil and gas industry.                                    

       In August 2007 Epic acquired The Carnrite Group, LLC for 3,177,812 shares
of its common stock.                                                            

     In December 2007 Epic acquired Pearl Investment Company (formerly named
Pearl Development Company) for 1,486,240 shares of its common stock and cash of 
$18,720,000.                                                                    

In February 2008, Epic acquired Epic Integrated Solutions, LLC, an
unaffiliated entity, for cash and 1,000,000 shares of its restricted common     
stock. At closing, Epic paid $600,000 and issued 1,000,000 shares of its common 
stock to three owners of Epic Integrated. An additional $1,700,000 will be paid 
to the three owners in periodic installments during 2008 and 2009.              

    The Carnrite Group, Pearl Investment Company and Epic Integrated provide
consulting services to the oil, gas and energy industry in the areas of         
engineering, construction management, operations, maintenance, oilfield project 
management training, operations documentation and data managment.               

    As of the date of this prospectus Epic's revenues from the sale of oil
and gas were not significant.                                                   

       Epic's officers are located at 10655 Six Pines, Suite 210, The Woodlands,
TX 77380 and its telephone number is (281) 419-3742 and its fax number is (281) 
419-1114.                                                                       

Epic's website is: www.1epic.com.                                 

The Offering                                                                    

   On December 5, 2007 Epic sold 4,406,334 shares of its common stock to a
group of private investors for gross proceeds of $6,609,500, or $1.50 per share.
The investors also received warrants which entitle the holders to purchase up to
4,406,334 shares of Epic's common stock. The warrants are exercisable at a price
of $1.50 per share and expire on December 5, 2012.                              

On December 31, 2007 Epic sold an additional 1,023,001 shares of its
common stock to a group of private investors for gross proceeds of $1,534,502 or
$1.50 per share. The investors also received warrants which entitle the holders 
to purchase up to 1,023,001 shares of Epic's common stock. The warrants are     
exercisable at a price of $1.50 per share and expire on December 5, 2012.       

On December 5, 2007 Epic also sold notes in the principal amount of 
$20,250,000 to a second group of private investors. The notes bear interest     
annually at 10% per year. The notes are due and payable on December 5, 2012 and 
are secured by liens on all of Epic's assets. The purchasers of the notes also  

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received warrants which entitle the holders to purchase up to 15,954,853 shares 
of Epic's common stock. The warrants are exercisable at a price of $1.65 per    
share and expire on December 5, 2012.                                           

  Rodman & Renshaw acted as the lead placement agent for the sale of the
common stock, notes and warrants. For its services in this regard, Rodman &     
Renshaw received $1,849,000 in cash from Epic, as well as warrants to purchase  
1,301,151 shares of Epic's common stock.                                        

      Epic may also issue shares of its common stock to the holders of the notes
as payment of principal.                                                        

By means of this prospectus investors are offering to sell shares of
Epic's common stock sold in the December 2007 financing as well shares which may
be issued in payment of the notes or upon the exercise of the warrants. See     
"Description of Securities" for information concerning the terms of the notes   
and the warrants.                                                               

 Epic will not receive any proceeds from the sale of the shares by the
selling shareholders. Although Epic will receive proceeds from the exercise of  
any warrants, Epic has not determined how the proceeds will be used.            

     As of February 29, 2008, Epic had 43,948,921 outstanding shares of common
stock. The number of outstanding shares does not give effect to shares which may
be issued as payment of principal on the notes sold in December 2007 or the     
exercise of outstanding warrants or options. See "Comparative Share Data".      

     The purchase of the securities offered by this prospectus involves a high
degree of risk. Risk factors include the potential for a decrease in revenues if
the price of oil or gas should decline and the limited market for Epic's common 
stock. See the "Risk Factors" section of this prospectus for additional Risk    
Factors.                                                                        

Forward Looking Statements                                                      

      This prospectus contains various forward-looking statements that are based
on Epic's beliefs as well as assumptions made by and information currently      
available to Epic. When used in this prospectus, the words "believe", "expect", 
"anticipate", "estimate" and similar expressions are intended to identify       
forward-looking statements. Such statements may include statements regarding    
seeking business opportunities, payment of operating expenses, and the like, and
are subject to certain risks, uncertainties and assumptions which could cause   
actual results to differ materially from projections or estimates. Factors which
could cause actual results to differ materially are discussed at length under   
the heading "Risk Factors". Should one or more of the enumerated risks or       
uncertainties materialize, or should underlying assumptions prove incorrect,    
actual results may vary materially from those anticipated, estimated or         
projected. Investors should not place undue reliance on forward-looking         
statements, all of which speak only as of the date made.                        

RISK FACTORS

The securities being offered involve a degree of risk. Prospective  
investors should consider the following risk factors which affect Epic's        
business and this offering. If any of the risks discussed below materialize,    

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Epic's common stock could decline in value or become worthless.                 

Energy Consulting Services                                                      

Epic's limited operating history may make it difficult for investors to assess  
Epic's future operating results. Epic was incorporated in 1989 but was inactive 
until April 2006 when it began operations in the energy consulting and oil and  
gas industries. Due to Epic's limited operating history, an investor's          
assessment of Epic's future performance may prove to be inaccurate.             

A decline in the price of, or demand for, oil or gas could reduce Epic's        
revenues. The demand for Epic's services depends on trends in oil and natural   
gas prices and is particularly sensitive to the level of exploration,           
development, and production by oil and natural gas companies. Historically, the 
prices for oil and gas have been volatile and are likely to continue to be      
volatile. Spending on exploration and production activities will have a         
significant impact on the activity level of Epic's consulting businesses.       

The loss of key management and technical personnel could harm Epic's business   
Epic depends greatly on the efforts of its executive officers and other key     
employees. The loss or unavailability of any of Epic's executive officers or    
other key employees could have a material adverse effect on its business. Many  
of the services that Epic provides are complex and highly engineered. Epic      
believes that its success will depend upon its ability to employ and retain     
skilled technical personnel. The demand for skilled workers is high, the supply 
is limited and Epic's inability to recruit and retain the workers it needs will 
hurt its business.                                                              

Competition for customers and personnel in the energy consulting business may   
reduce Epic's revenues. The energy consulting industry is highly competitive,   
with limited barriers to entry. Large full-service and specialized companies, as
well as small local operations, compete with Epic. Competition in some markets  
is intense, particularly with regard to recruiting personnel, and these         
competitive forces may limit Epic's ability to raise prices to its customers.   

The loss of one or more significant customers of Pearl Investment Company could 
result in a substantial decline in Epic's consolidated revenues. During the year
ended December 31, 2006 two customers accounted for 78% of the total revenues of
Pearl Investment Company. During the year ended December 31, 2005 four customers
accounted for 82% of Pearl Investment Company's total revenues. The loss of any 
significant customer of Pearl Investment Company could have a material adverse  
impact on the operating results of Pearl Investment Company and the consolidated
operating results of Epic.                                                      

Epic has significant working capital requirements. Epic needs significant       
working capital in order to operate its business. Epic must maintain cash       
reserves to pay its employees and consultants prior to receiving payment from   
customers. These working capital requirements may increase in future periods. If
Epic's cash balances cannot satisfy its working capital requirements, Epic could
be required to explore alternative sources of financing to satisfy its needs,   
including the sale of equity or debt securities which would result in dilution  
to existing shareholders.                                                       

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If Epic's expansion efforts are not successful, its operations will be adversely
affected. Epic recently acquired two energy consulting firms and Epic may       
continue to pursue new acquisitions in the future. However, unsuccessful        
acquisitions may result in significant additional expenses that would not       
otherwise be incurred. Epic may not be able to integrate the operations of these
two consulting firms without unanticipated costs and difficulties and retain its
customers and key employees. In addition, Epic may not realize the revenues that
it expected from these acquisitions.                                            

Epic may suffer losses from its fixed price contracts. Some of Epic's consulting
agreements are either on a cost-reimbursable basis or on a fixed-price basis.   
The failure to estimate accurately the resources and time required for a        
fixed-price project or the failure to complete contractual obligations within   
the time frame and costs committed could have a material adverse effect on      
Epic's business. In connection with projects covered by fixed-price contracts,  
Epic bears the risk of cost over-runs, inflation, labor availability and        
productivity, and supplier and subcontractor pricing and performance.           

Third parties Epic may use may not provide services in an adequate or timely    
manner. Epic may sometimes use third-party subcontractors and equipment         
manufacturers to assist Epic with a project. To the extent Epic cannot engage   
subcontractors or acquire equipment or materials, its ability to complete a     
project in a timely fashion or at a profit may be impaired. If the amount Epic  
is required to pay for goods and services exceeds the amount Epic estimated in  
bidding for fixed-price work, Epic could experience losses. Any delay or failure
by subcontractors to complete their portion of a project, may cause Epic to     
incur additional costs, including compensating the customer for delays. In      
addition, if a subcontractor or a manufacturer is unable to deliver services,   
equipment, or materials according to agreed upon terms for any reason, Epic may 
be required to purchase the services, equipment, or materials from another      
source at a higher price. This may reduce Epic's profit or result in a loss on a
project.                                                                        

Doing business in foreign countries subjects Epic to economic and political     
conditions which differ from those in the United States and which could result  
in losses. A significant portion of Epic's consulting revenue is derived from   
operations outside of the United States, which exposes Epic to risks inherent in
doing business in each of the countries in which it transacts business. The     
occurrence of any of the risks described below could have a material adverse    
effect on Epic's operations.                                                    

o    political and economic instability;                              
     o    civil unrest,  acts of terrorism,  force majeure,  war, or other armed
conflict;                                                   
o    currency fluctuations, devaluations, and conversion restrictions;
o    confiscatory taxation or other adverse tax policies;             
     o    government activities that limit or disrupt markets, restrict payments
or result in the deprivation of contract rights.            

Fluctuations in foreign exchange rates and changes in foreign exchange controls 
could reduce Epic's revenues and restrict the use of its revenue. A sizable     
portion of Epic's revenue is in foreign currencies. As a result, Epic is subject
to exchange risks resulting from changes in foreign exchange rates, the         
implementation of exchange controls, and potential limitations on Epic's ability

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to transfer earnings from operations in one country to fund operations in other 
countries.                                                                      

Epic could face substantial liability due to claims from customers or third     
parties. Through its subsidiaries, Epic provides advice to oil, gas and energy  
companies in a variety of areas, including well drilling and completion, project
design and construction management. The services provided by Epic expose it to  
potential professional liability, general and third-party liability, warranty,  
and other claims which may be in excess of its insurance limits.                

Epic's intellectual property may become obsolete and may not be protected from  
competitors. Epic relies on intellectual property rights to provide consulting  
services. Epic may not be able to successfully preserve these intellectual      
property rights in the future, and these rights could be invalidated,           
circumvented, or challenged. In addition, the laws of some foreign countries in 
which Epic provides services do not protect intellectual property rights to the 
same extent as the laws of the United States. Epic's failure to protect its     
proprietary information and any successful intellectual property challenges or  
infringement proceedings against Epic could adversely affect its competitive    
position.                                                                       

The market for Epic's services is characterized by continual      
technological developments. If Epic is not able to provide commercially         
competitive services in a timely manner in response to changes in technology,   
its business could be adversely affected and the value of its intellectual      
property may be reduced. Likewise, if Epic's proprietary technologies or work   
processes become obsolete, it may no longer be competitive and its business     
could be adversely affected.                                                    

Oil and Gas Exploration and Development                                         

If Epic cannot obtain additional capital, Epic may have to delay or postpone    
exploration and development and activities. Epic needs additional capital to    
find oil and gas reserves. Epic may be unable to obtain the funding which it    
requires.                                                                       

Oil and gas exploration and development is not an exact science, and involves a 
high degree of risk. The primary risk lies in the drilling of dry holes or      
drilling and completing wells which, though productive, do not produce gas      
and/or oil in sufficient amounts to return the amounts expended and produce a   
profit. Hazards, such as unusual or unexpected formation pressures, downhole    
fires, blowouts, loss of circulation of drilling fluids and other conditions are
involved in drilling and completing oil and gas wells and, if such hazards are  
encountered, completion of any well may be substantially delayed or prevented.  
In addition, adverse weather conditions can hinder or delay operations, as can  
shortages of equipment and materials or unavailability of drilling, completion, 
and/or work-over rigs. Even though a well is completed and is found to be       
productive, water and/or other substances may be encountered in the well, which 
may impair or prevent production or marketing of oil or gas from the well.      

   Exploratory drilling involves substantially greater economic risks than
development drilling because the percentage of wells completed as producing     
wells is usually less than in development drilling. Exploratory drilling itself 
can be of varying degrees of risk and can generally be divided into higher risk 
attempts to discover a reservoir in a completely unproven area or relatively    
lower risk efforts in areas not too distant from existing reservoirs. While     
exploration adjacent to or near existing reservoirs may be more likely to result

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in the discovery of oil and gas than in completely unproven areas, exploratory  
efforts are nevertheless high risk activities.                                  

      Although the completion of oil and gas wells is, to a certain extent, less
risky than drilling for oil and gas, the process of completing an oil or gas    
well is nevertheless associated with considerable risks. In addition, even if a 
well is completed as a producer, the well for a variety of reasons may not      
produce sufficient oil or gas in order to repay Epic's investment in the well.  

Epic's operations will be affected from time to time and in varying degrees by  
the price for oil or gas. The price of oil and gas is often volatile and        
influenced by political developments and Federal and state laws and regulations 
regarding the development, production and sale of crude oil and natural gas.    
These regulations require permits for drilling of wells and also cover the      
spacing of wells, the prevention of waste, and other matters. Rates of          
production of oil and gas have for many years been subject to Federal and state 
conservation laws and regulations and the petroleum industry is subject to      
Federal tax laws. In addition, the production of oil or gas may be interrupted  
or terminated by governmental authorities due to ecological and other           
considerations. Compliance with these regulations may require a significant     
capital commitment by and expense to Epic and may delay or otherwise adversely  
affect Epic's proposed operations.                                              

Risks Related to this Offering                                                  
------------------------------                                                  

There is, at present, only a limited market for Epic's common stock. Epic's     
common stock is quoted on the OTC Bulletin Board and is thinly traded. The OTC  
Bulletin Board is an inter-dealer, over-the-counter market that provides        
significantly less liquidity than other public trading markets, such as the     
NASDAQ stock market. Quotations for stocks included on the OTC Bulletin Board   
may not be listed in the financial sections of newspapers and prices for        
securities traded on the OTC Bulletin Board are often volatile.                 

Shares issuable for the payment of principal on the notes or the exercise of    
outstanding options and warrants may substantially increase the number of shares
available for sale in the public market and may depress the price of Epic's     
common stock. Epic had outstanding options and warrants which, as of February   
29, 2008, allow the holders to acquire up to approximately 24,407,000 additional
shares of its common stock. Until the options and warrants expire, the holders  
will have an opportunity to profit from any increase in the market price of     
Epic's common stock without assuming the risks of ownership. Holders of options 
and warrants may exercise these securities at a time when Epic could obtain     
additional capital on terms more favorable than those provided by the options or
warrants. The exercise of the options and warrants will dilute the voting       
interest of the owners of presently outstanding shares by adding a substantial  
number of additional shares of Epic's common stock.                             

    Epic has filed a registration statement with the Securities and Exchange
Commission so that the shares of common stock sold in the December 2007         
financing as well shares which may be issued in payment of the notes or upon the
exercise of the warrants may be sold in the public market. The sale of common   
stock issued or issuable upon the exercise of the warrants, or the perception   
that such sales could occur, may adversely affect the market price of Epic's    
common stock.                                                                   

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COMPARATIVE SHARE DATA

                                                     Number of      Note
                                                         Shares    Reference
                                                       ---------   ---------

Shares outstanding as of February 29, 2008:          43,948,921           

Shares to be sold in this offering:                                     
 Shares of common stock                             5,429,335        A

 Shares issuable upon exercise of warrants         21,384,188        A
 Shares issuable as payment of principal on notes   6,200,000        A
Shares issuable upon exercise of warrants issued                    

   to placement agent                               1,301,151        B

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

    The following table lists additional shares of Epic's common stock which
may be issued as of February 29, 2008:                                          

                                                     Number of      Note
                                                         Shares    Reference
                                                       ---------   ---------

Shares issuable upon the exercise of warrants                             
  held by private investors                           1,455,100          C

Shares issuable upon exercise of options granted                          

  to Epic's officers, employees and directors         1,611,000          D

Shares to be issued to officers and employees                             
  of Pearl Investment Company                         3,313,760          E

A. On December 5, 2007 Epic sold 4,406,334 shares of its common stock to a group
of private investors for gross proceeds of $6,609,500, or $1.50 per share. The  
investors also received warrants which entitle the holders to purchase up to    
4,406,334 shares of Epic's common stock. The warrants are exercisable at a price
of $1.50 per share and expire on December 5, 2012.                              

On December 31, 2007 Epic sold an additional 1,023,001 shares of its
common stock to a group of private investors for gross proceeds of $1,534,502 or
$1.50 per share. The investors also received warrants which entitle the holders 
to purchase up to 1,023,001 shares of Epic's common stock. The warrants are     
exercisable at a price of $1.50 per share and expire on December 5, 2012.       

 On December 5, 2007 Epic also sold notes in the principal amount of
$20,250,000 to a second group of private investors. The purchasers of the notes 
also received warrants which entitle the holders to purchase up to 15,954,853   
shares of Epic's common stock. The warrants are exercisable at a price of $1.65 
per share and expire on December 5, 2012.                                       

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      The actual number of shares issuable upon the exercise of the warrants may
increase as the result of future sales of Epic's common stock at prices below   
the warrant exercise price.                                                     

    At Epic's election, and under certain conditions, Epic may use shares of
its common stock to make principal payments on the notes. The number in the     
table is an estimate and assumes that Epic makes all principal payment with     
shares of its common stock having a price of $3.30 per share. The actual number 
of shares which may be issued as payment of principal will depend on the amount,
if any which Epic elects to pay with shares of its common stock and the future  
market price of Epic's common stock.                                            

    See "Description of Securities" for more detailed information concerning
the notes and warrants.                                                         

B. Rodman & Renshaw served as the lead placement agent in connection with the   
private placement of the securities described in Note A and received a cash fee 
of $1,849,000 as well as warrants to purchase 1,301,151 shares of Epic's common 
stock. Warrants to purchase 184,333 shares are exercisable at a price of $1.50  
per share and warrants to purchase 1,116,818 shares are exercisable at a price  
of $1.65 per share.                                                             

C. Between October 2006 and April 2007 Epic raised $ 1,414,700, net of          
commissions, from the sale of 1,455,100 shares of its common stock, plus 491,500
Series A warrants and 963,600 Series B warrants, to private investors. The      
Series A warrants expired on December 31, 2007. Each Series B Warrant entitles  
the holder to purchase one share of Epic's common stock at a price of $2.50 per 
share at any time prior to September 30, 2009.                                  

D. See "Management - Executive Compensation" for information concerning the     
terms of these options.                                                         

E. On December 5, 2007, Epic acquired Pearl Investment Company for 1,486,240    
shares of its common stock and cash of $18,720,000. It is expected that up to   
3,313,760 additional shares may be issued in the future to key employees and    
officers of Pearl Investment Company subject to certain vesting requirements.   

MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION

Epic was incorporated in Colorado on June 6, 1989. Following its  
formation Epic was inactive until April 2006, when Epic changed management and  
began operating in the oil and gas industry.                                    

       In August 2007 Epic acquired the Carnrite Group, LLC for 3,177,812 shares
of its common stock.                                                            

     In December 2007 Epic acquired Pearl Investment Company (formerly named
Pearl Development Company) for 1,486,240 shares of its common stock and         
$18,720,000 in cash.                                                            

    On February 20, 2008, Epic acquired Epic Integrated Solutions, LLC, an
unaffiliated entity, for cash and 1,000,000 shares of its restricted common     
stock. At closing, Epic paid $600,000 and issued 1,000,000 shares of its common 
stock to the three owners of Epic Integrated. An additional $1,700,000 will be  

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paid to the three owners in periodic installments during 2008 and 2009.         

      The Carnrite Group, Pearl Investment Company and Epic Integrated provide
consulting services to the oil, gas and energy industry in the areas of         
engineering, construction management, operations, maintenance, oil field project
management, training, operations documentation and data management.             

Epic has a 100% working interest in 58 shut in gas wells and a 50%
working interest in seven shut in gas wells.                                    

Results of Operations                                                           
---------------------                                                           

Epic                                                                            
----                                                                            

    Following its formation in 1989 Epic was relatively inactive until April
2006, when its management changed and it became involved in providing consulting
services and oil and gas exploration and development.                           

Year Ended December 31, 2006                                                    
----------------------------                                                    

    During the year ended December 3, 2005 Epic did not generate any revenue
and had a loss of $(20,000).                                                    

During the year ended December 31, 2006 Epic had gross revenues of $106,263     
which were derived from the sale of natural gas and consulting services. During 
2006 Epic's operating expenses increased as Epic hired full time management and 
staff and as a result of a write-down of Epic's oil and gas properties to their 
estimate value.                                                                 

Nine Months Ended September 30, 2007                                            
------------------------------------                                            

   During the nine months ended September 30, 2006 Epic was inactive until
April 2006. Following a change in management in April 2006, Epic hired full time
management and staff.                                                           

     During the nine months ended September 30, 2007 Epic had minimal revenues
were from the sale of gas from its wells in Kansas and Oklahoma. In August 2007 
Epic acquired The Carnrite Group, LLC, a company which provides energy          
consulting services. The increase in Epic's revenues during the nine months     
ended September 30, 2007 was the direct result of the consolidation of          
Carnrite's operations subsequent to August 13, 2007, the date of the            
acquisition.                                                                    

     Expenses which are directly related to oil and gas production are charged
to lease operating expenses. All other expenses (except depletion, accretion and
impairment), whether they relate to consulting services or oil and gas          
exploration/development, are recorded as general and administrative expenses.   

     During the nine months ended September 30, 2007 Epic's operating expenses
increased as the result of the acquisition of Carnrite and a write-down of the  
Epic's oil and gas properties to their estimate value.                          

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The Carnrite Group                                                              
------------------                                                              

    The Carnrite Group was formed on March 28, 2007. As a result, comparison
to prior periods is not possible.                                               

Pearl Investment Company                                                        
------------------------                                                        

Year Ended December 31, 2006                                                    
----------------------------                                                    

Revenues were $34,610,756 for the year ended December 31, 2006 as 
compared to 12,274,683 for the year ended December 31, 2005, an increase of     
$22,336,073 or 182.0%. Revenues increased due to a general increase in          
engineering, construction operations and maintenance consulting contracts and an
increase in contracts which required Pearl to purchase materials used by clients
in construction contracts. The cost of the materials was billed to the clients. 

     Cost of services were $25,894,816 for the year ended December 31, 2006 as
compared to $9,840,115 for the year ended December 31, 2005, an increase of     
$16,054,701 or 163.2%. Gross Profit was $8,715,940 or 25.2% of sales for the    
year ended December 31, 2006 as compared to $2,434,568 or 19.8% of sales for the
year ended December 31, 2005. The increase in Pearl's gross profit percentage   
was the result of more efficient use of personnel and a reduction in costs which
could not be billed to clients. General and Administrative Expenses were        
$4,317,806 for the year ended December 31, 2006 as compared to $1,651,705 for   
the year ended December 31, 2005, an increase of $2,666,101 or 161.4%. General  
and administrative expenses, as a percentage of total sales, were 12.5% in 2006,
which was comparable to 13.5% in 2005.                                          

Nine Months Ended September 30, 2007                                            
------------------------------------                                            

     Revenues were $37,575,940 for the nine months ended September 30, 2007 as
compared to 23,200,162 for the nine months ended September 30, 2006, an increase
of $14,375,778 or 62.0%. Revenues increased due to a general increase in        
consulting contracts and an increase in contracts which required Pearl to       
purchase materials used by clients in construction projects. The cost of the    
materials was billed to the clients.                                            

     Cost of Services were $28,667,745 for the nine months ended September 30,
2007 as compared to $16,888,212 for the nine months ended September 30, 2006, an
increase of $11,779,553 or 69.8%. Gross Profit was $8,908,195 or 23.7 % of sales
for the nine months ended September 30, 2007 as compared to $6,311,949 or 27.2% 
of sales for the nine months ended September 30, 2006. The decrease in Pearl's  
gross profit percentage was the result of higher salaries and employee benefit  
expense.                                                                        

     General and Administrative Expenses were $5,888,626 for the nine months
ended September 30, 2007 as compared to $2,334,665 for the nine months ended    
September 30, 2006, an increase of $3,553,961 or 152.2%. General and            
administrative expenses, as a percentage of total sales, were 16% in 2007,      
compared to 10% in 2006. General and administrative expenses increased primarily
as a result of the following:                                                   

     o    Marketing,  promotion and  communication  expenses  increased as Pearl
          made a  greater  effort  to  expose  its  services  to the oil and gas
community;                                                  

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     o    Office  expenses  increased as the result of the  expansion of Pearl's
main office in Colorado and the addition of branch offices; 

     o    Depreciation and amortization expense increased due to the purchase of
an airplane at the end of 2006;                             

     o    Professional  fees increased due to the costs associated with the sale
   of Pearl to Epic and the audit of Pearl's financial statements;

     o    Aviation expense  increased as a result of the purchase of an airplane
at the end of 2006.                                         

Liquidity and Capital Resources                                                 
-------------------------------                                                 

Between October 2006 and April 2007 Epic raised $1,414,700, net     
commissions, from the sale of 1,455,100 shares of its common stock, plus 491,500
Series A warrants and 963,600 Series B warrants, to private investors. The      
Series A warrants expired on December 31, 2007. Each Series B Warrant entitles  
the holder to purchase one share of Epic's common stock at a price of $2.50 per 
share at any time prior to September 30, 2009.                                  

   On December 5, 2007 Epic sold 4,406,334 shares of its common stock to a
group of private investors for gross proceeds of $6,609,500, or $1.50 per share.
The investors also received warrants which entitle the holders to purchase up to
4,406,334 shares of the Company's common stock. The warrants are exercisable at 
a price of $1.50 per share and expire on December 5, 2012.                      

On December 31, 2007 Epic sold an additional 1,023,001 shares of its
common stock to a group of private investors for gross proceeds of $1,534,502 or
$1.50 per share. The investors also received warrants which entitle the holders 
to purchase up to 1,023,001 shares of Epic's common stock. The warrants are     
exercisable at a price of $1.50 per share and expire on December 5, 2012.       

On December 5, 2007 Epic also sold notes in the principal amount of 
$20,250,000 to a second group of private investors. The notes were sold at their
face value without discount. The notes bear interest annually at 10% per year.  
The notes are due and payable on December 5, 2012 and are secured by liens on   
all of Epic's assets. The purchasers of the notes also received warrants which  
entitle the holders to purchase up to 15,954,545 shares of Epic's common stock. 
The warrants are exercisable at a price of $1.65 per share and expire on        
December 5, 2012.                                                               

      Interest on the notes is payable quarterly with the first interest payment
due on January 1, 2008. Beginning December 1, 2008 Epic is required to make     
quarterly payments of $1,265,625 toward the principal amount of the notes.      

   The amounts raised in the December 2007 financing were used as follows:

       Amount received from sale of common stock, notes and warrants$ 28,394,003

Less:                                                               
        Acquisition of Pearl Investment Company                 (18,720,000)
Reserve for income taxes of Pearl Investment Company        
            for year ended December 31, 2007                     (2,400,000)

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        Payment of Pearl Investment Company bank loans           (1,504,884)
        Placement agent fees                                     (1,785,000)
        Legal, accounting and other professional fees              (125,000)
                                                             -------------
         Remainder to be used as working capital             $ 3,859,119
                                                              ============

     Epic's  sources and (uses) of cash during the years ended December 31, 2006
and 2005 were:                                                                  
                                                2006          2005
                                                ----          ----

Cash used by operations                             $(595,807)     $(17,386)    
Acquisition of oil and gas properties                (102,100)           --     
Borrowings, net of repayments                          80,663            --     
Sale of common stock                                  903,195            --     
Capital contributions                                 304,221        17,386     

      Epic's sources and (uses) of cash during the nine months ended September
30, 2007 and 2006 were:                                                         
                                                          2007          2006
                                                          ----          ----

Cash used by operations                                 $(211,284)    $(229,349)
Investment in Epic Exploration and Development            (22,700)           -- 
Investment in oil and gas properties                       (1,031)           -- 
Cash resulting from acquisition of Carnrite                48,227               
Deposit toward acquisition of Pearl Investment Company   (300,000)           -- 
Borrowings, net of repayments                              78,827            -- 
Sale of common stock                                      523,600           440 
Capital contribution                                           --       305,021 
Other                                                      (4,902)           -- 

     Other than the  matters  discussed  in the "Risk  Factors"  section of this
prospectus,  Epic  does not know of any  future  trends or  events  which  would
materially affect its operating results or financial condition.                 

     During the period from March 28, 2007  through  June 30, 2007 the  Carnrite
Group's  operations  used cash of  $(287,492),  primarily  as the  result of the
increase in accounts  receivable of  $1,207,883.  During this period capital was
provided primarily through borrowing under a line of credit.                    

   Pearl Investment Company's sources and (uses) of cash during the year
ended December 31, 2006 and 2005 were:                                          
                                                        2006          2005
                                                        ----          ----

Cash provided by operations (1)                           $8,884,667   $479,560 
Purchase of property, plant and equipment                 (1,132,843)  (123,314)
Loan to related party                                       (291,871)        -- 
Distribution to shareholders of Pearl Investment Company    (688,872)        -- 
Payments on capital leases                                  (181,115)  (179,976)
Advances from line of credit                                 500,000         -- 

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 Pearl Investment Company's sources and (uses) of cash during the nine
months ended September 30, 2007 and 2006 were:                                  

                                                2007          2006
                                                ----          ----

Cash provided (used) by operations (1)            $(5,201,744)   $9,063,348     
Purchase of property, plant and equipment          (1,558,041)     (777,862)    
Cost of patent technology                           1,000,000            --     
Collection on advances to related party               291,871            --     
Advances from line of credit                          500,000            --     
Payments on capital leases                           (711,013)     (135,836)    
Bank overdraft                                        889,993            --     
Distributions to shareholders of Pearl Investment                               
Company                                            (580,362)     (196,923)  
Cash on hand at January 1, 2007                     7,369,296            --     

(1)  During 2006, Pearl Investment Company entered into a contractual           
relationship with a customer to procure engineered materials for a gas
     plant project. The customer provided cash in a lump sum to Pearl Investment
    Company to purchase the materials for use in the project. Pearl Investment
Company recognized the cash received from the customer as a Deposit   
    Liability in its financial statement for the year ended December 31, 2006.
     During the nine months ended September 30, 2007 a significant amount of the
cash provided by the customer was used to purchase materials.         

