UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended ~~March~~June 3130, 2013

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

For the transition period from _______________________________ to _______________________________

Commission File Number: 00-28171

VADDA ENERGY CORPORATION

(Exact name of registrant as specified in its charter)

Florida	27-0471741
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

600 Parker Square, Suite 250

Flower Mound, Texas

75028

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (214) 222-6500

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

Indicate by check mark whether the registrant has submitted ~~electronically~~ electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule- 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files)~~. Yes S No £~~

Yes Q No £

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

Large accelerated filer £ Accelerated filer £ Non-accelerated filer £*(Do not check if a smaller reporting company) Smaller reporting company SQ

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

~~The~~Yes ~~number of shares of registrant’s~~£ ~~common~~No ~~stock outstanding as of August 31, 2013 was 104,235,236.~~Q

The number of shares of registrant’s common stock outstanding as of September 30, 2013 was 104,235,236.

TABLE OF CONTENTS

		Page
PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements	1
	Consolidated Balance Sheets – March 31, 2013 (Unaudited) and December 31, 2012	1
	Consolidated Balance Sheets – June 30, 2013 (Unaudited) and December 31, 2012 (Audited)	3
	Consolidated Statements of Operations (Unaudited) – Three Months Ended March 31, 2013 and 2012	2
	Consolidated Statements of Operations (Unaudited) – Three and Six Months Ended June 30, 2013 and 2012	5
	Consolidated Statements of Cash Flows (Unaudited) – Three Months Ended March 31, 2013 and 2012	3
	Consolidated Statements of Cash Flows (Unaudited) – Six Months Ended June 30, 2013 and 2012	5
	Notes to Consolidated Financial Statements (Unaudited)	46
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	811
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	1217
Item 4.	Controls and Procedures	1217
PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	1418
Item 1A.	Risk Factors	1418
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	1418
Item 3.	Defaults Upon Senior Securities	1418
Item 4.	Mine Safety Disclosures	1418
Item 5.	Other Information	1418
Item 6.	Exhibits	1519
Signatures		1620

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

VADDA ENERGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	March 31, 2013			December 31, 2012
	(Unaudited)			(Audited)
Assets:
Cash	$	75,589		$	358,519
Accounts receivable - net		52,960			59,146
Receivable from affiliate		–			280,046
Deferred federal income tax - current		29,930			29,930
Prepaid drilling costs		1,395,083			455,009
Total current assets		1,553,562			1,182,650
Property and equipment:
Oil and gas properties, using successful efforts method of accounting:
Proved properties		2,130,500			2,130,500
Other property and equipment		304,369			304,369
Less: Accumulated depletion and depreciation		(677,593	)		(636,645	)
Property and equipment, net		1,757,276			1,798,224
Investment in joint ventures – cost method		849,689			849,689
Deferred federal income tax – non-current		432,267			332,332
Other assets		56,210			56,210
Total Assets	$	4,649,004		$	4,219,105
Liabilities and Equity:
Accounts payable and accrued liabilities	$	479,352		$	298,095
Current portion of notes payable		3,945			7,852
Payable to affiliate		81,421			–
Payable to shareholders		45,319			45,319
Deferred revenue		6,409,056			5,796,556
Total current liabilities		7,019,093			6,147,822
Asset retirement obligation		225,858			223,296
Total long-term liabilities		225,858			223,296
Preferred stock, $.001 par value; 10,000,000 shares authorized; none issued or outstanding as of March 31, 2013 and December 31, 2012		–			–
Common stock, $.001 par value; 150,000,000 shares authorized; 104,235,236 and 104,235,236 issued and outstanding as of March 31, 2013 and December 31, 2012		104,235			104,235
Additional paid-in capital		6,948,359			6,948,359
Accumulated deficit		(8,503,694	)		(8,212,688	)
Total Vadda stockholders’ deficit		(1,451,100	)		(1,160,094	)
Deficit attributable to noncontrolling interests		(1,144,847	)		(991,919	)
Total Deficit		(2,595,947	)		(2,152,013	)
Total Liabilities and Equity	$	4,649,004		$	4,219,105

See accompanying notes to unaudited consolidated financial statements.

VADDA ENERGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

	Three Months Ended March 31,
	2013			2012
Revenues:
Turnkey drilling revenues	$	–		$	2,664,474
Natural gas and oil sales		65,293			79,620
		65,293			2,744,094
Costs and expenses:
Turnkey drilling costs		–			1,258,976
Lease operating expense		43,461			37,192
General and administrative		522,191			518,117
Accretion expense		2,562			13,125
Depletion and depreciation		40,948			36,496
		609,162			1,863,906
Income (loss) before income taxes		(543,869	)		880,188
Income tax (benefit) expense		(99,935	)		231,000
Net income (loss)		(443,934	)		649,188
Net income (loss) attributable to noncontrolling interests		(152,928	)		377,268
Net income (loss) attributable to Vadda common stockholders	$	(291,006	)	$	271,920
Basic and diluted income (loss) per Vadda common share	$	(0.00	)	$	0.00
Weighted average number of common shares Outstanding – basic and fully diluted		104,235,236			104,235,236

See accompanying notes to unaudited consolidated financial statements.

~~VADDA~~PART ~~ENERGY~~I ~~CORPORATION~~– ~~AND~~FINANCIAL ~~SUBSIDIARIES~~INFORMATION

~~CONSOLIDATED STATEMENTS~~Item OF1. ~~CASH~~Financial ~~FLOWS (UNAUDITED)~~Statements

	Three Months Ended March 31,
	2013			2012
Cash flows from operating activities:
Net income (loss)	$	(443,934	)	$	649,188
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation, depletion and amortization		40,948			36,496
Accretion expense		2,562			13,125
Deferred tax expense (benefit)		(99,935	)		231,000
Changes in operating assets and liabilities:
Accounts receivable		6,186			(89,563	)
Prepaid drilling costs		(940,074	)		541,389
Accounts payable and accrued liabilities		181,257			253,706
Payable to affiliates		361,467			(74,222	)
Deferred revenues		612,500			(1,929,474	)
Net cash used in operating activities		(279,023	)		(368,355	)
Cash flows from financing activities:
Repayment of note payable		(3,907	)		(3,669	)
Net cash used in financing activities		(3,907	)		(3,669	)
Net change in cash		(282,930	)		(372,024	)
Cash balance, beginning of period		358,519			1,382,166
Cash balance, end of period	$	75,589		$	1,010,142

VADDA ENERGY CORPORATION AND SUBSIDIARIES

~~See accompanying notes to unaudited consolidated~~CONSOLIDATED ~~financial~~BALANCE ~~statements.~~SHEETS

	June 30, 2013			December 31, 2012
	(Unaudited)			(Audited)
Assets:
Cash	$	521,778		$	358,519
Accounts receivable - net		48,936			59,146
Receivable from affiliate		–			280,046
Deferred federal income taxes - current		29,930			29,930
Prepaid drilling costs		1,252,737			455,009
Total current assets		1,853,381			1,182,650

Property and equipment:
Oil and gas properties, using successful efforts method of accounting:
Proved properties		2,506,004			2,130,500
Other property and equipment		362,160			304,369
Less: Accumulated depletion and depreciation		(719,505	)		(636,645	)
Property and equipment, net		2,148,659			1,798,224

Investment in joint ventures – cost method		849,689			849,689
Deferred federal income tax – non-current		526,947			332,332
Other assets		56,210			56,210

Total Assets	$	5,434,886		$	4,219,105

Liabilities and Equity:
Accounts payable and accrued liabilities	$	315,067		$	298,095
Current portion of notes payable		11,202			7,852
Payable to affiliate		67,454			–
Payable to shareholders		12,319			45,319
Deferred revenue		7,838,223			5,796,556
Total current liabilities		8,244,265			6,147,822

Notes payable		22,887			–
Asset retirement obligation		228,420			223,296
Total long-term liabilities		251,307			223,296

Preferred stock, $.001 par value; 10,000,000 shares authorized; none issued or outstanding as of June 30, 2013 and December 31, 2012		–			–
Common stock, $.001 par value; 150,000,000 shares authorized; 104,235,236 and 104,235,236 issued and outstanding as of June 30, 2013 and December 31, 2012		104,235			104,235
Additional paid-in capital		7,136,111			6,948,359
Accumulated deficit		(8,794,988	)		(8,212,688	)
Total Vadda stockholders’ deficit		(1,554,642	)		(1,160,094	)
Deficit attributable to noncontrolling interests		(1,506,044	)		(991,919	)
Total Deficit		(3,060,686	)		(2,152,013	)

Total Liabilities and Equity	$	5,434,886		$	4,219,105

~~VADDA~~See ~~ENERGY~~accompanying ~~CORPORATION~~notes ~~AND~~to ~~SUBSIDIARIES~~unaudited consolidated financial statements

~~CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)~~3

~~NOTE~~VADDA ENERGY 1CORPORATION –AND ~~BASIS OF PRESENTATION~~SUBSIDIARIES

~~Vadda Energy Corporation (“Vadda”)~~CONSOLIDATED ~~was~~STATEMENTS ~~originally~~OF ~~incorporated~~OPERATIONS ~~in Florida in 1997. The foregoing consolidated financial statements include the accounts of Vadda, its wholly owned subsidiary, Mieka Corporation~~ (~~“Mieka”~~UNAUDITED) and Mieka LLC, a variable interest entity (“VIE”), which collectively are referred to as the “Company”. All significant intercompany balances and transactions have been eliminated and all normal recurring adjustments have been recorded that are necessary for a fair presentation of the information contained herein.

The accompanying interim consolidated financial statements and related notes are presented in accordance with U.S. generally accepted accounting principles (“GAAP”) and are expressed in U.S dollars, and have been prepared by the Company without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnotes have been condensed or omitted, although the Company believes that the disclosures are adequate to make the information presented not misleading. These consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements of the Company for the years ended December 31, 2012 and 2011, and notes thereto contained in the Company’s audited financial statements filed as part of its Form 10-K for the year ended December 31, 2012. The results of operations for such periods are not necessarily indicative of the results expected for a full year or any future period.

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2013			2012			2013			2012
Revenues:
Turnkey drilling revenues	$	–		$	–		$	–		$	2,664,474
Natural gas and oil sales		90,681			47,465			155,974			127,085
		90,681			47,465			155,974			2,791,559
Costs and Expenses:
Turnkey drilling costs		–			10,000			–			1,268,976
Lease operating expense		64,504			14,577			107,965			51,769
General and administrative		541,123			366,401			1,063,314			884,518
Accretion expense		2,562			13,126			5,124			26,251
Depletion and depreciation		41,911			34,782			82,859			71,278
		650,100			438,886			1,259,262			2,302,792

Income (loss) before income taxes		(559,419	)		(391,421	)		(1,103,288	)		448,767

Income tax expense (benefit)		(94,680	)		(90,000	)		(194,615	)		141,000

Net income (loss)		(464,739	)		(301,421	)		(908,673	)		347,767

Net income (loss) attributable to noncontrolling interests		(173,445	)		633			(326,373	)		377,901

Net loss attributable to Vadda common stockholders	$	(291,294	)	$	(302,054	)	$	(582,300	)	$	(30,134	)

Basic and diluted loss per Vadda common share		(0.00	)		(0.00	)		(0.01	)		(0.00	)

Weighted average number of common shares outstanding - basic and fully diluted		104,235,236			104,235,236			104,235,236			104,235,236

~~The~~See ~~Company~~accompanying isnotes anto ~~independent~~unaudited ~~developer~~consolidated ~~and producer~~financial ~~of natural gas and oil, with operations in Pennsylvania, Kentucky, and New York.~~statements

~~NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES~~4

~~Oil~~VADDA ENERGY ~~and~~CORPORATION ~~Gas~~AND ~~Producing Activities~~SUBSIDIARIES

~~The Company’s oil and gas producing activities~~CONSOLIDATED ~~were~~STATEMENTS ~~accounted~~OF ~~for~~CASH ~~using~~FLOWS the successful efforts method of accounting. Costs to acquire leasehold rights in oil and gas properties, to drill and equip exploratory wells that find proved reserves, to drill and equip development wells and costs of support equipment and facilities are capitalized. Costs to drill exploratory wells that do not find proved reserves, delay rentals and geological and geophysical costs are expensed.(UNAUDITED)

The Company earns carried working interests in wells drilled by joint ventures that it manages. Upon the successful completion of a well, the joint ventures are assigned well bore rights on acreage that comprises the legal spacing for the well. When a joint venture sells ownership interests in excess of the total offering amount, such additional interests reduce the Company’s carried working interest. The joint ventures typically pay 100% of the drilling and completion costs. The Company also intends to have ownership in wells drilled on leases in which the joint ventures do not participate.

