Knight Energy - Indicate by check mark whether the small business...

Knight Energy - Recent Material Event

Item 405 of Regulation S-B contained in this form, and no disclosure will be contained, to the best of small business issuer’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB. x

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

State Issuer’s revenues for its most recent fiscal year. $1,153,160

As of March 15, 2008, the aggregate market value of our common stock, $0.0001 par value, held by non-affiliates was approximately $9,850,384, based on 9,752,855 shares outstanding at $1.01 per share, which was the last reported sales price of the Company’s common stock on the Pink Sheets for such date). (See definition of affiliate in Rule 12b-2 of the Exchange Act.)

As of March 15, 2008, there were 25,497,855 shares of our common stock issued and outstanding.

Transitional Small Business Disclosure Format (check one): Yes o No x

TABLE OF CONTENTS

		Page
PART I

Item 1.	Description of Business
Item 2.	Description of Property
Item 3	Legal Proceedings
Item 4.	Submission of Matters to a Vote of Security Holders

PART II

Item 5.	Market for Common Equity, and Related Stockholder Matters and Small Business Issuer Purchases of Equity Securities
Item 6.	Management’s Discussion and Analysis or Plan of Operation
Item 7.	Financial Statements
Item 8.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Item 8A. (T)	Controls and Procedures
Item 8B.	Other Information

PART III

Item 9.	Directors, Executive Officers, Promoters and Control Persons and Corporate Governance; Compliance with Section 16(a) of the Exchange Act
Item 10.	Executive Compensation
Item 11.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Item 12.	Certain Relationships and Related Transactions, and Director Independence
Item 13.	Exhibits
Item 14.	Principal Accountant Fees and Services

SIGNATURES

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

In addition to historical information, this Annual Report contains statements that plan for or anticipate the future, including without limitation statements under the captions “Description of Business,” “Risk Factors” and “Management’s Discussion and Analysis or Plan of Operation.” These forward-looking statements include statements about our future business plans and strategies, future actions, future performance, costs and expenses, interest rates, outcome of contingencies, financial condition, results of operations, liquidity, objectives of management, and other such matters, as well as certain projections and business trends, and most other statements that are not historical in nature, that are “forward-looking”.

Because we are a “penny stock”, you cannot rely on the Private Securities Litigation Reform Act of 1995. Forward-looking information may be included in this Annual Report or may be incorporated by reference from other documents we have filed with the Securities and Exchange Commission (the “SEC”). You can identify these forward-looking statements by the use of words such as “may,” “will,” “could,” “should,” “project,” “believe,” “anticipate,” “expect,” “plan,” “estimate,” “forecast,” “potential,” “intend,” “continue” and variations of these words or comparable words. Forward-looking statements do not guarantee future performance, and because forward-looking statements involve future risks and uncertainties, there are factors that could cause actual results to differ materially from those expressed or implied. These risks and uncertainties include, without limitation, those described under “RISK FACTORS” in Item 1 of this Annual Report and those detailed from time to time in our filings with the SEC.

We have based the forward-looking statements relating to our operations on management’s current expectations, estimates, and projections about us and the industry in which we operate. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that we cannot predict. In particular, we have based many of these forward-looking statements on assumptions about future events that may prove to be inaccurate. Because forward-looking statements involve future risks and uncertainties, there are factors that could cause actual results to differ materially from those anticipated by these forward-looking statements. For example, a few of the uncertainties that could affect the accuracy of forward-looking statements include:

Changes in general economic and business conditions affecting us;

Changes in the assumptions used in making forward-looking statements;

Legal or policy developments that diminish our appeal;

Changes in our business strategies;

Our limited operating history;

The degree and nature of our competition;

Our ability to employ and retain qualified employees; and

The other factors referenced in this Annual Report, including without limitation, under the captions “Description of Business,” “Risk Factors” and “Management’s Discussion and Analysis or Plan of Operation.”

These risks are not exhaustive. Other sections of this Annual Report include additional factors which could adversely impact our business and financial performance. Moreover, we operate in a competitive and changing environment. New risk factors emerge from time to time and it is not possible for our management to predict all risk factors, nor can we assess the impact of all factors on our business or to the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Given these risks and uncertainties, we caution you not to place undue reliance on forward-looking statements as a prediction of actual results. All forward-looking statements are made only as of the date of this Annual Report. Except for our ongoing obligation to disclose material information as required by federal securities laws, we do not intend to update you concerning any future revisions to any forward-looking statements to reflect events or circumstances occurring after the date of this Annual Report. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information or future events.