      During the nine months ended September 30, 2007 The Carnrite Group and the
Pearl Investment Company had net income of $852,127 and $2,869,689 respectively.

      Epic's material future contractual obligations as of December 31, 2006 are
shown below:                                                                    

 Obligation          Amount          2007         2008       2009   Thereafter
 ----------          ------          ----         ----       ----   ----------

Epic - Loan from                                                                
private lender     $2,580,666  $   872,990  $   849,504 $  849,504  $    8,668

Pearl Investment -                                                              
Bank loans         $6,853,328   $3,240,785  $ 2,809,872 $2,470,163  $1,667,492

     Epic's loan from the private lender had a principal balance of $3,110,400
as of December 31, 2007 and is secured by Epic's gas wells in Rush County,      
Kansas. The loan bears interest at 10% per year and is payable in equal monthly 
installments of $72,000. The loan agreement provides that if the monthly net    
income from the wells is less than $72,000, the deficit will be added to the    
principal amount of the note. If the monthly net income from the wells is       
greater than $72,000, the net income is applied to the note principal. Since the
Kansas wells are shut in, it is anticipated that $25,000 will be added to the   
note principal each month until the wells return to production.                 

      As a result of the acquisition of The Carnrite Group, the Pearl Investment
Company and Epic Integrated, Epic believes that cash provided by its operations 
will satisfy its future capital requirements, including principal and interest  
payments required by the terms of the note secured by Epic's Kansas gas wells   
and the notes sold in December 2007.                                            

     As of the date of this prospectus Epic did not have any off balance sheet
arrangements.                                                                   

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    Other than the matters discussed in the "Risk Factors" section of this
prospectus, Epic does not know of any future trends or events which would       
materially affect its operating results or financial condition.                 

      Fluctuations in crude oil and natural gas prices will significantly affect
Epic's oil and gas operations. Cash flow from oil and gas production depends    
upon the quantity of production and the price obtained for such production. An  
increase in prices will permit Epic to finance its operations to a greater      
extent with internally generated funds, may allow Epic to obtain equity         
financing more easily or on better terms, and lessens the difficulty of         
attracting financing from industry partners and non-industry investors. However,
price increases heighten the competition for leases increase the costs of       
exploration and development activities 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 will (i) reduce the cash flow internally
generated by Epic which in turn will reduce the funds available for servicing   
debt and exploring for and replacing oil and gas reserves, (ii) increase the    
difficulty of obtaining equity and debt financing and worsens the terms on which
such financing may be obtained, (iii) reduce the number of leases which have    
reasonable economic terms, (iv) may cause Epic to allow leases to expire based  
upon the value of potential oil and gas reserves in relation to the costs of    
exploration, (v) result in marginally productive oil and gas wells being        
abandoned as non-commercial, and (vi) increase the difficulty of attracting     
financing from industry partners and non-industry investors.                    

Critical Accounting Policies                                                    

The preparation of Epic's financial statements requires it to make  
estimates and judgments that affect the reported amounts of its assets,         
liabilities and expenses and related disclosure of contingent assets and        
liabilities. Epic bases its estimates on historical experience and on various   
other assumptions that it believes to be reasonable under the circumstances, the
results of which form the basis for making judgments about the carrying values  
of assets and liabilities. Although Epic reviews its estimates on an ongoing    
basis, actual results may differ from its estimates under different assumptions 
or conditions. Epic believes the following accounting policies are critical to  
the judgments and estimates used in the preparation of its financial statements:

Accounts Receivable. Accounts receivable represent amounts due from 
customers for services performed. Epic extends various terms to its customers,  
with payment terms generally 30 days, depending on the customer and country, and
Epic does not require collateral. Epic periodically assesses the collectibility 
of its receivables, as necessary, based on various considerations including     
customer credit history, payment patterns, and aging of accounts. Once          
management determines an account receivable is not collectible, the account is  
written off. Epic has not experienced collectibility problems to date. If the   
collection history or aging of accounts receivable deteriorates, Epic may have  
to record a charge to operations to establish an allowance for doubtful         
accounts.                                                                       

     Full Cost Method of Accounting for Crude Oil and Natural Gas Activities .
SEC Regulation S-X defines the financial accounting and reporting standards for 
companies engaged in crude oil and natural gas activities. Two methods are      
prescribed: the successful efforts method and the full cost method. Epic has    
chosen to follow the full cost method under which all costs associated with     

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property acquisition, exploration and development are capitalized. Epic also    
capitalizes internal costs that can be directly identified with acquisition,    
exploration and development activities and do not include any costs related to  
production, general corporate overhead or similar activities. Effective with the
adoption of SFAS No. 143 in 2003, the carrying amount of oil and gas properties 
also includes estimated asset retirement costs recorded based on the fair value 
of the asset retirement obligation when incurred. Gain or loss on the sale or   
other disposition of oil and gas properties is not recognized, unless the gain  
or loss would significantly alter the relationship between capitalized costs and
proved reserves of oil and natural gas attributable to a country. Under the     
successful efforts method, geological and geophysical costs and costs of        
carrying and retaining undeveloped properties are charged to expense as         
incurred. Costs of drilling exploratory wells that do not result in proved      
reserves are charged to expense. Depreciation, depletion, amortization and      
impairment of crude oil and natural gas properties are generally calculated on a
well by well or lease or field basis versus the "full cost" pool basis.         
Additionally, gain or loss is generally recognized on all sales of crude oil and
natural gas properties under the successful efforts method. As a result Epic's  
financial statements will differ from companies that apply the successful       
efforts method since Epic will generally reflect a higher level of capitalized  
costs as well as a higher depreciation, depletion and amortization rate on our  
crude oil and natural gas properties.                                           

       At the time it was adopted, management believed that the full cost method
would be preferable, as earnings tend to be less volatile than under the        
successful efforts method. However, the full cost method makes Epic more        
susceptible to significant non-cash charges during times of volatile commodity  
prices because the full cost pool may be impaired when prices are low. These    
charges are not recoverable when prices return to higher levels. Epic's crude   
oil and natural gas reserves have a relatively long life. However, temporary    
drops in commodity prices can have a material impact on Epic's business,        
including impact from the full cost method of accounting.                       

   Ceiling Test. Companies that use the full cost method of accounting for
oil and gas exploration and development activities are required to perform a    
ceiling test each quarter. The full cost ceiling test is an impairment test     
prescribed by SEC Regulation S-X Rule 4-10. The test determines a limit, or     
ceiling, on the book value of oil and gas properties. That limit is basically   
the after tax present value of the future net cash flows from proved crude oil  
and natural gas reserves, excluding future cash outflows associated with        
settling asset retirement obligations that have been accrued on the balance     
sheet, plus the lower of cost or fair market value of unproved properties. If   
net capitalized costs of crude oil and natural gas properties exceed the ceiling
limit, Epic must charge the amount of the excess to earnings. This is called a  
"ceiling limitation write-down." This charge does not impact cash flow from     
operating activities, but does reduce Epic's stockholders' equity and reported  
earnings. The risk that Epic will be required to write-down the carrying value  
of crude oil and natural gas properties increases when crude oil and natural gas
prices are depressed or volatile. In addition, write-downs may occur if Epic    
experiences substantial downward adjustments to its estimated proved reserves or
if purchasers cancel long-term contracts for natural gas production. An expense 
recorded in one period may not be reversed in a subsequent period even though   
higher crude oil and natural gas prices may have increased the ceiling          
applicable to the subsequent period.                                            

 Estimates of Epic's proved reserves included in this prospectus are
prepared in accordance with GAAP and SEC guidelines. The accuracy of a reserve  
estimate is a function of:                                                      

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o    the quality and quantity of available data;                      

o    the interpretation of that data;                                 

o    the accuracy of various mandated economic assumptions; and       

o    the judgment of the persons preparing the estimate.              

Epic's proved reserves and the present value of estimated future net
revenues from its reserves are based upon estimates which Epic believes are     
reasonable. Because these estimates depend on many assumptions, all of which may
substantially differ from future actual results, reserve estimates will be      
different from the quantities of oil and gas that are ultimately recovered. In  
addition, results of drilling, testing and production after the date of an      
estimate may justify material revisions to the estimate. It should not be       
assumed that the present value of future net cash flows is the current market   
value of Epic's estimated proved reserves. In accordance with SEC requirements, 
Epic bases the estimated discounted future net cash flows from proved reserves  
on prices and costs on the date of the estimate. Actual future prices and costs 
may be materially higher or lower than the prices and costs as of the date of   
the estimate.                                                                   

   The estimates of proved reserves materially impact DD&A expense. If the
estimates of proved reserves decline, the rate at which we record DD&A expense  
will increase, reducing future net income. Such a decline may result from lower 
market prices, which may make it uneconomic to drill for and produce higher cost
fields.                                                                         

  Excluded Costs. Oil and gas properties include costs that are excluded
from capitalized costs being amortized. These amounts represent investments in  
unproved properties and major development projects. These costs are excluded    
until proved reserves are found or until it is determined that the costs are    
impaired. All costs excluded are reviewed at least quarterly to determine if    
impairment has occurred. The amount of any impairment is transferred to the     
capitalized costs being amortized (the DD&A pool) or a charge is made against   
earnings for those international operations where a reserve base has not yet    
been established. Impairments transferred to the DD&A pool increase the DD&A    
rate. Costs excluded for oil and gas properties are generally classified and    
evaluated as significant or individually insignificant properties.              

      Valuation of Intangibles and Long-Lived Assets. SFAS No. 142 provides that
goodwill and other intangible assets that have indefinite useful lives not be   
amortized but, instead, must be tested at least annually for impairment, and    
intangible assets that have finite useful lives should continue to be amortized 
over their useful lives. SFAS No. 142 also provides specific guidance for       
testing goodwill and other non-amortized intangible assets for impairment. SFAS 
No. 142 does not allow increases in the carrying value of reporting units that  
may result from Epic's impairment test; therefore, Epic may record goodwill     
impairments in the future, even when the aggregate fair value of its reporting  
units and the company as a whole may increase. Goodwill of a reporting unit will
be tested for impairment between annual tests if an event occurs or             
circumstances change that would more likely than not reduce the fair value of a 
reporting unit below its carrying amount. Examples of such events or            
circumstances may include a significant change in business climate or a loss of 
key personnel, among others. SFAS No. 142 requires that management make certain 

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estimates and assumptions in order to allocate goodwill to reporting units and  
to determine the fair value of reporting unit net assets and liabilities,       
including, among other things, an assessment of market conditions, projected    
cash flows, cost of capital and growth rates, which could significantly impact  
the reported value of goodwill and other intangible assets. Estimating future   
cash flows requires significant judgment, and Epic's projections may vary from  
cash flows eventually realized.                                                 

    Epic reviews long-lived assets for impairment whenever events or changes
in circumstances indicate that the carrying amount may not be realizable. If an 
evaluation is required, the estimated future undiscounted cash flows associated 
with the asset are compared to the asset's carrying amount to determine if an   
impairment of such asset is necessary. Estimating future cash flows requires    
significant judgment, and Epic's projections may vary from cash flows eventually
realized. The effect of any impairment would be to expense the difference       
between the fair value of such asset and its carrying value. In addition, Epic  
estimates the useful lives of its long-lived assets and other intangibles. Epic 
periodically reviews factors to determine whether these lives are appropriate.  

    Asset Retirement Obligations ("ARO"). The estimated costs of restoration
and removal of facilities are accrued. The fair value of a liability for an     
asset's retirement obligation is recorded in the period in which it is incurred 
and the corresponding cost capitalized by increasing the carrying amount of the 
related long-lived asset. The liability is accreted to its then present value   
each period, and the capitalized cost is depreciated by the units of production 
method. If the liability is settled for an amount other than the recorded       
amount, a gain or loss is recognized. For all periods presented, we have        
included estimated future costs of abandonment and dismantlement in the full    
cost amortization base and amortize these costs as a component of our depletion 
expense.                                                                        

     Revenue Recognition. Oil and gas production sales and consulting fees are
recognized as revenue in accordance with Securities and Exchange Commission     
Staff Accounting Bulletin (SAB) No. 104, "Revenue Recognition," when persuasive 
evidence of an arrangement exists, fees are fixed or determinable, title has    
passed (generally upon transmission of oil and gas production and completion of 
consulting services), and collection is reasonably assured.                     

  Stock-Based Compensation. Epic adopted FAS 123R on January 1, 2006 and
amortizes stock-based compensation expense on a straight-line basis over the    
expected life of the vesting period.                                            

Financial Instruments and Concentrations of Credit Risk. Epic's financial       
instruments consist of cash and cash equivalents, accounts receivable, accounts 
payable, accrued expenses, derivative financial instruments, and debt. Epic     
believes the carrying values of cash and cash equivalents, accounts receivable, 
accounts payable and accrued expenses approximate their fair values due to their
short-term nature. The fair value of debt is estimated based on the effective   
interest rate method.                                                           

 Epic generally does not use derivative financial instruments to hedge
exposures to cash-flow risks or market-risks that may affect the fair values of 
its financial instruments. However, certain other financial instruments, such as
warrants and embedded conversion features in Epic's debt that are indexed to its
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the notes. Such financial instruments are initially recorded at fair value and  
amortized to interest expense during the life of the debt.                      

Epic utilizes various types of financing to fund its business needs,
including debt with warrants attached and other instruments indexed to its      
stock. The embedded conversion features utilized in these instruments require an
initial measurement of the fair value of the derivative components. Pursuant to 
FAS 133 and EITF 00-19 Epic amortizes the discount associated with these        
derivative components to interest expense at each reporting period.             

Recent Accounting Pronouncements                                                

In September 2006, the Financial Accounting Standards Board ("FASB")
published Statement of Financial Accounting Standards No.157, "Fair Value       
Measurements" (FAS 157). FAS 157 defines fair value, establishes a framework for
measuring fair value in generally accepted accounting principles and expands    
disclosures about fair value measurements. FAS 157 applies under other          
accounting pronouncements that require or permit fair value measurements and    
accordingly, does not require any new fair value measurements. FAS 157 is       
effective for fiscal years beginning after November 15, 2007. Epic does not     
believe the adoption of FAS 157 will have a material impact on its financial    
statements.                                                                     

In June 2006, the FASB issued FASB Interpretation No. 48 ("FIN 48"),
"Accounting for Uncertainty in Income Taxes - an interpretation of FASB         
Statement No. 109"("FAS 109"), which clarifies the accounting for uncertainty in
income taxes recognized in an enterprise's financial statements in accordance   
with FAS No. 109, "Accounting for Income Taxes." FIN 48 prescribes a recognition
threshold and measurement attribute for the financial statement recognition and 
measurement of a tax position taken or expected to be taken in a tax return.    
This Interpretation also provides guidance on de-recognition, classification,   
interest and penalties, accounting in interim periods, disclosure, and          
transition. This Interpretation is effective for fiscal years beginning after   
December 15, 2006. Epic does not believe the adoption of FIN 48 will have a     
material impact on its financial statements.                                    

  In September 2006, the SEC released Staff Accounting Bulletin No. 108,
"Considering the Effects of Prior Year Misstatements When Quantifying           
Misstatements in Current Year Financial Statement" ("SAB 108"), which provides  
guidance on how companies should quantify financial statement misstatements. SAB
108 requires that the effect of misstatements that were not corrected at the end
of the prior year be considered in quantifying misstatements in the current-year
financial statements. Two techniques were identified as being used by companies 
in practice to accumulate and quantify misstatements -- the "rollover" approach 
and the "iron curtain" approach. The rollover approach quantifies a misstatement
based on the amount of the misstatement originating in the current-year income  
statement. Thus, this approach ignores the effects of correcting the portion of 
the current-year balance sheet misstatement that originated in prior years. The 
iron curtain approach quantifies a misstatement based on the effects of         
correcting the cumulative misstatement existing in the balance sheet at the end 
of the current year, irrespective of the misstatement's year(s) of origination. 
SAB 108 permits companies to adjust for the cumulative effect of misstatements  
relating to prior years in the carrying amount of assets and liabilities as of  
the beginning of the current fiscal year, with an offsetting adjustment to the  
opening balance of retained earnings in the year of adoption.                   

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   In February 2007, the Financial Accounting Standards Board (the "FASB")
issued FASB Statement No. 159, The Fair Value Option for Financial Assets and   
Financial Liabilities -- Including an Amendment of FASB Statement No. 115 ("SFAS
159"). This standard permits an entity to choose to measure many financial      
instruments and certain other items at fair value. Most of the provisions in    
SFAS 159 are elective; however, the amendment to FASB Statement No. 115,        
Accounting for Certain Investments in Debt and Equity Securities, applies to all
entities with available-for-sale and trading securities. The FASB's stated      
objective in issuing this standard is as follows: "to improve financial         
reporting by providing entities with the opportunity to mitigate volatility in  
reported earnings caused by measuring related assets and liabilities differently
without having to apply complex hedge accounting provisions."                   

 The fair value option established by SFAS 159 permits all entities to
choose to measure eligible items at fair value at specified election dates. A   
business entity will report unrealized gains and losses on items for which the  
fair value option has been elected in earnings (or another performance indicator
if the business entity does not report earnings) at each subsequent reporting   
date. The fair value option: (i) may be applied instrument by instrument, with a
few exceptions, such as investments otherwise accounted for by the equity       
method; (ii) is irrevocable (unless a new election date occurs); and (iii) is   
applied only to instruments and not to portions of instruments.                 

      SFAS 159 is effective as of the beginning of an entity's first fiscal year
that begins after November 15, 2007. Early adoption is permitted as of the      
beginning of the previous fiscal year provided that the entity makes that choice
in the first 120 days of that fiscal year and also elects to apply the          
provisions of FASB Statement No. 157, Fair Value Measurements ("SFAS 157"). Epic
is currently assessing the impact of SFAS 159 on its financial statements.      

MARKET FOR EPIC'S COMMON STOCK

   As of February 29, 2008 there were approximately 110 record holders of Epic's
common stock. Epic's common stock began trading on the OTC Bulletin Board on    
October 30, 2006 under the symbol "EPCC". Shown below are the range of high and 
low closing prices for Epic'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.                                                                   

Quarter Ended            High           Low                       

December 31, 2006        $ 2.80         $ 1.25                    
March 31, 2007           $ 3.07         $ 2.78                    
June 30, 2007            $ 3.20         $ 2.90                    
September 30, 2007       $ 3.83         $ 3.15                    
December 31, 2007        $ 4.29         $ 2.30                    

Holders of common stock are entitled to receive dividends as may be 
declared by the Board of Directors out of legally available funds and, in the   
event of liquidation, to share pro rata in any distribution of Epic's assets    
after payment of liabilities. The Board of Directors is not obligated to declare
a dividend. Epic has not paid any dividends on its common stock and Epic does   
not have any current plans to pay any common stock dividends.                   

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BUSINESS
Background                                                                      

     Epic was incorporated in Colorado on June 6, 1989 under the name San Juan
Financial. Following its formation Epic was relatively inactive until April     
2006, when its management changed and it become involved in oil and gas         
exploration and development.                                                    

  On March 11, 2005 the shareholders of Epic approved a 1-for-20 forward
split of Epic's common stock. Unless otherwise indicated, all per share data in 
this report has been revised to reflect this forward stock split.               

On May 15, 2006 Epic's shareholders:                                

     o    approved amendments to its Articles of Incorporation which changed the
corporate name to Epic Capital Group, Inc., and             

     o    changed Epic's  authorized  capitalization  to  100,000,000  shares of
common stock and 10,000,000 shares of preferred stock.      

    Between October 2006 and April 2007 Epic raised $1,455,100 from the sale
of 1,455,100 shares of its common stock, plus 491,500 Series A warrants and     
963,600 Series B warrants, to private investors. The Series A warrants expired  
on December 31, 2007. Each Series B Warrant entitles the holder to purchase one 
share of Epic's common stock at a price of $2.50 per share at any time prior to 
September 30, 2009.                                                             

On December 1, 2006 Epic's shareholders approved an amendment to its
Articles of Incorporation which changed the corporate name to Epic Energy       
Resources, Inc.                                                                 

In December 2007 Epic sold to private investors:                    

     o    5,429,335 shares of its common stock for gross proceeds of $8,144,007,
          or $1.50 per  share,  plus  warrants  which  entitle  the  holders  to
purchase up to 5.429,335 shares of Epic's common stock.     

     o    notes in the  principal  amount of  $20,250,000  plus  warrants  which
          entitle  the holders to  purchase  up to  15,954,545  shares of Epic's
common stock.                                               

  During 2007 Epic acquired the Carnrite Group, LLC and Pearl Investment
Company. The Carnrite Group and Pearl Investment Company provide engineering,   
construction management, operations, maintenance, field, and project management 
services to the oil, gas and energy industry.                                   

In February 2008, Epic acquired Epic Integrated Solutions, LLC, an  
unaffiliated entity. Epic Integrated provides the oil and gas industry with     
specialized training, operations documentation and data management services for 
the start-up and operation of complex energy production facilities.             

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     Unless otherwise indicated, all references to Epic include the operations
of the Carnrite Group, Pearl Investment Company and Epic Integrated, subsequent 
to the dates that Epic acquired these companies.                                

   As of the date of this prospectus, Epic's revenues from the sale of oil
and gas were not significant. However, Epic plans to evaluate undeveloped oil   
and gas prospects and participate in drilling activities on prospects which in  
the opinion of management are favorable for the production of oil or gas. Epic  
may also acquire other producing oil and gas properties which have the potential
to support additional oil and gas wells.                                        

Consulting Services                                                             
-------------------                                                             

    Through the late 1950's the early oil and gas companies such as Standard
Oil, Texaco and Mobil were fully vertically integrated enterprises with business
units that included oil and gas drilling, pipeline transportation, refining, gas
stations and motor oils. The consensus was that companies needed to own the     
entire chain to control the product and maximize profits.                       

In the late 1970's a new model emerged with smaller companies being 
created that focused on only one aspect of the industry. Independent production 
companies were created to find, drill and produce oil and gas. Pipeline         
companies were formed to deliver product from producers to refineries and other 
end users. Refining companies were organized to refine oil and gas into usable  
fuels and products. And, finally retail oriented companies were created to      
developed innovative ways to market gasoline (the birth of the gasoline station 
as a convenience store!).                                                       

      Epic sees the next natural progression to be the separation of oil and gas
producers into two groups: those that want to explore and drill for oil and gas 
and those that want to focus on the efficient processing of oil and gas before  
it is transported.                                                              

   Because of increasing demand and prices, major integrated oil companies
and large independents are exploring for new fields in areas such as West       
Africa, Brazil, Venezuela, Trinidad, the Caspian, Western Russia and others. The
scale of these projects requires significant financial and human resources.     
These projects usually require assembling a large international team consisting 
of staff from the oil company, a large engineering firm, a large fabrication and
construction company to build and assemble the structure and processing         
equipment, and an operations and maintenance partner to staff the project and   
manage the start-up. This rush to large, international, projects is consuming a 
substantial portion of the existing engineering and construction capability in  
the oil and gas industry. Many of the majors and larger independent oil and gas 
companies are exiting the domestic market and turning their capital, manpower   
and technology to new, high investment areas around the world. The service      
sector, especially the large engineering and construction companies, are        
following their main customers to these international projects leaving few      
companies to compete for domestic projects. At the same time, record drilling   
activity in the US onshore market will require more production, process and     
transportation infrastructure.                                                  

      Due to the high operating costs and low production rates of many older oil
and gas fields, most producers have been limited in their ability to maintain   
the operating condition of pipelines, compressor stations, gathering systems,   
SCADA systems, secondary recovery injection plants, and similar equipment.      

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      In August 2007 Epic acquired the Carnrite Group LLC for 3,177,812 shares
of common stock. In connection with this acquisition, 1,673,036 additional      
shares of common stock were issued to key officers of The Carnrite Group as     
retention shares that will vest during the two year period ending March 28,     
2009. All or part of these shares will be returned to Epic if one or more       
officers of Carnrite voluntarily terminate their employment prior to March 28,  
2009. The Carnrite Group currently employs five professionals in its offices in 
Houston, Texas and is presently providing services to clients in the United     
States, Argentina, Kazakhstan, Nigeria and Russia.                              

 In December 2007 Epic acquired Pearl Investment Company for 1,486,240
shares of its common stock and cash of $18,720,000. Up to 3,313,760 additional  
shares may be issued in the future to key employees and officers of Pearl       
Investment Company subject to certain vesting requirements. Pearl Investment    
Company currently employs over 200 professionals working from six offices and   
serves clients in the greater Rocky Mountain Region and the Middle East.        

In February 2008 Epic acquired Epic Integrated Solutions, LLC, an 
unaffiliated entity, for cash and shares of its restricted common stock. At     
closing, Epic paid $600,000 and issued 1,000,000 shares of its common stock to  
the three owners of Epic Integrated. An additional $1,700,000 will be paid to   
the three owners in periodic installments during 2008 and 2009. The 1,000,000   
shares were issued to Epic Integrated's owners, each of whom is also an officer 
of Epic Integrated. The shares issued to each owner will vest over a three-year 
period. All or a portion of the shares issued to each officer will be forfeited 
and returned to Epic if the officer voluntarily terminates his or her employment
prior to February 20, 2011.                                                     

     Through its subsidiaries the Carnrite Group, Pearl Investment Company and
Epic Integrated, Epic provides the following consulting services to the oil, gas
and energy industry:                                                            

o     monitoring performance of wells and reservoirs,                           
o     techniques to improve well productivity and increase recoverable reserves,
o     drilling and completion of oil and gas wells,                             
o     reservoir and formation evaluation,                                       
o     integration of data workflows and operational processes,                  
o     oilfield project management,                                              
o     design of energy and petrochemical projects,                              
o     construction management,                                                  
o     commodity marketing and trading,                                          

o     financial analysis,                                                       
o     organizational design,                                                    
o     specialized training,                                                     
o     operations documentation,                                                 
o     data management.                                                          

     Backlog represents the revenue Epic expects to realize in the future from
performing consulting work under multi-period contracts. Epic generally includes
total expected revenue in the backlog when a contract is awarded and the scope  
of the services are determined. Backlog is not defined by generally accepted    
accounting principles and Epic's process for determining backlog may not be     
comparable to the methodology used by other companies in determining backlog.   
Backlog may not be indicative of future operating results. Not all of Epic's    
consulting revenue is recorded in backlog for a variety of reasons, including   

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the fact that some projects begin and end within a short-term period. Many      
contracts do not provided for a fixed amount of work to be performed and are    
subject to modification or termination by the customer. The termination or      
modification of any one or more sizeable contracts or the addition of other     
contracts may have a substantial immediate effect on backlog.                   

 For long-term contracts, the amount included in backlog is limited to
twelve months. If the contract duration is indefinite, projects included in     
backlog are limited to the estimated revenue within the following twelve months.
Some contracts provide maximum dollar limits, with authorization to perform work
under the contract being agreed upon on a periodic basis with the customer. In  
these arrangements, only the amounts authorized are included in backlog.        

 As of November 30, 2007, Epic's backlog for consulting services to be
provided in the future was approximately $22.5 million. This compares to a      
combined backlog of approximately $16.5 million as of November 30, 2006, all of 
which was attributed to Pearl Investment Company since The Carnrite Group was   
not formed until March 2007.                                                    

      During the year ended December 31, 2006 two customers accounted for 78% of
the total revenues of Pearl Investment Company. During the year ended December  
31, 2005 four customers accounted for 82% of Pearl Investment Company's total   
revenues.                                                                       

Oil and Gas Exploration and Development                                         
---------------------------------------                                         

    Epic plans to evaluate undeveloped oil and gas prospects and participate
in drilling activities on 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, Epic will attempt
to acquire leases or other interests in the area and assemble a prospect. Epic  
may then attempt to sell a portion of its leasehold interests in a prospect to  
unrelated third parties, thus sharing the risks and rewards of the exploration  
and development of the prospect with the joint owners pursuant to an operating  
agreement. 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.                                                     

 Epic may also acquire producing oil and gas properties which have the
potential to support additional oil and gas wells.                              

Current Operations                                                              
------------------                                                              

       Epic has a 100% working interest (approximately 82% net revenue
interest) in 58 gas wells located on 28,600 acres in Rush County, Kansas. In    
January 2007 the gas wells were shut in due to the closure of the plant which   
was purchasing the gas produced from Epic's wells. Epic is in negotiations with 
another company which is interested in purchasing the gas from these wells.     

     Epic has a 50% working interest (approximate 40% net revenue interest) in
seven shut-in gas wells located on 6,000 acres in Kay County, Oklahoma. Epic    
estimates that it will cost approximately $7,000 (with Epic being responsible   
for its 50% share) to rework each shut-in well and place the well back on       
production. Two wells were successfully tested for commercial production        

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following workovers in 2007. Depending on weather conditions, Epic plans to     
begin reworking the remaining shut-in wells during the first quarter of 2008.   

     In July 2007 Epic formed a joint venture, Epic Exploration and Production
LLC, with a private investment firm to acquire energy assets and oil and gas    
properties. Epic will manage the operations of the joint venture. The private   
investment firm is responsible for providing capital required to acquire the    
assets on a project-by-project basis.                                           

 Epic will receive 20% of the net income from any asset or oil and gas
property acquired by the joint venture until the private investment firm        
receives 100% of the equity contributed by the private investment firm to       
acquire the asset or property. Thereafter, the net income from the asset or     
property will be allocated equally between Epic and the private investment firm.
As of the date of this prospectus, the joint venture was negotiating to acquire 
working interests, varying from 50% to 100%, in producing oil wells in Fort Bend
and Bazoria counties, Texas.                                                    

  Epic did not participate in the drilling of any wells in 2006 or 2007.

The following table shows, as of December 31, 2006, Epic's producing
wells, Developed Acreage, and Undeveloped Acreage, excluding service (injection 
and disposal) wells:                                                            

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

  Oklahoma          2          1         80          40    5,920         2,960
  Kansas           58         58      2,400       2,400   26,200        26,200
                 ----        ---      -----       -----   -------      -------

      Totals       60         59      2,480       2,440   32,120        29,160
                 ====       ====     ======      ======   =======      =======

(1) All wells are gas wells.                                                    

     Developed acreage represents the number of acres which are allocated or
assignable to producing wells or wells capable of production.                   

    Undeveloped acreage represents 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.               

   The following table shows, as of December 31, 2006 the status of Epic's
gross developed and undeveloped acreage.                                        

State          Gross Acreage     Held by Production    Not Held by Production   
-----          -------------     ------------------    ----------------------   

Kansas            6,000                   --                   6,000            
Oklahoma         28,600                   --                  28,600            

      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 

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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. Since the wells on the acreage shown in the table are 
shut-in, all acreage is classified as "Not Held By Production".                 