	Six Months Ended June 30,
	2013			2012
Cash flows from operating activities:
Net income (loss)	$	(908,673	)	$	347,767
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation, depletion and amortization		82,859			71,278
Accretion expense		5,124			26,251
Deferred tax expense (benefit)		(194,615	)		141,000
Changes in operating assets and liabilities:
Accounts receivable		10,210			(96,234	)
Prepaid drilling costs		(797,728	)		(22,413	)
Other assets		–			(22,208	)
Accounts payable and accrued liabilities		16,973			69,084
Payable to affiliates		347,500			8,651
Deferred revenues		2,041,667			(1,582,391	)
Net cash provided by (used in) operating activities		603,317			(1,059,215	)

Cash flows from investing activities:
Additions to oil and gas properties		(375,504	)		–
Additions to property and equipment		(57,791	)		(5,347	)
Net cash used in investing activities		(433,295	)		(5,347	)

Cash flows from financing activities:
Proceeds from note payable		35,000			–
Repayment of note payable		(8,763	)		(6,154	)
Repayment of shareholder payable		(33,000	)		–
Net cash used in financing activities		(6,763	)		(6,154	)


Net change in cash		163,259			(1,070,716	)

Cash balance, beginning of period		358,519			1,382,166
Cash balance, end of period	$	521,778		$	311,450


Non cash financing activities:
Non cash contribution to Vadda Energy Corporation	$	187,752		$	–
Non cash distribution to Mieka LLC owners	$	187,752		$	–

~~Turnkey~~See ~~Drilling~~accompanying ~~Revenue~~notes ~~Recognition~~to unaudited consolidated financial statements

In its role as the managing venturer of various oil and gas drilling joint ventures, the Company enters into turnkey drilling agreements with operators whereby a profit is earned by arranging the drilling and completion of prospect wells funded by the individual joint ventures. In accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 605, “Revenue Recognition,” revenue is deferred until wells are completed as producing wells or determined to be nonproductive. The associated drilling costs of wells are deferred until revenue is recognized. The Company did not recognize any turnkey drilling revenue or turnkey drilling costs on completed wells during the three months ended March 31, 2013. During the three months ended March 31, 2012, the Company recognized $2,664,474 of turnkey drilling revenue and $1,258,976 of turnkey drilling costs on two completed gas wells. As of March 31, 2013 and December 31, 2012, the Company had $6,347,806 and $5,796,556, respectively, in deferred turnkey drilling revenue. The Company had deferred drilling costs related to turnkey agreements in the amount of $1,395,083 and $455,009, respectively, as of March 31, 2013 and December 31, 2012.

~~No drilling costs are incurred by the Company~~VADDA ~~for~~ENERGY ~~its~~CORPORATION ~~carried~~AND ~~working interests retained in wells drilled by managed joint ventures.~~SUBSIDIARIES

4NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

~~VADDA~~NOTE ~~ENERGY~~1 ~~CORPORATION~~– ~~AND~~BASIS ~~SUBSIDIARIES~~OF PRESENTATION

~~CONSOLIDATED~~Vadda ~~STATEMENTS~~Energy OFCorporation ~~CASH~~(“Vadda”) was ~~FLOWS~~originally incorporated in Florida in 1997. The foregoing consolidated financial statements include the accounts of Vadda, its wholly owned subsidiary, Mieka Corporation (~~UNAUDITED~~“Mieka”) and Mieka LLC, a variable interest entity (“VIE”), which collectively are referred to as the “Company”. All significant intercompany balances and transactions have been eliminated and all normal recurring adjustments have been recorded that are necessary for a fair presentation of the information contained herein.

~~Depletion~~The accompanying interim consolidated financial statements and ~~Depreciation~~related notes are presented in accordance with U.S. generally accepted accounting principles (“GAAP”) and are expressed in U.S dollars, and have been prepared by the Company without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnotes have been condensed or omitted, although the Company believes that the disclosures are adequate to make the information presented not misleading. These consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements of the Company for the years ended December 31, 2012 and 2011, and notes thereto contained in the Company’s audited financial statements filed as part of its Form 10-K for the year ended December 31, 2012. The results of operations for such periods are not necessarily indicative of the results expected for a full year or any future period.

~~Estimates~~The ofCompany ~~natural~~is ~~gas~~an ~~and~~independent ~~oil~~developer ~~reserves utilized~~and inproducer ~~the calculation~~ of ~~depletion~~natural ~~are~~gas ~~prepared using certain assumptions. Reserve estimates are based upon existing economic~~ and ~~operating~~ ~~conditions~~oil, with nooperations ~~provision~~in ~~for~~Pennsylvania, ~~price~~Kentucky, and ~~cost~~New ~~escalations except by contractual arrangements~~York. Natural gas and oil reserve estimates are inherently imprecise and are subject to change as more current information becomes available. Capitalized costs are depleted and amortized using the units of production method, based upon reserve estimates.

~~Impairments~~NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

~~The~~Oil ~~carrying value of oil~~ and ~~gas~~Gas ~~properties is~~Producing assessed for possible impairment on at least an annual basis, or as circumstances warrant, based on geological analysis or changes in proved reserve estimates. When impairment occurs, an adjustment is recorded as a reduction of the asset carrying value.Activities

~~Asset~~The ~~Retirement~~Company’s ~~Obligations~~oil and gas producing activities were accounted for using the successful efforts method of accounting. Costs to acquire leasehold rights in oil and gas properties, to drill and equip exploratory wells that find proved reserves, to drill and equip development wells and costs of support equipment and facilities are capitalized. Costs to drill exploratory wells that do not find proved reserves, delay rentals and geological and geophysical costs are expensed.

AThe ~~provision~~Company ~~has~~earns ~~been~~carried ~~recorded~~working ~~for~~interests in ~~the~~wells ~~estimated liability~~drilled ~~for~~by ~~the~~joint ~~plugging~~ventures ~~and~~that ~~abandonment~~it ofmanages. ~~natural~~Upon ~~gas~~the ~~and~~successful ~~oil~~completion ~~wells~~of ata well, the ~~end~~joint ofventures ~~their~~are ~~productive~~assigned ~~lives.~~leasehold rights ~~The~~on ~~liability~~acreage ~~and~~ that comprises the ~~associated~~legal ~~increase~~spacing infor the ~~related~~well. ~~asset~~When ~~are~~a ~~recorded~~joint inventure ~~the~~sells ~~period~~ownership interests in ~~which~~excess of the total ~~asset~~offering ~~retirement obligation~~amount, orsuch ~~ARO,~~additional isinterests ~~incurred~~reduce the Company’s carried working interest. The ~~liability~~joint isventures ~~accreted~~typically pay to100% ~~its~~of ~~present~~the ~~value~~drilling ~~each~~and ~~period~~completion ~~and~~costs. ~~the~~The ~~capitalized~~Company ~~cost~~also isintends ~~depreciated~~to ~~over~~have ~~the~~ownership ~~useful~~in ~~life~~wells ofdrilled on leases in which the ~~related~~joint ~~asset~~ventures do not participate.

~~The~~Turnkey ~~estimated~~Drilling ~~liability~~Revenue is calculated annually using the estimated remaining lives of the wells based on reserve estimates and federal and state regulatory requirements. The liability is discounted using an assumed credit-adjusted risk-free rate. At the time of abandonment, the Company recognizes a gain or loss on abandonment to the extent that actual costs do not equal the estimated costs.Recognition

~~The~~In its role as the managing venturer of various oil and gas drilling joint ventures, the Company ~~recognized~~enters $2into turnkey drilling agreements with operators whereby a profit is earned by arranging the drilling and completion of prospect wells funded by the individual joint ventures. In accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 605,~~562~~ “Revenue Recognition,” revenue is deferred until wells are completed as producing wells or determined to be nonproductive. The associated drilling costs of ~~accretion~~wells are deferred until revenue is recognized. The ~~expense~~Company did not recognize any turnkey drilling revenue or turnkey drilling costs on completed wells during the ~~three~~six months ended June 30, 2013. During the six months ended ~~March~~June 3130, 2012, the Company recognized $2,664,474 of turnkey drilling revenue and $1,268,976 of turnkey drilling costs on two completed gas wells. As of June 30, 2013 and December 31, 2012, the Company had $7,838,223 and $135,~~125~~796,556, ~~during~~respectively, in deferred turnkey drilling revenue. The Company had deferred drilling costs related to turnkey agreements in the ~~three~~amount ~~months~~of ~~ended~~$1,252,737 ~~March~~and $455,009, respectively, as of June 30, 2013 and December 31, 2012.

~~Recently~~No ~~Issued~~drilling ~~Accounting~~costs ~~Standards~~are incurred by the Company for its carried working interests retained in wells drilled by managed joint ventures.

The SEC and FASB continually adopt new reporting requirements and makes revisions to existing disclosures required for oil and gas companies, which are intended to provide investors with a more meaningful and comprehensive understanding of such information. No new pronouncements were issued that would impact the Company’s financial position or operations as of March 31, 2013.6

~~NOTE 3~~VADDA ENERGY –CORPORATION ~~INCOME~~AND ~~TAXES~~SUBSIDIARIES

~~The Company computes quarterly income taxes~~NOTES ~~under~~TO ~~the~~CONSOLIDATED ~~effective~~FINANCIAL ~~tax~~STATEMENTS ~~rate method based on applying an anticipated annual effective rate to its quarterly net income~~ (~~loss~~UNAUDITED), except for discrete items. Income taxes for discrete items are computed and recorded in the period that the specific transaction occurs. For the three months ended March 31, 2013, the Company’s overall effective tax rate on pre-tax income from operations used was 18.4%. Based on net losses and income for the three months ended March 31, 2013 and 2012, the Company had an estimated income tax benefit and income tax expense of $99,935 and $231,000, respectively.

~~NOTE 4~~Depletion –and ~~RELATED PARTY TRANSACTIONS~~Depreciation

~~Pursuant~~Estimates toof annatural ~~arrangement~~gas ~~between~~and ~~the~~oil ~~Company~~reserves utilized ~~and~~in ~~Mieka~~the ~~LLC,~~calculation anof ~~entity~~depletion ~~wholly~~are ~~owned~~prepared byusing ~~the~~certain ~~Company’s~~assumptions. ~~principal~~Reserve ~~stockholders,~~estimates ~~Mieka~~are ~~LLC~~based ~~provides~~upon ~~drilling~~existing ~~and~~economic ~~completion~~and ~~services~~operating onconditions ~~wells~~with ~~owned~~no byprovision ~~the~~for ~~Company.~~price ~~During~~and ~~the~~cost ~~three~~escalations ~~months~~except ~~ended~~by ~~March~~contractual ~~31,~~arrangements. Natural ~~2013~~ gas and ~~2012,~~oil ~~the~~reserve ~~Company~~estimates ~~incurred~~are ~~drilling~~inherently ~~costs associated~~imprecise ~~with~~and ~~turnkey~~are ~~drilling~~subject ~~contracts~~to ~~with~~change ~~Mieka~~as ~~LLC~~more ofcurrent ~~$686,000~~information ~~and~~becomes ~~$457,333, respectively~~available. Capitalized costs Asare ofdepleted ~~March 31, 2013~~ and ~~December 31,~~amortized ~~2012,~~using the ~~Company~~units ~~was~~of ~~obligated~~production ~~to pay $1~~method,~~505,363~~ ~~and~~based ~~$1,562,206,~~upon ~~respectively,~~reserve ~~to Mieka LLC~~estimates.

During the three months ended March 31, 2013, Mieka LLC was charged an administrative fee of $24,000 from Vadda Energy Corporation and $102,000 from Mieka Corporation. This activity is eliminated in the consolidated financial statements.Impairments

5The carrying value of oil and gas properties is assessed for possible impairment on at least an annual basis, or as circumstances warrant, based on geological analysis or changes in proved reserve estimates. When impairment occurs, an adjustment is recorded as a reduction of the asset carrying value.

~~VADDA~~Asset ~~ENERGY~~Retirement ~~CORPORATION AND SUBSIDIARIES~~Obligations

~~CONSOLIDATED~~A ~~STATEMENTS~~provision OFhas ~~CASH~~been ~~FLOWS~~recorded ~~(UNAUDITED)~~for the estimated liability for the plugging and abandonment of natural gas and oil wells at the end of their productive lives. The liability and the associated increase in the related asset are recorded in the period in which the asset retirement obligation, or ARO, is incurred. The liability is accreted to its present value each period and the capitalized cost is depreciated over the useful life of the related asset.