PART I

Item 1. Description of Business

The business of Knight Energy Corp. (“Knight”, “we”, “us”, “our”, “its”), is to acquire, develop, own, operate and otherwise be involved and invest in energy-related businesses, assets and investments, including, without limitation, the acquisition, exploration and development of natural gas and crude oil, the acquisition and operation of drilling rigs and/or gathering systems and/or pipelines for natural gas and/or crude oil, and other related businesses, assets and investments. The Company’s website is www.knightenergycorp.com.

History of Company Development

We were originally formed as a Nevada corporation on May 8, 1998 with the name "The Living Card Corporation." On June 14, 2000, we changed our name to Integrated Technology Group, which we refer to herein as ITG. From formation and until approximately July 2000, we engaged in the creation, development and marketing of unique, educational and low-cost greeting cards.

During 2000, ITG's management decided to exit the greeting card business. Subsequently, in July 2000 ITG acquired all of the issued and outstanding shares of Safe Tire Disposal Corp., a Delaware corporation whose subsidiaries were engaged in the tire recycling business in Texas and Oklahoma. We engaged in this business between July 2000 and early 2003, when we halted operations. In August 2003, we filed a Form 15 with the SEC suspending our reporting obligations, and we were inactive between August 2003 and February 2006.

On March 2, 2006, Knight Energy Corp., a Delaware corporation ("Knight Delaware") was formed. Knight Delaware's business plan is to acquire, develop, own, operate and otherwise be involved and invest in energy-related businesses, assets and investments, including, without limitation, the acquisition, exploration and development of natural gas and crude oil, the acquisition and operation of drilling rigs and/or gathering systems and/or pipelines for natural gas and/or crude oil, and other related businesses, assets and investments.

In June 2006, Knight Delaware and ITG consummated a stock exchange pursuant to which ITG issued shares of its common stock for al of the outstanding shares of Knight Delaware, and Knight Delaware became a wholly-owned subsidiary of ITG. After the stock exchange agreement was signed in June 2006, ITG changed its name to Knight Energy Corp., a Nevada corporation ("Knight Nevada"), and when this transaction closed, Knight Delaware became a wholly-owned subsidiary of Knight Nevada.

In April 2007, the Knight Nevada Board of Directors and a majority of the stockholders approved an amendment to the Knight Nevada Articles of Incorporation increasing the Company's authorized capital to a total of 550,000,000 shares of stock, consisting of 50,000,000 shares of series A preferred stock, $0.0001 par value per share, and 500,000,000 shares of common stock, $0.0001 par value per share.

On April 11, 2007 and April 12, 2007, respectively, the Board of Directors and the stockholders approved the reincorporation of the Company as a Maryland corporation ("Knight Maryland"), which was effective on April 30, 2007.

Our Strategy

Management believes that:

Natural gas is an environmentally friendly fuel that will be increasingly valued in the United States;

There are a number of natural gas and/or oil and development projects that we are pursuing which will require significant capitalization to complete, explore and develop;

We have the ability to assemble the technical and commercial and resources needed to pursue these potential projects; and

Our successful development of one or more large potential natural gas or oil projects will create substantial shareholder value.

The principal elements of our strategy to maximize shareholder value are:

Generate growth through drilling. We expect to generate long-term reserve and production growth predominantly through our drilling activities. We anticipate the substantial majority of our future capital expenditures will be directed toward the drilling of wells, although we expect to continue to acquire additional leasehold interests. Initially, we anticipate reserve growth will be our primary focus with a more balanced reserve and production growth profile as we continue to execute our growth strategy.

Manage costs by maximizing operational control. We seek to exert control over our exploration, exploitation and development activities. As the operator of our projects, we have greater control over the amount and timing of the expenditures associated with those activities. As we manage our growth, we are focused on reducing lease operating expenses and general and administrative costs, and finding and development costs on a per mcfe basis. As of December 31, 2007, we operated 100% of our wells, although we may not be able to be operator of all our future projects.

Pursue complementary leasehold interests and property acquisitions. We intend to attempt to supplement our drilling strategy with complementary leasehold interests and property acquisitions.