Epic does not own any overriding royalty Interests.                 

   Title to properties is 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 is made at the time
of acquisition (other than a preliminary review of local records). However,     
drilling title opinions are always prepared before commencement of drilling     
operations.                                                                     

   The following table shows Epic's net production of oil and gas, average
sales prices and average production costs during the year ended December 31,    
2006. Production Data:                                                          

Production -                                                              
Oil (Bbls)                 --                                       
Gas (Mcf)              18,902                                       
Average sales price -                                                     
Oil (Bbls)                 --                                       
Gas (Mcf)                5.02                                       

Average production                                                        
costs per MCF           2.86                                      

Production costs may vary substantially among wells depending on the
methods of recovery employed and other factors, but generally include severance 
taxes, administrative overhead, maintenance and repair, labor and utilities.    

      Epic is not obligated to provide a fixed and determined quantity of oil or
gas in the future. During the last fiscal year, Epic did not have, nor does it  
now have, any long-term supply or similar agreement with any government or      
governmental authority.                                                         

      Below are estimates of Epic's net proved reserves and the present value of
estimated future net revenues from its reserves based upon the standardized     
measure of discounted future net cash flows relating to proved oil and gas      
reserves in accordance with the provisions of Statement of Financial Accounting 
Standards No. 69, "Disclosures about Oil and Gas Producing Activities" (SFAS No.
69). The standardized measure of discounted future net cash flows is determined 
by using estimated quantities of proved reserves and the periods in which they  
are expected to be developed and produced based on period-end economic          
conditions. The estimated future production is priced at period-end prices,     
except where fixed and determinable price escalations are provided by contract. 
The resulting estimated future cash inflows are then reduced by estimated future
costs to develop and produce reserves based on period-end cost levels. No       
deduction has been made for depletion, depreciation or for indirect costs, such 

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as general corporate overhead. Present values were computed by discounting      
future net revenues by 10% per year.                                            
                                               December 31, 2006
                                                --------------------
                                                Oil            Gas
                                                (Bbls)         (Mcf)

 Proved reserves                                 3,717       4,970,318
Estimated future net cash flows from proved                         
oil and gas reserves                          $ 13,355,253
Present value of future net cash flows from                         
proved oil and gas reserves                    $  7,354,511 

   Epic's proved reserves include only those amounts which Epic reasonably
expects to recover in the future from known oil and gas reservoirs under        
existing economic and operating conditions, at current prices and costs, under  
existing regulatory practices and with existing technology. Accordingly, any    
changes in prices, operating and development costs, regulations, technology or  
other factors could significantly increase or decrease estimates of Proved      
Reserves.                                                                       

Government Regulation                                                           
---------------------                                                           

Although Epic's consulting business is not subject to any particular
governmental regulations, Epic's oil and gas operations are subject to numerous 
environmental laws and regulations. These laws and regulations include:         

     o    the Comprehensive  Environmental Response,  Compensation and Liability
Act;                                                        
o    the Resources Conservation and Recovery Act;                     
o    the Clean Air Act;                                               
o    the Federal Water Pollution Control Act; and                     
o    the Toxic Substances Control Act.                                

In addition to the federal laws and regulations, states often have  
numerous environmental, legal, and regulatory requirements which Epic must      
comply with.                                                                    

  Epic does not expect that costs pertaining to environmental compliance
will have a material adverse effect on its operations.                          

      Various state and federal agencies regulate the production and sale of oil
and natural gas. All states in which Epic 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.                    

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Epic's sales of any natural gas will be affected by intrastate and  
interstate gas transportation regulation. Beginning in 1985, the FERC adopted   
regulatory changes that have significantly altered the transportation and       
marketing of natural gas. These changes are intended by the FERC to foster      
competition by, among other things, transforming the role of interstate pipeline
companies from wholesale marketers of natural gas to the primary role of gas    
transporters. All natural gas marketing by the pipelines is required to divest  
to a marketing affiliate, which operates separately from the transporter and in 
direct competition with all other merchants. As a result of the various omnibus 
rulemaking proceedings in the late 1980s and the individual pipeline            
restructuring proceedings of the early to mid-1990s, the interstate pipelines   
must provide open and nondiscriminatory transportation and                      
transportation-related services to all producers, natural gas marketing         
companies, local distribution companies, industrial end users and other         
customers seeking service. Through similar orders affecting intrastate pipelines
that provide similar interstate services, the FERC expanded the impact of open  
access regulations to intrastate commerce.                                      

   Federal, state, and local agencies have promulgated extensive rules and
regulations applicable to Epic's oil and 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     
Epic's properties. The federal and state regulatory burden on the oil and       
natural gas industry increases Epic's cost of doing business and affects its    
profitability.                                                                  

Competition                                                                     
-----------                                                                     

Consulting Services                                                             
-------------------                                                             

     The energy consulting industry is highly competitive. Competitors include
large, multinational corporations such as SAIC, Accenture, KBR and Baker Energy 
as well as many medium sized and small consulting firms. Because the energy     
consulting industry is large and crosses numerous geographic lines, a meaningful
estimate of the total number of Epic's competitors is not possible.             
Competitive factors include:                                                    

o    price;                                                           
     o    service delivery  (including the ability to deliver services quickly);
and                                                         
o    technical proficiency.                                           

Oil and Gas                                                                     
-----------                                                                     

    Epic will be faced with strong competition from many other companies and
individuals engaged in the oil and gas business, many of which are very large,  
with substantial capabilities and well established. Epic will compete with these
individuals and companies, many of which have greater financial resources and   
larger technical staffs. Although it is nearly impossible to estimate the number

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of competitors; 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. Epic 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 Epic's    
ability expeditiously to drill, complete, recomplete and work-over its wells.   
However, Epic has not experienced and does not anticipate difficulty in         
obtaining supplies, materials, drilling rigs, equipment or tools.               

   The market for oil and gas is dependent upon a number of factors beyond
Epic'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. Increased imports of natural   
gas, primarily from Canada, have occurred and are expected to continue. Such    
imports may adversely affect the market for domestic natural gas.               

Since the early 1970's the market price for crude oil has been      
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. Epic 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 produced and sold from Epic's wells.                                

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 December 31, 2007, Epic and its subsidiaries, the Carnrite Group and
Pearl Investment Company, had 220 full time employees.                          

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    Epic's offices are located at 10655 Six Pines, Suite 210, The Woodlands,
Texas 77380. Approximately 1,500 square feet of office space is occupied under  
the lease requiring rental payments of $2,400 per month. The lease on this space
is occupied on a month-to-month basis.                                          

The offices of The Carnrite Group are located at 219 W. 11th Street,
Houston, Texas. The 1,480 square feet of office space is occupied under the     
lease requiring rental payments of $2,500 per month through April 2008, $2,750  
per month thru April 2009 and $3,000 per month through April 2010. The lease on 
this space expires in April 2010.                                               

The primary offices of Pearl Investment Company are located at 7110 
Jefferson Avenue, Lakewood, Colorado. The 30,552 square feet of office space is 
occupied under the lease requiring rental payments of $42,168 per month. The    
third floor lease on this space expires in July 2011 and the second floor lease 
on this space expires in March 2012. Pearl has eight branch offices and         
facilities in Colorado, Wyoming, Montana and Utah. The rental for all of the    
branch offices is approximately $18,900 per month.                              

MANAGEMENT

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

   Rex Doyle              49    Chief Executive Officer and a Director
John Ippolito          48    President                          
   David Reynolds         56    Executive Vice President and Secretary
R. Bret Rhinesmith     44    Executive Vice President           
Michael Kinney         50    Executive Vice President, Principal
                            Financial and Accounting Officer

W. Robert Eissler      57    Director                           
Dr. Robert Ferguson    64    Director                           
Kevin G. McMahon       40    Director                           

     Rex P. Doyle has been an officer and  director of Epic since April 4, 2006.
Mr. Doyle was a Vice President of Michael Baker Corporation  (AMEX:BKR)  between
August 2000 and September 2002.  Between September 2002 and April 2004 Mr. Doyle
was Vice  President of Business  Development  for Baker Energy,  a subsidiary of
Michael  Baker  Corporation.  Between  April 2005 and April  2006 Mr.  Doyle was
Senior Vice  President of Global  Operations  for Baker Energy and an officer of
Michael  Baker  Corporation.  Mr.  Doyle  graduated  with  a  BS  in  Mechanical
engineering from The Ohio State University, and has been a licensed professional
engineering in the state of Louisiana(inactive).  He graduated with a Masters of
Business Administration,  with Distinction, from the University of Michigan, and
also graduated from the Harvard IPAA Program for Owners and Executives.         

     John S.  Ippolito  has been an  officer of Epic  since  April 4, 2006.  Mr.
Ippolito was Business  Development  Manager - North and South America Integrated
Project Management  Division for Schlumberger Ltd. between 2000 and August 2003.
Between August 2003 and April 2006 Mr. Ippolito was Senior Business  Development
Director,  Continental  U.S.,  and  Business  Manager - Large  Asset  Management
Contracts, for Baker Energy, a subsidiary of Michael Baker Corporation.         

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     David R.  Reynolds  has been an officer of Epic  since  April 4, 2006.  Mr.
Reynolds  was a principal  of Orion Oil & Gas L.L.C.  between  2003 and December
2005. Between January 2006 and April 2006 Mr. Reynolds was working on a business
plan,  adopted  by Epic in  April  2006,  for an oil and gas  exploration/energy
consulting  company.  From  2001 to 2003 Mr.  Reynolds  was  with  the  Business
Development Group of Union Oil of California.                                   

R. Bret Rhinesmith was appointed an officer in December 2007 of Epic
following Epic's acquisition of the Pearl Investment Company. Since 1994 Mr.    
Rhinesmith has been the President of the Pearl Investment Company and its       
predecessor companies.                                                          

    W. Robert Eissler has been a director of Epic since December 2006. Since
1983 Mr. Eissler has been the President of Eissler & Associates, an executive   
recruiting firm based in The Woodlands, Texas. Mr. Eissler also serves as Texas 
State Representatives for the 80th Legislature (2006-2007).                     

Michael E. Kinney has been Epic's Executive Vice President and Chief
Financial Officer since February 2008. Between 2005 and February 2008, Mr.      
Kinney was employed by Accretive Solutions, a financial consulting firm, leading
its corporate governance team which focused on small to mid-size energy clients 
in the Houston area. From 2003 to 2005, Mr. Kinney was the Internal Audit       
Director for Stewart & Stevenson, Inc., a manufacturer of tactical vehicles for 
the federal government. Between 1996 and 2001 Mr. Kinney held several positions 
with Federal Express, including director of logistics operations (1999 to 2001) 
and managing director of audit (1997 to 1999) with responsibility for financial 
and operational audits. Mr. Kinney has also worked in various audit capacities  
with i2 Technologies and Textron. Mr. Kinney, age 49 is a CPA, and holds an MBA 
in Finance & Information Technology from Dallas Baptist University and a BBA in 
Accounting from the University of Texas at Arlington.                           

     Dr.  Robert M.  Ferguson has been a director of Epic since  December  2006.
Since  October  2005  Dr.  Ferguson  has been the  President  of the  Leadership
Institute for Vision and Ethics (Live) in Houston,  Texas.  Between January 2002
and September 2005 Dr.  Ferguson was an  independent  consultant in the areas of
organization  and  leadership.  Since  2002 Dr.  Ferguson  has  been an  Adjunct
Professor of Philosophy and Business Ethics at the Lone Star College, Montgomery
in The  Woodlands,  Texas,  and an  Adjunct  Professor  in  Business  Ethics and
Biblical Studies at Belhaven College in Houston,  Texas. Since February 2008 Dr.
Ferguson  has been  pastor at the Faith  Fellowship  Church  in  Spring,  Texas.
Between  February  January 2002 and October 2005 he was pastor at Spring Cypress
Presbyterian Church in Spring, Texas.                                           

     Kevin G. McMahon has been a director of Epic since July 2007. Mr. McMahon
is the Company's financial expert and serves as the Chairman of the Audit       
Committee. Since May 2006, Mr. McMahon has been Senior Vice President of        
Internal Audit and Sarbanes Oxley Compliance for Calpine Corp. From September   
2005 to May 2006, he was the Vice President and General Auditor for Exide       
Technologies. From March 1997 to August 2005, he was the Vice President of      
Internal Audit. Mr. McMahon has over 19 years experience in banking, public     
accounting, healthcare, manufacturing and energy/power generation. Kevin has a  
master of business administration degree from Palm Beach Atlantic University and
a bachelor of science degree in accounting from the State University of New     
York, and is a Certified Internal Auditor.                                      

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     Epic has a compensation committee. Dr. Robert Ferguson is the only member
of the compensation committee. Epic's audit committee is comprised of Dr. Robert
Ferguson and Kevin G. McMahon. Kevin McMahon serves as Epic's financial expert. 
All of Epic's directors, with the exception of Rex Doyle, are independent as    
that term is defined in Section 121(A) of the listing standards of the American 
Stock Exchange.                                                                 

Epic has adopted a Code of Ethics applicable to Epic's principal    
executive, financial, and accounting officers and persons performing similar    
functions.                                                                      

Changes in Management                                                           

On April 4, 2006, Mark W. Moniak, Epic's only officer and director, 
appointed Rex Doyle, John S. Ippolito and David R. Reynolds as directors of     
Epic. Following these appointments Mr. Moniak, resigned as an officer and       
director of Epic.                                                               

 Epic's directors then appointed the following persons to be officers:

Name                   Position                               

        Rex P. Doyle           Chief Executive and Principal Financial Officer
John S. Ippolito       President                              
David R. Reynolds      Executive Vice President and Secretary 

  On November 6, 2006 John Sherwood was appointed a director of Epic. On
November 30, 2006, John Ippolito and David Reynolds resigned as directors of    
Epic, but remained executive officers of Epic. On December 1, 2006 Robert       
Eissler and Dr. Robert Ferguson were appointed directors of Epic. On July 1,    
2007 Kevin G. McMahon was appointed as a director of Epic. On October 1, 2007   
Mr. Sherwood resigned as a director. R. Bret Rhinesmith was appointed as an     
officer of Epic in December 2007.                                               

Management of Subsidiaries                                                      

The managing directors of the Carnrite Group are:                   

Name                     Age                                

Lea Ann Robertson         51                                
Rita L. Williams          47                                
Sherri Herzig             41                                
Gillian A. Tilbury        44                                
Carolyn Stortstrom        47                                

     All of Carnrite's managing directors have been employed by Carnrite since
its inception in March 2007. Between 2002 and the formation of Carnrite, all of 
these persons were employed by Jeffries Energy Consulting LLC.                  

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The officers of Pearl Investment Company are:                       

Name                  Age       Position                                

R. Bret Rhinesmith    44        President                               
Mona Walker           41        Chief Financial Officer                 
Curtis L. Good        48        Vice President                          
Patrick W. Murray     50        Vice President                          

Information concerning the management of Pearl Investment Company   
(formerly named Pearl Development Company) follows. For purposes of the         
biographical information, employment by any subsidiary of Pearl Investment is   
considered to be employment by the parent company, Pearl Investment Company.    

   R. Bret Rhinesmith has been an officer of Epic since December 2007. Mr.
Rhinesmith has been the Chief Executive Officer of Pearl Investment Company     
since 1993.                                                                     

     Mona Walker has been an officer of Pearl Investment Company since October
2006. Between 2005 and 2006 Ms. Walker was the Director of Accounting and       
Finance for Centennial Energy, a natural gas liquids marketing company. Between 
1990 and 2005 Ms. Walker was the Risk & Financial Planning Manager for an       
affiliate of MarkWest Hydrocarbons, Inc.                                        

    Curtis L. Good has been an officer of the Pearl Investment Company since
2004. Between 2000 and 2004 Mr. Good was a consultant with J.M. Huber           
Corporation where he consulted in the construction of pipelines, roads,         
reservoirs, and water and gravel pits.                                          

   Patrick W. Murray has been an officer of Pearl Investment Company since
2006. Between 1995 and 2006 Mr. Murray managed his own investments. Between 1988
and 1995 Mr. Murray was Chief Financial Officer and Vice President of Finance   
for MarkWest Hydrocarbon Partners, Ltd.                                         

The managing directors of Epic Integrated are:                      

Name                   Age                                        

Joseph Wright           27                                        
Richard Dean Harvey     47                                        
Traci Marlene Harvey    46                                        

Joseph Wright has been senior consultant with Epic Integrated Solutions since   
February 2006. Between 1997 and 2006, Mr. Wright was employed with Baker Energy 
in various capacities including senior technical consultant, technology manager,
systems integrator, and network administrator.                                  

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Richard D. Harvey has been a training consultant and technical manager with Epic
Integrated Solutions since February 2006. Between March 2000 and February 2006, 
Mr. Harvey was Technical Manager with Baker Energy responsible for project      
development, planning, research and development, project estimates, budgeting,  
quality control, personnel administration and vendor relationships for major    
training projects.                                                              

Traci Harvey has been a training consultant and project manager with Epic       
Integrated Solutions since 2005. Between 2002 and 2005, Ms. Harvey was employed 
by Baker Energy in project, personnel and budget management, project            
coordination, training and graphic design.                                      

EXECUTIVE COMPENSATION                                                          

The following table shows the compensation paid or accrued to Epic's
Principal Executive and Financial Officer and the four other most highly        
compensated executive officers of Epic, or Epic's subsidiaries, during the years
ended December 31, 2007 and 2006.                                               

                                                        [Enlarge/Download Table]
                                                                                             
                                                                           All               
                                                                          Other              
                                                                          Annual             
                                                     Stock      Option    Compen-            
Name and Principal       Fiscal   Salary     Bonus   Awards     Awards    sation             
    Position              Year     (1)        (2)     (3)         (4)       (5)      Total   
------------------       -----    ------     -----   ------     -------   -------    ------  

Rex Doyle, Chief          2007   $210,000        --  $990,000  $  72,713      --   $1,272,713
  Principal Executive     2006   $118,750        --        --   $101,439      --   $  220,189
  and Financial Officer                                                                      

John Ippolito             2007   $175,000        --  $990,000    $45,321      --   $1,210,321
   President since        2006   $105,625        --        --   $101,439      --   $  207,064

   April 4, 2006                                                                             

R. Bret Rhinesmith,       2007   $343,264  $300,000        --         --  $12,917  $  656,181
  President of Pearl      2006   $156,398        --        --         --       --  $  156,398
  Investment Company                                                                         

Pat Murray                2007   $205,192  $500,000        --         --  $ 9,587  $  714,779
  President of Pearl      2006   $ 76,154  $ 85,000                       $   477  $  161,631
  Development                                                                                


(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 Epic could not properly 
report in any other                                                             

column of the table.                                                  

  In February 2008 Michael Kinney replaced Rex Doyle as Epic's Principal
Financial and Accounting Officer.                                               

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     The  compensation  shown in the table for R. Bret  Rhinesmith  and  Patrick
Murray was paid by Pearl  Investment  Company.  Epic acquired  Pearl  Investment
Company in  December  20070.  Mr.  Rhinesmith  has been the  President  of Pearl
Investment  Company since 1994.  Mr. Murray joined Pearl  Investment  Company in
2006.                                                                           

     Epic does not have an employment  agreement with any of its officers except
for Mr. Rhinesmith.                                                             

  Carnrite has employment agreements with each of its managing directors
which provide that each managing director will be paid an annual salary of      
$150,000.                                                                       

Each employment agreement continues in effect until the death or    
disability of the employee, or upon 30 days notice of termination given by      
either Carnrite or the employee. If the employment agreement is terminated by   
Carnrite without cause, then Carnrite will be required to pay the employee      
one-twelfth of the employee's then current salary.                              

For purposes the employment agreements "cause" means.               

     o    The  commission by the employee of acts that's are both  dishonest and
demonstrably injurious to Carnrite in any material respect; 
     o    The failure of the  employee  to observe  and comply  with  Carnrite's
published policies;                                         
     o    The willful failure the employee to observe and comply with any lawful
  and ethical directions or instruction of Carnrite's Directors;
     o    The failure of the employee to perform,  in any material respect,  her
          duties  with  Carnrite,  but only if such  failure  was not  caused by
          disability or incapacity and shall have continued  unremedied for more
          than  30 days  after  written  notice  is  given  to the  employee  by
Carnrite;                                                   
     o    Any willful  conduct on the part of the employee that  prejudices,  in
any material respect, the reputation of Carnrite.           

      Epic has employment agreements with the officers of Pearl Investment which
provide for the following:                                                      

Name of Employee                       Annual Salary                

R. Bret Rhinesmith                      $310,000                    
Mona L. Walker                          $175,000                    
Curtis L. Good                          $220,000                    
Patrick W. Murray                       $220,000                    

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Each employment agreement continues in effect until the death or  
disability of the employee, or upon 30 day's notice of termination given by     
either Epic or the employee. If the employment agreement is terminated by Epic  
without cause, then Epic will be required to pay the employee the greater of:   

o    Three months of employee's then current salary;                  
     o    The amount the employee would have received had the employee continued
  to work between the date of termination and September 1, 2010.
     o    If the employment agreement is terminated after September 1, 2010, the
          amount the employee would have received had the employee  continued to
          work between the date of termination and the next following  September
1st.                                                        

For purposes of the employment agreements, "cause" means:           

     o    An act of fraud,  embezzlement,  or theft in the course of  employment
with Epic;                                                  
     o    Unauthorized   intentional  disclosure  of  Epic's  trade  secrets  or
confidential information;                                   
     o    Violation  of any federal,  state or local law,  ordinance,  rule,  or
          regulation  while  conducting  business  on behalf of Epic (other than
traffic violations or similar offenses);                    
o    Any material breach of fiduciary duties owed to Epic;            
o    Refusal to perform the duties reasonably required by Epic;       
o    Unsatisfactory job performance;                                  
     o    Any  material  misconduct  in the course  and scope of the  employee's
          employment  with  Epic,  including  dishonesty,   disorderly  conduct,
          insubordination,  harassment of other  employees or customers or abuse
of alcohol or controlled substances, or                     
   o    The violation of any material provision of the employment agreement.

Epic has employment agreements with each managing director of Epic
Integrated. Each employment agreement provides that the director will be paid an
annual salary of $150,000 and that the employment agreement will continue in    
effect until February 20, 2011 or the death or disability of the director,      
whichever occurs first. However, either Epic or the director may terminate the  
employment agreement earlier upon written notice. If the employment agreement is
terminated earlier by Epic without cause, then Epic will be required to pay the 
director $150,000.                                                              

     For purposes of the employment agreements, "cause" has the same meaning
as that term is used in Epic's employment agreements with the officers of the   
Pearl Investment Company.                                                       

      Long-Term Incentive Plans. Epic does not provide its officers or employees
with stock appreciation rights, long-term incentive or similar plans.           

     Employee Pension, Profit Sharing or other Retirement Plans. Epic 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.                  

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Compensation of Directors During Year Ended December 31, 2007                   

Name                    Paid        Stock         Option                        
                in Cash    Awards (1)     Awards (2)         Total
----                   -------    ----------     ----------         -----       

Robert Eissler           $500                        --                         
Dr. Robert Ferguson      $500                        --                         
Kevin McMahon              --          --             --              --        

(1)  The fair value of stock issued for services computed in accordance with FAS
123R on the date of grant.                                            
(2)  The fair value of options granted computed in accordance with FAS 123R on  
the date of grant.                                                    

Mr.  McMahon was not paid any director's fees in 2007 since he did not become a 
director until July 2007.                                             

Stock Option and Bonus Plans                                                    

      Epic has adopted stock option and stock bonus plans. A summary description
of these plans follows. In some cases these Plans are collectively referred to  
as the "Plans".                                                                 

      Incentive Stock Option Plan. Epic's Incentive Stock Option Plan authorizes
the issuance of shares of Epic's Common Stock to persons that exercise options  
granted pursuant to the Plan. Only Company employees may be granted options     
pursuant to the Incentive Stock Option Plan.                                    

   Non-Qualified Stock Option Plan. Epic's Non-Qualified Stock Option Plan
authorizes the issuance of shares of Epic's Common Stock to persons that        
exercise options granted pursuant to the Plans. Epic'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 the    
offer or sale of securities in a capital-raising transaction. The option        
exercise price is determined by the Committee but cannot be less than the market
price of Epic's Common Stock on the date the option is granted.                 

Stock Bonus Plan. Epic'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 the offer or sale of  
securities in a capital-raising transaction.                                    

Summary. The following is a summary, as of December 31, 2007, of the
options granted, or the shares issued, pursuant to the Plans. Each option       
represents the right to purchase one share of Epic's common stock.              

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

Incentive Stock                                                                 
Option Plan        2,000,000            --          N/A          2,000,000  
Non-Qualified                                                                   
Stock Option Plan  3,000,000     1,611,000          N/A          1,389,000  
Stock Bonus Plan     1,000,000           N/A      600,000            400,000    

      The following tables show, during the fiscal years ended December 31, 2006
and 2007, the options granted to and held by, the persons named below. All of   
the options listed below were granted pursuant to Epic's Non-Qualified Stock    
Option Plan.                                                                    

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

Rex Doyle          100,000                         $0.50      10/24/08  
Rex Doyle           50,000          50,000         $3.00      10/24/08  
John Ippolito      100,000                         $0.50      10/24/08  
John Ippolito       50,000          50,000         $3.00      10/24/08  
David Reynolds     100,000                         $0.50      10/24/08  
David Reynolds      50,000          50,000         $3.00      10/24/08  
Rex Doyle               --         292,000         $3.30      12/31/12  
John Ippolito           --         182,000         $3.30      12/31/12  
David Reynolds          --         143,000         $3.30      12/31/12  
Michael Kinney          --          65,000         $3.17       7/10/12  
W. Steven Goff          --          89,000         $3.30      12/13/12  
Sherry L Herzig         --          46,000         $3.30      12/13/12  
Lea Ann Robertson       --          46,000         $3.30      12/13/12  
Carolyn N Stortstrom    --          46,000         $3.30      12/13/12  
Gillian L Tilbury       --          46,000         $3.30      12/13/12  
Rita L Williams         --          46,000         $3.30      12/13/12  
Elizabeth Gallagher     --          10,000         $3.30      12/13/12  

As of March 5, 2008 none of the options granted by Epic have been   
exercised.                                                                      

The following table shows the weighted average exercise price of the
outstanding options granted pursuant to Epic's stock option plans as of December
31, 2007. Epic's stock option plans were not approved by its shareholders.      

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

Incentive Stock                                                                 
Option Plan                   --             --                2,000,000    
Non-Qualified Stock                                                             
Option Plan            1,611,000          $2.71                1,389,000    

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      On December 13, 2007 Rex Doyle and John Ippolito were each awarded 300,000
shares of Epic's common stock pursuant to Epic's Stock Bonus Plan.              

     In connection  with the December 2007  acquisition of the Pearl  Investment
Company,  R. Bret Rhinesmith  received,  in exchange for his shares of the Pearl
Investment Company, 1,000,000 shares of Epic's common stock and was appointed an
officer of Epic.                                                                

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                                  

On April 4, 2006 Epic sold:                                           

o   20,000,000 shares of its common stock to Rex Doyle for $200;      
o   20,000,000 shares of its common stock to John Ippolito for $200;  
o   2,000,000 shares of its common stock to David Reynolds for $20;   
    o   2,000,000 shares of its common stock to two unrelated parties for $20.

On March 12, 2007 Rex Doyle and John Ippolito each agreed to the    
cancellation of 11,600,000 of their shares of Epic's common stock. Mr. Doyle and
Mr. Ippolito did not receive any consideration for the cancellation of their    
shares.                                                                         

 PRINCIPAL SHAREHOLDERS.

      The following table sets forth the number of and percentage of outstanding
shares of common stock owned by Epic's officers, directors and those            
shareholders owning more than 5% of Epic's common stock as of February 29, 2008.

 Shares of
Name and Address                  Common Stock (1)        Percent of Class (2)  
----------------                  ----------------       ---------------------- 

Rex P. Doyle                          8,600,000                    19.6%        
10655 Six Pines Drive, Suite 210                                                

The Woodlands, TX 77380                                                         

John Ippolito                         8,600,000                    19.6%        
10655 Six Pines Drive, Suite 210                                                

The Woodlands, TX 77380                                                         

David Reynolds                        2,200,000                     5.0%        
10655 Six Pines Drive, Suite 210                                                

The Woodlands, TX 77380                                                         

R. Bret Rhinesmith                    1,000,000                     2.3%        
7110 Jefferson Ave.                                                             

Lakewood, CO  80235                                                             

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W. Robert Eissler                        15,000                        *        
10655 Six Pines Drive, Suite 210                                                
The Woodlands, TX 77380                                                         

Dr. Robert Ferguson                      18,000                        *        
10655 Six Pines Drive, Suite 210                                                
The Woodlands, TX 77380                                                         

Kevin G. McMahon                             --                       --        
717 Texas Avenue, Suite 1000                                                    
Houston, TX 77002                                                               

All Executive Officers               20,433,000                    46.5%        
and Directors as a group (7 persons)                                            

*     Less than 1%.                                                             

(1)  Includes shares issuable upon the exercise of options, all of which are    
presently exercisable, and held by the following persons:             

                          Shares Issuable Upon
Name                            Exercise of Options   

Rex Doyle                            200,000          
John Ippolito                        200,000          
David Reynolds                       200,000          

Except as listed in footnote (1) none of the persons listed in the  
Principal Shareholders table hold any options, warrants or other securities     
which are convertible into shares of Epic's common stock.                       