~~During~~The ~~the~~estimated ~~three~~liability ~~months~~is ~~ended~~calculated ~~March 31, 2013,~~annually ~~Daro~~using ~~and~~the ~~Anita~~estimated ~~Blankenship,~~remaining ~~principal~~lives ~~shareholders~~ of the ~~Company,~~wells ~~received~~based ~~aggregate~~on ~~compensation~~reserve ~~from~~estimates ~~the~~and ~~Company~~federal ~~of $26,000~~ and ~~$32,500,~~state ~~respectively~~regulatory requirements. ~~During the three months ended March 31,~~The ~~2012,~~liability ~~they~~is ~~received~~discounted ~~aggregate~~using ~~compensation~~an ofassumed ~~$24,000~~credit-adjusted ~~and~~risk-free ~~$30,000, respectively~~rate. AsAt ofthe ~~March~~time ~~31,~~of ~~2013 and December 31~~abandonment, ~~2012,~~ the Company ~~was~~recognizes ~~obligated~~a togain or ~~pay~~loss ~~Daro~~on ~~and~~abandonment ~~Anita~~to ~~Blankenship~~the ~~$45,319~~extent inthat ~~repayment~~actual ofcosts ado ~~previous~~not ~~loan.~~equal ~~As of March 31, 2013~~ the ~~Company~~ ~~had~~estimated ~~payables to affiliates of $81,421~~costs.

~~NOTE~~ The Company recognized $2,562 and $5,124 of accretion expense during the three and six months ended June –30, ~~LEASES~~2013, and $13,126 and $26,251 during the three and six months ended June 30, 2012.

AtRecently ~~the~~Issued ~~end~~Accounting of September 2012, the Company relocated its principal offices to Flower Mound, Texas under a new lease agreement entered into in May 2012. The lease provides approximately 7,800 square feet of office space for a term of 6 ½ years. After an initial six-month rent abatement period, basic rent for the following 12 months will be $9,775 monthly.Standards

~~NOTE 6~~The –SEC ~~NOTES~~and ~~PAYABLE~~FASB continually adopt new reporting requirements and makes revisions to existing disclosures required for oil and gas companies, which are intended to provide investors with a more meaningful and comprehensive understanding of such information. No new pronouncements were issued that would impact the Company’s financial position or operations as of June 30, 2013.

InNOTE 3 ~~June~~– ~~2011~~INCOME the Company obtained an installment loan in the principal amount of $30,000 to purchase oil and gas accounting software. Under the terms of the loan agreement, the loan bears interest at the rate of 6.5% per year and the Company has a monthly payment obligation of $1,338 until the loan’s maturity in June 2013. As of March 31, 2013, the remaining unpaid principal balance was $3,945.TAXES

~~NOTE~~The Company computes quarterly income taxes under the effective tax rate method based on applying an anticipated annual effective rate to its quarterly net income (loss), except for discrete items. Income taxes for discrete items are computed and recorded in the period that the specific transaction occurs. For the three and six months ended June 730, –2013, ~~LIQUIDITY~~the ~~AND~~Company’s ~~GOING~~overall ~~CONCERN~~effective tax rate on pre-tax income from operations used was 16.9% and 17.6% respectively. This is less than the 34% statutory tax rate because there is a full valuation reserve against the tax impact of Vadda’s net loss since it is determined to be unrecognizable in future periods.

~~The~~Based ~~Company~~on ~~evaluated~~net ~~the~~income ~~ability~~and tolosses ~~continue~~for the three asmonths aand ~~going~~six ~~concern~~months ~~through~~ended June 30, 2013 and 2012, the ~~year~~Company ~~ended~~had ~~December~~an 31estimated income tax benefit of $94,680 and $194,615 for the three and six months ended June 30, 2013, ~~due~~an toestimated income tax benefit of $90,000 for the ~~following~~three ~~factors:~~months ended June 30, 2012 and an income tax expense of $141,000 for the six months ended June 30, 2012.

~~· recurring operating losses; · working capital deficiencies; · negative cash flows from operating activities; and · accumulated deficits.~~7

~~Cash flow from operations is the Company’s~~VADDA ~~most~~ENERGY ~~significant~~CORPORATION ~~source~~AND ~~of liquidity. The Company generates operating cash flow from two primary sources:~~SUBSIDIARIES

·NOTES TO ~~Turnkey~~CONSOLIDATED ~~oil~~FINANCIAL ~~and~~STATEMENTS ~~gas drilling joint ventures, from which the Company generally receives turnkey fees~~ (which generate profits to the extent the turnkey price the Company charges to the joint ventures exceeds the actual costs necessary to acquire leases and drill, test and complete wells for such joint venturesUNAUDITED) and carried working interests in such wells (which generate monthly revenue and cash flow to the extent such wells produce natural gas and oil), as well as interests in such joint ventures purchased by the Company (which also generate monthly revenue and cash flow to the extent such wells produce natural gas and oil in commercial quantities); and · Natural gas and oil sales, which are generally attributable to working interests owned and held directly by the Company in wells on producing oil and gas properties (which generate monthly revenue and cash flow to the extent such wells produce natural gas and oil in commercial quantities) and carried working interests in such wells (which also generate monthly revenue and cash flow to the extent such wells produce natural gas and oil), as well as overriding royalty interests and reversionary interests (which may generate additional monthly revenue and cash flow to the extent such wells produce natural gas and oil in commercial quantities).

~~The~~NOTE 4 ~~Company’s~~– ~~plan~~RELATED toPARTY ~~generate cash flows to meet ongoing drilling obligations and fund general and administrative expenses through the remainder of 2013 is to execute the following:~~TRANSACTIONS

·Pursuant ~~continue~~ to ~~generate~~an ~~turnkey~~arrangement ~~drilling~~between ~~revenues~~the Company and ~~profits;~~Mieka ·LLC, ~~obtain~~an ~~carried~~entity ~~interests~~wholly inowned by the Company’s principal stockholders, Mieka LLC provides drilling and completion services on wells ~~drilled~~owned by ~~new~~the ~~joint~~Company. ~~ventures;~~During the three months ended June 30, 2013 and ·2012, ~~directly~~the ~~participate~~Company inincurred ~~wells~~drilling ~~drilled~~costs associated inwith turnkey drilling contracts with Mieka LLC of $1,003,417 and $306,249, respectively. During the ~~Marcellus~~six ~~Shale~~months ended June 30, ~~Utica~~2013 ~~Shale~~and 2012, the Company incurred drilling costs associated with turnkey drilling contracts with Mieka LLC of $1,689,417 and ~~oil~~$763,582, ~~sands~~respectively. inAs ~~New~~of ~~York~~June 30, 2013 and ~~Pennsylvania~~December 31, 2012, the Company was obligated to pay $1,566,508 and $1,562,206, respectively, to Mieka LLC.

6During the six months ended June 30, 2013, Mieka LLC was charged an administrative fee of $48,000 from Vadda Energy Corporation and $204,000 from Mieka. This activity is eliminated in the consolidated financial statements.

~~VADDA~~During ~~ENERGY~~the ~~CORPORATION~~six ~~AND~~months ~~SUBSIDIARIES~~ended June 30, 2013, Daro and Anita Blankenship, principal shareholders of the Company, received aggregate compensation from the Company of $52,000 and $65,000, respectively. During the six months ended June 30, 2012, they received aggregate compensation of $50,000 and $62,500, respectively. As of June 30, 2013 and December 31, 2012, the Company was obligated to pay Daro and Anita Blankenship $12,319 and $45,319 in repayment of a previous loan. As of June 30, 2013 the Company had payables to affiliates of $67,454. As of December 31, 2012 the Company had receivables from affiliates of $280,046.

~~CONSOLIDATED~~Martin ~~STATEMENTS~~N. OFMayrath ~~CASH~~is ~~FLOWS~~a ~~(UNAUDITED)~~principal of Mayrath & Co., PC, which has been engaged to perform the function of Chief Financial Officer, in addition to providing tax services. The Company paid to Mayrath & Co. a total of $30,784 and $37,226 for its services in the quarters ended June 30, 2013 and June 30, 2012 respectively.

~~The~~NOTE ~~Company~~5 ~~may~~– ~~not~~EQUITY be able to raise additional capital or generate turnkey drilling revenues or profits in amounts sufficient to fund ongoing drilling obligations and general and administrative expenses. If the Company cannot continue to raise additional capital or start generating sufficient cash flow from operations the Company may have to significantly delay the timing of expenditures for drilling and/or administrative expenses to meet its current obligations or consider curtailing operations. Although the Company typically retains a significant degree of control over the timing of its capital expenditures, the Company may not always be able to defer or accelerate certain capital expenditures to address any potential liquidity issues, although largely discretionary. The Company has been able to generate significant funds from the sale of interests in its joint ventures in 2013 to allow the Company to continue as a going concern, including a total of $2,041,667 from April 1, 2013 through September 16, 2013. The Company expects to continue to generate additional investment to fund operations through the year ended December 31, 2013; however, the Company cannot give any assurance of its ability to do so.TRANSACTIONS

~~NOTE~~During 8the –quarter ~~VARIABLE~~ended ~~INTERESTS~~June 30, 2013, ~~ENTITIES~~Mieka LLC paid $375,503 in drilling costs for the Potter Lumber #2 well in return for a 43.7% working interest (~~VIE~~37.1% net revenue interest) in such well. Fifty percent of such working interest was contributed by Mieka LLC to Vadda as an equity contribution. Vadda then contributed such working interest to Mieka as a capital contribution to Mieka, which contribution is appropriately eliminated in consolidation. After the consummation of these transactions, Mieka LLC and Mieka each hold a 21.8% working interest (18.6% net revenue interest) in the Potter Lumber #2 well, with a capitalized value of $187,752 each in oil and gas properties.

~~Management~~NOTE 6 – performs an analysis of the Company’s variable interests to determine if those type interests are held in other entities. The analysis primarily is based on a qualitative review, but also includes quantitative considerations in evaluating the variable interests. Qualitative analyses are performed based on an evaluation of the design by the entity, its organizational structure, to include decision-making ability, and financial arrangements. When used to supplement qualitative analyses, quantitative analyses are based on forecasted cash flows of the entity.LEASES

~~GAAP~~At ~~requires~~the ~~reporting~~end ~~entities~~of ~~to consolidate~~September ~~variable~~2012, ~~interest~~the ~~entities~~Company ~~when~~relocated its ~~they~~principal ~~have~~offices ~~variable~~to ~~interests~~Flower ~~that~~Mound, ~~provide~~Texas under a ~~controlling~~new ~~financial~~lease ~~interest~~agreement entered into in ~~variable~~May 2012. The lease provides approximately ~~interest~~7,800 ~~entities~~square feet of office space for a term of 6 ½ years. ~~Entities~~After ~~that~~an ~~consolidate~~initial ~~variable~~six-month ~~interest~~rent ~~entities~~abatement ~~are~~period, ~~referred~~basic torent for asthe ~~primary~~following ~~beneficiaries~~12 months will be $9,775 monthly.

~~Mieka,~~NOTE 7 ~~LLC (“VIE”),~~– anNOTES entity under common control of the Company, was evaluated as a variable interest entity of the Company. The VIE’s only source of revenue is from the drilling of oil and gas wells contracted with the Company through certain turnkey contracts entered into by the Company. The VIE also is an investor in certain joint ventures of the Company. The relationship was evaluated to determine if the arrangement gave the Company a variable interest in a variable interest entity and to determine whether the Company was the primary beneficiary that would result in consolidating the VIE. PAYABLE

~~The~~In ~~Company~~May ~~was~~2013 ~~considered~~the toCompany beobtained ~~the~~an installment ~~primary~~loan ~~beneficiary~~in asthe aprincipal ~~result~~amount of ~~the~~$35,000 ~~obligation~~ to ~~absorb~~purchase ~~losses~~a ~~that~~Ford ~~could~~F350 ~~be significant to the VIE~~truck. ~~Additionally,~~Under ~~since future revenue for~~ the ~~VIE~~terms isof ~~dependent upon~~ the ~~Company~~loan ~~entering into future turnkey contracts or drilling programs~~agreement, the ~~Company~~loan ~~directs~~bears interest ~~activities~~at ~~that~~the ~~most~~rate ~~significantly impact economic performance~~ of ~~the VIE~~4.5% ~~The~~per ~~Company~~year ~~was determined to be the primary beneficiary of the VIE for 2013~~ and ~~2012 and~~ the ~~VIE~~Company has ~~been~~a ~~included~~monthly inpayment ~~the~~obligation ~~consolidated financial statements as~~ of ~~and~~$1,042 ~~for~~until the ~~year~~loan’s ~~ended December~~maturity ~~31,~~in ~~2012~~May 2016. ~~and~~As as of ~~and~~June 30, ~~for~~2013, the ~~three~~remaining ~~months~~unpaid ~~ended~~principal ~~March~~balance ~~31,~~was ~~2013~~$34,089.