Current Natural Gas and Oil Projects

We are in the process of building our portfolio of exploration and exploitation projects targeting both oil and natural gas. We believe that there is potential for commercial development in areas where historical drilling attempts resulted in indications of oil and gas but ultimate development was not pursued, and we intend to continue to focus our activities in areas having this profile. We believe that the application of advanced drilling, completion and stimulation technologies combined with a strong commodity pricing environment could make development of our project areas economically viable.

Through Charles Hill Drilling, Inc. (“CHD”), our wholly-owned subsidiary, we control oil and gas leases on approximately 2,200 acres located in Stephens County and Eastland County, Texas. Additionally, we have a right of first refusal on oil and gas leases for approximately 2,600 acres in the same counties. On these leases, we have a total of sixty-six (66) wells with twenty (20) of them producing. As of March 15, 2008, we were receiving an aggregate of approximately 35 barrels of oil and 500,000 mcf of natural gas per day from these 20 producing wells.

In November 2006, we acquired an oil and gas lease covering approximately 1,000 undeveloped acres in the Salt Creek Prospect area of Oklahoma. We intend to conduct a satellite imaging program to further evaluate this acreage. We also intend to pursue acquisitions and/or investment in other energy-related businesses, assets, and/or investments, as opportunities, time and available capital will permit.

Natural Gas and Oil Reserves

The following tables present information as of December 31, 2007 and 2006 with respect to our estimated proved reserves.

*Net Proved Reserve Summary and PV-10 Forecast from December 31, 2007*
Reserve Categories	Oil (MBO)		Gas (MMCF)		Cash Flow (000’s)		PV-10 (000’s) (c)
PDP (b)		66.7		430.2	$	6,704	$	3,542
PDBP/PDNP (b)		47.5		188.5		4,355		2,524
PUD (b)		50.6		196.3		3,999		1,945
Total Proved (a)		164.8		815.0	$	15,058	$	8,011

*Net Proved Reserve Summary and PV-10 Forecast from December 31, 2006*
Reserve Categories	Oil (MBO)		Gas (MMCF)		Cash Flow ($000’s)		PV-10 ($000’s) (c)
PDP (b)		-		-	$	-	$	-
PDBP/PDNP (b)		1.4		137.9
PUD (b)		-		127.5
Total Proved (a)		1.4		265.4	$	1,418	$	849

Changes in the Company's proved crude oil and natural gas reserves for the year ended December 31, 2007 were as follows:

	Crude Oil (MBO)			Natural Gas (MMCF)
Proved reserves:

Beginning of the period - December 31, 2006		1.4			265.4

Other		0.6			(138.1	)

Revisions of previous estimates		-			(104.8	)

Improved recovery		-			-

Purchase of minerals in place		69.3			-

Extensions and discoveries		104.1			885.5

Production		(10.6	)		(93.0	)

Sale of minerals in place		-			-

End of the period - December 31, 2007		164.8			815.0

(a)	Proved reserves are those quantities of gas that, by analysis of geological and engineering data, can be estimated with reasonable certainty to be commercially recoverable from known reservoirs and under current economic conditions, operating methods and government regulations.

(b)

PDP are developed reserves that are expected to be recovered from existing wells. PDBP are proved developed behind pipe and PDNP are proved non-producing reserves which are proved reserves that are expected to be recovered from existing wells. PUD are provided undeveloped reserves, which are expected to be recovered: (i) from new wells on undrilled acreage; (ii) from deepening existing wells to a different reservoir; or (iii) where a relatively large expenditure is required to re-complete an existing well or install production or transportation facilities for primary or improved recovery projects.

(c)

PV-10 represents the present value, discounted at 10% per annum, of estimated future net revenue before income tax of our estimated proved reserves. The estimated future net revenues were determined by using reserve quantities of proved reserves and the periods in which they are expected to be developed and produced based on economic conditions prevailing at December 31, 2007 and 2006. PV-10 is a non-GAAP financial measure because it excludes income tax effects. Management believes that the presentation of the non-GAAP financial measure of PV-10 provides useful information to investors because it is widely used by professional analysts and sophisticated investors in evaluating oil and natural gas companies. PV-10 is not a measure of financial or operating performance under GAAP. PV-10 should not be considered as an alternative to the standardized measure as defined under GAAP. We have included a reconciliation of PV-10 to the most directly comparable GAAP measure — standardized measure of discounted future net cash flow — in the following table:

		December 31,
		2007			2006