 SELLING SHAREHOLDERS AND PLAN OF DISTRIBUTION

The owners of the common stock, notes and the warrants sold in the  
December 2007 financing, are referred to in this prospectus as the "selling     
shareholders". Epic will not receive any proceeds from the sale of the shares by
the selling shareholders. None of the selling shareholders held any position,   
office or had any other material relationship with Epic or any of Epic's        
affiliates during the past three years.                                         

   The names of and the shares to be sold by the selling shareholders are:

                                                        [Enlarge/Download Table]
                                                                                                     

                                           Shares Which                                              
                            Shares of        May be       Share Which                                
                           Common Stock      Acquired        May be                                  
                          Owned as of the      Upon        Received as                               
                            date of this     Exercise of    Payment of    Total Shares    Ownership  
Name                        Prospectus      Warrants (1)  Principal (2)    Offered     After Offering
-----                     ---------------  -------------  -------------  ------------  --------------

Chestnut Ridge Partners, LP    200,000          200,000         --           400,000           --    

Ironman PI Fund (QP), L.P.     500,000          500,000         --         1,000,000           --    

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                                                                [Download Table]
                                                                         

Truk Opportunity Fund, LLC   250,000    250,000         --    500,000  --

Truk International Fund, LP   83,333     83,333         --    166,666  --

Brio Capital L.P.            100,000    100,000         --    200,000  --

GCA Strategic Investment                                                 
  Fund Ltd.                  333,333    333,333         --    666,666  --

Cranshire Capital, L.P.      166,667    363,637     76,545    606,849  --

Midsummer Investment, Ltd.   500,000  4,045,455  1,377,780  5,923,235  --

Fort Mason Master, LP        469,550  2,134,319    646,935  3,250,804  --

Fort Mason Partners, LP       30,450    138,410     41,955    210,815  --

Fraser Black and                                                         
  Deirdre D. Black           333,333    333,333         --    666,666  --

Marcus Wilkins               100,000    100,000         --    200,000  --

Robert R. Henry              130,000    130,000         --    260,000  --

C. Allen Robinson             66,666     66,666         --    133,332  --

Castex New Ventures, L.P.    666,667    666,667         --  1,333,334  --

Roger S. Kellett              35,000     35,000         --     70,000  --

Ricky D. Needham              22,000     22,000         --     44,000  --

Thomas E. Palmer Jr.          20,000     20,000         --     40,000  --

Thomas Edwin Palmer Sr.       33,334     33,334         --     66,668  --

Terry P. Sellers              33,333     33,333         --     66,666  --

Continental American                                                     
  Resources, Inc.             33,333     33,333         --     66,666  --

Morgan J. Scudi               40,000     40,000         --     80,000  --

Albert G Aaron                66,667     66,667         --    133,334  --

Edward Perera                 76,001     76,001         --    152,002  --

Warren W. Smith               66,667     66,667         --    133,334  --

William Reed Moraw            50,000     50,000         --    100,000  --

M. Richard Asher             466,667    466,667         --    933,334  --

Susanne Young                 66,667     66,667         --    133,334  --

Steven Hahn                   66,667     66,667         --    133,334  --

Jeffrey Hahn                  66,667     66,667         --    133,334  --

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                                                                [Download Table]
                                                                           
Braden S. Carlsson              23,000     23,000         --     46,000  --

Retzloff Family Company Ltd.,                                              
   LLLP                        333,333    333,333         --    666,666  --

Shelter Island Opportunity                                                 
  Fund, LLC                               787,879    306,170  1,094,049  --

William H. Wilson, Jr.                     55,152     21,430     76,582  --

H. Steven Walton                           39,394     15,310     54,704  --

Peter Morin                                51,213     19,900     71,113  --

Todd M. Binet                              51,513     19,900     71,113  --

Whitebox Convertible Arbitrage          4,333,334  1,683,950  6,017,284  --
 Partners, LP                                                              

Pandora Select Partners, LP             2,363,637    918,520  3,282,157  --

Whitebox Special Opportunities          2,363,637    918,520  3,282,157  --
 Partners Series B, LP                                                     

Guggenheim Portfolio Company              393,940    153,085    547,025  --
  XXXI, LLC                                                                

Rodman & Renshaw (3)                --  1,301,151         --  1,301,151  --

(1) Each warrant holder, with the exception of Rodman & Renshaw, is prohibited  
 from exercising the warrants to the extent that such exercise would result in
such holder, together with any affiliate of the warrant holder, beneficially
owning in excess of 4.999% of the outstanding shares of Epic's common stock 
 following such exercise. This restriction may be waived by each holder on not
less than 61 day's notice to Epic. However, the 4.999% limitation would not 
prevent each warrant holder from acquiring and selling in excess of 4.999%  
Epic's common stock through a series of acquisitions and sales under the    
warrants so long as the warrant holder never beneficially owns more than    
4.999% of Epic's common stock at any one time.                              

 The number of shares issuable upon the exercise of the warrants is subject to
adjustment under those conditions explained in the section of the prospectus
entitled "Description of Securities - Notes and Warrants".                  

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(2) At Epic's election, and under the conditions described in the section of the
prospectus captioned "Description of Securities", Epic may use shares of its
 common stock to make principal payments on the notes. The number in the table
is an estimate and assumes that Epic makes all principal payment with shares
of its common stock having a price of $3.30 per share. The actual number of 
  shares which may be issued as payment of principal cannot be predicted at this
time and will depend upon a variety of factors, including the amount, if any
  which Epic elects to pay with shares of its common stock and the future market
  price of Epic's common stock and Epic's decision, or ability, to pay principal
with shares of its common stock. Epic may not use its common stock to pay   
  principal if the number of shares to be issued would result in the note holder
being the beneficial owner of more than 4.999% of Epic's outstanding shares.
The note holder may waive this restriction in the same manner as provided in
footnote(1) above.                                                          

 The controlling person of each selling shareholders which is not an
individual is shown below:                                                      

Selling Shareholder                        Controlling Person         
---------------------                      ------------------         

Chestnut Ridge Partners, LP                Kenneth Holz               

Ironman PI Fund (QP), L.P.                 G. Bryan Dutt              

Truk Opportunity Fund, LLC                 Aaron Braxton              
by: Atoll Asset Management, LLC                                 

Truk International Fund, LP                Aaron Braxton              
by: Atoll Asset Management, LLC                                 

Brio Capital L.P., 401 E. 34th Street      Shaye Hirsch               

GCA Strategic Investment Fund Ltd.         Michael S. Brown           

Cranshire Capital, L.P.                    Mitchell P. Kopin          

Midsummer Investment, Ltd.                 Alisa Butchkowski          

    Fort Mason Master, LP                      Marshall Jensen or David Smolen

    Fort Mason Partners, LP                    Marshall Jensen or David Smolen

Castex New Ventures, L.P.                  Alan G. Carnrite           

Continental American Resources, Inc.       Carl Suter                 

Retzloff Family Company Ltd., LLLP         Mark A. Retzloff           

Shelter Island Opportunity Fund, LLC       Michael Fein               

Whitebox Convertible Arbitrage                                        
Partners, LP                             Jonathan Wood            

Pandora Select Partners, LP                Jonathan Wood              

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Whitebox Special Opportunities                                        
Partners Series B, LP                    Jonathan Wood            

Guggenheim Portfolio Company XXXI, LLC     Jonathan Wood              

Rodman & Renshaw (3)                       Thomas Pinou               

(3) Rodman & Renshaw served as the lead placement agent in connection with the  
  sale of the shares of common stock, notes and warrants and received a cash fee
of $1,849,000 as well as warrants to purchase 1,301,151 shares of Epic's    
common stock.                                                               

Manner of Sale.                                                                 

The selling stockholders may, from time to time, sell any or all of their 
shares of common stock on any stock exchange, market or trading facility on     
which the shares are traded or in private transactions. These sales may be at   
fixed or negotiated prices. The selling stockholders may use any one or more of 
the following methods when selling shares:                                      

     o    ordinary   brokerage   transactions  and  transactions  in  which  the
broker-dealer solicits purchasers;                          

     o    block  trades  in which the  broker-dealer  will  attempt  to sell the
          shares as agent but may  position and resell a portion of the block as
principal to facilitate the transaction;                    

     o    purchases  by  a   broker-dealer   as  principal  and  resale  by  the
broker-dealer for its account;                              

     o    an  exchange   distribution  in  accordance  with  the  rules  of  the
applicable exchange;                                        

o    privately negotiated transactions;                               

o    short sales;                                                     

     o    broker-dealers  may  agree  with the  selling  stockholders  to sell a
    specified number of such shares at a stipulated price per share;

o    a combination of any such methods of sale; and                   

o    any other method permitted pursuant to applicable law.           

  The selling stockholders may also sell shares under Rule 144 under the
Securities Act, if available, rather than under this prospectus.                

    The selling stockholders may also engage in short sales against the box,
puts and calls and other transactions in our securities or derivatives of our   
securities and may sell or deliver shares in connection with these trades.      

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      The selling stockholders may sell shares of common stock short and deliver
shares of common stock covered by this prospectus to close out short positions  
and to return borrowed shares in connection with such short sales.              

    Broker-dealers engaged by the selling stockholders may arrange for other
brokers-dealers to participate in sales. Broker-dealers may receive commissions 
or discounts from the selling stockholders (or, if any broker-dealer acts as    
agent for the purchaser of shares, from the purchaser) in amounts to be         
negotiated. The selling stockholders do not expect these commissions and        
discounts to exceed what is customary in the types of transactions involved. Any
profits on the resale of shares of common stock by a broker-dealer acting as    
principal might be deemed to be underwriting discounts or commissions under the 
Securities Act. Discounts, concessions, commissions and similar selling         
expenses, if any, attributable to the sale of shares will be borne by a selling 
stockholder. The selling stockholders may agree to indemnify any agent, dealer  
or broker-dealer that participates in transactions involving sales of the shares
if liabilities are imposed on that person under the Securities Act.             

     The selling stockholders may from time to time pledge or grant a security
interest in some or all of the shares of common stock owned by them and, if they
default in the performance of their secured obligations, the pledgees or secured
parties may offer and sell the shares of common stock from time to time under   
this prospectus after Epic has filed an amendment to this prospectus under Rule 
424(b)(3) or other applicable provision of the Securities Act of 1933 amending  
the list of selling stockholders to include the pledgee, transferee or other    
successors in interest as selling stockholders under this prospectus.           

    The selling stockholders also may transfer the shares of common stock in
other circumstances, in which case the transferees, pledgees or other successors
in interest will be the selling beneficial owners for purposes of this          
prospectus and may sell the shares of common stock from time to time under this 
prospectus after Epic has filed an amendment to this prospectus under Rule      
424(b)(3) or other applicable provision of the Securities Act of 1933 amending  
the list of selling stockholders to include the pledgee, transferee or other    
successors in interest as selling stockholders under this prospectus.           

The selling stockholders and any broker-dealers or agents that are  
involved in selling the shares of common stock may be deemed to be              
"underwriters" within the meaning of the Securities Act in connection with such 
sales. In such event, any commissions received by the broker-dealers or agents  
and any profit on the resale of the shares of common stock purchased by them may
be deemed to be underwriting commissions or discounts under the Securities Act. 

      Epic is required to pay all fees and expenses incident to the registration
of the shares of common stock. Epic has agreed to indemnify the selling         
stockholders against certain losses, claims, damages and liabilities, including 
liabilities under the Securities Act.                                           

      The selling stockholders have advised Epic that they have not entered into
any agreements, understandings or arrangements with any underwriters or         
broker-dealers regarding the sale of their shares of common stock, nor is there 
an underwriter or coordinating broker acting in connection with a proposed sale 
of shares of common stock by any selling stockholder. If Epic is notified by any
selling stockholder that any material arrangement has been entered into with a  
broker-dealer for the sale of shares of common stock, if required, Epic will    
file a supplement to this prospectus. If the selling stockholders use this      
prospectus for any sale of the shares of common stock, they will be subject to  
the prospectus delivery requirements of the Securities Act.                     

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     The anti-manipulation rules of Regulation M under the Securities Exchange
Act of 1934 may apply to sales of Epic's common stock and activities of the     
selling stockholders.                                                           

 DESCRIPTION OF SECURITIES

Common Stock                                                                    

Epic is authorized to issue 100,000,000 shares of common stock, (the
"common stock"). Holders of common stock are each entitled to cast one vote for 
each share held of record on all matters presented to shareholders. Cumulative  
voting is not allowed; hence, the holders of a majority of the outstanding      
common stock can elect all directors.                                           

    Holders of common stock are entitled to receive such dividends as may be
declared by the Board of Directors out of funds legally available therefor and, 
in the event of liquidation, to share pro rata in any distribution of Epic's    
assets after payment of liabilities. The board is not obligated to declare a    
dividend. It is not anticipated that dividends will be paid in the foreseeable  
future.                                                                         

 Holders of common stock do not have preemptive rights to subscribe to
additional shares if issued by Epic. There are no conversion, redemption,       
sinking fund or similar provisions regarding the common stock. All of the       
outstanding shares of Common stock are fully paid and non-assessable.           

Preferred Stock                                                                 

   Epic is authorized to issue up to 10,000,000 shares of preferred stock.
Epic's Articles of Incorporation provide that the Board of Directors has the    
authority to divide the preferred stock into series and, within the limitations 
provided by Colorado statute, to fix by resolution the voting power,            
designations, preferences, and relative participation, special rights, and the  
qualifications, limitations or restrictions of the shares of any series so      
established. As the Board of Directors has authority to establish the terms of, 
and to issue, the preferred stock without shareholder approval, the preferred   
stock could be issued to defend against any attempted takeover of Epic.         

Notes and Warrants                                                              

   On December 5, 2007 Epic sold 4,406,334 shares of its common stock to a
group of private investors for gross proceeds of $6,609,500, or $1.50 per share.
The investors also received warrants which entitle the holders to purchase up to
4,406,334 shares of Epic's common stock. The warrants are exercisable at a price
of $1.50 per share and expire on December 5, 2012.                              

On December 31, 2007 Epic sold an additional 1,023,001 shares of its
common stock to a group of private investors for gross proceeds of $1,534,502 or
$1.50 per share. The investors also received warrants which entitle the holders 
to purchase up to 1,023,001 shares of Epic's common stock. The warrants are     
exercisable at a price of $1.50 per share and expire on December 5, 2012.       

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On December 5, 2007 Epic also sold notes in the principal amount of 
$20,250,000 to a second group of private investors. The notes bear interest     
annually at 10% per year. The notes are due and payable on December 5, 2012 and 
are secured by liens on all of Epic's assets. The purchasers of the notes also  
received warrants which entitle the holders to purchase up to 15,954,853 shares 
of Epic's common stock. The warrants are exercisable at a price of $1.65 per    
share and expire on December 5, 2012.                                           

      Interest on the notes is payable quarterly with the first interest payment
due on January 1, 2008. Beginning December 1, 2008 Epic is required to make     
quarterly payments of $1,265,625 toward the principal amount of the notes. If   
Epic fails to make any interest or principal payment when due, the notes will   
become immediately due and payable.                                             

  At Epic's election, quarterly principal payments may be paid in Epic's
common stock. In the event Epic elects to pay principal in shares of its common 
stock, the number of shares of common stock to be issued to each note holder    
will be determined by dividing the amount to be paid by a price equal to 90% of 
the average of Epic's VWAPs for the ten consecutive trading days prior to the   
applicable payment date,                                                        

 Epic may not use its common stock to pay principal unless each of the
following conditions is satisfied: (i) the number of authorized but unissued and
otherwise unreserved shares of common stock is sufficient for the issuance; (ii)
the shares of common stock to be issued in payment for principal and interest   
may be sold by the holder pursuant to an effective registration statement       
covering the shares or, in the alternative, all the shares may be sold pursuant 
to Rule 144; (iii) Epic's common stock is listed (and is not suspended from     
trading) on the OTC Bulletin Board; (iv) the number of shares to be issued would
not result in the note holder being the beneficial owner of more than 4.999% of 
Epic's outstanding shares; (v) Epic is not in default with respect to any       
material obligation in its agreements with the holders of the notes; (vi) no    
public announcement of a proposed change in the control of Epic has occurred    
that has not been consummated and (vii) the number of shares to be issued to all
note holders will not exceed an amount equal to 20% of the total dollar trading 
volume of Epic's common stock over the twenty-two trading days immediately prior
to the date which is thirty trading days prior to the applicable payment date.  

   In the event that the consolidated cash and accounts receivable amounts
reported on any balance sheet included in any 10-Q, 10-QSB, 10-K or 10-KSB      
report filed by Epic is less than 90% of Epic's consolidated cash and accounts  
receivables on December 5, 2007 (the "Closing Current Assets Balance"), any note
holder will have the right to require Epic to redeem a portion of the holder's  
note in cash, in an amount equal to the holder's pro-rata portion (based on the 
then outstanding principal amounts of all outstanding notes) of the difference  
between the Closing Current Asset Balance and Epic's consolidated cash and      
accounts receivable.                                                            

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  If Epic sells any additional shares of common stock, or any securities
convertible into common stock at a price below the then applicable exercise     
price of the warrants, the warrant exercise price will be lowered to the price  
at which the shares were sold or the lowest price at which the securities are   
convertible, as the case may be.                                                

      If the warrant exercise price is decreased, the number of shares of common
stock issuable upon the exercise of the warrant will be increased according to  
the following formula:                                                          

WS   x EP1  =  NWS                                                    
---                                                     
EP2                                                     

Where:                                                                          

     WS   = The number of shares  issuable  upon the exercise of warrants  based
upon the exercise price prior to adjustment.            

EP1  = The old exercise price of the warrants.                        

EP2  = The new exercise price of the warrants.                        

     NWS  = The number of shares of Epic's common stock  issuable based upon the
new exercise price of the warrants.                     

   The exercise price of the warrants, as well as the shares issuable upon
the exercise of the warrants, will also be proportionately adjusted in the event
of any stock splits.                                                            

However, neither the exercise price of the warrants nor the shares  
issuable upon the exercise of the warrant will be adjusted as the result of     
shares issued in connection with a Permitted Financing.                         

 A Permitted Financing involves shares of common stock issued or sold:

     o    in connection with acquisitions, or other strategic transactions,  the
primary purpose of which is not to raise cash;              

     o    upon the exercise of options or the issuance of common stock to Epic's
          employees,  officers or  directors,  in  accordance  with Epic's stock
option, stock bonus or similar plans.;                      

Epic's agreements with the note holders provide that Epic may not:

     o    sell or  issue  any  shares  of its  common  stock  or any  securities
          convertible  into  common  stock  until 90 days after the date of this
prospectus.                                                 

     o    issue options,  warrants or securities  convertible into Epic's common
          stock unless the exercise or  conversion  price exceeds 130% of Epic's
          average  VWAPs for the five  trading days prior to the issuance of the
security.                                                   

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     o    issue securities convertible into common stock with a conversion price
          or a number of  shares  issuable  upon  conversion  that  floats or is
          subject to  adjustment  based upon the market  price of Epic's  common
stock.                                                      

 o    reverse split, forward stock split or reclassify its common stock.

     o    become  obligated on any new debt with the  exception of  indebtedness
not exceeding $1,000,000 used to acquire capital assets;    

     o    amend its  articles  of  incorporation  or bylaws in any  manner  that
adversely affects any rights of a note holder.              

     o    purchase or otherwise acquire any of its capital stock other than a de
          minimis number of shares or other than shares purchased from departing
          officers and  directors,  provided  that the  purchase  price does not
exceed $100,000 for all officers and directors;             

     o    repay debt, other than debt which was outstanding on December 5, 2007.

     o    declare or pay any  dividends  (other  than a stock  dividend or stock
split) or make any                                          
distributions to any holders of its common stock;       

     o    enter into any transaction  with any affiliate  unless the transaction
          is made on an  arm's-length  basis and  approved  by a majority of the
disinterested directors of Epic.                            

Any of the following are an event of default:                         

o    Epic fails to make any interest or principal payment when due;   

     o    Epic breaches any  representation  or warranty or covenant or defaults
          in the timely  performance  of any other  obligation  in its agreement
with the note holders.                                      

     o    Epic, or any of its major subsidiaries,  files for protection from its
          creditors under the federal  bankruptcy code or a third party files an
          involuntary  bankruptcy  petition  against  Epic  or any of its  major
subsidiaries.                                               

     o    Epic,  or  any  of  its  major  subsidiaries,  defaults  in any of its
          obligations  under any other  note or  credit  agreement  or long term
          lease in an amount exceeding $150,000, and the default continues for a
          period of five days and results in the  indebtedness  becoming payable
 prior to the date on which it would otherwise become payable;

     o    Epic's  common stock is not listed on the OTC Bulletin  Board or other
public trading market                                       

     o    Epic is acquired by another company,  or Epic agrees to sell in excess
          of  33%  of its  assets  in  one  transaction  or  series  of  related
transactions;                                               

o    a Change in Control occurs;                                      

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     o    the  effectiveness  of  the  Registration  Statement,  of  which  this
prospectus is a part, lapses for any reason                 

     o    the holders of the notes and  warrants  are not  permitted to sell any
          shares under the Registration Statement for twenty or more consecutive
          trading  days or thirty  trading  days (which need not be  consecutive
          trading  days) in any twelve  month period and the common stock issued
          or issuable  upon the  conversion of the notes cannot be sold pursuant
to Rule 144;                                                

     o    Epic fails for any reason to deliver a certificate within five trading
          days after  delivery of the  certificate  is required  pursuant to any
agreement with the note holders;                            

     o    a judgment or judgments  for the payment of money in excess of $50,000
          are  rendered  against Epic and are not bonded,  discharged  or stayed
          pending appeal within forty-five days after the entry of the judgment;
or                                                          

       At any time after an event of default the interest rate on the notes will
increase to 18% per year, or the maximum rate permitted under applicable law,   
and the note holders may require Epic to repurchase all or any portion of the   
outstanding notes at a price equal to 130% of the outstanding principal, plus   
all accrued but unpaid interest. So long as the notes are outstanding, the note 
holders have a right to participate in any subsequent financings involving Epic.

     Until June 5, 2008 the note holders have the option to purchase from Epic
notes in the principal amount of $10,125,000 plus warrants which would allow the
holders to purchase an additional 7,977,273 shares of Epic's common stock. The  
additional notes and warrants, if purchased, will have the same terms and       
provisions as the notes and warrants purchased by the note holders in December  
2007.                                                                           
For purposes of the notes:                                                      

 The term "VWAP" means for any particular period the volume weighted
average trading price per share of Epic's common stock, and                     

   A Change in Control is any transaction whereby any person acquires more
than 33% of Epic's voting securities, Epic merges into or consolidates with any 
other company and after the transaction the stockholders of Epic immediately    
prior to the transaction own less than 66% of the voting power of the successor 
entity immediately after the transaction, Epic sells all or substantially all of
its assets and the stockholders of Epic immediately prior to the transaction own
less than 66% of the total voting power of the acquiring entity immediately     
after the transaction or, the replacement within a three year period of more    
than half of Epic's directors which is not approved by a majority of Epic's     
directors holding office on December 5, 2007.                                   

    Epic has filed a registration statement, of which this prospectus is a
part, with the Securities and Exchange Commission in order that the shares of   
common stock sold in the December 2007 financing as well as the shares which may
be issued in payment of the notes or upon the exercise of the warrants or may be
resold in the public market. If Epic's registration statement is not declared   
effective by the Securities and Exchange Commission prior to April 4, 2008, Epic
will be required to pay the investors in the December 2007 financing $567,860   
every 30 days until the registration statement is declared effective.           

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  Rodman & Renshaw acted as the lead placement agent for the sale of the
common stock, notes and warrants. For its services in this regard, Rodman &     
Renshaw received $1,849,000 in cash from Epic, as well as warrants to purchase  
1,301,151 shares of Epic's common stock, plus $25,000 as reimbursement of its   
legal expenses. Warrants to purchase 184,333 shares are exercisable at a price  
of $1.50 per share and warrants to purchase 1,116,818 shares are exercisable at 
a price of $1.65 per share. Epic paid $235,000 to other placement agents, none  
of which were affiliated with Epic, participating in the financing.             

       Prior to the sale of the convertible notes and warrants, 8,882,502 shares
of Epic's common stock were owned by persons other than Epic's officers and     
directors, the selling shareholders, and affiliates of the selling shareholders.

INFORMATION  REGARDING  POTENTIAL  PROFIT  THAT MAY BE  REALIZED  BY  HOLDERS OF
CONVERTIBLE NOTES AND WARRANTS                                                  

Convertible Notes                                                               
------------------                                                              

Closing price of Epic's common stock on December 5, 2007,                       
the date the notes were sold                                              $3.15 

Number of shares of Epic's common stock which could be issued                   
to note holders in payment of principal, assuming the principal                 
amount of all notes are paid with shares of Epic's common stock.                
The number of shares was determined by dividing $20,250,000 by                  
   $2.835 which was 90% of closing price on December 5, 2007.        7,142,857

Total dollar value of 7,142,857 shares issuable in payment of                   
notes, based upon closing price of Epic's common stock on                       
December, 2007                                                      $22,500,000 

Potential profit to note holders, assuming all notes are                        
paid with shares common stock at a price of $2.835 per                          
share and then resold at a price of $3.15 per share.                 $2,250,000 

Warrants                                                                        
--------                                                                        

Number of warrants issued to:                                                   
 Note holders:                                                      15,945,545
 Placement Agent:                                                    1,116,818
Exercise price of warrants issued to Note holders                           
 and Placement Agent                                                     $1.65

Number of shares of Epic's common stock which could be                          
issued to Note holders and placement agent, assuming all                        
warrants are exercised                                               17,062,363 

Closing price of Epic's common stock on the date                                
the warrants were issued (December 5, 2007)                               $3.15 

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Total dollar value of shares issuable upon exercise of warrants,                
based upon closing price of Epic's common stock on December 5,                  
2007                                                                $53,746,443 

Potential profit to warrant holders, assuming all 17,062,363                    
warrants issued to the Note holders and the Placement Agent                     
are exercised at a price of $1.65 per share and all shares                      
issuable upon the exercise of the warrants are resold at a                      
price of $3.15 per share.                                           $25,593,543 

Combined total potential profit to note and warrant holders:                    

A.   Amount received by Epic from sale of notes:                    $20,250,000 

B.   Less placement agent fees (sale of notes only)                  (1,417,500)

C.   Less placement agent expenses (25,000)                                     

D.   Less interest payable over term of notes                        (5,799,357)

E.   Net proceeds to Epic from sale of notes                        $13,008,143 

F.   Combined total profit to holders of notes and warrants,                    
assuming notes are paid with shares of Epic's common                  
stock having a value of $2.835 per share, warrants to                 
purchase 17,062,363 shares are exercised at a price of $1.65          
per share, and shares issuable in payment of the notes and            
exercise of warrants are sold at a price of $3.15 per share,          
which was the closing price of Epic's common stock on the             
    date the notes and warrants were sold.                         $27,843,543

Profit percentage:                                                              

B  +  D  +  F      =    $35,060,400    =  270%                        
-------------           -----------                                   
E                                                           

Average profit percentage over term of notes:  54%                              

Payments to Selling Shareholders and Finders                                    

     The notes bear interest at 10% per year. Beginning December 1, 2008 Epic is
required to make quarterly  principal payments of $1,265,625.  The notes are due
on December 5, 2012. Assuming:                                                  

o    Epic makes all required quarterly principal payments,            

 o    none of the notes are paid with shares of Epic's common stock, and

at maturity, the notes will have been paid in full and Epic will have paid      
approximately $5,799,000 in interest during the term of the notes.              

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     During the twelve months ending December 4, 2008 Epic will make mandatory
principal payments of $2,265,625 to the note holders and pay approximately      
$2,002,000 in interest.                                                         

   Epic will also be required to pay the holders of the notes and warrants
damages in the event Epic does not deliver certificates representing the common 
stock issuable if the notes are paid with shares of Epic's common stock within  
three trading days after any due date for the payment of the notes or, if the   
warrants are exercised, within three trading days after the date the warrants   
are exercised. The amount of any damages will depend upon:                      

o    The number of shares delivered late,                             

     o    Number  of  trading   days  past  the  third   trading  day  that  the
certificates are delivered, and                             

     o    If, due to Epic's failure to timely deliver  certificates,  the amount
          of any loss  suffered  by the note or  warrant  holders  if they  were
          forced to buy Epic's common stock in the open market to settle trades.

The note holders will also be entitled to damages if this prospectus
cannot be used by the note holders for ten consecutive calendar days, or fifteen
calendar days, during any twelve-month period. The amount of damages will be    
equal to 2% of the outstanding principal balance of the notes at the end of the 
ten or fifteen day period, as the case may be.                                  

  Rodman & Renshaw acted as the lead placement agent for the sale of the
notes and warrants. For its services in this regard, Rodman & Renshaw received  
$1,849,000 in cash from Epic, warrants to purchase 1,116,818 shares of Epic's   
common stock plus $25,000 as reimbursement of its legal and other expenses. Epic
paid $235,000 to other placement agents, none of which were affiliated with     
Epic, participating in the financing. The warrants issued to Rodman & Renshaw   
are exercisable at a price of $1.65 per share                                   

    Rodman & Renshaw also received a cash commission and warrants for acting
as the lead placement agent for the sale of the common stock and warrants sold  
by Epic in December 2007.                                                       

Warrants Held by Other Investors                                                

See "Comparative Share Data" for information concerning the terms of    
warrants held by investors other than those listed in the "Selling Shareholders"
section of this prospectus.                                                     

Transfer Agent                                                                  

TranShare Corporation                                         
5105 DTC Parkway, Suite 325                                   
Greenwood Village, CO 80111                                   
303-662-1112                                                  
303-662-1113 - Fax                                            

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 LEGAL MATTERS

     The validity of the securities offered by this prospectus has been passed
upon by Hart & Trinen, Denver, Colorado.                                        

 EXPERTS

 Effective February 21, 2007 Epic replaced (i.e. dismissed) Comiskey &
Company with Malone & Bailey, P.C. as Epic's independent certified public       
accountants. Comiskey & Company audited Epic's financial statements for the     
fiscal years ended December 31, 2004 and 2005. During Epic's two most recent    
fiscal years and subsequent interim period ended February 21, 2007, there were  
no disagreements with Comiskey & Company on any matter of accounting principles 
or practices, financial statement disclosure or auditing scope or procedures,   
which disagreements, if not resolved to the satisfaction of Comiskey & Company  
would have caused it to make reference to such disagreements in its report had a
reports.                                                                        

 During the two most recent fiscal years and subsequent interim period
ended February 21, 2007, Epic did not consult with Malone & Bailey regarding the
application of accounting principles to a specified transaction, either         
completed or proposed, or the type of audit opinion that might be rendered on   
Epic's financial statements, or any matter that was the subject of a            
disagreement or a reportable event as defined in the regulations of the         
Securities and Exchange Commission.                                             

The change in Epic's auditors was recommended and approved by the   
directors of Epic.                                                              

     The consolidated financial statements of Epic as of December 31, 2006 and
for the year ended December 31, 2006 included in this prospectus have been      
audited by Malone & Bailey, an independent registered public accounting firm, as
stated in their report appearing elsewhere in this prospectus, and have been    
included in reliance upon the report of such firm given upon their authority as 
experts in accounting and auditing.                                             

     The financial statements of Epic as of December 31, 2005 and for the year
ended December 31, 2005 included in this prospectus have been audited by        
Comiskey & Company, an independent registered public accounting firm, as stated 
in their report appearing elsewhere in this prospectus, and have been included  
in reliance upon the report of such firm given upon their authority as experts  
in accounting and auditing.                                                     

   The financial statements of the Carnrite Group, LLC as of June 30, 2007
and for the period ended June 30, 2007, in this prospectus have been audited by 
Malone & Bailey, an independent registered public accounting firm, as stated in 
their report appearing elsewhere in this prospectus, and have been included in  
reliance upon the report of such firm given upon their authority as experts in  
accounting and auditing.                                                        

      The financial statements of Pearl Investment Company (formerly named Pearl
Development Company) as of December 31, 2006 and for each of the two years in   
the period ended December 31, 2006, in this prospectus have been audited by     
Ehrhardt Keefe Steiner & Hottman PC, an independent registered public accounting
firm, as stated in their report appearing elsewhere in this prospectus, and have
been included in reliance upon the report of such firm given upon their         
authority as experts in accounting and auditing.                                