~~The~~NOTE 8 ~~table~~– ~~below~~LIQUIDITY ~~reflects~~AND ~~the~~GOING ~~amount of assets and liabilities from the VIE included in the consolidated balance sheets as of March 31, 2013 and December 31, 2012.~~CONCERN

	March 31, 2013			December 31, 2012
Assets:
Cash	$	–		$	278,032
Accounts receivable from affiliates		1,505,363			1,562,206
Prepaid drilling cost		1,395,083			455,009
Investment in joint ventures		612,500			612,500
Other assets		79,184			60,602
Total assets	$	3,592,130		$	2,968,349
Liabilities and Equity:
Accounts payable and accrued liabilities	$	230,222		$	139,513
Deferred revenue		4,506,755			3,820,755
Total liabilities	$	4,736,977		$	3,960,268
Retained earnings (accumulated deficit)		(1,144,847	)	$	(991,919	)
Total stockholders’ equity (deficit)		(1,144,847	)		(991,919	)
Total Liabilities and Equity	$	3,592,130		$	2,968,349

The Company evaluated the ability to continue as a going concern through the year ended December 31, 2013 due to the following factors:

7· recurring operating losses;

~~Item~~· 2.working ~~Management’s~~capital ~~Discussion and Analysis of Financial Condition and Results of Operations.~~deficiencies;

~~Unless~~· ~~the~~negative ~~context~~cash ~~requires~~flows ~~otherwise, as~~from ~~used~~operating inactivities; ~~this report, the “Company,” “Vadda,” “we,” “us” or “our,” refer, collectively, to Vadda Energy Corporation (“Vadda”), Mieka Corporation, a Delaware corporation~~ and ~~a wholly owned subsidiary of Vadda (“Mieka”), and Mieka LLC, a Delaware limited liability company and a variable interest entity under common control with Vadda and Mieka.~~

~~Cautionary~~· ~~Statement~~accumulated ~~Concerning Forward-Looking Statements~~deficits.

This report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are statements other than historical fact and give our current expectations or forecasts of future events. They may include estimates of natural gas and oil reserves, expected natural gas and oil production and future expenses, assumptions regarding future natural gas and oil prices, planned capital expenditures and anticipated asset acquisitions and sales, as well as statements concerning anticipated cash flow and liquidity, business strategy and other plans and objectives for future operations.8

~~Although we believe the expectations~~VADDA ~~and~~ENERGY ~~forecasts~~CORPORATION ~~reflected~~AND in these and other forward-looking statements are reasonable, we can give no assurance they will prove to have been correct. They can be affected by inaccurate assumptions or by known or unknown risks and uncertainties. Factors that could cause actual results to differ materially from expected results include:SUBSIDIARIES

·NOTES TO ~~the~~CONSOLIDATED ~~volatility~~FINANCIAL ofSTATEMENTS ~~natural gas and oil prices;~~(UNAUDITED)

·Cash ~~the~~flow ~~limitations~~from ~~our~~operations ~~level~~is ofthe ~~cash~~Company’s most ~~flow~~significant orsource ~~ability~~of toliquidity. ~~raise~~The ~~capital~~Company ~~may~~generates ~~have~~operating oncash ~~our~~flow ~~operational~~from ~~and~~two ~~financial~~primary ~~flexibility;~~sources:

· ~~declines~~Turnkey oil and gas drilling joint ventures, from which the Company generally receives turnkey fees (which generate profits to the extent the turnkey price the Company charges to the joint ventures exceeds the actual costs necessary to acquire leases and drill, test and complete wells for such joint ventures) and carried working interests in such wells (which generate monthly revenue and cash flow to the ~~values~~extent ofsuch ~~our~~wells produce natural gas and oil), ~~properties~~as ~~resulting~~well as interests in ~~impairments~~such joint ventures purchased by the Company (which also generate monthly revenue and cash flow to the extent such wells produce natural gas and oil in commercial quantities); and

· Natural gas and oil sales, which are generally attributable to working interests owned and held directly by the ~~availability~~Company ofin ~~capital~~wells on anproducing ~~economic~~oil ~~basis~~and gas properties (which generate monthly revenue and cash flow to ~~fund~~the ~~reserve~~extent ~~replacement~~such ~~costs;~~wells produce natural gas and oil in commercial quantities) and carried working interests in such wells (which also generate monthly revenue and cash flow to the extent such wells produce natural gas and oil), as well as overriding royalty interests and reversionary interests (which may generate additional monthly revenue and cash flow to the extent such wells produce natural gas and oil in commercial quantities).

·The ~~our~~Company’s ~~ability~~plan to ~~replace~~generate ~~reserves~~cash flows to meet ongoing drilling obligations and ~~sustain~~fund ~~production;~~general and administrative expenses through the remainder of 2013 is to execute the following:

· ~~uncertainties~~continue ~~inherent~~to ingenerate ~~estimating~~turnkey ~~quantities~~drilling ofrevenues ~~natural gas~~ and ~~oil reserves and projecting future rates of production and the timing of development expenditures~~profits;

· ~~inability~~obtain tocarried ~~generate~~interests ~~profits~~in orwells ~~achieve~~drilled ~~targeted~~by ~~results~~new injoint ~~our~~ventures; ~~drilling~~ and ~~well operations;~~

· ~~leasehold~~directly ~~terms~~participate ~~expiring~~in ~~before~~wells ~~production~~drilled ~~can~~in bethe ~~established;~~Marcellus Shale, Utica Shale and oil sands in New York and Pennsylvania.

·The Company may not be able to raise additional capital or generate turnkey drilling revenues or profits in amounts sufficient to fund ongoing drilling obligations and ~~operating~~general and ~~risks~~administrative expenses. If the Company cannot continue to raise additional capital or start generating sufficient cash flow from operations the Company may have to significantly delay the timing of expenditures for drilling and/or administrative expenses to meet its current obligations or consider curtailing operations. Although the Company typically retains a significant degree of control over the timing of its capital expenditures, ~~including~~the Company may not always be able to defer or accelerate certain capital expenditures to address any potential ~~environmental~~liquidity ~~liabilities~~issues, ~~associated~~although ~~with~~largely ~~hydraulic~~discretionary. ~~fracturing~~The Company has been able to generate significant funds from the sale of interests in its joint ventures in 2013 to allow the Company to continue as a going concern, including a total of $735,000 from July 1, 2013 through September 30, 2013. The Company expects to continue to generate additional investment to fund operations through the year ended December 31, 2013; however, the Company cannot give any assurance of its ability to do so.

·NOTE ~~changes~~9 in- ~~legislation~~VARIABLE ~~and~~INTERESTS ~~regulation~~ENTITIES ~~adversely affecting our industry and our business;~~(VIE)

·Management ~~general~~performs ~~economic~~an ~~conditions~~analysis ~~negatively~~of ~~impacting~~the usCompany’s variable ~~and~~interests ~~our~~to ~~business~~determine ~~counterparties;~~if those type interests are held in other entities. The analysis primarily is based on a qualitative review, but also includes quantitative considerations in evaluating the variable interests. Qualitative analyses are performed based on an evaluation of the design by the entity, its organizational structure, to include decision-making ability, and financial arrangements. When used to supplement qualitative analyses, quantitative analyses are based on forecasted cash flows of the entity.

·GAAP ~~transportation~~requires ~~capacity~~reporting ~~constraints~~entities ~~and~~to ~~interruptions~~consolidate variable interest entities when they have variable interests that ~~could~~provide ~~adversely~~a ~~affect~~controlling ~~our~~financial ~~cash~~interest ~~flow~~in variable interest entities. Entities that consolidate variable interest entities are referred to as primary beneficiaries.

WeMieka, ~~caution~~LLC ~~you~~(“VIE”), ~~not~~an toentity ~~place undue reliance~~under oncommon ~~these~~control ~~forward-looking~~of ~~statements~~the Company, ~~which~~was ~~speak~~evaluated ~~only~~ as a variable interest entity of the ~~date~~Company. ofThe ~~this~~VIE’s ~~report,~~only ~~and~~source weof ~~undertake~~revenue is nofrom ~~obligation~~the todrilling ~~update~~of ~~this information.~~oil ~~Forward-looking~~and ~~statements~~gas ~~are~~wells ~~not~~contracted ~~guarantees~~with ofthe ~~future~~Company ~~performance~~through ~~and~~certain ~~actual~~turnkey ~~results~~contracts ~~may~~entered ~~differ~~into ~~significantly~~by ~~from~~ the ~~results~~Company. The ~~discussed~~VIE inalso ~~the~~is ~~forward-looking~~an ~~statements.~~investor Wein ~~urge~~certain ~~you~~joint toventures ~~carefully~~of ~~review~~the ~~and~~Company. ~~consider~~The ~~the~~relationship ~~disclosures~~was ~~made~~evaluated into ~~this~~determine if the arrangement ~~report~~gave ~~and~~the ~~our~~Company ~~other~~a ~~filings~~variable ~~with~~interest ~~the~~in ~~SEC~~a ~~that~~variable ~~attempt~~interest toentity ~~advise~~and ~~interested~~to ~~parties~~determine ofwhether the ~~risks~~Company ~~and~~was ~~factors~~the primary beneficiary that ~~may~~would ~~affect~~result ~~our business~~in consolidating the VIE.

~~Overview~~9

~~Vadda is a publicly held, independent energy~~VADDA ~~company~~ENERGY ~~engaged~~CORPORATION ~~primarily~~AND in the exploration for, and development of, natural gas and crude oil reserves. We generate our revenues and cash flows from two primary sources: profits from the difference between the amounts we received in turnkey fees from joint ventures we manage and our actual costs to conduct the joint ventures’ operations, and proceeds from the sale of oil and gas production on properties we hold.SUBSIDIARIES

8NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

~~Strategy~~The Company was considered to be the primary beneficiary as a result of the obligation to absorb losses that could be significant to the VIE. Additionally, since future revenue for the VIE is dependent upon the Company entering into future turnkey contracts or drilling programs, the Company directs activities that most significantly impact economic performance of the VIE. The Company was determined to be the primary beneficiary of the VIE for 2013 and 2012 and the VIE has been included in the consolidated financial statements as of and for the years ended December 31, 2012 and 2011 and as of and for the six months ended June 30, 2013.

~~Our~~The ~~long-term~~table ~~growth~~below ~~strategy~~reflects isthe ~~primarily focused~~amount onof ~~building cash flow from developing crude oil reserves through drilling horizontal wells in southern~~assets ~~New York~~ and ~~north~~liabilities ~~central~~from ~~Pennsylvania~~the ~~and~~VIE ~~natural~~included ~~gas reserves on lease acreage~~ in the ~~Marcellus~~consolidated ~~Shale~~balance ~~and~~sheets ~~Utica~~as ~~Shale formations~~of inJune 30, ~~southwestern~~2013 ~~Pennsylvania.~~and WeDecember 31, ~~believe this strategy will create greater value for investors~~2012.

We hope to accomplish our objectives in the following manner:

	June 30, 2013			December 31, 2012
Assets:
Cash	$	390,936		$	278,032
Accounts receivable from affiliates		1,566,508			1,562,206
Prepaid drilling cost		1,252,737			455,009
Oil and gas properties		187,752			–
Investment in joint ventures		612,500			612,500
Other assets		150,290			60,602
Total assets	$	4,160,723		$	2,968,349

Liabilities and Equity:
Accounts payable, accrued liabilities, and notes payable	$	156,595		$	139,513
Deferred revenue		5,510,172			3,820,755
Total liabilities	$	5,666,767		$	3,960,268

Retained earnings (accumulated deficit)		(1,506,044	)	$	(991,919	)
Total stockholders’ equity (deficit)		(1,506,044	)		(991,919	)

Total Liabilities and Equity	$	4,160,723		$	2,968,349

~~· Generating turnkey drilling profits from wells funded and drilled by joint ventures we manage.~~10

·Item ~~Earning carried working interests in wells drilled by joint ventures we sponsor~~2. InManagement’s ~~all~~Discussion ~~wells drilled by sponsored joint ventures, our carried interest bears no drilling~~ and ~~completion~~Analysis ~~costs. We bear only the cost~~ of ~~the~~Financial ~~leasehold~~Condition ~~rights~~ and ~~our~~Results ~~share~~ of ~~operating expenses after the wells are drilled, completed and commence production~~Operations.

·Unless Wethe ~~also~~context ~~purchase~~requires anotherwise, ~~interest~~as used in ~~each~~this ~~joint~~report, ~~venture~~the ~~equal~~“Company,” “Vadda,” “we,” “us” or “our,” refer, collectively, to 1%Vadda ofEnergy ~~the~~Corporation ~~working~~(“Vadda”), ~~interest~~Mieka Corporation, a Delaware corporation and a wholly owned bysubsidiary of ~~the~~Vadda ~~joint~~(“Mieka”), ~~venture.~~and ~~Such~~Mieka ~~interest~~LLC, isa ~~not~~Delaware ~~carried~~limited liability company and ~~pays~~a ~~its~~variable ~~proportionate~~interest ~~share~~entity ofunder ~~joint~~common control ~~venture~~with ~~costs~~Vadda and ~~expenses~~Mieka.