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 INDEMNIFICATION

    Epic's bylaws authorize indemnification of a director, officer, employee
or agent of Epic against expenses incurred by him in connection with any action,
suit, or proceeding to which he is named a party by reason of his having acted  
or served in such capacity, except for liabilities arising from his own         
misconduct or negligence in performance of his duty. In addition, even a        
director, officer, employee, or agent of Epic who was found liable for          
misconduct or negligence in the performance of his duty may obtain such         
indemnification if, in view of all the circumstances in the case, a court of    
competent jurisdiction determines such person is fairly and reasonably entitled 
to indemnification. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers, or persons      
controlling Epic pursuant to the foregoing provisions, Epic has been informed   
that in the opinion of the Securities and Exchange Commission, such             
indemnification is against public policy as expressed in the Act and is         
therefore unenforceable.                                                        

ADDITIONAL INFORMATION

      Epic is subject to the requirements of the Securities Exchange Act of l934
and is required to file reports, proxy statements and other information with the
Securities and Exchange Commission. Copies of any such reports, proxy statements
and other information filed by Epic can be read and copied at the Commission's  
Public Reference Room at 100 F. Street, N.E., Washington, D.C. 20549. The public
may obtain information on the operation of the Public Reference Room by calling 
the Commission at 1-800-SEC-0330. The Commission maintains an Internet site that
contains reports, proxy and information statements, and other information       
regarding Epic. The address of the SEC's website is http://www.sec.gov.         

     Epic has filed with the Securities and Exchange Commission a Registration
Statement under the Securities Act of l933, as amended, with respect to the     
securities offered by this prospectus. This prospectus does not contain all of  
the information set forth in the Registration Statement. For further information
with respect to Epic and such securities, reference is made to the Registration 
Statement and to the exhibits filed with the Registration Statement. Statements 
contained in this prospectus as to the contents of any contract or other        
documents are summaries which are not necessarily complete, and in each instance
reference is made to the copy of such contract or other document filed as an    
exhibit to the Registration Statement, each such statement being qualified in   
all respects by such reference. The Registration Statement and related exhibits 
may also be examined at the Commission's internet site.                         

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 EPIC ENERGY RESOURCES, INC.

 DECEMBER 31, 2006

FINANCIAL STATEMENTS

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 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors                                                       
Epic Energy Resources, Inc.                                                   
(a development stage company)                                                   
The Woodlands, Texas                                                          

We have audited the accompanying consolidated balance sheet of Epic Energy      
Resources, Inc. as of December 31, 2006 and the related consolidated statements 
of operations, stockholders' equity (deficit) and cash flows for the year then  
ended and for the period from April 10, 2000 (inception) through December 31,   
2006. The financial statements for the period April 10, 2000 (inception) through
December 31, 2005, were audited by other auditors whose reports expressed       
unqualified opinions on those statements. The financial statements for the      
period April 10, 2000 (inception) through December 31, 2005, include total      
revenues and net loss of $0 and $98,312, respectively. Our opinion on the       
statements of operations, stockholders' equity, and cash flows for the period   
April 10, 2000 (inception) through December 31, 2006, insofar as it relates to  
amounts for prior periods through December 31, 2005, is based solely on the     
report of other auditors. These financial statements are the responsibility of  
Epic's management. Our responsibility is to express an opinion on these         
financial statements based on our audits.                                       

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

In our opinion, the financial statements referred to above present fairly, in   
all material respects, the financial position of Epic as of December 31, 2006   
and the results of its operations and cash flows for the periods described above
in conformity with accounting principles generally accepted in the United States
of America.                                                                     

MALONE & BAILEY, PC                                                             

www.malone-bailey.com                                                           
Houston, Texas                                                                  
April 16, 2007                                                                  

Except for the removal of Note 3 (Going Concern) and the going concern paragraph
in our report, the date as to which is January 3, 2008.                         

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COMISKEY & COMPANY
PROFESSIONAL CORPORATION

 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We have audited the balance sheet of Epic Energy Resources, Inc. (formerly San  
Juan Financial, Inc.) (not presented) as of December 31, 2005, and the related  
statements of operations, cash flows, and stockholders' equity (deficit) for the
year ended December 31, 2005, and for the period from inception (April 10, 2000)
to December 31, 2005. 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 made by management, as well as        
evaluating the overall financial statement presentation. We believe that our    
audits provide a reasonable basis for our opinion.                              

In our opinion, the financial statements referred to above present fairly, in   
all material respects, the financial position of Epic Energy Resources, Inc. as 
of December 31, 2005, and the results of its operations, its cash flows, and its
changes in stockholders' equity for the year ended December 31, 2005, and for   
the period from inception (April 10, 2000) to December 31, 2005, in conformity  
with generally accepted accounting principles in the United States of America.  

Denver, Colorado                                                                
April 3, 2006                                                                   

                                                  /s/ COMISKEY & COMPANY
                                          PROFESSIONAL CORPORATION

Certified Public Accountants & Consultants
                 789 Sherman Street - Suite 385 - Denver, CO 80203 (303)
      830-2255 - Fax (303) 830-0876 - info@comiskey.com - www.comiskey.com

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EPIC ENERGY RESOURCES INC 
 (A Development Stage Company)

CONSOLIDATED BALANCE SHEET
 December 31, 2006

Assets                  
Current assets:                                                                 
Cash and cash equivalents                       $     590,172             
Accounts receivable                                     4,600             
Prepaid expenses and other current assets             120,219             
                                      ----------
Total current assets                            714,991       

Oil and gas properties (full-cost method),                                
net of depletion                                                              
Proved developed                               7,354,511        
Unproved                                          60,000        
Other mineral reserves                                783,474             
                                      ----------
Total assets                               $  8,912,976       
                                      ==========
Liabilities and Stockholders' Equity                

Current liabilities:                                                            
Accounts payable                                 $     97,630             
Accrued liabilities                                     7,346             
Current portion of long-term debt                     872,990             
                                    ------------
Total current liabilities                       977,966       

Long-term liabilities:                                                          
Asset Retirement Obligation                           142,343             
Long-term debt                                      1,707,676             
                                    ------------

Total liabilities                             2,827,985       
                                    ------------
Stockholders' Equity                                                            
Preferred stock, no par value; 10,000,000                                 
shares authorized; no shares issued and                               
Outstanding                                              --           
Common stock, no par value; 750,000,000                                   
shares authorized; 53,441,061 shares                                  
issued and outstanding at December 31, 2006       9,822,605           
Additional paid-in capital                            330,912             
Deficit accumulated during development stage      (4,068,526)             
                                    ------------
Total stockholders' equity                    6,084,991       
                                    ------------
                                    $  8,912,976
                                    ============

See accompanying notes to consolidated financial statements.

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EPIC ENERGY RESOURCES INC.
 (A Development Stage Company)

 CONSOLIDATED STATEMENTS OF OPERATIONS

Years ended December 31, 2006 and 2005 and Period from
April 10, 2000 (inception) through December 31, 2006

                                                            For the period
                                                            from inception
                                                            (April 10, 2000)
                                                             To December 31,
                                  2006        2005          2006
                                        ----        ----     ---------------

Revenue from operations:                                                        
Oil & gas revenue                    $ 73,073   $      --      $  73,073  
Consulting revenue                     33,190          --         33,190  
                                   --------    --------       --------

 Revenue from operations            106,263          --        106,263
Cost of operations:                                                             
General and administrative expenses   926,301      20,000      1,024,613  
Lease operating expense                59,460          --         59,460  
Depletion expense                      30,814          --         30,814  
Accretion expense                         725          --            725  
Impairment of oil and gas                                                 
   properties                     3,062,265          --      3,062,265
                                  ---------    --------     ----------

 Cost of operations               4,079,565      20,000      4,177,877
                                  ---------    --------    -----------

  Loss from operations            (3,973,302)    (20,000)    (4,071,614)

Other income (expense):                                                         
Interest and other income               3,519          --          3,519  

Interest expense                         (431)         --           (431) 
                                 ----------   ---------    -----------

  Net loss                       $(3,970,214)  $ (20,000)   $(4,068,526)
                                ===========   =========    ===========

Loss per common share - Basic                                                   
and Diluted:                     $     (0.10)  $  ($0.00)               
                  ==========    ==========

Weighted average number of common                                               
shares Outstanding                   38,045,590     5,260,000                 
                    ==========   ===========

See accompanying notes to consolidated financial statements.

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EPIC ENERGY RESOURCES INC.
 (A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
           For the Period from Inception (April 10, 2000) to December 31, 2006

                                                        [Enlarge/Download Table]
                                                                                                  
                                                                        Deficit                   
                                                                      Accumulated                 
                                                          Additional  During the    Stockholders' 
                                       Common Stock        Paid-in    Development      Equity     
                                  Shares         Amount    Capital       Stage        (Deficit)   
                                 -------         ------   ----------  ------------  --------------

Issuance of common stock for                                                                      
cash at $0.05 per share          1,260,000     $  63,000   $      -     $       -     $  63,000   

Issuance of common stock no                                                                       
  consideration received       100,000,000             -          -             -             -   

Net loss for the period from                                                                      
  inception (April 10, 2000)                                                                      
  to December 31, 2000                   -             -          -       (56,711)      (56,711)  
                              ------------    ----------   --------     ----------     ---------  

Balance, December 31, 2000     101,260,000        63,000          -       (56,711)        6,289   

Cancellation of stock for                                                                         
  consideration not received  (100,000,000)            -          -             -             -   

Net loss for the year ended                                                                       
  December 31, 2001                      -             -          -        (5,825)       (5,825)  
                              ------------    ----------   --------     ----------     ---------  
Balance, December 31, 2001       1,260,000        63,000          -       (62,536)           464  

Net loss for the year ended                                                                       
  December 31, 2002                      -             -          -          (464)          (464) 
                              ------------    ----------   --------     ----------     ---------  
Balance, December 31, 2002       1,260,000        63,000          -       (63,000)             -  

Net loss for the year ended                                                                       
  December 31, 2002                      -             -          -             -              -  
                              ------------    ----------   --------     ----------     ---------  
Balance, December 31, 2003       1,260,000        63,000          -       (63,000)             -  

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

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EPIC ENERGY RESOURCES INC.
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
 CONTINUED
 For the Period From Inception (April 10, 2000) to December 31, 2006

                                                        [Enlarge/Download Table]
                                                                                                    
                                                                          Deficit                   
                                                                        Accumulated                 
                                                           Additional   During the    Stockholders' 
                                       Common Stock         Paid-in     Development      Equity     
                                  Shares         Amount     Capital        Stage        (Deficit)   
                                 -------         ------    ----------   ------------  --------------

Shares issued for compensation  4,000,000         5,000             -              -       5,000    

Expenses paid by shareholders           -             -         9,305              -       9,305    

Net loss for the year ended                                                                         
  December 31, 2003                     -             -             -        (15,312)    (20,000)   
                              ------------  ------------  ------------   ------------ ------------  
Balance, December 31, 2004      5,260,000        68,000         9,305        (78,312)     (1,007)   

Expenses paid by shareholders           -             -        17,386              -      17,386    

Net loss for the year ended                                                                         
  December 31, 2005                     -             -             -        (20,000)    (20,000)   
                              ------------  ------------  ------------   ------------ ------------  
Balance, December 31, 2005      5,260,000   $    68,000   $    26,691    $   (98,312) $   (3,621)   

Shares issued for cash         44,902,755       903,195             -              -     903,195    

Shares issued for services         75,000        57,094             -              -      57,094    

Shares issued for Oil and Gas                                                                       
property (Kansas field)         3,200,000     8,480,000             -              -   8,490,000    

Shares issued for un-proved                                                                         
properties (Oklahoma)               3,846        10,000             -              -      10,000    

Expenses paid by shareholders           -             -       304,221              -     304,221    

SFAS 123R stock option expense          -       304,316             -              -     304,316    

Net loss for the year ended                                                                         
  December 31, 2006                     -             -             -     (3,970,214) (3,970,214)   
                              ------------  ------------  ------------   ------------ ------------  
Balance, December 31, 2006     53,441,601   $ 9,822,605   $   330,912    $(4,068,526) $6,084,991    
                              ============  ============  ============   ============ ============  


F-6 

See accompanying notes to consolidated financial statements.

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 EPIC ENERGY RESOURCES INC
 CONSOLIDATED STATEMENTS OF CASH FLOWS
Years ended December 31, 2006 and 2005 and For the
 period from April 10, 2000(inception) through December 31, 2006

                                                                For the period
                                  For the year   For the year   from inception
                                       ended          ended     (April 10, 2000)
                                    December 31,  December 31,   to December 31,
                                 2006           2005            2006
                                   -------------  ------------   ---------------
CASH FLOWS FROM OPERATING                                                       
ACTIVITIES                                                                
 Net                  loss       $(3,970,214)   $   (20,000)  $  (4,068,526)
Adjustments to reconcile net                                            
loss to net cash flows from                                             
operating activities:                                                   
   Depletion                         30,814              -          30,814
Impairment of oil and gas                                           
    Properties                    3,062,265              -       3,062,265
   Accretion of ARO                     725              -             725
   Shares issued for compensation   361,410              -         366,410
Changes in operating assets                                               
and liabilities:                                                        
     Accounts payable                44,012          2,614          47,633
      Accounts receivable             (4,600)             -          (4,600)
      Prepaid expenses              (120,219)             -        (120,219)
                                   ------------   ------------   ---------------
Net cash flows from operating                                             
   activities                       (595,807)       (17,386)       (685,498)

CASH FLOWS FROM INVESTING                                                       
ACTIVITIES                                                                    
   Acquisition of properties        (102,100)             -        (102,100)
                                   ------------   ------------  ----------------
CASH FLOWS FROM FINANCING                                                       
ACTIVITIES                                                                    
  Debt service                       (24,089)             -         (24,089)
 Proceeds from debt                 104,752              -         104,752
Proceeds from the issuance                                              
  of common stock                   903,195              -         966,195
 Capital donated by shareholders    304,221         17,386         330,912
                                   ------------   ------------  ----------------

Net cash flows from financing                                               
 activities                       1,288,079         17,386       1,377,770

NET INCREASE (DECREASE) IN CASH                                                 
AND CASH EQUIVALENTS                  590,172              -         590,172  
CASH AND CASH EQUIVALENTS,                                                      
BEGINNING OF PERIOD                         -              -               -  
                                   ------------   ------------  ----------------
CASH AND CASH EQUIVALENTS,                                                      
END OF PERIOD                     $   590,172    $         -   $     590,172  
                                   ============   ============  ================

Additional cash flow disclosures:                                               
Non-cash investing and financing                                            
activities:                                                                 
Oil and gas properties acquired                                           
with stock                      $8,480,000              -               
Note payable for Oil and                                                  
Gas properties                  $1,707,673              -               

See accompanying notes to consolidated financial statements.                    

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 EPIC ENERGY RESOURCES INC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.   Organization and Operations                                                

Background                                                                      

   San Juan Financial, Inc. was incorporated under the laws of Colorado on
June 6, 1989. Following incorporation, San Juan remained an inactive shell      
company. Effective April 10, 2000, San Juan entered the development stage in    
accordance with SFAS No. 7. San Juan's principal activities since April 10, 2000
have consisted of organizational matters and the sale of its no par value common
stock. This changed in April 2006 when the name changed to Epic Capital Group   
Inc. During this time, Epic refocused its business plan to oil and gas          
activities. On April 4, 2006, Epic signed an agreement for the sale of          
44,000,000 shares of common stock to five individuals for an aggregate price of 
$440. Mark W. Moniak, Epic's President and only director, appointed Rex Doyle,  
John Ippolito and David Reynolds as directors of Epic. Following these          
appointments Mr. Moniak, resigned as an officer and director of Epic. Epic's new
directors then appointed the following persons to be officers of Epic:          

Name               Position                             
----               --------                             

          Rex Doyle          Chief Executive and Principal Financial Officer
John Ippolito              President                    
 David Reynolds     Executive Vice President and Secretary

Amendment to Articles                                                           

    On April 10, 2000, San Juan filed amended articles of incorporation with
the State of Colorado, at which time San Juan revised Article XI, Board of      
Directors. The Board consists of one director who is also the President of San  
Juan. On September 15, 2004, Troy Fullmer, Epic's only officer and director,    
appointed Mark W. Moniak as a director of Epic and as Epic's President and Chief
Executive Officer. Following the appointment of Mr. Moniak, Mr. Fullmer resigned
as an officer and director Epic. Mr. Moniak resigned as an officer and director 
of Epic on April 4, 2006.                                                       

Operations                                                                      

   Epic is engaged primarily in the acquisition, exploration, development,
production, and sales of, oil, gas and natural gas liquids.                     

     The  shareholders  of Epic  approved  an  amendment  to Epic's  Articles of
Incorporation  in May 2006 which  changed the name of the  corporation  from San
Juan Financial Inc. to Epic Capital Group Inc. In December 2006 the shareholders
approved an  amendment to change the name of the  corporation  from Epic Capital
Group Inc. to Epic Energy Resources Inc. (Epic)                                 

F-8 

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2.   Summary of Significant Accounting Policies                                 

Development Stage Activities                                                    

  Epic Energy Resources Inc. entered the development stage in accordance
with Financial Accounting Standards Board Statements of Financial Accounting    
Standards (SFAS) No. 7, "Accounting and Reporting by Development Stage          
Enterprises" in 2000, upon commencement of activities. Epic's original business 
plan was to operate as a mortgage banking and brokerage company over the        
Internet. In 2006, Epic changed its focus to that of an oil and gas company.    

Use of Estimates                                                                

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

Fair Value of Financial Instruments                                             

     Financial instruments, including cash, receivables, accounts payable, and
notes payable are carried at amounts which reasonably approximate their fair    
value due to the short-term nature of these amounts.                            

Credit Risk and Concentrations                                                  

   Epic does not require collateral from its customers with respect to
accounts receivable but performs periodic credit evaluations of such customer's 
financial conditions. Epic determines any required allowance by considering a   
number of factors including lengths of time accounts receivable are past due and
Epic's previous loss history. Epic provides an allowance to reserve for accounts
receivable when they become uncollectible. As of December 31, 2006 and 2005,    
Epic has determined that no allowance for doubtful accounts is required.        

Cash Equivalents                                                                

Epic considers all highly liquid debt instruments purchased with an 
original maturity of three months or less to be cash equivalents.               

Revenue recognition                                                             

 Epic records oil and gas revenues following the entitlement method of
accounting for production, in which any excess amount received above Epic's     
share is treated as a liability. If less than Epic's share is received, the     
underproduction is treated as an asset. Epic did not have an imbalance position 
in terms of volumes or values at December 31, 2006.                             

Proceeds from the sale or disposition of oil and gas properties are 
accounted for as a reduction to capitalized costs, unless a significant portion 
of Epic's proved reserve quantities in a particular cost center are sold        
(greater than 25 percent), in which case a gain or loss is recognized.          

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Oil and gas properties                                                          

 Epic follows the full cost accounting method to account for the costs
incurred in the acquisition, exploration, development and production of oil and 
gas reserves. Under this method, all costs, including internal costs directly   
related to acquisition, exploration and development activities are capitalizable
as oil and gas property costs. Properties not subject to amortization consist of
exploration and development costs which are evaluated on a property-by-property 
basis. Amortization of these unproved property costs begins when the properties 
become proved or their values become impaired. Epic assesses the realizability  
of unproved properties on at least an annual basis or when there has been an    
indication that an impairment in value may have occurred. Impairment of unproved
properties is assessed based on management's intention with regard to future    
exploration and development of individually significant properties and the      
ability of Epic to obtain funds to finance such exploration and development. If 
the results of an assessment indicate that the properties are impaired, the     
amount of the impairment is added to the capitalized costs to be amortized.     
There was no impairment of unproved properties during the years ended December  
31, 2006 and 2005.                                                              

     On the sale or retirement of a complete unit of proved property, the cost
and related accumulated depreciation, depletion, and amortization are eliminated
from the property accounts, and the resultant gain or loss is recognized. On the
retirement or sale of a partial unit of proved property, the cost is charged to 
accumulated depreciation, depletion, and amortization with a resulting gain or  
loss recognized in income.                                                      

      On the sale of an entire interest in an unproved property for cash or cash
equivalent, gain or loss on the sale is recognized, taking into consideration   
the amount of any recorded impairment if the property had been assessed         
individually. If a partial interest in an unproved property is sold, the amount 
received is treated as a reduction of the cost of the interest retained.        

 The fair value of an asset retirement obligation is recognized in the
period in which it is incurred if a reasonable estimate of fair value can be    
made. The present value of the estimated asset retirement costs is capitalized  
as part of the carrying amount of the long-lived asset. For Epic, asset         
retirement obligations relate to the abandonment of oil and gas producing       
facilities. The amounts recognized are based upon numerous estimates and        
assumptions, including future retirement costs, future recoverable quantities of
oil and gas, future inflation rates and the credit-adjusted risk-free interest  
rate.                                                                           

Costs of oil and gas properties are amortized using the units of    
production method. Depletion expense per equivalent physical unit of production 
amounted to $30,814 and $ 0, for the years ended December 31, 2006 and 2005,    
respectively.                                                                   

    Under full cost accounting rules for each cost center, capitalized costs
of proved properties, less accumulated amortization and related deferred income 
taxes, shall not exceed an amount (the "cost ceiling") equal to the sum of (a)  
the present value of future net cash flows from estimated production of proved  
oil and gas reserves, based on current economic and operating condition,        
discounted at 10 percent, plus (b) the cost of properties not being amortized,  
plus (c) the lower of cost or estimated fair value of any unproved properties   
included in the costs being amortized, less (d) any income tax effects related  
to differences between the book and tax basis of the properties involved. If    
capitalized costs exceed this limit, the excess is charged as an impairment     
expense. During the year ended December 31, 2006, the Company incurred a proved 
property impairment expense of $3,062,265 which is reflected in the accompanying
Consolidated Statement of Operations.                                           

Other mineral reserves                                                          

      Helium is a gas produced as part of the production stream from our oil and
gas properties in Kansas. Helium is a byproduct of the production process. We   
have estimated that the net recoverable amount of helium is approximately       
$783,474.                                                                       

Long-lived assets                                                               

   Long-lived assets to be held and used or disposed of other than by sale
are reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount may not be recoverable. When required, impairment      

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losses on assets to be held and used or disposed of other than by sale are      
recognized based on the fair value of the asset. Long-lived assets to be        
disposed of by sale are reported at the lower of the asset's carrying amount or 
fair value less cost to sell.                                                   

Income Taxes                                                                    

   Epic uses the liability method in accounting for income taxes. Deferred
tax assets and liabilities are recognized for temporary differences between     
financial statement carrying amounts and the tax bases of assets and            
liabilities, and are measured using the tax rates expected to be in effect when 
the differences reverse. Deferred tax assets are also recognized for operating  
loss and tax credit carry forwards. The effect on deferred tax assets and       
liabilities of a change in tax rates is recognized in the results of operations 
in the period that includes the enactment date. A valuation allowance is used to
reduce deferred tax assets when uncertainty exists regarding their realization. 

Loss per Common Share                                                           

   Basic and diluted net loss per share calculations are calculated on the
basis of the weighted average number of common shares outstanding during the    
year. The per share amounts include the dilutive effect of common stock         
equivalents in years with net income. Basic and diluted loss per share is the   
same due to the absence of common stock equivalents as all potential common     
stock equivalents are anti-dilutive.                                            

Stock-based compensation                                                        

     In 2006, Epic began issuing options to purchase common stock to employees
as compensation. Epic records as compensation expense the fair value of such    
shares as calculated pursuant to Statement of Financial Accounting Standard No. 
123R, Accounting for Stock-Based Compensation ("SFAS No. 123R"), recognized over
the related requisite service period. Epic accounts for stock-based compensation
issued to non-employees in accordance with the provisions of SFAS No. 123R and  
EITF No. 96-18, "Accounting for Equity Instruments That Are Issued to           
Non-Employees for Acquiring, or in Conjunction with Selling Goods or Services". 
For accounting purposes, the value of common stock issued to non-employees and  
consultants is determined based on the fair value of the services received or   
the fair value of the equity instruments issued, whichever value it more        
reliably measurable. Epic utilizes a standard option pricing model, the         
Black-Scholes model, to measure the fair value of stock options granted.        

3.    Prepaid Expenses and Other Current Assets                                 

   Prepaid expenses and other current assets consisted of the following at
December 31, 2006.                                                              

Workers' Compensation & Liability Insurance $86,886                 
Directors' and Officers' Insurance           33,333                 
                          --------
Total                                $120,219           
                          ========

4.   Acquisition of Oil and Gas Properties                                      

In December 2006 Epic acquired a 100% working interest  
(approximately 82% net revenue interest) in 28,600 acres in Rush County, Kansas.
Located on the acreage were 58 producing gas wells with total proved reserves at
December 31, 2006 of 3,717 barrels of oil and 2,793,000 Mcf of gas.             

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     The acreage and wells were acquired for $100,000 in cash, a $2,500,000 loan
from the sellers of the property  and  3,200,000  shares of Epic's  common stock
valued at  $8,480,000  using the  closing  price of Epic's  common  stock at the
inception of the agreement.  The $2,500,000  loan bears interest at 10% per year
and is payable in 42 equal monthly installments of $72,000.                     

     In December 2006 Epic acquired a 50% working interest  (approximate 40% net
revenue interest) in 6,000 acres in Kay County, Oklahoma.  Located on the leased
acreage were one  producing gas well and six shut-in gas wells.  Epic  estimated
that it will cost approximately  $7,000 (with Epic being responsible for its 50%
share) to rework each shut-in well and place the wells back on production.  Epic
plans to begin  reworking the six shut-in wells in the next few months.  For its
interest in this prospect,  Epic paid $50,000 in cash and issued 3,846 shares of
its common  stock to the sellers  valued at $10,000  using the closing  price of
Epic's common stock at the inception of the agreement. 5. Other Mineral Reserves

     Our proved oil and gas properties in Rush County, Kansas contain a Helium
reserve estimated between 1% and 2% of our proved gas reserves of the property. 
Our engineers engaged to perform an analysis of our Oil and Gas reserves        
estimate that our average proved Helium reserve gross of extraction costs is    
approximately $1,566,947. We are currently in negotiations with a third party   
that would extract our Helium reserves for a cost of approximately half of our  
estimated a reserve. As a result we have stated our net other mineral reserves  
at an estimated net value of $783,474 at December 31, 2006.                     

6.    Asset Retirement Obligations                                              

  Epic records depreciation of the capitalized asset retirement cost and
accretion of the asset retirement obligation over time. The depreciation will   
generally be determined on a straight line basis, while the accretion to be     
recognized will escalate over the life of the producing assets, typically as    
production declines. The following table indicates the changes to Epic's ARO    
account:                                                                        

Balance at December 31, 2005                   $0                     
Liabilities Incurred                     $148,964                     
Accretion Expense                             725                     
                ------------
Balance at December 31, 2006       $149,689               

Current asset retirement obligation    $    7,346                     
Long-term asset retirement obligation    $142,343                     
                    --------
                    $149,689

7.   Long-Term Debt                                                             

 In December 2006, Epic borrowed $2,500,000 secured by the Rush County
Kansas property. The note is for a term of 42 months pursuant to 10% interest.  
The monthly principal and interest payment of this note is approximately        
$71,000.                                                                        

     If the cash flow from the property is less than the monthly principal and
interest payment, the deficit is added to the principal amount of the note. If  
the cash flow from the property is greater than the monthly principal and       
interest, the additional amount reduces the principal of the note.              

Long-term debt at December 31, 2006 consists of the following:      

         Note payable secured by property acquired            $2,486,386
         Note payable General Liability Insurance                 65,480
         Note payable Director & Officers Insurance               28,800
          Less current maturities                                (872,990)
                                                              ------------
                                                              $1,707,676
                                                              ============

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The long-term debt is scheduled to mature as follows, subject to    
production payments:                                                            

Year ending                                                 
December 31st,                                Amount          
--------------                               ---------        

2007                                     $872,990     
2008                                      849,504     
2009                                      849,504     
2010                                        8,668     
2011                                            -     
  Thereafter                               -
                                 -------------
                                   2,580,666

Less: current portion of long-term debt      (872,990)        
                                 -------------

Total long-term debt, net of current                          
maturities                               $1,707,676       
                                 =============

8.  Stockholders' Equity                                                        

Following its original incorporation in June 1989, Epic had issued  
100,000,000 shares of its no par value common stock to an officer as payment for
services related to the organization and start-up of the Company. The value of  
the transaction could not be objectively measured as a related party rendered   
the services. The transaction has been recorded at no value since the Board of  
Directors determined that the rendered services for which these shares had been 
issued were incomplete. On November 2, 2001, the Board of Directors authorized  
the cancellation of the original 100,000,000 shares of common stock, as a result
of the incomplete performance.                                                  

      On April 7, 2000, the Board of Directors authorized a 1-to-8 reverse split
of Epic's no par value common stock, effective on that date. All share and per  
share amounts reflect this reverse split.                                       

    In May 2000, Epic conducted a private placement offering whereby it sold
1,260,000 shares of its no par value common stock for $0.05 per share pursuant  
to an exemption from registration claimed under Sections 4(2) and 4(6) of the   
Securities Act of 1933, as amended, and Regulation D promulgated hereunder. Epic
received net proceeds of $63,000.                                               

On September 15, 2004, Mark W. Moniak was appointed as Director,    
President, and Chief Executive Officer of Epic. Epic does not have an employment
agreement with Mr. Moniak. Epic issued 4,000,000 shares of its common stock,    
valued at $5,000, to Mr. Moniak in return for Mr. Moniak serving as Epic's      
President until September 15, 2005.                                             

     During the year ended December 31, 2004, Epic incurred $9,305 of expenses
which were paid by stockholders and recorded as additional paid-in capital.     

  On March 11, 2005, Epic held a special meeting of its shareholders. At
this meeting, the shareholders of Epic held a 20-for-1 forward stock split of   
Epic's common stock. All share and per share data has been retroactively        
restated to reflect this forward stock split.                                   

      During the year ended December 31, 2005, Epic incurred $17,386 of expenses
which were paid by stockholders and recorded as additional paid-in capital.     