·Cautionary ~~Direct~~Statement ~~participation~~Concerning as a working interest owner in wells through a combination of strategies, including retention of carried working interests, overriding royalty interests and reversionary interests (which we expect will provide us ownership in wells after outside investors have recovered their drilling and completion costs from net revenues from the wells).Forward-Looking Statements

·This ~~Overhead~~report ~~fees~~includes ~~and~~“forward-looking statements” ~~income~~within ~~earned~~the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the ~~managing~~Securities Exchange ~~venturer~~Act of ~~joint~~1934, ~~ventures~~as amended. Forward-looking statements are statements other than historical fact and give our current expectations or forecasts of future events. They may include estimates of natural gas and oil reserves, expected natural gas and oil production and future expenses, assumptions regarding future natural gas and oil prices, planned capital expenditures and anticipated asset acquisitions and sales, as well as statements concerning anticipated cash flow and liquidity, business strategy and other plans and objectives for future operations.

·Although ~~Raising~~we ~~additional~~believe ~~capital~~the ~~through~~expectations ~~debt~~and forecasts reflected in these and other forward-looking statements are reasonable, we can give no assurance they will prove to have been correct. They can be affected by inaccurate assumptions or ~~equity~~by ~~offerings~~known or unknown risks and uncertainties. Factors that could cause actual results to differ materially from expected results include:

· ~~Exploiting~~the ~~our~~volatility ~~oil~~of ~~and~~natural gas ~~wells through use of hydraulic fracturing, a method we have employed on past wells we have drilled~~ and~~/or~~ ~~operated,~~oil ~~and a technique we intend to utilize in our Marcellus Shale operations.~~prices;

As· ~~part~~the limitations our level of ~~this~~cash ~~strategy,~~flow weor ~~formed~~ability ~~the~~to ~~following joint~~raise ~~ventures~~capital ~~which~~may ~~are~~have ~~managed~~on byour ~~Mieka:~~operational and financial flexibility;

~~2009~~· ~~Mieka~~declines PAin ~~Westmoreland/Marcellus Shale~~the ~~Project~~values ~~I—Marcellus~~of Iour JVnatural gas and oil properties resulting in impairments;

In· ~~June 2010, we formed our first drilling joint venture that consisted of wells targeting~~ the ~~Marcellus~~availability Shale formation. The 2009 Mieka PA Westmoreland/Marcellus Shale Project I (“Marcellus I JV”) received $2,304,000 in capital contributions from outside investors. As the managing venturer we contributed $23,273 of capital for a 1% interest in the joint venture, which equals a 0.44% working interest and a 0.36% net revenue interest in the joint venture wells. We also purchased $82,500 of the Marcellus I JV in January 2010 on ~~the~~an ~~same~~economic ~~terms and~~basis conditions as outside investors, which equals 1.63% working interest and 1.35% net revenue interest in the wells. In addition, we hold a 4.91% carried working interest (3.35% net revenue interest), in each of the wells, which is carried to ~~the~~fund ~~tanks,~~reserve ~~outside the~~replacement ~~joint venture. We also hold an additional 36.04% working interest (29.28% net revenue interest) in the wells outside the joint venture.~~costs;

~~The~~· ~~Marcellus~~our Iability JV drilled a total of two natural gas wells, one of which was completed in December 2010 and is producing. The second well was completed during the first quarter of 2012. In December 2011, the Commonwealth of Pennsylvania enacted new legislation, which now requires us to ~~obtain~~replace ~~a permit~~reserves ~~to build a pipeline to move the natural gas produced from the second well. The permit was approved in October 2012, which will enable us to construct the pipeline~~ and ~~begin~~sustain production ~~during the fourth quarter of 2013.~~;

~~2010~~· ~~Mieka~~uncertainties ~~PA/WestM/Marcellus Shale~~inherent ~~Project~~in ~~II—Marcellus~~estimating IIquantities JVof natural gas and oil reserves and projecting future rates of production and the timing of development expenditures;

~~The~~· ~~2010~~inability Mieka PA/WestM/Marcellus Project II (“Marcellus II JV”) was formed in January 2011. In October 2011, the Marcellus II JV was closed with total capital contributions of $4,435,200 from outside investors. The Marcellus II JV was originally formed to ~~drill~~generate ~~one~~profits ~~vertical~~or ~~oil~~achieve ~~and~~targeted ~~gas well~~results ~~and one horizontal oil and gas well targeting the Marcellus Shale formation~~ in ~~Pennsylvania.~~our Indrilling ~~March 2013, the venture voted to acquire interest in two horizontal wells in New York in substitution for the horizontal well. As of August 31, 2013, the vertical well has been drilled, tested~~ and ~~completed and is awaiting a pipeline, and the horizontal wells have not commenced operations. Mieka holds a .77% carried working interest (0.00% net revenue interest) in the vertical~~ well. As the managing venturer we contributed $44,800 of capital for a 1% interest in the joint venture, which equals a 0.44% working interest and a 0.36% net revenue interest in the vertical well and a 0.36% working interest and a 0.30% net revenue interest in the horizontal wells.operations;

9· leasehold terms expiring before production can be established;

~~2011~~· ~~Mieka/Jefferson-Cattaraugus Oil~~drilling &and ~~Gas~~operating ~~Project~~risks, ~~A—Mieka~~including ~~Jefferson~~potential Aenvironmental JVliabilities associated with hydraulic fracturing;

~~The~~· ~~2011~~changes ~~Mieka/Jefferson-Cattaraugus Oil & Gas Project A (“Mieka Jefferson A JV”) began accepting investor subscriptions~~ in ~~December~~legislation ~~2011~~ and ~~had~~regulation ~~received~~adversely ~~capital contributions~~affecting ofour ~~$6,514,917~~industry ~~as of August 31, 2013. The Mieka Jefferson A JV was originally formed to drill two gas wells, one vertical~~ and ~~one~~our horizontal, targeting the Marcellus Shale formation and two horizontal oil wells, which were to be drilled to the 1st, 2nd or 3rd Bradford Sands formation in western New York. In March 2013, the venture voted to acquire interests in two horizontal wells in New York in substitution for the horizontal gas well. As of August 31, 2013, the vertical natural gas well had been drilled, tested, and fracked. One of the horizontal oil wells was completed in the quarter ended September 30, 2012 and the other horizontal well has been completed in the quarter ended September 30, 2013. The other two horizontal wells have not yet commenced operations. Mieka holds a 6% carried working interest (4.25% net revenue interest) in the wells that have commenced operations, and will hold a 4% carried working interest (3.4% net revenue interest) in the wells that have not commenced operations. As the managing venturer we have contributed $86,616 of capital for a 1% interest in the joint venture, which equals a 0.44% working interest and a 0.36% net revenue interest in the wells that have commenced operations and will equal a 0.36% working interest and a 0.30% net revenue interest in the wells that have not commenced operation. Additionally, Mieka LLC holds a 10% working interest (8.12% net revenue interest) in one of the wells that has commenced operations.business;

~~Mieka~~· ~~LLC~~general ~~purchased~~economic ~~$612,500~~conditions ofnegatively ~~joint~~impacting ~~venture units~~us ~~in December 2011, which represents a 3.11% working interest~~ and ~~2.57%~~our ~~net~~business ~~revenue~~counterparties; ~~interest in the wells.~~and

~~Results~~· oftransportation ~~Operations~~capacity constraints and interruptions that could adversely affect our cash flow.

~~Comparison~~We ofcaution ~~Three~~you ~~Months~~not ~~Ended~~to place undue reliance ~~March~~on 31these forward-looking statements, ~~2013~~which tospeak ~~Three~~only ~~Months~~as ~~Ended~~of ~~March~~the 31date of this report, ~~2012~~and we undertake no obligation to update this information. Forward-looking statements are not guarantees of future performance and actual results may differ significantly from the results discussed in the forward-looking statements. We urge you to carefully review and consider the disclosures made in this report and our other filings with the SEC that attempt to advise interested parties of the risks and factors that may affect our business.

Total Revenues. Total revenues decreased $2,678,801 to $65,293 for the first three months of 2013 from $2,744,094 for the 2012 quarter, due to the recognition of turnkey drilling revenue during the first quarter of 2012, and to decreased natural gas and oil sales.11

Turnkey Drilling Revenues. Turnkey drilling cash received during the three months ended March 31, 2013 was not recognized, but was deferred because of certain GAAP requirements. Turnkey revenues for the three months ended March 31, 2012, represent two wells completed during the first quarter of 2012 and are comprised of $2,664,474 of revenues earned from the 50% working interest owned by the Marcellus I JV and the Marcellus II JV.Overview

~~Natural~~Vadda ~~Gas~~is ~~and~~a ~~Oil~~publicly ~~Sales. Natural~~held, independent energy ~~gas~~company ~~and~~engaged ~~oil~~primarily ~~sales~~in ~~decreased~~the ~~$14~~exploration for,~~327~~ and development of, ornatural 18gas and crude oil reserves.~~0%,~~ toWe ~~$65,293~~generate ~~for~~our ~~the~~revenues and ~~three~~cash ~~months~~flows ~~ended~~from ~~March~~two ~~31,~~primary ~~2013~~sources: profits from ~~$79,620~~the ~~for~~difference ~~2012,~~between ~~due to~~the ~~normal~~amounts ~~production~~we ~~decline~~received in ~~existing~~turnkey ~~wells~~fees ~~coupled~~from ~~with~~joint ventures awe ~~decrease~~manage inand our actual costs to conduct the ~~price~~joint ventures’ operations, and proceeds from the sale of ~~natural~~oil and gas production on properties we hold.

Total Costs and Expenses. Total costs and expenses decreased $1,254,744, or 67.3%, to $609,162 for the three months ended March 31, 2013 from $1,836,906 for the prior year quarter, due primarily to the recognition of turnkey drilling costs on completed projects in 2012.Strategy

~~Turnkey~~Our ~~Drilling~~long-term ~~Costs. Turnkey drilling~~growth ~~costs~~strategy ~~were~~is $0primarily focused ~~for~~on ~~the~~building ~~three~~cash ~~months~~flow ~~ended~~from ~~March~~developing ~~31,~~crude ~~2013.~~oil ~~Turnkey~~reserves through drilling ~~costs~~horizontal ~~were~~wells ~~$1,258,976~~ in ~~the first three months~~southern ofNew ~~2012~~York and ~~included~~north ~~costs~~central toPennsylvania ~~drill~~and ~~100%~~natural ofgas ~~two~~reserves ~~wells~~on ~~owned~~lease ~~50%~~acreage byin the Marcellus IShale JV and ~~the~~Utica ~~Marcellus~~Shale formations IIin JVsouthwestern Pennsylvania. We believe this strategy will create greater value for investors.

~~General~~We ~~and~~hope ~~Administrative Expenses. General and administrative expenses increased only slightly by $4,074, or 0.0%,~~ to ~~$522,191~~accomplish ~~during~~our ~~the~~objectives ~~three months ended March 31, 2013 from $518,117 for the same period~~ in ~~2012 due to increased payroll and commission costs, partially offset by~~ the ~~decrease~~ infollowing ~~2013 from 2012 costs related to becoming a public company.~~manner:

~~Net~~· ~~Income~~Generating (Loss). The net loss attributable to Vadda common stockholders was $291,006, or $0.00 per basic and diluted common share, for the three months ended March 31, 2013 as compared to net income attributable to Vadda common stockholders of $271,920, or $0.00 per basic and diluted common share, for the 2012 quarter. The total net loss of $443,934 for the first quarter of 2013 represents a consolidated net loss, which includes a net loss of $152,928 attributable to Mieka LLC. The net income for the 2012 quarter was attributable to net turnkey drilling ~~income~~profits ~~recognized~~from onwells ~~two~~funded ~~wells~~and drilled by ~~two~~ joint ventures ~~and~~we ~~a third party~~manage. That 2012 total net income of $649,188 represents a consolidated net income that includes net income of $377,628 attributable to Mieka LLC. Mieka LLC is a variable interest entity that is not owned by the Company, but which shares common control. Due to Mieka LLC’s ownership and dependence upon the Company and its subsidiaries for its cash flows, its financial information is required to be consolidated with Vadda’s and Mieka’s financial statements under variable interest entity accounting. See Note 7 to the unaudited consolidated financial statements included elsewhere in this report.

10· Earning carried working interests in wells drilled by joint ventures we sponsor. In all wells drilled by sponsored joint ventures, our carried interest bears no drilling and completion costs. We bear only the cost of the leasehold rights and our share of operating expenses after the wells are drilled, completed and commence production.

~~Liquidity~~· We also purchase an interest in each joint venture equal to 1% of the working interest owned by the joint venture. Such interest is not carried and ~~Capital~~pays ~~Resources~~its proportionate share of joint venture costs and expenses.

~~The~~· ~~Company~~Direct ~~evaluated~~participation ~~the~~as ~~ability~~a ~~to continue~~working asinterest aowner ~~going~~in ~~concern~~wells through ~~the~~a ~~year~~combination ~~ended~~of ~~December~~strategies, 31including retention of carried working interests, ~~2013~~overriding ~~due~~royalty tointerests ~~the~~and ~~following~~reversionary ~~factors:~~interests (which we expect will provide us ownership in wells after outside investors have recovered their drilling and completion costs from net revenues from the wells).

· ~~recurring~~Overhead ~~operating~~fees ~~losses;~~and income earned as the managing venturer of joint ventures.

· ~~working~~Raising additional capital ~~deficiencies;~~through debt or equity offerings.

· ~~negative~~Exploiting ~~cash~~our ~~flows~~oil ~~from~~and ~~operating~~gas ~~activities;~~wells through use of hydraulic fracturing, a method we have employed on past wells we have drilled and/or operated, and a technique we intend to utilize in our Marcellus Shale operations.

·As ~~accumulated~~part ~~deficits.~~of this strategy, we formed the following joint ventures which are managed by Mieka:

~~Cash~~2009 ~~and~~Mieka ~~cash~~PA ~~equivalents totaled $75,589 as~~Westmoreland/Marcellus ofShale ~~March~~Project ~~31,~~I—Marcellus ~~2013,~~I as compared to $358,519 as of December 31, 2012. As of March 31, 2013, we had a working capital deficit of $5,465,531, which consisted of $1,553,562 of current assets offset by $7,019,093 of current liabilities. Current assets as of March 31, 2013 included cash of $75,589, prepaid drilling costs of $1,395,083, accounts receivable (net) of $52,960, and deferred income tax of $29,930. Current liabilities as of March 31, 2013 included deferred revenue of $6,409,056, accounts payable and accrued liabilities of $479,352, payable to affiliate of $81,421, payable to shareholders of $45,319 and current portion of note payable of $3,945.JV

AsIn ofJune ~~December 31~~2010, ~~2012,~~ we ~~had~~formed aour ~~working~~first ~~capital~~drilling ~~deficit~~joint venture that consisted of wells targeting the Marcellus Shale formation. The 2009 Mieka PA Westmoreland/Marcellus Shale Project I (“Marcellus I JV”) received $42,~~965~~304,~~172,~~000 ~~which~~in ~~consisted~~capital ofcontributions from outside investors. As the managing venturer we contributed $123,~~182,650~~273 of ~~current~~capital ~~assets~~for ~~offset~~a by1% $6interest in the joint venture,~~147,822~~ ofwhich ~~current~~equals ~~liabilities~~a 0.44% ~~Current~~working ~~assets~~interest and a 0.36% net asrevenue ofinterest ~~December~~in ~~31,~~the ~~2012~~joint ~~included~~venture ~~cash~~wells. ofWe also purchased $~~358~~82,~~519,~~500 ~~prepaid~~of ~~drilling~~the ~~costs~~Marcellus ofI ~~$455,009,~~JV ~~receivable~~in ~~from~~January ~~affiliate~~2010 ofon ~~$280,046,~~the ~~accounts~~same terms ~~receivable~~and ofconditions ~~$59~~as outside investors,~~146~~ which equals 1.63% working interest and ~~deferred~~1.35% ~~income~~net ~~tax~~revenue ofinterest ~~$835~~in the wells. In addition,~~275~~ we hold a 4.91% ~~Current~~carried ~~liabilities~~working asinterest (3.35% net revenue interest), in each of ~~December~~the 31wells, ~~2012~~which ~~included~~is ~~deferred~~carried ~~revenue of~~to $5the tanks,~~796,556,~~ ~~accounts~~outside the ~~payable~~joint ~~and~~venture. ~~accrued~~We ~~liabilities~~also ofhold ~~$298,095,~~an ~~payable~~additional to36.04% ~~stockholders~~working ofinterest ~~$45,319,~~(29.28% ~~and~~net ~~current~~revenue ~~portion~~interest) ~~of note~~in ~~payable~~the ofwells ~~$7,852~~outside the joint venture.

~~Cash~~The ~~flow~~Marcellus ~~from~~I ~~operations~~JV isdrilled ~~our~~a ~~most~~total ~~significant~~of two natural ~~source~~gas wells, one of ~~liquidity~~which was completed in December 2010 and is producing. WeThe ~~generate~~second ~~our~~well ~~operating~~was ~~cash~~completed ~~flow~~during the first quarter of 2012. In December 2011, the Commonwealth of Pennsylvania enacted new legislation, which now requires us to obtain a permit to build a pipeline to move the natural gas produced from ~~two~~the ~~primary~~second ~~sources:~~well. The permit was approved in October 2012, which will enable us to construct the pipeline and begin production during the fourth quarter of 2013.

· Turnkey oil and gas drilling joint ventures, from which we generally receive turnkey income (which generates profits to the extent the turnkey price we charge to the joint ventures exceeds the actual costs necessary to acquire leases and drill, test and complete wells for such joint ventures) and carried working interests in such wells (which generate monthly revenue and cash flow to the extent such wells produce natural gas and oil), as well as interests in such joint ventures purchased by the Company (which also generate monthly revenue and cash flow to the extent such wells produce natural gas and oil in commercial quantities); and12

·2010 ~~Natural~~Mieka ~~gas~~PA/WestM/Marcellus ~~and~~Shale ~~oil~~Project II—Marcellus ~~sales,~~II which are attributable to working interests owned and held directly by us in wells on producing oil and gas properties (which generate monthly revenue and cash flow to the extent such wells produce natural gas and oil in commercial quantities) and carried working interests in such wells (which also generate monthly revenue and cash flow to the extent such wells produce natural gas and oil), as well as overriding royalty interests and reversionary interests (which may generate additional monthly revenue and cash flow to the extent such wells produce natural gas and oil in commercial quantities).JV

~~Cash~~The ~~used~~2010 Mieka PA/WestM/Marcellus Project II (“Marcellus II JV”) was formed in ~~operating~~January ~~activities~~2011. In October 2011, the Marcellus II JV was closed with total capital contributions of $~~279~~4,~~023~~435,200 from outside investors. The Marcellus II JV was originally formed to drill one vertical oil and gas ~~for~~well and one horizontal oil and gas well targeting the ~~three~~Marcellus ~~months~~Shale ~~ended~~formation in Pennsylvania. In March 2013, the venture voted to acquire interest in two horizontal wells in New York in substitution for the horizontal well. As of August 31, 2013, ~~compared~~the tovertical well has been drilled, tested and completed and is awaiting a pipeline, and the horizontal wells have not commenced operations. Mieka holds a .77% carried working interest (0.00% net revenue interest) in the vertical well. As the managing venturer we contributed $~~368~~44,~~355~~800 of capital for ~~the~~a ~~three~~1% ~~months~~interest ~~ended~~in ~~March~~the 31joint venture, ~~2012~~which equals a 0.44% working interest and a 0.36% net revenue interest in the vertical well and a 0.36% working interest and a 0.30% net revenue interest in the horizontal wells.

~~Changes~~2011 ~~in cash flows from operations are largely due to the same factors that affect our net income, excluding various non~~Mieka/Jefferson-~~cash~~Cattaraugus ~~items such as impairments of assets, depreciation,~~Oil ~~depletion~~& ~~and~~Gas ~~amortization~~Project ~~and~~A—Mieka ~~deferred~~Jefferson ~~income~~A ~~taxes. For example, changes in turnkey drilling revenues, production volumes and market prices for natural gas and oil directly impact the level of our cash flow from operations.~~JV

~~Although~~The ~~our~~2011 ~~long~~Mieka/Jefferson-~~term~~Cattaraugus ~~growth~~Oil ~~strategy~~& Gas ~~calls~~Project A (“Mieka Jefferson A JV”) began accepting investor subscriptions in December 2011 and had received capital ~~for~~contributions anof ~~increased~~$6,757,917 ~~focus~~as onof ~~our~~September ~~own~~30, ~~natural~~2013. The Mieka Jefferson A JV was originally formed to drill two gas wells, one vertical and ~~oil~~one ~~operations~~horizontal, targeting the Marcellus Shale formation and wetwo ~~intend~~horizontal oil wells, which were to ~~rely~~be ~~less~~drilled onto the ~~turnkey~~1st, ~~drilling~~2nd ~~revenues~~or 3rd Bradford Sands formation in ~~the future~~western New York. In March 2013, wethe ~~expect~~venture voted to ~~continue~~acquire ~~our~~interests ~~reliance~~in ontwo horizontal ~~these~~wells ~~sources~~in ofNew ~~liquidity~~York in substitution for the ~~future~~horizontal gas well. WeAs ~~use~~of ~~cash~~September ~~flows~~30, ~~from~~2013, ~~operations~~the tovertical ~~fund expenditures~~natural ~~related~~gas towell had ~~our~~been ~~exploration~~drilled, ~~development~~tested, and ~~acquisition~~fracked. One of ~~natural~~the ~~gas~~horizontal oil wells was completed in the quarter ended September 30, 2012 and the ~~oil~~other ~~properties~~horizontal well has been completed in the quarter ended September 30, 2013. WeThe other two horizontal wells have ~~historically~~not ~~obtained~~yet ~~most~~commenced ofoperations. Mieka holds a 6% carried working interest (4.25% net revenue interest) in the ~~capital~~wells tothat ~~fund~~have ~~expenditures~~commenced ~~related~~operations, and towill ~~our~~hold ~~turnkey~~a ~~drilling~~4% ~~ventures~~carried ~~from~~working interest (3.4% net revenue interest) in the ~~sale~~wells that have not commenced operations. As the managing venturer we have contributed $86,616 of ~~interests~~capital for a 1% interest in the joint ~~ventures~~venture, which equals a 0.44% working interest toand ~~outside~~a ~~participants~~0.36% ~~Since~~net ~~2001,~~revenue weinterest in the wells that have ~~raised~~commenced ~~approximately~~operations ~~$44~~and will equal a 0.936% ~~million~~working ~~from~~interest ~~outside~~and ~~investors~~a in0.30% net 32revenue ~~joint~~interest ~~ventures~~in the wells that have not commenced operation. Additionally, Mieka LLC holds a 10% working interest (8.12% ~~drilled~~net ~~167~~revenue ~~oil~~interest) in one well, which has commenced operations. Mieka LLC and ~~gas~~Mieka ~~wells~~also each hold a 21.82% working interest (18.55% net revenue interest) in the Potter Lumber #2 well, which was completed in the quarter ended September 30, 2013.

~~However,~~Results ~~our ability to raise capital from outside investors through joint ventures is dependent upon the ability~~ of the investors to deduct intangible drilling costs on their federal income tax returns. If there are changes to the U.S. tax laws to eliminate or significantly limit this deduction, it could materially adversely affect our ability to fund our turnkey drilling operations and generate our turnkey drilling revenues.Operations

11Comparison of Three Months Ended June 30, 2013 to Three Months Ended June 30, 2012

~~Our~~Total ~~plan~~Revenues. toTotal ~~generate~~revenues ~~cash~~increased $43,036 ~~flows~~ to ~~meet~~$90,681 ~~ongoing drilling~~for ~~obligations~~the ~~and~~three ~~fund~~months ~~general~~ended ~~and~~June ~~administrative~~30, ~~expenses~~2013 ~~through~~from $47,645 for the ~~remainder~~2012 ofsecond ~~2013~~quarter, isdue to ~~execute~~increased ~~the~~natural gas ~~following:~~and oil sales.

·Turnkey ~~continue~~Drilling toRevenues. ~~generate~~Turnkey drilling ~~turnkey~~cash ~~drilling~~received ~~revenues~~of $1,429,167 and ~~profits;~~$347,083 during the three months ended June 30, 2013 and 2012 respectively, was not recognized, but was deferred because of certain GAAP requirements.

·Natural ~~obtain~~Gas ~~carried~~and ~~interests~~Oil inSales. Natural gas ~~wells~~and ~~drilled~~oil bysales increased $43,036, or 90.7%, to $90,681 for the three months ended June 30, 2013 from $47,645 for 2012, due to increased production from two new ~~joint~~oil ~~ventures;~~wells coupled with an increase in the price of both oil and natural gas.