 On April 4, 2006, Epic signed an agreement for the sale of 44,000,000
shares of common stock to five individuals for an aggregate price of $440. Mark 
W. Moniak, Epic's President and only director, appointed Rex Doyle, John        
Ippolito and David Reynolds as directors of Epic. Following these appointments  
Mr. Moniak, resigned as an officer and director of Epic. Epic's new directors   
then appointed the following persons to be officers of Epic:                    

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Name              Position                              
----              --------                              

         Rex Doyle         Chief Executive and Principal Financial Officer
John Ippolito       President                           
David Reynolds    Executive Vice President and Secretary

     In addition to the shares issued for cash stated above, 902,755 shares of
stock were issued in a private offering in December 2006. The total cash        
received was $902,755. There were no registration rights penalties associated   
with this issuance. The shares issued were restricted shares in accordance with 
SEC section 144.                                                                

    In December 2006, 45,000 shares of common stock were issued to directors
for services rendered and for services to be rendered over the next 12 months.  
The fair market value using the closing price of the Epic's stock on the        
measurement date was $65,254 of which $13,594 has been recorded as compensation 
expense. 30,000 shares of common stock were issued to key employees for services
previously rendered. The fair market value of the services rendered for the     
common stock was approximately $43,500 using the closing price of Epic's stock  
on the measurement date and is included as component of compensation expense.   

      In December 2006, 3,200,000 shares of stock were issued to purchase proved
oil and gas properties in Rush County, Kansas. Based upon the closing price of  
Epic's stock on the effective date of the purchase agreement, the value was     
$8,480,000. Additionally, 3,846 shares were issued in December 2006 for         
un-proved oil and gas properties in Oklahoma. The value of the stock at the time
of purchase was $10,000 based upon the closing price of Epic's stock on the     
agreement effective date.                                                       

   In April 2006 several shareholders loaned Epic $300,000. The loans were
unsecured, did not bear interest and were to be cancelled at such time as Epic's
common stock became eligible for listing on the OTC Bulletin Board. In September
2006 Epic's common stock was listed on the OTC Bulletin Board, the loans were   
cancelled, and the $300,000 liability was reclassified as additional paid-in    
capital.                                                                        

9. Income Taxes                                                                 

During 2006 and 2005, EPIC incurred net losses and, therefore, had no tax 
liability. The net deferred tax asset generated by the loss carry-forward has   
been fully reserved. The cumulative net operating loss carry-forward is         
approximately $645,000 at December 31, 2006, and will expire in the years 2019  
through 2026.                                                                   

At December 31, 2006, deferred tax assets consisted of the following:     

Deferred tax assets               
      Net operating losses            $225,700
       Less:  valuation allowance      (225,700)
                                    ----------
      Net deferred tax asset        $        0
                                    ==========

10.   Commitments and Contingencies                                             

Epic is not currently involved in any pending legal proceedings. In the   
future, Epic may become involved in various legal proceedings from time to time,
either as a plaintiff or as a defendant. and either in or outside the normal    
course of business. Epic is not now in the position to determine when, if ever, 
such legal proceedings may arise. If Epic becomes involved in legal proceedings,
Epic's financial condition, operations, or cash flows could be materially       
adversely affected, depending on the facts and circumstances related to such    
proceedings.                                                                    

11.   Lease Agreement                                                           

  Our executive offices are located in The Woodlands, Texas, in a leased
facility consisting of approximately 1,500 square feet requiring lease payments 
of $2,400 per month. The lease for our offices expires on December 31, 2006,    
however we can extend the lease for a subsequent period of 12 months at that    
time. All of our facilities are in good repair.                                 

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12.   Stock Options and Warrants                                                

      There were no stock options issued or outstanding prior to 2006. A summary
of changes in outstanding options is as follows:                                

                                 Weighted         Weighted
                                  Average          Average
                                   Options       Share Price

Outstanding at December 31, 2005                --                --            

Changes during the year:                                                        
Granted                              600,000             $1.75      
Exercised                                 --                --      
Forfeited                                 --                --      
                          ------------        ----------

Outstanding at December 31, 2006           600,000             $1.75            

Options outstanding and exercisable as of December 31, 2006:        

                             Exercisable
    Outstanding              Remaining
Exercise Price       Life      Number of Shares 
--------------      -------    ---------------- 

$  .50           2 years       300,000    
$3.00        2 years       300,000

  Epic has determined, based upon the Black-Scholes model, that the fair
value of the warrants on the date of grant was approximately $335,619, using an 
expected life of two years, volatility of 47% and a risk-free interest rate of  
4.9%.                                                                           

A summary of warrant activity for 2006 is as follows:                           

                            Number of Warrants          Weighted
                                  Outstanding and       Average Exercise
                              Exercisable                Price
                                ------------------      ----------------

Outstanding, December 31, 2005               -             $         -  
       Granted                       897,100                    2.25
            ----------
Outstanding, December 31, 2006         897,100             $      2.25  
            ==========

     As of  December  31,  2006,  the range of warrant  prices for shares  under
warrants and the weighted average remaining contractual life is as follows:     

                                                                Weighted Average
                                                                 Remaining
                                     Exercise     Number of     Contractual Life
                                     Price      Warrants         (in months)
                                     --------     ---------    -----------------

      Series A Warrants         $    2.00      212,500              12.0
      Series B Warrants              2.50      684,600              33.5
                             ---------
                             897,100

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13.   Subsequent Events                                                         

   On March 12, 2007 Rex Doyle (Chief Executive Officer) and John Ippolito
(President) surrendered to the Company a total of 23,200,000 shares of common   
stock. This action was taken in order to place the Company in a favorable       
position to attract the equity and debt financing required to continue to       
execute its business plan.                                                      

     In January 2007 the Rush County gas wells were shut in due to the closure
of the plant which was purchasing the gas produced from Epic's wells. Epic does 
not know if the plant will reopen and is currently looking for an alternate     
buyer for the gas. The acreage and wells were acquired for $100,000 in cash, a  
$2,500,000 loan from the sellers of the prospect and 3,100,000 shares of Epic's 
common stock. The $2,500,000 loan bears interest at 10% per year and is payable 
in 42 equal monthly installments of $72,000.                                    

       In August 2007 the Company acquired the Carnrite Group, LLC for 3,177,812
shares of its common stock.                                                     

      In December 2007 the Company acquired Pearl Investment Company (formerly
named Pearl Development Company) for 1,486,240 shares of its common stock and   
$18,720,000 in cash.                                                            

The Carnrite Group and Pearl Investment Company provide consulting
services to the oil, gas and energy industry in the areas of engineering,       
construction management, operations, maintenance and oilfield project           
management.                                                                     

       On December 5, 2007 the Company sold 4,406,334 shares of its common stock
to a group of private investors for gross proceeds of $6,609,500, or $1.50 per  
share. The investors also received warrants which entitle the holders to        
purchase up to 4,406,334 shares of the Company's common stock. The warrants are 
exercisable at a price of $1.50 per share and expire on December 5, 2012.       

   On December 31, 2007 the Company sold an additional 1,023,001 shares of
its common stock to a group of private investors for gross proceeds of          
$1,534,502 or $1.50 per share. The investors also received warrants which       
entitle the holders to purchase up to 1,023,001 shares of the Company's common  
stock. The warrants are exercisable at a price of $1.50 per share and expire on 
December 5, 2012.                                                               

      On December 5, 2007 the Company also sold notes in the principal amount of
$20,250,000 to a second group of private investors. The notes bear interest     
annually at 10% per year. The notes are due and payable on December 5, 2012 and 
are secured by liens on all of the Company's assets. The purchasers of the notes
also received warrants which entitle the holders to purchase up to 15,954,545   
shares of the Company's common stock. The warrants are exercisable at a price of
$1.65 per share and expire on December 5, 2012.                                 

      Interest on the notes is payable quarterly with the first interest payment
due on January 1, 2008. Beginning December 1, 2008 the Company is required to   
make quarterly payments of $1,265,625 toward the principal amount of the notes. 

SUPPLEMENTARY  FINANCIAL  INFORMATION  FOR  OIL  AND  GAS  PRODUCING  ACTIVITIES
(UNAUDITED)                                                                     

All of our operations are directly related to oil and gas producing 
activities located in Kansas and Oklahoma; we did not own or participate in any 
oil and gas properties prior to January 1, 2006.                                

Capitalized Costs Relating to Oil and Gas Producing Activities

December 31,                                       2006       

Proved oil and gas properties             $ 10,447,590
Unproved oil and gas properties                 60,000
                                         ---------------
Total capitalized costs                     10,507,590
 Less impairment allowance                   (3,062,265)

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Less accumulated depreciation and                     
    amortization                                (30,814)
                                         ---------------
Net Capitalized Costs                     $  7,414,511
                                         ===============

Costs Incurred in Oil and Gas Producing Activities            

 For the Fiscal Years Ended December 31,                    2006

        Acquisition of proved properties                   $10,296,526
        Acquisition of unproved properties                      60,000
        Development costs                                        2,100
Exploration costs - Asset retirement costs            
         recognized according to SFAS No. 143                  148,964
                                                            --------------
        Total Costs Incurred                              $ 10,507,590
                                                            ==============

Results of Operations from Oil and Gas Producing Activities         

 For the Fiscal Years Ended December 31,                    2006

       Oil and gas revenues                                 $ 73,073
        Production costs and taxes                            (59,460)
        Depreciation and amortization and ARO accretion       (31,539)
                                                           -----------
        Results of operations before income taxes             (17,926)
       Provision for income taxes                                 --
                                                           -----------
        Results of Oil and Gas Producing Operations         $ (17,926)
                                                           ===========

     The Company has presented the reserve estimates utilizing an oil price of
$56.32 per Bbl and a natural gas price of $5.02 per Mcf as of December 31, 2006.
Information for oil is presented in barrels (Bbl) and for natural gas in        
thousands of cubic feet (Mcf).                                                  

There are many inherent uncertainties in estimating proved reserve        
quantities, projecting future production rates, and timing of development       
expenditures. Accordingly, these estimates are likely to change as future       
information becomes available.                                                  

   Proved oil and natural gas reserves are the 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. Proved developed reserves are 
those reserves expected to be recovered through existing wells, with existing   
equipment and operating methods.                                                

A summary of changes in proved reserve balances is presented below: 

                                     Total Proved           Proved Developed
                                     ------------           ----------------
                                   BBL          MCF          BBL         MCF
                                   ---          ---          ---         ---
Reserves as of January 1,                                                 
   2006                                -            -            -           -
Purchase of reserves in                                                   
   place                           3,717    4,985,197        3,717   2,793,010
  Sale of reserves in place            -            -            -           -
  Extensions and discoveries           -            -            -           -
  Revisions of previous estimates      -            -            -           -
   Production                           -      (14,879)           -     (14,879)
                                   -------  -----------      -------  ----------
Reserves as of December 31,                                               
   2006                            3,717    4,970,318        3,717   2,778,131
                                   =======  ===========      =======  ==========

     The following is a standardized measure of the discounted net future cash
flows and changes applicable to proved oil and natural gas reserves required by 
Statement of Financial Accounting Standards No. 69, Disclosures about Oil and   

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Gas Producing Activities (SFAS No. 69). The future cash flows are based on      
estimated oil and natural gas reserves utilizing prices and costs in effect as  
of year end, discounted at 10% per year and assuming continuation of existing   
economic conditions.                                                            

      The standardized measure of discounted future net cash flows is based upon
imprecise estimates of quantities and rates of production of reserves. Revisions
of previous year estimates can have a significant impact on these results. Also,
exploration costs in one year may lead to significant discoveries in later years
and may significantly change previous estimates of proved reserves and their    
valuation. Therefore, the standardized measure of discounted future net cash    
flow is not necessarily indicative of the fair value of the Company's proved oil
and natural gas properties.                                                     

   Future income taxes are based on year-end statutory rates, adjusted for
net operating loss carry forwards and tax credits. A discount factor of 10% was 
used to reflect the timing of future net cash flows. The Standardized Measure of
Discounted Future Net Cash Flows is not intended to represent the replacement   
cost or fair market value of the Company's oil and natural gas properties.      

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

                                                             December 31, 2006
                                                             -----------------

    Future cash inflows                                    $  25,156,646

Future costs:                                                   
      Production and development costs                       (9,993,835)
      Future income taxes                                    (1,807,558)
                                                             -----------
     Future net cash flows                                  13,355,253
10% annual discount for estimated timing of                 
       cash flows                                            (6,000,742)
                                                             -----------
Standardized measure of discounted future net               
      cash flows                                          $  7,354,511
                                                           =============

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 EPIC ENERGY RESOURCES, INC.

FINANCIAL STATEMENTS AS OF

SEPTEMBER 30, 2007
 (Unaudited)

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EPIC ENERGY RESOURCES INC.
 CONSOLIDATED BALANCE SHEETS

                                                September 30,     December 31,
ASSETS                                              2007              2006    
                             (unaudited)
CURRENT ASSETS                                                                
Cash and cash equivalents                       $    700,909      $  590,172  
Accounts receivable:                                                          
  Billed, net of allowance of $0                 1,454,062           4,600
  Unbilled, at estimated net realizable value      330,597               -
Accounts receivable from affiliates                    5,000               -  
Prepaid expenses and other                            16,250         120,219  
                                              ------------       ---------

TOTAL CURRENT ASSETS                               2,506,818         714,991  

Oil and gas properties (full-cost method),                                    
net of accumulated depreciation, depletion,                                 
amortization and impairment                                                 
 Proved                                          6,075,984       7,354,511
 Unproved                                                -          60,000
Other mineral reserves                               783,474         783,474  
Property and equipment, net                           27,473               -  
Investment in joint venture                           22,700               -  
Other assets                                         304,902               -  
Goodwill                                           9,967,252               -  
                                                ------------       ---------
TOTAL ASSETS                                    $ 19,688,603     $ 8,912,976  
                                              ============     ===========

LIABILITIES AND STOCKHOLDERS' EQUITY                                          

CURRENT LIABILITIES                                                           
Accounts payable                                $    418,998     $    97,630  
Accrued liabilities                                  375,937           7,346  
Current portion of long term debt                    849,505         872,990  
Line of credit                                       362,000               -  
                                              ------------       ---------

TOTAL CURRENT LIABILITIES                          2,006,440         977,966  

Asset retirement obligations                         151,555         142,343  
Long-term debt .                                   1,830,658       1,707,676  
                                              ------------       ---------
             TOTAL LIABILITIES                   3,988,653       2,827,985

STOCKHOLDERS' EQUITY                                                          
Common stock, no par value: 100,000,000                                   
authorized:                                                             
36,939,586 and 53,441,601 shares issued                                 
and outstanding at September 30, 2007 and                               
 December 31, 2006, respectively                21,318,341       9,822,605
Additional paid-in capital                         331,412         330,912
 Accumulated deficit                             (5,949,803)     (4,068,526)
                                               ------------      ---------
TOTAL STOCKHOLDERS EQUITY                         15,699,950       6,084,991  

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY     $  19,688,603     $ 8,912,976  
                                             =============     ===========

    See accompanying notes to consolidated financial statements.

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EPIC ENERGY RESOURCES INC.
 CONSOLIDATED STATEMENTS OF OPERATIONS
 (unaudited)

                                                        [Enlarge/Download Table]
                                                                                               

                                        For the three months         For the nine months       
                                        ended September 30,          ended September 30,       
                                      2007               2006        2007               2006   
                                        -------------------         -------------------------  
REVENUES                                                                                       
Consulting fees                    $  2,233,190    $       -    $ 2,328,032         $        - 
Oil and gas revenue                           -            -          9,674                  - 
     TOTAL REVENUES                   2,233,190            -      2,337,706                  - 

OPERATING EXPENSES                                                                             
    General and administrative          478,733      143,655      1,328,275            249,012 
    Lease operating expenses             80,228            -        202,783                  - 
    Professional and subcontracted                                                             
      services                          678,411            -        678,411                  - 
    Compensation and benefits           258,740            -        258,740                  - 
    Occupancy, communication and other  112,358            -        112,358                  - 
    Depreciation, depletion and                                                                
       amortization                           -            -              -                  - 
   Accretion expense                          -            -          9,212                  - 
   Impairment of oil and gas properties       -            -      1,338,527                  - 
     OPERATING EXPENSES               1,608,470      143,655      3,928,306            249,012 

INCOME (LOSS) FROM OPERATIONS           624,720     (143,655)    (1,590,600)          (249,012)

OTHER INCOME (EXPENSE)                                                                         
   Interest and other income                157          787          6,867              1,756 
   Interest expense                    (217,280)           -       (297,544)                 - 
     OTHER INCOME (EXPENSE)            (217,123)         787       (290,677)             1,756 

NET INCOME (LOSS)                  $    407,597    $(142,868)  $ (1,881,277)       $  (247,256)

INCOME (LOSS) PER COMMON                                                                       
       SHARE - Basic .             $       0.01    $   (0.00)  $      (0.05)       $     (0.01)
INCOME (LOSS) PER COMMON                                                                       
SHARE - Diluted                    $       0.01    $   (0.00)  $      (0.05)       $     (0.01)
WEIGHTED AVERAGE COMMON SHARES                                                                 
   OUTSTANDING - Basic               33,901,262   49,260,000     38,946,918         34,109,817 
WEIGHTED AVERAGE COMMON SHARES                                                                 
   OUTSTANDING - Diluted             34,796,571   49,260,000     38,946,918         34,109,817 

    See accompanying notes to consolidated financial statements.

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EPIC ENERGY RESOURCES INC.
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 (unaudited)

                                               Nine Months Ended September 30,
                                              2007                    2006
CASH FLOWS FROM OPERATING ACTIVITIES                                            
Net loss                                     $  (1,881,277)     $   (247,256) 
Adjustments to reconcile net loss to net                                      
cash used in operating activities:                                      
Depreciation, depletion and amortization                 -                 -  
Impairment of oil and gas properties             1,338,527                 -  
Accretion expense                                    9,212                 -  
Shares issued for compensation                     276,128                 -  
Imputed interest on acquisition                    115,000                 -  
Amortization of prepaid assets                      99,349                 -  
Changes in operating assets and liabilities:                                  
Accounts receivable                             (577,176)                -
Prepaid expenses and other                        30,191                 -
 Accounts payable                                  11,812            (3,098)
Accrued liabilities                              366,950            21,005
                                             ------------       ----------
    Net cash used in operating activities        (211,284)         (229,349)
                                             ------------       ----------
CASH FLOWS FROM INVESTING ACTIVITIES                                          
Investment in joint venture                        (22,700)                   
Acquisition of oil and gas properties and                                     
property and equipment                            (1,031)                -
Acquisition of Carnrite, net of cash received       48,227                 -  
Increase in other assets                          (304,902)                   
                                             ------------       ----------
Net cash used in investing activities           (280,406)                -
                                             ------------       ----------
CASH FLOWS FROM FINANCING ACTIVITIES                                          
Payments on debt .                                (114,950)                -  
Proceeds from debt                                 193,777                 -  
Proceeds from issuance of common stock             523,600               440  
Capital contributed by stockholders                      -           305,021  
                                             ------------       ----------
   Net cash provided by financing activities     602,427           305,461
                                             ------------       ----------
NET INCREASE IN CASH AND CASH EQUIVALENTS          110,737            76,112  
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD     590,172                 -  
                                             ------------       ----------
CASH AND CASH EQUIVALENTS, END OF PERIOD         $ 700,909        $   76,112  
                                             ============       ==========

SUPPLEMENTAL CASH FLOW DISCLOSURES:                                           
  Interest paid                            $     5,978        $        -
NON-CASH INVESTING AND FINANCING ACTIVITIES:                                  
  Acquisition of Carnrite with stock       $10,696,508                 -

    See accompanying notes to consolidated financial statements.

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EPIC ENERGY RESOURCES INC.

Notes to Consolidated Financial Statements
 (unaudited)

1.    Basis of Presentation                                                     

The accompanying consolidated financial statements of Epic Energy Resources,    
Inc. ("Epic" or "the Company") at September 30, 2007 have been prepared without 
audit, pursuant to the rules and regulations of the Securities and Exchange     
Commission. Certain information and footnote disclosures normally included in   
financial statements prepared in conformity with generally accepted accounting  
principles have been omitted or condensed pursuant to such rules and            
regulations. These statements should be read in conjunction with Epic's audited 
financial statements and notes thereto for the year ended December 31, 2006     
included elsewhere in this prospectus. In management's opinion, these interim   
consolidated financial statements reflect all adjustments necessary for a fair  
presentation of the consolidated financial position and results of operations   
for each period presented. The accompanying unaudited interim financial         
statements for the nine months ended September 30, 2007 are not necessarily     
indicative of the results which can be expected for the entire year.            

Epic was in the development stage until the acquisition of The Carnrite Group   
L.L.C. ("Carnrite") on August 13, 2007. As a result, 2007 is the first year     
during which Epic is considered an operating company and no longer in the       
development stage.                                                              

Use of Estimates                                                                

The preparation of financial statements in conformity with US GAAP requires     
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at   
the date of the financial statements and the reported amounts of revenues and   
expenses during the reporting periods. Actual results could differ from those   
estimates.                                                                      

Cash and cash equivalents                                                       

For purposes of the statement of cash flow, cash and cash equivalents include   
demand deposits, time deposits and short-term liquid investments such as        
certificates of deposit with a maturity of three months or less when purchased. 
Epic maintains deposits at one financial institution, the balance of which may  
at times exceed amounts covered by insurance provided by the U.S. Federal       
Deposit Insurance Corporation ("FDIC"). However, Epic has not experienced any   
losses in such accounts and does not believe it is exposed to any significant   
credit risks from these excess deposits.                                        

Receivables From Clients                                                        

Billed receivables from clients are presented at their billed amount less an    
allowance for doubtful accounts. Unbilled receivables are stated at net         
realizable value less an allowance for non-billable amounts. Epic provides an   

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allowance for doubtful accounts on receivables based on historical collection   
experience and a specific review of each customer's receivable balance. As of   
September 30, 2007, management determined that no allowance for doubtful        
accounts was required based on management's assessment of the collect ability of
these items. No accounts were written off during the nine months ended September
30, 2007.                                                                       

Property and Equipment                                                          

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

Revenue Recognition                                                             

Revenue includes fees primarily generated from consulting services provided. The
Company recognizes revenue from these consulting engagements when hours are     
worked, either on a time-and-materials basis or on a fixed-fee basis, depending 
on the terms and conditions defined at the inception of an engagement with a    
client. The terms of the contracts with clients are fixed and determinable and  
may change based upon agreement by both parties. Individual consultants' billing
rates are principally based on a multiple of salary and compensation costs.     
Revenue recognized in excess of billings is recorded as unbilled accounts       
receivable. Cash collections and invoices generated in excess of revenue        
recognized are recorded as deferred revenue until the revenue recognition       
criteria are met. Client reimbursable expenses, including those relating to     
travel, other out-of-pocket expenses and any third-party costs, are included in 
revenue, and an equivalent amount of reimbursable expenses are included in      
professional and subcontracted services as a cost of revenue.                   

Fair Value of Financial Instruments                                             

In accordance with the reporting requirements of SFAS No. 107, "Disclosures     
About Fair Value of Financial Instruments", the Company calculates the fair     
value of its assets and liabilities which qualify as financial instruments under
this statement and includes this additional information in the notes to the     
financial statements when the fair value is different than the carrying value of
those financial instruments. The estimated fair value of cash, accounts         
receivable and accounts payable approximate their carrying amounts due to the   
short maturity of these instruments. The carrying value of short and long-term  
debt also approximates fair value since their terms are similar to those in the 
lending market for comparable loans with comparable risks. None of these        
instruments are held for trading purposes.                                      

Earnings Per Share                                                              

The Company applies the provisions of Statement of Financial Accounting         
Standards No. 128 "Earnings per Share" which requires the presentation of basic 
earnings per share which excludes dilution and is computed by dividing net      
income (loss) available to common stockholders by the weighted-average number of
shares of common stock outstanding for the period. The provisions also require  
dual presentation of basic and diluted earnings per share on the face of the    

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statement of operations and requires a reconciliation of the numerators and     
denominators of basic and diluted earnings per share. Employee stock options and
stock warrants were not included in the computation of diluted earnings per     
share for the quarter and nine months ended September 30, 2007 and the quarter  
and nine months ended September 30, 2006 because the effect of their assumed    
exercise would have an antidilutive effect on the computation of diluted loss   
per share.                                                                      

Recent Accounting Pronouncements                                                

In September 2006, the Financial Accounting Standards Board ("FASB") published  
Statement of Financial Accounting Standards No.157, "Fair Value Measurements"   
(FAS 157). FAS 157 defines fair value, establishes a framework for measuring    
fair value in generally accepted accounting principles and expands disclosures  
about fair value measurements. FAS 157 applies under other accounting           
pronouncements that require or permit fair value measurements and accordingly,  
does not require any new fair value measurements. FAS 157 is effective for      
fiscal years beginning after November 15, 2007. The Company does not believe the
adoption of FAS 157 will have a material impact on its financial statements.    

In June 2006, the FASB issued FASB Interpretation No. 48 ("FIN 48"), "Accounting
for Uncertainty in Income Taxes - an interpretation of FASB Statement No.       
109"("FAS 109"), which clarifies the accounting for uncertainty in income taxes 
recognized in an enterprise's financial statements in accordance with FAS No.   
109,"Accounting for Income Taxes." FIN 48 prescribes a recognition threshold and
measurement attribute for the financial statement recognition and measurement of
a tax position taken or expected to be taken in a tax return. This              
Interpretation also provides guidance on de-recognition, classification,        
interest and penalties, accounting in interim periods, disclosure, and          
transition. This Interpretation was effective for fiscal years beginning after  
December 15, 2006 so it was effective for the Company in the first quarter of   
fiscal year 2007, which began January 1, 2007. The adoption of FIN 48 did not   
have a material impact on its financial statements.                             

In September 2006, the SEC released Staff Accounting Bulletin No. 108,          
"Considering the Effects of Prior Year Misstatements When Quantifying           
Misstatements in Current Year Financial Statement" ("SAB 108"), which provides  
guidance on how companies should quantify financial statement misstatements. SAB
108 requires that the effect of misstatements that were not corrected at the end
of the prior year be considered in quantifying misstatements in the current-year
financial statements. Two techniques were identified as being used by companies 
in practice to accumulate and quantify misstatements -- the "rollover" approach 
and the "iron curtain" approach. The rollover approach quantifies a misstatement
based on the amount of the misstatement originating in the current-year income  
statement. Thus, this approach ignores the effects of correcting the portion of 
the current-year balance sheet misstatement that originated in prior years. The 
iron curtain approach quantifies a misstatement based on the effects of         
correcting the cumulative misstatement existing in the balance sheet at the end 
of the current year, irrespective of the misstatement's year(s) of origination. 
SAB 108 permits companies to adjust for the cumulative effect of misstatements  
relating to prior years in the carrying amount of assets and liabilities as of  
the beginning of the current fiscal year, with an offsetting adjustment to the  
opening balance of retained earnings in the year of adoption.                   

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In February 2007, the Financial Accounting Standards Board (the "FASB") issued  
FASB Statement No. 159, The Fair Value Option for Financial Assets and Financial
Liabilities -- Including an Amendment of FASB Statement No. 115 ("SFAS 159").   
This standard permits an entity to choose to measure many financial instruments 
and certain other items at fair value. Most of the provisions in SFAS 159 are   
elective; however, the amendment to FASB Statement No. 115, Accounting for      
Certain Investments in Debt and Equity Securities, applies to all entities with 
available-for-sale and trading securities. The FASB's stated objective in       
issuing this standard is as follows: "to improve financial reporting by         
providing entities with the opportunity to mitigate volatility in reported      
earnings caused by measuring related assets and liabilities differently without 
having to apply complex hedge accounting provisions."                           

The fair value option established by SFAS 159 permits all entities to choose to 
measure eligible items at fair value at specified election dates. A business    
entity will report unrealized gains and losses on items for which the fair value
option has been elected in earnings (or another performance indicator if the    
business entity does not report earnings) at each subsequent reporting date. The
fair value option: (i) may be applied instrument by instrument, with a few      
exceptions, such as investments otherwise accounted for by the equity method;   
(ii) is irrevocable (unless a new election date occurs); and (iii) is applied   
only to instruments and not to portions of instruments.                         

SFAS 159 is effective as of the beginning of an entity's first fiscal year that 
begins after November 15, 2007. Early adoption is permitted as of the beginning 
of the previous fiscal year provided that the entity makes that choice in the   
first 120 days of that fiscal year and also elects to apply the provisions of   
SFAS 157. Epic is currently assessing the impact of SFAS 159 on its financial   
statements.                                                                     

2.    Business Combination                                                      

On August 13, 2007, Epic acquired The Carnrite Group, LLC, an energy consulting 
company, for 3,177,810 shares of its restricted common stock valued at          
$10,486,773. The value of the shares issued in the acquisition was based upon a 
price of $3.30 per share, which was the closing price of Epic's common stock on 
August 13, 2007. Up to 1,673,036 additional shares have been awarded to         
employees of Carnrite as retention shares. These shares will be required to be  
returned to Epic if the employees of Carnrite voluntarily terminate their       
employment prior to March 28, 2009. In accordance with EITF No. 95-8 "Accounting
for Contingent Consideration Paid to the Shareholders for an Acquired Enterprise
in a Business Combination", the contingent consideration is considered          
compensation cost for post-combination recognition and not additional purchase  
price consideration. In addition, Epic issued 63,556 shares of its restricted   
common stock valued at $209,735 as a transaction fee to an individual that      
assisted with the acquisition. The consolidated statement of operations includes
the operations of Carnrite for the period from July 1, 2007 through September   
30, 2007. Because the actual purchase date for Carnrite was August 13, 2007,    
imputed interest in the amount of $115,000 was recorded as of September 30,     
2007.                                                                           

The acquisition and related transactions have been treated as a purchase        
business combination for accounting purposes, and Carnrite's assets acquired and
liabilities assumed are recorded at their fair value. The allocations of the    
purchase price to Carnrite's assets and liabilities are only preliminary        

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allocations based on estimates of fair value and will change when the actual    
fair values are determined. Among the provisions of Statement of Financial      
Accounting Standards No. 141, "Business Combinations" criteria have been        
established for determining whether intangible assets should be recognized      
separately from goodwill. Statement of Financial Accounting Standards No. 142   
"Goodwill and Other Intangible Assets" provides, among other guidelines, that   
goodwill and intangible assets with indefinite lives will not be amortized, but 
rather are tested for impairment at least on an annual basis.                   