·Total ~~directly~~Costs ~~participate~~and inExpenses. ~~wells~~Total ~~drilled~~costs and inexpenses increased $211,214, or 48.1%, to $650,100 for the ~~Marcellus~~three ~~Shale~~months ended June 30, ~~Utica~~2013 ~~Shale~~from ~~and~~$438,886 ~~oil~~for ~~sands~~the inprior ~~New~~year quarter, ~~York~~due to increased lease operating costs, general and ~~Pennsylvania~~administrative costs, and depletion and depreciation in 2013.

~~The~~Turnkey ~~selling~~Drilling ~~price for natural gas we produce has decreased over the past couple of years~~Costs. There ~~However, the prices have increased approximately 50% thus far in 2013, and natural~~were ~~gas~~no ~~futures~~turnkey ~~indicate continuing improved performance over the next several years. The Company’s current~~ drilling ~~joint~~costs ~~venture,~~for the ~~2011~~three ~~Mieka/Jefferson-Cattaraugus~~months ~~Oil~~ended &June ~~Gas Project A~~30, ~~includes four oil wells in addition to one gas well~~2013. ~~The~~Turnkey ~~Zlomek~~drilling #2costs ~~H-1~~were ~~horizontal oil well~~$10,000 ~~located~~ in ~~Cattaraugus County, New York, was completed in~~ the ~~quarter~~three months ended ~~September~~June 30, 2012. The Kruger Thomas vertical gas well, located in Jefferson County, New York, is expected to be completed by the end of the year. The Potter Lumber 2 #1 horizontal oil well, located in Cattaraugus County, New York, has been completed in the third quarter of 2013. Two additional horizontal oil wells, to be located in Cattaraugus County, New York, have been permitted, and preparations to begin drilling are in process.

Our revenues and cash flow could be adversely impacted by lower natural gas and crude oil prices and we are presently not participating in any hedging activities. Although gas prices have been depressed over the past couple of years, they have been increasing in 2013 and based on natural gas futures we expect continuing improved performance. Oil prices have been steady and we expect this trend to continue.13

WeGeneral ~~may not be able to raise additional capital or generate turnkey drilling revenues or profits in amounts sufficient to fund ongoing drilling obligations~~ and ~~general~~Administrative ~~and administrative expenses~~Expenses. ~~If we cannot continue to raise additional capital or start generating sufficient cash flow from operations, we may have~~ toGeneral ~~significantly delay the timing of expenditures for drilling~~ and~~/or~~ administrative expenses toincreased ~~meet~~$174,722, ~~our current obligations~~ or ~~consider~~ ~~curtailing operations~~47. ~~Although we typically retain a significant degree of control over the timing of our capital expenditures~~7%, we ~~may not always be able~~ to ~~defer or accelerate certain capital expenditures to address any potential liquidity issues~~$541,123 ~~although largely~~during ~~discretionary. The Company has been able to generate significant funds from~~ the ~~sale~~three ofmonths ~~interests~~ended inJune ~~its~~30, ~~joint ventures in~~ 2013 ~~to allow us to continue as a going concern, including a total of~~ from $2366,~~041,667~~401 ~~from~~for ~~April~~the 1,same ~~2013~~period ~~through~~in ~~September~~2012 ~~16,~~due ~~2013. We~~primarily ~~expect~~ to ~~continue~~increased tocommissions ~~generate~~and ~~additional~~payroll ~~investment~~related ~~to fund operations through the year ended December 31, 2013; however, we cannot give any assurance of our ability to do so~~expenses.

WeNet ~~did~~Income ~~not~~(Loss). ~~generate~~Net ~~any~~loss ~~cash~~attributable to ~~flow~~Vadda ~~from financing~~common ~~activities~~stockholders inwas ~~either~~$291,294, ofor $0.00 per basic and diluted common share, for the three months ended ~~March 31~~June 30, 2013 as compared to a net loss attributable to Vadda common stockholders of $302,054, or $0.00 per basic and diluted common share, for the 2012 quarter. The total net loss of $464,739 for the second quarter of 2013 represents a consolidated net loss, which includes a net loss of $173,445 attributable to Mieka LLC. The 2012 total net loss of $301,421 represents a consolidated net loss that includes net income of $633 attributable to Mieka LLC. Mieka LLC is a variable interest entity that is not owned by the Company, but which shares common control. Due to Mieka LLC’s ownership and dependence upon the Company and its subsidiaries for its cash flows, its financial information is required to be consolidated with Vadda’s and Mieka’s financial statements under variable interest entity accounting. See Note 9 to the unaudited consolidated financial statements included elsewhere in this report.

WeComparison cannot give any assurance that we will be able to raise additional equity capital or generate sufficient cash flow from operations to fund operations or growth. If we are unable to achieve a sufficient level of ~~cash~~Six ~~inflows~~Months ~~and/or~~Ended ~~cannot~~June ~~secure equity financing~~30, ~~if needed, on satisfactory~~ ~~terms,~~2013 ~~we may be unable~~ to ~~support~~Six orMonths ~~expand~~Ended ~~our~~June ~~operations. Additional equity financings are likely to be dilutive to holders of our common stock and debt financings~~30, ~~if available, may involve significant payment obligations and covenants that restrict how we operate our business.~~2012

~~Item~~Total 3Revenues. ~~Quantitative~~Total ~~and~~revenues ~~Qualitative~~decreased $2,635,585 ~~Disclosures~~to ~~About~~$155,974 ~~Market~~for ~~Risk~~the six months ended June 30, 2013 from $2,791,559 for the first six months of 2012, due primarily to the recognition of turnkey drilling revenue during the first quarter of 2012, offset slightly by increased natural gas and oil sales in 2013.

WeTurnkey ~~are~~Drilling aRevenues. ~~“smaller~~Turnkey ~~reporting company”~~drilling ascash ~~defined~~received byduring ~~Rule~~the ~~12b-2~~six ~~under~~months ended June 30, 2013 was not recognized, but was deferred because of certain GAAP requirements. Turnkey revenues for the ~~Securities~~six ~~Exchange~~months ~~Act~~ended June 30, 2012 represent two wells completed during the first quarter of 2012 and asare comprised ~~such~~of $2,664,474 ~~are~~of ~~not~~revenues ~~required~~earned tofrom ~~provide~~the 50% working interest owned by the ~~information~~Marcellus ~~required under~~I ~~this~~JV ~~Item~~and the Marcellus II JV.

~~Item~~Natural 4Gas and Oil Sales. Natural gas ~~Controls~~and oil sales increased $28,889, or 22.7%, to $155,974 for the six months ended June 30, 2013 from $127,085 for the 2012 period, due to increased production from two new oil wells coupled with an increase in the price of both oil and ~~Procedures~~natural gas.

~~Disclosure~~Total ~~Controls~~Costs and ~~Procedures~~Expenses. Total costs and expenses decreased $1,043,530, or 45.3%, to $1,259,262 for the six months ended June 30, 2013 from $2,302,792 for the prior year, due primarily to the recognition of turnkey drilling costs on completed projects in 2012.

WeTurnkey ~~maintain~~Drilling ~~disclosure~~Costs. Turnkey ~~controls and procedures~~drilling ascosts ~~defined~~were in$0 ~~Rule~~for ~~13a-15(e)~~the orsix ~~15d-15(e)~~months ~~under~~ended ~~the~~June ~~Securities Exchange Act~~30, ~~which~~2013. ~~(1)~~Turnkey ~~are~~drilling ~~designed~~costs towere ~~ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act is recorded~~$1, ~~processed~~268, ~~summarized~~976 ~~and reported, within the time periods specified~~ in the ~~SEC’s~~first ~~rules~~six ~~and~~months ~~forms~~of ~~and~~2012 ~~(2) include controls~~ and ~~procedures~~ ~~designed~~included costs to ~~ensure~~drill ~~that~~100% ~~such~~of ~~information~~two iswells ~~accumulated~~owned ~~and~~50% ~~communicated~~by tothe ~~our~~Marcellus ~~management,~~I ~~including~~JV ~~our principal executive officer~~ and ~~principal financial officer, or~~ the ~~person~~Marcellus orII ~~persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure~~JV.

12General and Administrative Expenses. General and administrative expenses increased $178,796, or 20.2%, to $1,063,314 during the six months ended June 30, 2013 from $884,518 for the same period in 2012 due primarily to increased commission costs and payroll related expenses.

~~Our~~Net ~~management~~Income ~~evaluated,~~(Loss). ~~with~~Net ~~the~~loss ~~participation~~attributable ofto ~~our~~Vadda ~~Chief~~common ~~Executive~~stockholders ~~Officer~~was ~~and Chief Financial Officer~~$582,300 ~~the~~or ~~effectiveness~~$0.01 ofloss ~~such~~per ~~disclosure~~basic ~~controls~~ and ~~procedures~~diluted ascommon ~~of March 31~~share, ~~2013,~~for the ~~end~~six ofmonths ~~the~~ended ~~period covered by this report~~June 30, 2013 as ~~required~~compared byto ~~paragraph~~a ~~(b)~~net ofloss ~~Rule~~attributable ~~13a-15~~to orcommon ~~Rule~~stockholders ~~15d~~of 15$30,134, ~~under the~~or ~~Securities~~$0.00 ~~Exchange~~per ~~Act.~~basic ~~Based~~and ondiluted ~~this~~common ~~evaluation~~share, ~~our~~for ~~Chief~~the 2012 ~~Executive~~period. ~~Officer~~The ~~and~~total ~~Chief~~net ~~Financial~~loss ~~Officer~~of ~~concluded~~$908,673 ~~that~~for ~~our disclosure~~the ~~controls~~six ~~and~~months ~~procedures~~ended ~~were~~June ~~effective~~30, at2013 represents a ~~reasonable~~consolidated ~~assurance~~net ~~level~~loss, aswhich ofincludes a ~~March~~net ~~31,~~loss ~~2013.~~of ~~However~~$326,373 ~~management~~attributable ~~has taken significant steps~~ to ~~improve~~Mieka ~~its~~LLC. ~~disclosure~~The ~~controls~~2012 ~~and~~total ~~procedures~~net ~~over~~income ~~the~~of ~~last~~$347,767 ~~year.~~represents ~~The~~a ~~Company~~consolidated ~~has~~net ~~engaged~~income that includes a ~~new~~net ~~Chief Financial~~income ~~Officer~~of $377,901 ~~Vice~~attributable ~~President~~to ofMieka ~~Finance,~~LLC. ~~and~~Mieka ~~Accounting~~LLC ~~Manager~~is toa ~~review~~variable ~~control~~interest ~~deficiencies,~~entity ~~implement~~that ~~accounting~~is ~~controls, and~~not ~~provide~~owned ~~multiple~~by ~~levels~~the ofCompany, but ~~review~~which ofshares ~~financial~~common ~~information~~control. ADue ~~new~~to ~~oil~~Mieka &LLC’s ~~gas~~ownership ~~accounting~~and ~~software~~dependence ~~system~~upon ~~has~~the ~~been~~Company ~~implemented to~~and ~~provide~~its ~~more~~subsidiaries ~~accurate~~for ~~and~~its cash ~~detailed~~flows, its financial information. Ais ~~formal~~required ~~monthly~~to ~~accounting~~be ~~close~~consolidated ~~process~~with ~~has~~Vadda’s ~~been~~and ~~implemented.~~Mieka’s ~~Management~~financial statements ~~will~~under ~~continue~~variable tointerest ~~take~~entity ~~steps~~accounting. See Note 7 to ~~improve~~the ~~its~~unaudited ~~disclosure~~consolidated ~~controls~~financial ~~and~~statements ~~procedures~~included elsewhere in this ~~2013~~report.

~~Changes in Internal Control over Financial Reporting~~14

~~There~~Liquidity ~~were~~and noCapital changes in our internal control over financial reporting during the quarter ended March 31, 2013 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Resources

13The Company evaluated the ability to continue as a going concern through the year ended December 31, 2013 due to the following factors:

~~Part II~~· –recurring ~~Other~~operating ~~Information~~losses;

~~Item~~· 1.working ~~Legal~~capital ~~Proceedings.~~deficiencies;

In· ~~April~~negative ~~2011,~~cash inflows the Matter of Mieka Corporation, Daro Blankenship and Stephen Romo, Case No. XY-11-CD-11, Fred J. Joseph, the Colorado Securities Commissioner, and the Colorado Division of Securities, entered a Final Cease and Desist Order against Mieka, Daro Blankenship and Stephen Romo (the “Respondents”) directing them to refrain from ~~committing~~operating oractivities; causing any violations of Sections 301, 401 or 501 of the Colorado Securities Act, or otherwise engaging in conduct in violation of the Colorado Securities Act. The Colorado Securities Commissioner found that (1) joint venture interests in a joint venture sponsored by Mieka were “investment contracts” and therefore “securities” within the meaning of the Colorado Securities Act, (2) the offer of such interests in Colorado required registration under Colorado Revised Statute Section 11-51-301 or an exemption to that registration requirement and (3) the Respondents violated provisions of the Colorado Securities Act relating to the employment of securities broker/dealers or sales representatives. The Respondents appealed the Order to the Colorado Court of Appeals in May 2011. The appellate court affirmed the Order on May 10, 2012.