The following table presents the allocation of the acquisition cost to the      
assets acquired and liabilities assumed, based on estimated fair values:        

                                    Amount

Cash                                $       48,227      
Receivables from clients                1,207,883     
Property and equipment, net                26,442     
Other assets                                4,901     
Goodwill                               10,082,252     
     Total assets acquired        11,369,705
Accounts payable                          (311,197)     
Line of credit                           (362,000)    
 Total liabilities assumed           (673,197)
                                --------------
 Net assets acquired           $  10,696,508
                                ==============

Carnrite commenced its operations on March 28, 2007. Summarized below is the pro
forma statement of operations for the nine months ended September 30, 2007 had  
the acquisition of Carnrite taken place as of January 1, 2007:                  

                                  Amount
                                  ------
                               As Reported        RESTATED
                               -----------        --------

  Revenues                      $3,560,318      $  2,898,209
  Operating expenses             4,535,806         4,323,538
   Other income (expense)          (292,783)         (292,783)
                              -------------    -------------
         Net loss               $(1,268,271)      $(1,718,112)
                              =============    =============

         Net loss per share     $     (0.03)     $      (0.04)
                              =============    =============

The pro forma information is presented for informational purposes only and is   
not necessarily indicative of the results of operations that actually would have
been achieved had the acquisition been consummated as of that time, nor is it   
intended to be a projection of future results.                                  

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3.    Oil and Gas Properties                                                    

Epic has a 100% working interest (approximately 82% net revenue interest) in 58 
gas wells located on 28,600 acres in Rush County, Kansas. In January 2007 the   
gas wells were shut in due to the closure of the plant which was purchasing the 
gas produced from Epic's wells. Epic does not know if the plant will reopen and 
is currently looking for an alternate buyer for the gas.                        

Epic has a 50% working interest (approximate 40% net revenue interest) in seven 
shut-in gas wells located on 6,000 acres in Kay County, Oklahoma. Epic estimates
that it will cost approximately $7,000 (with Epic being responsible for its 50% 
share) to rework each shut-in well and place the well back on production. Two   
wells were successfully tested for commercial production following workovers in 
2007. Depending on weather conditions, Epic plans to begin reworking the        
remaining shut-in wells during the first quarter of 2008.                       

In July 2007 Epic formed a joint venture, Epic Exploration and Production LLC,  
with a private investment firm to acquire energy assets and oil and gas         
properties. Epic will manage the operations of the joint venture. The private   
investment firm is responsible for providing capital required to acquire the    
assets on a project-by-project basis.                                           

Epic will receive 20% of the net income from any asset or oil and gas property  
acquired by the joint venture until the private investment firm receives 100% of
the equity contributed by the private investment firm to acquire the asset or   
property. Thereafter, the net income from the asset or property will be         
allocated equally between Epic and the private investment firm. As of February  
29, 2008, the joint venture was negotiating to acquire working interests,       
varying from 50% to 100%, in producing oil wells in Fort Bend and Bazoria       
counties, Texas.                                                                

4.    Line of Credit and Long-Term Debt                                         

On May 1, 2007, Epic entered into a line of credit agreement with a bank which  
provided Epic with the ability to borrow up to $800,000. As of September 30,    
2007 the amount outstanding under the line of credit was $312,000. Amounts drawn
on the line of credit bear interest at 8.25% per year and are payable on April  
30, 2008. Interest is payable monthly. The line of credit is secured by Epic's  
accounts at the bank.                                                           

On May 9, 2007, Epic borrowed $50,000 from Carnrite Group Consolidated Business 
Enterprises Ltd. ("CCBE"). CCBE is owned by Alan Carnrite, a former director of 
the Carnrite Group, a wholly-owned subsidiary of Epic. The loan bears interest  
at 8.25% and is due on demand.                                                  

Epic's gas wells in Rush County, Kansas serve as collateral for a loan which had
a principal balance of $2,680,163 as of September 30, 2007. The loan bears      
interest at 10% per year and is payable in equal monthly installments of        
$72,000. The loan agreement provides that if the monthly net income from the    
wells is less than $72,000, the deficit will be added to the principal amount of
the note. If the monthly net income from the wells is greater than $72,000, the 
net income is applied to the note principal. Since the Kansas wells are shut in,
it is anticipated that $25,000 will be added to the note principal each month   
until the wells return to production.                                           

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Long-term debt at September 30, 2007 consists of the following:                 

                                            Amount

Note payable secured by property acquired    $ 2,680,163  
Line of credit                                   362,000  
Less - current maturities                     (1,211,505) 
                                          ------------
Total                                    $ 1,830,658
                                          ============

5.    Stockholder's Equity                                                      

Common Stock                                                                    

In December 2006, an employment agreement was initiated with the new President  
of the oil and gas operations that included the future issuance of 200,000      
shares of restricted common stock for services to be provided over the next 36  
months. The fair market value using the closing price of the Epic's stock on the
measurement date, was $554,000 of which $46,168 and $138,500 has been recorded  
as compensation expense for the three and nine months ended September 30, 2007, 
respectively. In addition, on March 26, 2007, 20,000 shares of restricted common
stock were issued to a consultant for services rendered. The fair market value  
of the services rendered for the common stock was approximately $61,000 using   
the closing price of Epic's stock on the March 26, 2007 measurement date and is 
included as compensation expense.                                               

On March 12, 2007, Epic's Chief Executive Officer and President surrendered to  
the Company a total of 23,200,000 shares of common stock and these shares were  
subsequently retired. This action was taken in order to place the Company in a  
favorable position to attract the equity and debt financing required to continue
to execute its business plan.                                                   

In the first nine months of 2007, Epic issued 101,500 shares of unregistered    
restricted common stock for gross proceeds of $558,000 in private placements.   
There were $40,400 of finder's fee related to these offerings. Epic sold 279,000
units with each unit consisting of 2 shares of Epic common stock and 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 $2.00 per share  
at any time prior to October 31, 2007. The expiration period for the purchase of
the Series A Warrants has been extended to December 31, 2007, due to            
management's focus on raising capital to complete the acquisition of Pearl      
Investment Company (See Note 7). Each Series B Warrant entitles the holder to   
purchase one share of the Company's common stock at a price of $2.50 per share  
at any time prior to October 31, 2009. Both the shares and the shares associated
with the warrants are restricted for a one year period. The relative fair value 
of the Common Stock and the Warrants was as follows:                            

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                                                      Relative
                                       Shares         Fair Value

   Common Stock                       558,000       $  412,262
   Series A Warrants                  279,000           77,386
   Series B Warrants                  279,000           68,352
                                    ----------     -------------
        Total proceeds                                 558,000
    Placement fees                                      (40,400)
                                                   -------------
            Net proceeds                           $   517,600
                                                   =============

Proceeds raised in these private placements were used for due diligence and     
acquisition costs associated with the acquisition of the Rush County, Kansas    
property, costs associated with investigating nitrogen and helium processing    
equipment for the Rush County, Kansas property, legal and administrative costs  
associated with setting up the Joint venture in Kay County Oklahoma, initial    
well work and field maintenance costs in Kay county Oklahoma, due diligence     
costs associated with several ongoing acquisitions, working capital, and general
and administrative costs.                                                       

In August 2007, 3,177,810 shares of restricted common stock were issued in      
conjunction with the Carnrite acquisition. In September 2007, 1,673,036 shares  
of restricted common stock were issued as contingency shares and in October     
2007, 300,000 shares were held in escrow associated with the acquisition of     
Pearl Investment Company ("Pearl"). See Note 7.                                 

A total of 107,056 shares were issued to consultants for services rendered with 
a value of $336,835 during the nine months ended September 30, 2007.            

Warrants                                                                        

A summary of warrant activity for 2007 is as follows:                           

                                  Number of Warrants      Weighted     Aggregate
                                   Outstanding and    Average Exercise Intrinsic
                                   Exercisable           Price         Value
                                  ------------------  ---------------- ---------

Outstanding, December 31, 2006         897,100           $  2.38      $357,438
Granted                             558,000              2.25           
     ---------
Outstanding, September 30, 2007      1,455,100           $  2.33    $2,181,033
     =========

As of September 30, 2007, the range of warrant prices for shares under warrants 
and the weighted average remaining contractual life is as follows:              

                                                            Weighted Average
                                                             Remaining
                                   Exercise    Number of      Contractual Life
                                   Price       Warrants          (in months)
                                   --------    ---------     -----------------

Series A Warrants               $    2.00       491,500             3.0       
Series B Warrants                    2.50       963,600            24.5       
                       ---------
                       1,455,100

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Stock Options                                                                   

A summary of stock option activity for 2007 is as follows:                      

                                  Number of Warrants      Weighted     Aggregate
                                   Outstanding and    Average Exercise Intrinsic
                                   Exercisable           Price         Value
                                  ------------------  ---------------- ---------

Outstanding, December 31, 2006          600,000           $   1.75    $  618,000
Granted                                  65,000           $   3.17    $2,060,050
      --------
Outstanding, September 30, 2007         665,000           $   1.89    $1,290,900
      ========

As of September 30, 2007, the range of option prices and the weighted average   
remaining contractual life is as follows:                                       

    Exercise          Exercisable Remaining     Outstanding Life
    Price               Number of Shares         (in months)
    --------          ---------------------     ----------------

$ 0.50                  300,000                 15.0    
3.00                  300,000                 15.0  

3.17                   65,000                 57.3  
----------------------------------------------------    

As of September 30, 2007, there was approximately $1.7 million of total         
unrecognized compensation cost related to unvested share-based compensation     
arrangements that is expected to be recognized over a weighted-average period of
1.7 years.                                                                      

Restricted stock grants consist of the Company's common stock and generally vest
after three years, with the exception of grants under the Non-employee Director 
Stock Option Plan, which vest when granted due to the fact that they are granted
in lieu of cash payments. All restricted stock grants are cliff-vested.         
Restricted stock awards are valued at the average market price of the Company's 
common stock at the date of grant.                                              

6.    Segment reporting                                                         

With the acquisition of Carnrite during the quarter, Epic has two distinct      
business segments, (1) engineering consulting and (2) oil and gas production.   
These operating segments were determined based on the nature of the products and
services offered. Operating segments are defined as components of an enterprise 
about which separate financial information is available that is evaluated       
regularly by the chief operating decision-maker in deciding how to allocate     
resources and in assessing performance. The Company's chief executive officer   
and chief operating officer have been identified as the chief operating decision
makers. The Company's chief operating decision makers direct the allocation of  
resources to operating segments based on the profitability and cash flows of    
each respective segment. The Company evaluates performance based on several     
factors, of which the primary measure is business segment operating income. The 
accounting policies are the same as those described in Note 1. The following    
information summarizes the operating results of these two segments for the nine 
months ended September 30, 2007 (RESTATED):                                     

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                          Engineering  Oil and Gas
                                          Segment     Segment     Consolidated

Revenues                               $  1,665,923   $    9,674  $  1,675,597
Operating expenses:                                                           
 General and administrative                 641,676      945,339     1,587,015
 Lease operating expenses                         -      202,783       202,783
Professional and subcontracted                                              
  services                                  504,196            -       504,196
Occupancy, communication                                                    
  and other                                  75,394            -        75,394
 Accretion expense                                -        9,212         9,212
Impairment of oil and gas                                                   
  properties                                      -    1,338,527     1,338,527
                                       -------------- ------------  ------------

   Total operating expenses               1,221,266    2,495,861     3,717,127
       Income (loss) from operations   $     444,657  $(2,486,187) $ (2,041,530)
                                       ============== ============ =============
          Total assets                $  11,956,925  $ 7,069,569  $ 19,026,494
                                       ============== ============ =============

The following information summarizes the operating results of these two 
segments for the nine months ended September 30, 2007 (AS REPORTED):    

                         Engineering   Oil and Gas
                                          Segment     Segment     Consolidated

Revenues                               $  2,328,032   $    9,674  $  2,337,706

Operating expenses:                                                           
 General and administrative                 641,676      945,339     1,587,015
 Lease operating expenses                         -      202,783       202,783

Professional and subcontracted                                              
  services                                  678,411            -       678,411
Occupancy, communication                                                    
  and other                                 112,358            -       112,358

Depreciation, depletion                                                     
  and amortization                                -            -             -
 Accretion expense                                -        9,212         9,212
Impairment of oil and gas                                                   
  properties                                      -    1,338,527     1,338,527
                                       -------------- ------------  ------------

 Total operating expenses                 1,432,445    2,495,861     3,928,527
  Income (loss) from operations        $     895,587  $(2,486,187)  $(1,590,600)

                                       ============== ============  ============

 Total assets                         $  12,619,034  $ 7,069,569   $19,688,603

                                       ============== ============  ============

7.    Subsequent events                                                         

In December 2007 Epic acquired Pearl Investment Company (formerly named Pearl   
Development Company) for 1,486,240 shares of its common stock and $18,720,000 in
cash. Pearl Investment Company provides consulting services to the oil, gas and 
energy industry in the areas of engineering, construction management,           
operations, maintenance and oilfield project management.                        

On December 5, 2007 Epic sold 4,406,334 shares of its common stock to a group of
private investors for gross proceeds of $6,609,500, or $1.50 per share. The     
investors also received warrants which entitle the holders to purchase up to    
4,406,334 shares of Epic's common stock. The warrants are exercisable at a price
of $1.50 per share and expire on December 5, 2012.                              

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On December 31, 2007 Epic sold an additional 1,023,001 shares of its common     
stock to a group of private investors for gross proceeds of $1,534,502 or $1.50 
per share. The investors also received warrants which entitle the holders to    
purchase up to 1,023,001 shares of Epic's common stock. The warrants are        
exercisable at a price of $1.50 per share and expire on December 5, 2012.       

On December 5, 2007 Epic also sold notes in the principal amount of $20,250,000 
to a second group of private investors. The notes bear interest annually at 10% 
per year. The notes are due and payable on December 5, 2012 and are secured by  
liens on all of Epic's assets. The purchasers of the notes also received        
warrants which entitle the holders to purchase up to 15,954,853 shares of Epic's
common stock. The warrants are exercisable at a price of $1.65 per share and    
expire on December 5, 2012.                                                     

Interest on the notes is payable quarterly with the first interest payment due  
on January 1, 2008. Beginning December 1, 2008 Epic is required to make         
quarterly payments of $1,265,625 toward the principal amount of the notes.      

The amount raised in the December 2007 was used as follows:         

       Amount received from sale of common stock, notes and warrants$ 28,394,003

Less:                                                               
        Acquisition of Pearl Investment Company                 (18,720,000)

Reserve for income taxes of Pearl Investment Company        
          for year ended December 31, 2007                       (2,400,000)

        Payment of Pearl Investment Company bank loans           (1,504,884)

        Placement agent fees                                     (1,785,000)

        Legal, accounting and other professional fees              (125,000)
                                                           ---------------

       Remainder to be used as working capital              $    3,859,119
                                                             ===============

8.    Restatement                                                               

Subsequent to the November 15, 2007 filing of its original Quarterly Report for 
the reporting period ended September 30, 2007, the Company determined that it   
needed to restate the financial statements that accompanied that report. The    
restatement was required because of an error made in the preparation of the     
financials statements whereby two journal entries were not properly reversed in 
the correct accounting period. The restatement affected the accounts receivable 
and accounts payable lines on the balance sheet and the consulting fees and     
operating expenses sections of the statement of operations.                     

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The following tables summarize in a condensed format the financial statements   
previously reported and restated as of September 30, 2007.                      

                                      September 30, 2007
                                       ---------------------
                                          As Reported  As Reported
                            Restated
BALANCE SHEET                                                                   
ASSETS                                                                          
CURRENT ASSETS                                    2,506,818     1,844,709       
NON CURRENT ASSETS                               17,181,785    17,181,785       
                                         ------------- -------------
TOTAL ASSETS                                19,688,603    19,026,494  
                                         ============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY                                            
CURRENT LIABILITIES                               2,006,440     1,795,261       
LONG TERM LIABILITIES                             1,982,213     1,982,213       
                                         ------------- -------------
TOTAL LIABILITIES                            3,988,653     3,777,474  
STOCKHOLDERS EQUITY                                                             
Common stock                                     21,318,341    21,318,341       
Additional paid in capital                          331,412       331,412       
Accumulated deficit                              (5,949,803)   (6,400,733)      
TOTAL STOCKHOLDERS EQUITY                        15,699,950    15,249,020       
                                         ------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY        19,688,603    19,026,494       
                                         ============= =============

                         For the three months    For the nine months
                           ended September 30,     ended September 30,
        As                      As
                             Reported    Restated    Reported    As Restated
                             --------    --------    --------    -----------
STATEMENT OF OPERATIONS                                                         
REVENUES                       2,233,190   1,571,081   2,337,706    1,675,597   
OPERATING EXPENSES             1,608,470   1,397,291   3,928,306    3,717,127   
                            ----------- ----------- ----------- ------------
INCOME (LOSS) FROM OPERATIONS    624,720     173,790  (1,590,600)  (2,041,530)  
OTHER INCOME (EXPENSE)          (217,123)   (217,123)   (290,677)    (290,677)  
                            ----------- ----------- ----------- ------------
NET INCOME (LOSS)                407,597     (43,333) (1,881,277)  (2,332,207)  
                            =========== =========== =========== ============
INCOME (LOSS) PER COMMON                                                        
SHARE - BASIC AND DILUTED    $     0.01  $    (0.00) $    (0.05) $     (0.06) 

WEIGHTED AVERAGE COMMON SHARES                                                  
OUTSTANDING                 33,901,262 33,901,262  38,946,918   38,946,918

                                                       For the nine months
                                                       ended September 30,
                                                   As           As
                                                         Reported     Restated
                                                         --------     --------
STATEMENT OF CASH FLOWS                                                         
Net loss                                                 (1,881,277) (2,332,207)
Changes in operating assets and liabilities:                                
     Accounts receivable                                  (577,176)     84,933
      Accounts payable                                       11,812    (199,367)
Net cash used in operating activities                      (211,284)   (211,284)
Net cash used in investing activities                      (280,406)   (280,406)
Net cash provided by financing activities                   602,427     602,427 
Net increase in cash and cash equivalents                   110,737     110,737 

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Financial Statements as of

December 31, 2006 and 2005

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 Table of Contents

                                                                          Page

Independent Auditors' Report...............................                F-35 

Financial Statements                                                            

     Balance Sheets.......................................                F-36

     Statements of Income.................................                F-37

     Statement of Changes in Stockholders' Equity.........                F-38

     Statements of Cash Flows.............................                F-39

Notes to Financial Statements..............................                F-40 

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INDEPENDENT AUDITORS' REPORT

Board of Directors and Stockholders                                             
Pearl Development Company                                                       
Lakewood, Colorado                                                              

We have audited the accompanying balance sheets of Pearl Development Company as 
of December 31, 2006 and 2005, and the related statements of income, changes in 
stockholders' equity and cash flows for the years then ended. These financial   
statements are the responsibility of the Company's management. Our              
responsibility is to express an opinion on these financial statements based on  
our audits.                                                                     

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and       
perform the audit 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 made by management, as well as evaluating the overall     
financial statement presentation. We believe that our audits provide a          
reasonable basis for our opinion.                                               

In our opinion, the financial statements referred to above present fairly, in   
all material respects, the financial position of Pearl Development Company as of
December 31, 2006 and 2005, and the results of its operations and its cash flows
for the years then ended in conformity with accounting principles generally     
accepted in the United States of America.                                       

                           Ehrhardt Keefe Steiner & Hottman PC

June 6, 2007                                                                    
Denver, Colorado                                                                

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Balance Sheets

                                                    December 31,
                                                     2006                 2005
                                                     ---------------------------
Assets

Current assets                                                                  
 Cash and cash equivalents                       $   7,369,296    $    279,320
 Accounts receivable - trade                        10,580,513       2,115,067
 Prepaid expenses                                      137,345               -
                                                  --------------   -------------
     Total current assets                           18,087,154       2,394,387
                                                  --------------   -------------
Non-current assets                                                              
 Property, plant and equipment, net                  2,669,680         861,479
 Note receivable - related party                       291,871               -
 Deposits                                               28,269             847
                                                  --------------   -------------
     Total non-current assets                        2,989,820         862,326
                                                  --------------   -------------
Total assets                                      $  21,076,974    $  3,256,713 
                                                  ==============   =============

Liabilities and Stockholders' Equity                          

Current liabilities                                                             
 Accounts payable - trade                        $   5,690,259    $    887,291
 Accounts payable - related party                       93,563               -
 Accrued expenses                                      702,806         475,565
 Line-of-credit                                        500,000               -
 Current portion of capital lease obligations          476,976         188,051
                                                  --------------   -------------
     Total current liabilities                       7,463,604       1,550,907
                                                  --------------   -------------
Non-current liabilities                                                         
 Capital lease obligations, less current portion       783,193         187,754
 Deposit liability                                   7,485,412               -
                                                  --------------   -------------
     Total non-current liabilities                   8,268,605         187,754
                                                  --------------   -------------
     Total liabilities                              15,732,209       1,738,661
                                                  --------------   -------------
Commitments and contingencies                                                   

Stockholders' equity                                                            
Common stock, no par value; 1,000 shares                                      
 authorized, issued and outstanding                          -               -
 Additional paid-in capital                            257,443         257,443
 Retained earnings                                   5,087,322       1,260,609
                                                  --------------   -------------
     Total stockholders' equity                      5,344,765       1,518,052
                                                  --------------   -------------
Total liabilities and stockholders' equity        $  21,076,974    $  3,256,713 
                                                  ==============   =============

See notes to financial statements.

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Statements of Income

                                                   For the Years Ended
                                                    December 31,
                                                   2006             2005
                                                   -----------------------

Sales                                                                           

Service revenue                                       $20,400,823   $ 7,746,651 
Reimbursed expenses                                    14,209,933     4,528,032 
                                                     -------------  ------------
     Total sales                                      34,610,756    12,274,683
                                                     -------------  ------------

Cost of services (exclusive of depreciation                                     
and amortization shown below)                                                 

 Reimbursed expenses                                  16,260,146     4,527,963
 Professional services                                   869,494       598,506
 Salaries and employee benefits                        8,765,176     4,713,646
                                                     -------------  ------------
     Total cost of services                           25,894,816     9,840,115
                                                     -------------  ------------
Gross profit                                            8,715,940     2,434,568 
                                                     -------------  ------------
General and administrative expenses                                             
 Vehicle expense                                         938,124       474,958
 Marketing, promotion, and communication                 794,148       268,435
 Office expense                                          503,060       208,602
 Insurance                                               410,501       212,342
 Depreciation and amortization                           390,121       241,775
 Professional fees                                       340,392        16,464
 Specialty equipment                                     318,850       111,067
 Other                                                   303,534        19,893
 Aviation expense                                        143,843             -
 Computer software and licenses                          138,385        88,057
 Training                                                 36,848        10,112
                                                     -------------  ------------
     Total general and administrative expenses         4,317,806     1,651,705
                                                     -------------  ------------
Income from operations                                  4,398,134       782,863 
                                                     -------------  ------------
Other income (expense)                                                          
  Interest expense                                        (59,782)      (42,046)
 Interest income                                         177,233           782
  Loss on disposal of assets                                    -       (22,970)
                                                     -------------  ------------
      Total other income (expense)                        117,451       (64,234)
                                                     -------------  ------------
Net income                                           $  4,515,585   $   718,629 
                                                     =============  ============

See notes to financial statements.

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Statement of Changes in Stockholders' Equity
For the Years Ended December 31, 2006 and 2005

                                                        [Enlarge/Download Table]
                                                                                          
                                                      Additional                 Total    
                                 Common Stock          Paid-in    Retained   Stockholders'
                              Shares        Amount     Capital    Earnings     Equity     

Balance - December 31, 2004     1,000     $      -   $ 257,443   $  541,980    $ 799,423  

Net income                          -            -           -      718,629      718,629  
                              -------     --------   ---------   ----------    ---------  

Balance - December 31, 2005     1,000            -     257,443    1,260,609    1,518,052  

Distributions to stockholders       -            -           -     (688,872)    (688,872) 

Net income                          -            -           -    4,515,585    4,515,585  
                              -------     --------   ---------   ----------    ---------  
Balance - December 31,                                                                    
  2006                          1,000     $      -  $  257,443   $5,087,322  $ 5,344,765  
                              =======     ========  ==========   ==========  ===========  


See notes to financial statements.

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Statements of Cash Flows

                                               For the Years Ended
                                              December 31,
                                                2006                2005
                                               ----------         ----------
Cash flows from operating activities                                            
Net income                                     $ 4,515,585        $  718,629
                                               -----------        ----------
Adjustments to reconcile net income                                         
to net cash provided by operating                                         
activities                                                                
 Depreciation and amortization                     390,121           241,775
 Loss on disposal of assets                              -            22,970
Changes in assets and liabilities                                         
    Accounts receivable - trade                  (8,465,446)       (1,434,134)
   Prepaid expenses                               (137,345)                -
   Deposits                                        (27,422)                -
   Accounts payable - trade                      4,802,968           644,155
   Accounts payable - related party                 93,563                 -
   Accrued expenses                                227,241           286,165
   Deposit liability                             7,485,412                 -
                                               -----------        ----------
                                                  4,369,092          (239,069)
    Net cash provided by operating activities    8,884,677           479,560
                                               -----------        ----------

Cash flows from investing activities                                            
 Purchases of property, plant and equipment      (1,132,843)         (123,314)
Note receivable - related party                   (291,871)                -
                                                 -----------        ----------
     Net cash used in investing activities       (1,424,714)         (123,314)
                                                 -----------        ----------

Cash flows from financing activities                                            
Distributions to stockholders                     (688,872)                -
 Payments on capital leases                        (181,115)         (179,976)
Proceeds from line of credit                       500,000                 -
                                                 -----------        ----------
     Net cash used in financing activities         (369,987)         (179,976)
                                                 -----------        ----------

Net increase in cash                               7,089,976           176,270  

Cash and cash equivalents - beginning of year        279,320           103,050  
                                                  ----------        ----------

Cash and cash equivalents  - end of year         $ 7,369,296         $ 279,320  
                                               ===========         =========

Supplemental disclosure of cash flow information:                               

     Cash paid for interest for the years ended December 31, 2006 and 2005 was
$59,782 and $42,046, respectively.                                  

Supplemental disclosure of non-cash activity:                                   

    The Company entered into capital lease transactions during 2006 and 2005
in the amount of $1,065,479 and $164,760, respectively .            

See notes to financial statements.

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 Notes to Financial Statements

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

Pearl Development Company (the Company) provides value added engineering,       
construction and field consulting services to the natural gas production,       
gathering, processing, and transportation industry. The Company also supports   
the production, refinery, petrochemical, and pipeline industries. The Company's 
expertise involves providing high level, conceptual engineering, construction   
and field consulting services that improve the profitability of energy industry 
companies and to provide support and insight to implement projects in a timely  
and cost effective manner.                                                      

Cash and Cash Equivalents                                                       

The Company considers all highly liquid instruments purchased with an original  
maturity of 3 months or less to be cash equivalents. The Company continually    
monitors its positions with, and the credit quality of, the financial           
institutions it invests with. As of the balance sheet date, and periodically    
throughout the year, the Company has maintained balances in various operating   
accounts in excess of federally insured limits.                                 

Concentrations of Credit Risk                                                   

The Company grants credit in the normal course of business to customers. The    
Company periodically performs credit analysis and monitors the financial        
condition of its customers to reduce credit risk.                               

The Company records trade accounts receivable in the normal course of business  
related to the sale of services or for reimbursement of expenses. The Company   
evaluates the collectibility of its accounts receivable periodically and has    
determined that no allowance for doubtful accounts is necessary based on a      
history of successful collections of amounts due. As such, no allowance for     
doubtful accounts has been recorded in the accompanying financial statements.   

During the years ended December 31, 2006 and 2005, 2 and 4 customers accounted  
for 78% and 82% of total revenues, respectively. At December 31, 2006 and       
December 31, 2005, the same customers accounted for 46% and 74% of total        
accounts receivable, respectively.                                              

Prepaid Expenses                                                                

Prepaid expenses consist primarily of software maintenance, rent, deposits and  
other expenses paid in advance                                                  

Property and Equipment                                                          

Property and equipment is stated at cost. Equipment under capital leases is     
valued at the lower of fair market value or net present value of the minimum    
lease payments at inception of the lease. Depreciation and amortization is      
provided utilizing the straight-line method over the estimated useful lives for 
owned assets, ranging from 3 to 10 years, and the related lease terms for       
leasehold improvements and equipment under capital leases.                      

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 Notes to Financial Statements

Note 1 - Description of Business and Summary of Significant  Accounting Policies
(continued)                                                   

Deposit Liability                                                               

The deposit liability represents advance payments for procurement of materials  
for a customer. During 2006, the Company entered into a contractual relationship
with a customer to procure engineered materials for a gas plant project. The    
customer provides funds in a lump sum to the Company to procure the materials   
for use in the project. The Company recognizes the related cash and a liability 
in the financial statements for future materials to be purchased as agent for   
the customer. Any excess funds received shall be refunded to the customer at the
end of the contract.                                                            

Revenue Recognition                                                             

The Company recognizes revenue from four distinct revenue streams. Service      
revenue is received from certain contractual relationships under time and       
materials type contracts, for which revenue is recognized monthly in the period 
in which the related time is incurred and as expenses are recognized. Agent fees
revenue is recognized in the period in which related materials are purchased and
customers are simultaneously invoiced for reimbursement. Revenues from lump-sum 
turn-key contracts is recognized upon achievement of contract milestones, based 
on contracts. Interest income is generated from certain customer prepayments for
materials to be procured, received, and paid for on behalf of the customer and  
is recognized monthly.                                                          

Advertising Costs                                                               

The Company expenses advertising costs as incurred. Advertising expense for the 
years ended December 31, 2006 and 2005 was $65,508 and $7,908, respectively.    

Income Taxes                                                                    

The Company has elected their tax status in accordance with Subchapter S (S     
Corporation) of the Internal Revenue Code, as a limited liability corporation   
(LLC). As these types of entities are not taxpaying entities for federal or     
state income tax purposes, no income tax expense or income tax benefit has been 
recorded in these financial statements. Income or losses are reflected in the   
stockholders' individual income tax returns.                                    

Use of Estimates                                                                

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

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 Notes to Financial Statements

Note 2 - Notes Receivable - Related Party                                       

During 2006, the Company granted a note receivable in the amount of $290,000 to 
Pearl Aviation, an affiliated company, to fund the down payment on an airplane. 
The note receivable accrues interest at 7.5% per annum, and both principal and  
interest are due and payable on demand. As of December 31, 2006, the Company was
owed $291,871 in principal and interest on the note.                            

Note 3 - Property and Equipment                                                 

Property and equipment, including assets under capital leases (Note 6), consist 
of the following:                                                               

                                                  December 31,
                                                  2006          2005
                                                  -----          -----

Vehicles                                         $1,954,029     $ 565,487 
Software                                            453,649       263,326 
Computer equipment                                  445,642       352,017 
Office equipment                                    327,939       184,684 
Equipment                                           323,978         7,071 
Leasehold improvements                              142,518        76,848 
                                                 ---------     ---------
                                                 3,647,755     1,449,433
Less accumulated depreciation                      (978,075)     (587,954)
                                                 ---------     ---------
                                                $2,669,680    $  861,479
                                                ==========    ==========

Note 4 - Accrued Expenses                                                       

Accrued expenses consist of the following:                                      

                                                    December 31,
                                                  2006          2005
                                                  -----          -----

Accrued vacation                                  $ 227,536     $  93,689 
Accrued compensation                                157,783       168,982 
Accrued employee benefits                            93,110        73,106 
Accrued retirement plan                              92,888        27,973 
Accrued sales taxes                                  92,335         8,616 
Accrued payroll taxes                                23,796        91,326 
Accrued expenses                                     15,358        11,873 
                                                 ---------     ---------
                                                 $ 702,806     $ 475,565
                                                 =========     =========

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 Notes to Financial Statements

Note 5 - Line-of-Credit                                                         

                                                        December 31,
                                                        2006          2005
                                                       -----------------------
$3,000,000  line-of-credit  payable  to  a  bank,  due                          
December   2007.   Interest   is  at  7.75%   payable                         
monthly.  The line contains  affirmative and negative                         
covenants.  It is  Collateralized  by all  assets  of                         
the  Company   and   guaranteed   by  the   Company's                         
president.                                             $500,000        $     -
                                                       ========        =======

Note 6 - Capital Leases                                                         

The Company has acquired assets under the provisions of long-term leases. For   
financial reporting purposes, minimum lease payments relating to the assets have
been capitalized. The leases expire between March 1, 2007 and December 15, 2010.
Amortization of the leased property is included in depreciation expense.        

The assets under capital lease that are included in property and equipment (Note
3) have cost and accumulated amortization as follows:                           

                                                      December 31,
                                                      2006          2005
                                                     -----------------------
 Vehicles - cost                                   $ 1,954,029     $ 565,487
  Less accumulated amortization                        (392,366)     (149,413)
                                                    -----------     ----------
                                                    $ 1,561,663     $  416,074
                                                    ===========     ==========

Maturities of capital lease obligations are as follows:                         

Year Ending December 31,                                                  
2007                                         $     558,887
2008                                               538,100
2009                                               277,856
2010                                                16,855
                                             -------------
Total minimum lease payments                     1,391,698
 Amount representing interest                      (131,529)
                                             -------------
Present value of net minimum lease payments      1,260,169
 Less current portion                              (476,976)
                                             -------------

Long-term capital lease obligation           $     783,193
                                             =============

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 Notes to Financial Statements

Note 7 - Related Party Transactions                                             

The Company has a note receivable from Pearl Aviation, an affiliated company,   
related to a loan for the down payment and related closing costs for the        
purchase of a Cessna Jet in the amount of $290,000 plus accrued interest of     
$1,871 for a balance of $291,871 at December 31, 2006.                          

The Company owes $93,563 to Pearl Development - Australia, an affiliated        
company, related to reimbursable expenses.                                      

The Company is named guarantor of the aircraft loan between Pearl Aviation and  
Cessna Financial in the approximate amount of $4,800,000.                       

Note 8 - Commitments and Contingencies                                          

Operating Leases                                                                

The Company leases facilities, equipment and vehicles under non-cancelable      
operating leases. Rent expense for these leases was:                            

Year Ended December 31,                                                   

2006                                         $     330,303
2005                                         $     189,005

Future minimum lease payments under these leases are approximately as follows:  

Year Ending December 31,                                                  
2007                                         $     391,555
2008                                               390,897
2009                                               394,138
2010                                               299,390
2011                                               172,860
                                             -------------
                                             $   1,648,840

Litigation                                                                      

In the normal course of business, the Company is party to litigation from time  
to time. The Company maintains insurance to cover certain actions and believes  
that resolution of such litigation will not have a material adverse effect on   
the Company. As of December 31, 2006, management is not aware of any pending or 
threatened litigation.                                                          

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Note 9 - Subsequent Events                                                      

As of January 1, 2007, the Company implemented a reorganization plan to better  
manage the risks and cross-liabilities of the Company's various business units  
and to allow each business unit to focus on its core business and operations. As
part of the reorganization plan, the Company formally changed its name to "Pearl
Investment Company," and formed the following Colorado entities which are owned 
by the Company or are under common ownership or control with the Company: "Pearl
Development Company, LLC"; "Pearl Field Services, LLC"; "Pearl Process Systems, 
LLC"; "Pearl Group Management, LLC"; and "Pearl Construction Company, LLC."     

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PEARL INVESTMENT COMPANY    

           Unaudited Condensed Consolidated Financial Statements
September 30, 2007

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PEARL INVESTMENT COMPANY

 Table of Contents

                                                                    Page

Financial Statements                                                            

Condensed Consolidated Balance Sheet (Unaudited)......................F-49

Condensed Consolidated Statements of Income (Unaudited)...............F-50

Condensed Consolidated Statements of Cash Flows (Unaudited)...........F-51

Notes to Unaudited Condensed Consolidated Financial Statements...........F-52   

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PEARL INVESTMENT COMPANY

Condensed Consolidated Balance Sheet
 (unaudited)

                                       September 30,
                                      2007
Assets                                                                          
Current assets                                                                  
Cash and cash equivalents                             $       -             

Accounts receivable - trade                          13,477,185             
Accounts receibable - related party                      80,000             
Prepaid expenses                                        267,297             
                                        ----------
Total current assets                             13,824,482         
                                         -----------

Non-current assets                                                              
Property and equipment, net                           9,940,691             
Intangible assets                                     1,000,000             
Deposits                                                184,312             
                                         ---------
Total non-current assets                         11,125,003         
                                         -----------
Total assets                                          $24,949,485               
                                        ============

Liabilities and Stockholders' Equity                                            

Current liabilities                                                             
Accounts payable - trade                            $ 4,003,767             
Bank overdrafts                                         889,993             
Accrued expenses                                      1,238,391             
Line of credit                                        1,000,000             
Current portion of capital lease obligations          1,576,091             
                                        ----------
Total current liabilities                         8,708,242         
                                        ----------
Non-current liabilities                                                       

Capital lease obligations, less current portion       5,572,732             
Deposit liability                                    3,034,419            
                                        ----------
Total non-current liabilities                     8,607,151         
                                        ----------
Total liabilities                                17,315,393         
                                        ----------

Stockholders' equity                                                            
Common stock, no par value; 1,000 shares authorized, issued                 
and outstanding                                               -             
Additional paid-in-capital                              257,463             
Retained earnings                                     7,376,629             
                                         ---------
Total stockholders' equity                        7,634,092         
                                        ----------

Total liabilities and stockholders' equity             24,949,485               
                                        ==========

See notes to unaudited financial statements.

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PEARL INVESTMENT COMPANY
Condensed Consolidated Statements of Income 
 (unaudited)

                                                       Nine Months Ended
                                                       September 30,
                                                      2007          2006
                                                 -----------------------
Sales                                                                           
 Revenue                                            $37,575,940    $23,200,162
                                                    -----------    -----------
     Total sales                                     37,575,940     23,200,162
                                                    -----------    -----------
Cost of services                                                                
 Reimbursed expenses                                 15,239,550     10,595,767
 Professional services                                  643,513        760,689
 Salaries and employee benefits                      12,784,682      5,531,756
                                                    -----------     ----------
     Total cost of services                          28,667,745     16,888,212
                                                     -----------     -----------
Gross profit                                           8,908,195      6,311,949 
                                                     -----------     -----------
General and administrative expenses                                             
 Vehicle expense                                        738,336        669,809
 Marketing, promotion, and communication                945,258        396,645
 Office expense                                         896,565        340,132
 Insurance                                              578,541        313,748
 Depreciation and amortization                          886,697        212,500
 Professional fees                                      715,846         80,569
 Specialty equipment                                    189,900        156,647
 Other                                                  (20,052)        26,740
 Aviation expense                                       673,024              0
 Computer software and licenses                         189,074        113,994
 Training                                                95,437         23,881
                                                     -----------      ----------
     Total general and administrative expenses        5,888,626      2,334,665
                                                    -----------      ---------
Income from operations                                 3,019,569      3,977,285 
                                                     -----------      ----------
Other income (expense)                                                          
  Interest expense                                     (347,170)        (38,568)
 Interest income                                        193,712         75,896
 Other income                                             3,578              0
                                                    -----------      ---------
     Total other income (expense)                     (149,880)         37,328
                                                    -----------     ----------
Net income                                           $ 2,869,689     $4,014,613 
                                                    ===========     ==========

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PEARL INVESTMENT COMPANY

 Condensed Consolidated Statements of Cash Flows
 (unaudited)

                                                     Nine Months Ended
                                                     September 30,
                                                     -----------------
                                                     2007         2006
Cash flows from operating activities                                            
Net income                                           $2,869,689   $4,014,613
Adjustments to reconcile net income to net                                  
cash provided by (used in) operating                                        
activities                                                                      
  Depreciation and amortization                         886,697      212,500
Changes in assets and liabilities                                       
     Accounts receivable - trade                      (2,896,672)  (3,103,282)
    Accounts receivable - related party                 (80,000)           -
     Prepaid expenses                                   (129,952)     (95,833)
     Deposits                                           (156,043)     (19,887)
    Accounts payable - trade                         (1,780,055)   1,547,516
    Accounts payable - related party                          -            -
    Accrued expenses                                    535,585        3,104
    Deposit liability                                (4,450,993)   6,504,617
                                                    -----------    ---------
Net cash provided by (used in)                                          
    operating activities                             (5,201,744)   9,063,348

Cash flows from investing activities                                            
 Purchases of property and equipment                  (1,558,041)    (777,862)
Intangible assets - patent technology                (1,000,000)           0
Collections on notes receivable - related party         291,871            0
                                                       ---------     ---------
     Net cash used in investing activities            (2,266,170)    (777,862)

Cash flows from financing activities                                            
 Net proceeds from line of credit                        500,000             0
  Payments on capital leases                             (711,013)     (135,836)
 Net increase in bank overdrafts                         889,993             -
  Distributions to stockholders                          (580,362)     (196,923)
                                                      ----------     ---------
      Net cash provided by (used in) financing             98,618      (332,759)
        activities                                    ----------     ---------

Net increase (decrease) in cash and cash                                        
equivalents                                            (7,369,296)    7,952,727 
Cash and cash equivalents - beginning of period         7,369,296       279,320 
                                                      ----------     ---------
Cash and cash equivalents - end of period              $        -    $8,232,047 
                                                      ==========    ==========

Supplemental disclosure of cash flow information:                               

   Cash paid for interest for the nine months ended September 30, 2007 and
2006 was $347,170 and $38,568, respectively.                        

Supplemental disclosure of non-cash investing and financing activity:           

     The Company entered into capital lease transactions during the first nine
months of 2007 and 2006 in the approximate amount of $6,600,000 and 
$857,000 respectively.                                              

See notes to unaudited financial statements.

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PEARL INVESTMENT COMPANY

            Notes to Unaudited Condensed Consolidated Financial Statements

Note 1 - Summary of Significant Accounting Policies                             

Organization and Nature of Business                                             

Pearl Investment Company (the "Company"), formerly known as Pearl Development   
Company, provides value added engineering, construction and field consulting    
services to the natural gas production, gathering, processing, and              
transportation industry. The Company also supports the production, refinery,    
petrochemical, and pipeline industries. The Company's expertise involves        
providing high level, conceptual engineering, construction and field consulting 
services that improve the profitability of energy industry companies and to     
provide support and insight to implement projects in a timely and cost effective
manner.                                                                         

Basis of Presentation                                                           

The accompanying condensed consolidated financial statements of the Company     
included herein have been prepared by the Company's management, without audit,  
pursuant to the rules and regulations of the Securities and Exchange Commission 
(the "SEC") and, in the opinion of management, reflect all adjustments necessary
to present a fair statement of operations, financial position and cash flows.   
The Company's management believes that the disclosures are adequate and the     
information presented is not misleading, although certain information and       
footnote disclosures normally included in financial statements prepared in      
accordance with accounting principles generally accepted in the United States of
America have been condensed or omitted pursuant to such rules and regulations.  
The accompanying condensed consolidated financial statements should be read in  
conjunction with the financial statements and notes of Pearl Development Company
for the year ended December 31, 2006.                                           

The accompanying condensed consolidated financial statements include the        
accounts of our wholly-owned subsidiaries: Pearl Development Company, LLC, Pearl
Field Services, LLC, Pearl Group Management, LLC, Pearl Process Systems, LLC,   
Pearl Construction Company, LLC and Pearl Aviation, LLC. All significant        
intercompany balances and transactions have been eliminated in consolidation.   

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Fair Value of Financial Instruments                                             

In accordance with the reporting requirements of SFAS No. 107, "Disclosures     
About Fair Value of Financial Instruments", the Company calculates the fair     
value of its assets and liabilities which qualify as financial instruments under
this statement and includes this additional information in the notes to the     
financial statements when the fair value is different than the carrying value of
those financial instruments. The estimated fair value of cash, accounts         
receivable and accounts payable approximate their carrying amounts due to the   
short maturity of these instruments. The carrying value of the line of credit   
and short and long-term capital lease obligations also approximates fair value  
since their terms are similar to those in the lending market for comparable debt
and capital leases with comparable risks. None of these instruments are held for
trading purposes.                                                               

Recent Accounting Pronouncements                                                

In September 2006, the Financial Accounting Standards Board ("FASB") published  
Statement of Financial Accounting Standards No.157, "Fair Value Measurements"   
(FAS 157). FAS 157defines fair value, establishes a framework for measuring fair
value in generally accepted accounting principles and expands disclosures about 
fair value measurements. FAS 157 applies under other accounting pronouncements  
that require or permit fair value measurements and accordingly, does not require
any new fair value measurements. FAS 157 is effective for fiscal years beginning
after November 15, 2007. The Company does not believe the adoption of FAS 157   
will have a material impact on its financial statements.                        

In June 2006, the FASB issued FASB Interpretation No. 48 ("FIN 48"), "Accounting
for Uncertainty in Income Taxes - an interpretation of FASB Statement No. 109"  
("FAS 109"), which clarifies the accounting for uncertainty in income taxes     
recognized in an enterprise's financial statements in accordance with FAS No.   
109,"Accounting for Income Taxes." FIN 48 prescribes a recognition threshold and
measurement attribute for the financial statement recognition and measurement of
a tax position taken or expected to be taken in a tax return. This              
Interpretation also provides guidance on de-recognition, classification,        
interest and penalties, accounting in interim periods, disclosure, and          
transition. This Interpretation is effective for fiscal years beginning after   
December 15, 2006 so it was effective for the Company in first quarter of fiscal
year 2007, which began on January 1, 2007. The adoption of FIN 48 did not have a
material impact on the Company's financial statements.                          

In  September  2006,  the  SEC  released  Staff  Accounting  Bulletin  No.  108,
"Considering   the  Effects  of  Prior  Year   Misstatements   When  Quantifying
Misstatements in Current Year Financial  Statement" ("SAB 108"),  which provides
guidance on how companies should quantify financial statement misstatements. SAB
108 requires that the effect of misstatements that were not corrected at the end
of the prior year be considered in quantifying misstatements in the current-year
financial statements.  Two techniques were identified as being used by companies
in practice to accumulate and quantify  misstatements -- the "rollover" approach
and the "iron curtain" approach. The rollover approach quantifies a misstatement
based on the amount of the misstatement  originating in the current-year  income
statement.  Thus, this approach ignores the effects of correcting the portion of
the current-year  balance sheet misstatement that originated in prior years. The
iron  curtain  approach  quantifies  a  misstatement  based  on the  effects  of
correcting the cumulative  misstatement existing in the balance sheet at the end
of the current year,  irrespective of the misstatement's year(s) of origination.
SAB 108 permits  companies to adjust for the cumulative  effect of misstatements

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relating to prior years in the carrying  amount of assets and  liabilities as of
the beginning of the current fiscal year,  with an offsetting  adjustment to the
opening balance of retained earnings in the year of adoption.                   

In February 2007, the Financial Accounting Standards Board (the "FASB") issued  
FASB Statement No. 159, The Fair Value Option for Financial Assets and Financial
Liabilities -- Including an Amendment of FASB Statement No. 115 ("SFAS 159").   
This standard permits an entity to choose to measure many financial instruments 
and certain other items at fair value. Most of the provisions in SFAS 159 are   
elective; however, the amendment to FASB Statement No. 115, Accounting for      
Certain Investments in Debt and Equity Securities, applies to all entities with 
available-for-sale and trading securities. The FASB's stated objective in       
issuing this standard is as follows: "to improve financial reporting by         
providing entities with the opportunity to mitigate volatility in reported      
earnings caused by measuring related assets and liabilities differently without 
having to apply complex hedge accounting provisions."                           

The fair value option established by SFAS 159 permits all entities to choose to 
measure eligible items at fair value at specified election dates. A business    
entity will report unrealized gains and losses on items for which the fair value
option has been elected in earnings (or another performance indicator if the    
business entity does not report earnings) at each subsequent reporting date. The
fair value option: (i) may be applied instrument by instrument, with a few      
exceptions, such as investments otherwise accounted for by the equity method;   
(ii) is irrevocable (unless a new election date occurs); and (iii) is applied   
only to instruments and not to portions of instruments.                         

SFAS 159 is effective as of the beginning of an entity's first fiscal year that 
begins after November 15, 2007. Early adoption is permitted as of the beginning 
of the previous fiscal year provided that the entity makes that choice in the   
first 120 days of that fiscal year and also elects to apply the provisions of   
FASB Statement No. 157, Fair Value Measurements ("SFAS 157"). The Company's     
management is currently assessing the impact of SFAS 159 on its financial       
statements.                                                                     

Note 2 - Capital Leases                                                         

The Company has acquired assets under the provisions of long-term leases. For   
financial reporting purposes, minimum lease payments relating to the assets have
been capitalized. The leases expire between March 1, 2007 and November 27, 2018.
Amortization of the leased property is included in depreciation expense.        

The assets under capital lease that are included in property and equipment (Note
3) have cost and accumulated amortization as follows:                           

                                                         September 30,
                                                        2007          2006
                                                       -----------------------
  Vehicles - cost                                     $2,447,688    $1,613,665
   Less accumulated amortization                         (267,429)     (331,628)
                                                       -----------------------
                                                      $2,180,259    $1,282,037

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Maturities of capital lease obligations are as follows:                         

Twelve months ending September 30,                                        
2008                                         $   1,890,402
2009                                             1,572,011
2010                                               960,471
2011                                               651,407
       Thereafter                                4,198,501
                                             -------------
Total minimum lease payments                     9,272,792
 Amount representing interest                    (2,123,969)
                                             -------------
Present value of net minimum lease payments      7,148,823
 Less current portion                            (1,576,091)
                                             -------------
Long-term capital lease obligation              $5,572,732
                                                ==========

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Note 3 - Subsequent Events                                                      

In December 2007, the Company was acquired by Epic Energy Resources, Inc. for   
1,486,240 shares of its restricted common stock and $18,720,000 in cash. The    
1,486,240 shares are restricted securities as that term is defined in Rule 144  
of the Securities and Exchange Commission. Up to 3,313,760 additional shares may
be issued in the future to key employees and officers of Pearl Investment       
Company subject to certain vesting requirements.                                

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 EPIC ENERGY RESOURCES, INC.

           Unaudited Pro Forma Condensed Combined Financial Statements
September 30, 2007 and December 31, 2006

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 Epic Energy Resources, Inc.
Unaudited Pro forma Condensed Combined Balance Sheet
September 30, 2007

                                                        [Enlarge/Download Table]
                                                                                                           
                                                                                             Pro Forma     
                                         Epic            Pearl                               Epic/Pearl    
                                      Consolidated   Consolidated        Pro Forma             as of       
                                          As of September 30,            Adjustments        September 30,  
                                        2007             2007          Dr           Cr          2007       
                                      -----------     ----------       ---          ---     -------------- 
                  ASSETS                                                                                   
CURRENT ASSETS                                                                                             

Cash and cash equivalents (1), (2)    $   700,909              -     26,675,003   18,720,000   $ 8,655,912 

Accounts receivable:                                                                                       
  Billed, net of allowance of $0          791,953     13,477,185                                14,296,138 
  Unbilled, at estimated net                                                                               
   realizable value                       330,597              -                                   330,597 

AR from affiliates                          5,000         80,000                                    85,000 
Prepaid expenses and other                 16,250        267,297                                   283,547 
                                     -------------  -------------  ------------- ------------- ------------
TOTAL CURRENT ASSETS                    1,844,709     13,824,482     26,675,003    18,720,000   23,624,193 
Oil and gas properties (full-cost                                                                          
 method), net                                                                                              

   Proved                               6,075,984              -                                 6,075,984 
   Unproved                                     -              -                                         - 
Other mineral reserves                    783,474              -                                   783,474 
Property and equipment, net                27,473      9,940,691                                 9,968,165 
Investment in joint venture                22,700              -                                    22,700 

Other assets (3)                          304,902      1,184,312      1,719,000                  3,208,214 
Goodwill (1)                            9,967,252              -     15,767,564                 25,734,816 
                                     -------------  -------------  ------------- ------------- ------------

TOTAL ASSETS                         $ 19,026,494   $ 24,949,485   $ 44,161,567  $ 18,720,000  $69,417,546 
                                     =============  =============  ============= ============= ============

LIABILITIES AND STOCKHOLDERS' EQUITY                                                                       
CURRENT LIABILITIES                                                                                        
Accounts payable                     $    207,819   $  4,003,767                                 4,211,586 
Bank overdrafts                                 -        889,993                                   889,993 
Accrued liabilities (5)                   375,936      1,238,391                      567,860    2,182,187 
Current portion of long term debt         849,505      1,576,091                                 2,425,596 
Line of credit                            362,000      1,000,000                                 1,362,000 
                                     -------------  -------------  ------------- ------------- ------------
TOTAL CURRENT LIABILITIES               1,795,261      8,708,242              -       567,860   11,071,363 
Asset retirement obligations              151,555              -                                   151,555 
Long-term debt (3)                      1,830,658      5,572,732                   20,250,000   27,653,390 
Other long-term liabilities                     -      3,034,419                                 3,034,419 
Debt discount (4)                               -              -      7,177,458                 (7,177,458)
                                     -------------  -------------  ------------- ------------- ------------

        TOTAL LIABILITIES               3,777,474     17,315,393      7,177,458    20,250,000   34,733,269 

STOCKHOLDERS' EQUITY                                                                                       

  Common stock (1), (2)                21,318,341              -              -    12,825,659   34,144,000 
  Member equity (1)                             -        257,463        257,463                          - 
  Additional paid-in capital (1), (4)     331,412              -              -    13,085,380   13,416,792 

  Accumulated (earnings) deficit                                                                           
   (1), (4), (5)                       (6,400,733)     7,376,629     13,314,298      (538,113) (12,876,515)
                                     -------------  -------------  ------------- ------------- ------------

TOTAL STOCKHOLDERS EQUITY              15,249,020      7,634,092     13,571,761    25,372,926   34,684,277 
                                     -------------  -------------  ------------- ------------- ------------

TOTAL LIABILITIES AND                                                                                      

STOCKHOLDERS EQUITY                  $ 19,026,494   $ 24,949,485   $ 20,749,219  $ 46,190,786  $69,417,546 
                                     =============  =============  ============= ============= ============


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 Epic Energy Resources, Inc.
Unaudited Pro forma Condensed Combined Statement of Operations
Nine Months Ended September 30, 2007

                                                        [Enlarge/Download Table]
                                                                                                  
                                    Pro Forma                                                     
                                  Epic/Carnrite                                    Pro Forma      
                                    Combined       Pearl for                  Epic/Carnrite/Pearl 
                                   nine months     the nine                       for the nine    
                                      ended       months ended                    months ended    
                                  September 30,   September 30,    Pro Forma      September 30,   
                                      2007            2007        Adjustments          2007       
                                  -------------   -------------   ----------- --------------------
REVENUES                                                                                          
  Consulting fees                 $  2,888,535    $ 37,575,940    $        -       $ 40,464,475   
  Oil and gas revenue                    9,673               -             -              9,673   
  Other                                      -               -                                -   
                                  -------------   -------------   ----------- ------------------- 
      TOTAL REVENUES                 2,898,208      37,575,940             -         40,474,148   
                                  -------------   -------------   ----------- ------------------- 
OPERATING EXPENSES                                                                                
    Compensation and benefits       12,784,682         416,634             -         13,201,316   
    Reimbursed expenses             15,239,550               -             -         15,239,550   
    General and administrative (5)   1,348,607       3,389,518       567,860          5,305,985   
    Lease operating expenses           202,783               -             -            202,783   
    Professional and subcontracted                                                                
     services                          801,894       1,359,359             -          2,161,253   
    Occupancy, communication and                                                                  
     other                             204,355         896,565             -          1,100,920   
    Depreciation and amortization        1,089         886,697             -            887,786   
    Accretion expense                   10,738               -             -             10,738   
   Impairment of oil and gas                                                                      
    properties                       1,338,527               -             -          1,338,527   
                                  -------------   -------------   ----------- ------------------- 
      OPERATING EXPENSES             4,324,627      34,556,371       567,680         39,448,858   
                                  -------------   -------------   ----------- ------------------- 
INCOME (LOSS) FROM OPERATIONS       (1,426,418)      3,019,569      (567,680)         1,025,291   

OTHER INCOME (EXPENSE) (4), (6)       (288,571)       (149,880)   (4,295,802)        (4,734,253)  
                                  -------------   -------------   ----------- ------------------- 
NET INCOME, BEFORE TAXES            (1,714,989)      2,869,689    (4,863,662)        (3,708,962)  

TAXES                                        -               -             -                  -   
                                  -------------   -------------   ----------- ------------------- 
NET INCOME (LOSS)                 $ (1,714,989)   $  2,869,689   $(4,863,662)     $  (3,708,962)  
                                  ==============  =============  ============ =================== 
LOSS PER COMMON SHARE                                                             $       (0.08)  
                                                                              =================== 
WEIGHTED AVERAGE COMMON SHARES                                                                    
OUTSTANDING                                                                          48,742,691   
                                                                              =================== 

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 Epic Energy Resources, Inc.
Unaudited Pro forma Condensed Combined Statement of Operations
Year Ended December 31, 2006

                                                        [Enlarge/Download Table]
                                                                                           
                                                                              Pro Forma    
                                  Epic for       Pearl for                    Epic/Pearl   
                                  the year       the year                    for the year  
                                    ended         ended                         ended      
                                 December 31,   December 31,    Pro Forma     December 31, 
                                    2006           2006        Adjustments        2006     
                                 ------------   ------------  -------------  --------------

REVENUES                                                                                   
  Consulting fees                $    33,190    $34,610,756    $         -    $34,643,946  
  Oil and gas revenue                 73,073              -              -         73,073  
  Other revenue                            -                                            -  
                                -------------  -------------   ------------   ------------ 
      TOTAL REVENUES                 106,263     34,610,756              -     34,717,019  
                                -------------  -------------   ------------   ------------ 
OPERATING EXPENSES                                                                         
  Compensation and benefits                -      8,765,176              -      8,765,176  
    Reimbursed expenses                    -     16,260,146              -     16,260,146  
    General and administrative       926,301      3,424,625              -      4,350,926  
    Lease operating expenses          59,460              -              -         59,460  
    Professional and                                                                       
     subcontracted services                -        869,494              -        869,494  
    Occupancy, communication                                                               
     and other                             -        503,060              -        503,060  
    Depreciation and amortization     30,814        390,121              -        420,935  
    Accretion expense                    725              -              -            725  
    Impairment of oil and gas                                                              
     properties                    3,062,265              -              -      3,062,265  
                                -------------  -------------   ------------   ------------ 
      OPERATING EXPENSES           4,079,565     30,212,622              -     34,292,187  
                                -------------  -------------   ------------   ------------ 
INCOME (LOSS) FROM OPERATIONS     (3,973,302)     4,398,134              -        424,832  

OTHER INCOME (EXPENSE) (4), (6)        3,088        117,451     (5,155,870)    (5,035,331) 
                                -------------  -------------   ------------   ------------ 
NET INCOME (LOSS), BEFORE TAXES   (3,970,214)     4,515,585     (5,155,870)    (4,610,499) 

TAXES                                      -              -              -              -  
                                -------------  -------------   ------------   ------------ 
NET INCOME (LOSS)               $ (3,970,214)  $  4,515,585    $(5,155,870)   $(4,610,499) 
                                =============  =============   ============   ============ 
LOSS PER COMMON SHARE                                                         $     (0.09) 
                                                                              ============ 
WEIGHTED AVERAGE COMMON                                                                    
     SHARES OUTSTANDING                                                        48,852,566  
                                                                              ============ 

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 EXPLANATORY NOTES

Pro forma adjustments                                                           

1.    The adjustment to the balance sheet for the acquisition is to recognize   
 the consideration for the acquisition, being 1,486,240 shares of Epic
     common stock valued at the closing price on December 5, 2007 of $3.15 per
  share and $18,720,000 in cash. The excess purchase price paid over net
    book value is recorded as Goodwill. The equity of Pearl is eliminated as
is standard in consolidation of acquired entities.                  

2.    The adjustment to the balance sheet for the issuance of 5,429,355 shares  
of common stock in the equity offering, raising gross proceeds of   
$8,144,003.                                                         

3.    The adjustment to the balance sheet for the issuance of $20,250,000 of 10%
notes.                                                              

4.    The adjustment to the balance sheet to reflect the derivative liability   
   associated with the issuance of in-the-money warrants in the equity and
note offerings per 2. and 3. above.                                 

5.    An adjustments was made for potential liquidated damages that must be paid
in cash if the registration statement to be utilized to register the
    shares is not declared effective within 120 days after the offering. The
     penalty is 2% of the gross proceeds for both the debt and equity offering
    and amounts to $567,860 for each 30 days that the registration statement
is not declared effective.                                          

6.    The adjustment to the income statement for the interest expense accrued   
on the $20,250,000 notes issued in conjunction with the Pearl       
acquisition.                                                        

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 THE CARNRITE GROUP, LLC

FINANCIAL STATEMENTS AS OF

 JUNE 30, 2007

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 Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of                                   
The Carnrite Group L.L.C.                                                       

We have audited the accompanying balance sheet of The Carnrite Group L.L.C. (the
"Company") as of June 30, 2007, and the related statements of income, members'  
equity and cash flows for the period from March 28, 2007 (inception) through    
June 30, 2007. 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 audit.                                        

We conducted our audit in accordance with the standards of the Public Company   
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit 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 made by management, as well as evaluating the overall     
financial statement presentation. We believe that our audit provides 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 The Carnrite Group L.L.C. as of
June 30, 2007, and the results of its operations and cash flows for the period  
from March 28, 2007 (inception) through June 30, 2007, in conformity with       
accounting principles generally accepted in the United States of America.       

/s/ Malone & Bailey, PC                                                         
Malone & Bailey, PC                                                             
www.malone-bailey.com