~~Item~~· ~~1A.~~accumulated ~~Risk Factors~~deficits.

WeCash ~~are~~and acash ~~“smaller~~equivalents ~~reporting~~totaled ~~company”~~$521,778 as ~~defined~~of June 30, 2013, as compared to $358,519 as of December 31, 2012. As of June 30, 2013, we had a working capital deficit of $6,390,884, which consisted of $1,853,381 of current assets offset by ~~Rule~~$8,244,265 ~~12b-2~~of ~~under~~current ~~the~~liabilities. ~~Securities~~Current ~~Exchange~~assets ~~Act~~as of June 30, 2013 included cash of $521,778, prepaid drilling costs of $1,252,737, accounts receivable (net) of $48,936, and deferred income tax of $29,930. Current liabilities as ~~such~~of June 30, ~~are~~2013 ~~not~~included ~~required~~deferred torevenue ~~provide~~of ~~the~~$7,838,223, ~~information~~accounts ~~required~~payable ~~under~~and accrued liabilities ~~this~~of ~~Item~~$315,067, payable to affiliate of $67,454, payable to shareholders of $12,319 and current portion of note payable of $11,202.

~~Item~~As 2of December 31, 2012, we had a working capital deficit of $4,965,172, which consisted of $1,182,650 of current assets offset by $6,147,822 of current liabilities. ~~Unregistered~~Current ~~Sales~~assets as of ~~Equity~~December ~~Securities~~31, 2012 included cash of $358,519, prepaid drilling costs of $455,009, receivable from affiliate of $280,046, accounts receivable of $59,146 and ~~Use~~deferred income tax of ~~Proceeds~~$835,275. Current liabilities as of December 31, 2012 included deferred revenue of $5,796,556, accounts payable and accrued liabilities of $298,095, payable to stockholders of $45,319, and current portion of note payable of $7,852.

~~Not~~Cash ~~applicable~~flow from operations is our most significant source of liquidity. We generate our operating cash flow from two primary sources:

~~Item~~· 3.Turnkey ~~Defaults~~oil ~~Upon~~and ~~Senior~~gas ~~Securities.~~drilling joint ventures, from which we generally receive turnkey income (which generates profits to the extent the turnkey price we charge to the joint ventures exceeds the actual costs necessary to acquire leases and drill, test and complete wells for such joint ventures) and carried working interests in such wells (which generate monthly revenue and cash flow to the extent such wells produce natural gas and oil), as well as interests in such joint ventures purchased by the Company (which also generate monthly revenue and cash flow to the extent such wells produce natural gas and oil in commercial quantities); and

~~Not~~· ~~applicable~~Natural gas and oil sales, which are attributable to working interests owned and held directly by us in wells on producing oil and gas properties (which generate monthly revenue and cash flow to the extent such wells produce natural gas and oil in commercial quantities) and carried working interests in such wells (which also generate monthly revenue and cash flow to the extent such wells produce natural gas and oil), as well as overriding royalty interests and reversionary interests (which may generate additional monthly revenue and cash flow to the extent such wells produce natural gas and oil in commercial quantities).

~~Item~~Cash 4.provided ~~Mine~~by ~~Safety~~operating ~~Disclosures~~activities was $603,317 for the six months ended June 30, 2013, compared to $1,059,215 used in operating activities for the six months ended June 30, 2012.

~~Not~~Changes ~~applicable~~in cash flows from operations are largely due to the same factors that affect our net income, excluding various non-cash items such as impairments of assets, depreciation, depletion and amortization and deferred income taxes. For example, changes in turnkey drilling revenues, production volumes and market prices for natural gas and oil directly impact the level of our cash flow from operations.

~~Item~~Although 5our long-term growth strategy calls for an increased focus on our own natural gas and oil operations and we intend to rely less on turnkey drilling revenues in the future, we expect to continue our reliance on these sources of liquidity in the future. ~~Other~~We ~~Information~~use cash flows from operations to fund expenditures related to our exploration, development and acquisition of natural gas and oil properties. We have historically obtained most of the capital to fund expenditures related to our turnkey drilling ventures from the sale of interests in the joint ventures to outside participants. Since 2001, we have raised approximately $46.4 million from outside investors in 32 joint ventures that drilled 168 oil and gas wells.

~~Not applicable.~~15

14However, our ability to raise capital from outside investors through joint ventures is dependent upon the ability of the investors to deduct intangible drilling costs on their federal income tax returns. If there are changes to the U.S. tax laws to eliminate or significantly limit this deduction, it could materially adversely affect our ability to fund our turnkey drilling operations and generate our turnkey drilling revenues.

~~Item~~Our 6.plan ~~Exhibits.~~to generate cash flows to meet ongoing drilling obligations and fund general and administrative expenses through the remainder of 2013 is to execute the following:

~~The~~· ~~following~~continue ~~exhibits~~to ~~are~~generate ~~furnished as~~turnkey ~~exhibits~~drilling torevenues ~~this~~and ~~report:~~profits;

~~EXHIBIT~~· ~~INDEX~~obtain carried interests in wells drilled by new joint ventures; and

Exhibit		Description
31.1		Certification of Principal Executive Officer of Periodic Report pursuant to Rule 13a-14a/Rule 14d-14(a)
31.2		Certification of Principal Financial Officer of Periodic Report pursuant to Rule 13a-14a/Rule 14d-14(a)
32.1		Certification of Principal Executive Officer of Periodic Report pursuant to 18 U.S.C. Section 1350
32.2		Certification of Principal Financial Officer of Periodic Report pursuant to 18 U.S.C. Section 1350
101.INS*		XBRL Instances Document
101.SCH*		XBRL Taxonomy Extension Schema Document
101.CAL*		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*		XBRL Taxonomy Extension Label Linkbase Document
101.PRE*		XBRL Taxonomy Extension Presentation Linkbase Document

directly participate in wells drilled in the Marcellus Shale, Utica Shale and oil sands in New York and Pennsylvania.

~~_______________~~The selling price for natural gas we produce has decreased over the past couple of years. However, the prices have increased approximately 50% thus far in 2013, and natural gas futures indicate continuing improved performance over the next several years. The Company’s current drilling joint venture, the 2011 Mieka/Jefferson-Cattaraugus Oil & Gas Project A, includes four oil wells in addition to one gas well. The Zlomek #2 H-1 horizontal oil well, located in Cattaraugus County, New York, was completed in the quarter ended September 30, 2012. The Kruger Thomas vertical gas well, located in Jefferson County, New York, is expected to be completed by the end of the year. The Potter Lumber 2 #1 horizontal oil well, located in Cattaraugus County, New York, has been completed in the third quarter of 2013. Two additional horizontal oil wells, to be located in Cattaraugus County, New York, have been permitted, and preparations to begin drilling are in process.

*Our ~~Pursuant~~revenues toand ~~Rule~~cash ~~406T~~flow ofcould ~~Regulation~~be ~~S-T,~~adversely impacted ~~these~~by ~~interactive~~lower ~~data~~natural ~~files~~gas and crude oil prices and we are presently not ~~deemed~~participating ~~filed~~in orany ~~part~~hedging ofactivities. aAlthough ~~registration~~gas prices ~~statement~~have orbeen ~~prospectus~~depressed ~~for~~over ~~purposes~~the past couple of ~~Section~~years, 11they orhave 12been ofincreasing ~~the~~in ~~Securities~~2013 ~~Act~~and orbased ~~Section~~on 18natural ofgas ~~the~~futures ~~Securities~~we expect ~~Exchange~~continuing ~~Act~~improved performance. Oil prices have been steady and ~~otherwise~~we ~~not~~expect ~~subject~~this trend to ~~liability~~continue.

15We may not be able to raise additional capital or generate turnkey drilling revenues or profits in amounts sufficient to fund ongoing drilling obligations and general and administrative expenses. If we cannot continue to raise additional capital or start generating sufficient cash flow from operations, we may have to significantly delay the timing of expenditures for drilling and/or administrative expenses to meet our current obligations or consider curtailing operations. Although we typically retain a significant degree of control over the timing of our capital expenditures, we may not always be able to defer or accelerate certain capital expenditures to address any potential liquidity issues, although largely discretionary. The Company has been able to generate significant funds from the sale of interests in its joint ventures in 2013 to allow us to continue as a going concern, including a total of $735,000 from July 1, 2013 through September 30, 2013. We expect to continue to generate additional investment to fund operations through the year ended December 31, 2013; however, we cannot give any assurance of our ability to do so.

~~SIGNATURES~~Cash flows used in investing activities was $433,295 and 5,347 for the six months ended June 30, 2013 and 2012, respectively. This represents primarily cash used for additions to oil and gas properties, as well as additions to property and equipment.

~~Pursuant~~Cash toflow ~~the~~generated ~~requirements~~from offinancing ~~the~~was ~~Securities~~$35,000 ~~Exchange~~and ~~Act~~$0 ofin ~~1934,~~ the ~~registrant~~six ~~has~~months ~~duly~~ended ~~caused~~June ~~this~~30, ~~report~~2013 toand be2012 ~~signed on its behalf by the undersigned thereunto duly authorized~~respectively.

	VADDA ENERGY CORPORATION
Date: September 19, 2013	By:	/s/ Daro Blankenship
		Daro Blankenship President and Chief Executive Officer (principal executive officer)

We cannot give any assurance that we will be able to raise additional equity capital or generate sufficient cash flow from operations to fund operations or growth. If we are unable to achieve a sufficient level of cash inflows and/or cannot secure equity financing, if needed, on satisfactory terms, we may be unable to support or expand our operations. Additional equity financings are likely to be dilutive to holders of our common stock and debt financings, if available, may involve significant payment obligations and covenants that restrict how we operate our business.

Date: September 19, 2013	By:	/s/ Martin N. Mayrath
		Martin N. Mayrath Chief Financial Officer (principal financial officer)

16Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We are a “smaller reporting company” as defined by Rule 12b-2 under the Securities Exchange Act, and as such, are not required to provide the information required under this Item.

Item 4. Controls and Procedures.

Disclosure Controls and Procedures

We maintain disclosure controls and procedures as defined in Rule 13a-15(e) or 15d-15(e) under the Securities Exchange Act, which (1) are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and (2) include controls and procedures designed to ensure that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, or the person or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Our management evaluated, with the participation of our Chief Executive Officer and Chief Financial Officer, the effectiveness of such disclosure controls and procedures as of June 30, 2013, the end of the period covered by this report, as required by paragraph (b) of Rule 13a-15 or Rule 15d 15 under the Securities Exchange Act. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective at a reasonable assurance level as of June 30, 2013. However, management has taken significant steps to improve its disclosure controls and procedures over the last year. The Company has engaged a new Chief Financial Officer, Vice President of Finance, and Accounting Manager to review control deficiencies, implement accounting controls, and provide multiple levels of review of financial information. A new oil & gas accounting software system has been implemented to provide more accurate and detailed financial information. A formal monthly accounting close process has been implemented. Management continues to take steps to improve its disclosure controls and procedures in 2013.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended June 30, 2013 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Part II - Other Information

Item 1. Legal Proceedings.

Not applicable.

Item 1A. Risk Factors.

We are a “smaller reporting company” as defined by Rule 12b-2 under the Securities Exchange Act, and as such, are not required to provide the information required under this Item.

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

Not applicable.

Item 3. Defaults Upon Senior Securities.

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information.

Not applicable.

Item 6. Exhibits.

The following exhibits are furnished as exhibits to this report:

EXHIBIT INDEX

Exhibit		Description
31.1		Certification of Principal Executive Officer of Periodic Report pursuant to Rule 13a-14a/Rule 14d-14(a)
31.2		Certification of Principal Financial Officer of Periodic Report pursuant to Rule 13a-14a/Rule 14d-14(a)
32.1		Certification of Principal Executive Officer of Periodic Report pursuant to 18 U.S.C. Section 1350
32.2		Certification of Principal Financial Officer of Periodic Report pursuant to 18 U.S.C. Section 1350
101.INS*		XBRL Instances Document
101.SCH*		XBRL Taxonomy Extension Schema Document
101.CAL*		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*		XBRL Taxonomy Extension Label Linkbase Document
101.PRE*		XBRL Taxonomy Extension Presentation Linkbase Document

Pursuant to Rule 406T of Regulation S-T, these interactive data files are not deemed filed or part of a registration statement or prospectus for purposes of Section 11 or 12 of the Securities Act or Section 18 of the Securities Exchange Act and otherwise not subject to liability

SIGNATURES

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

	VADDA ENERGY CORPORATION


Date: October 17, 2013	By: /s/ Daro Blankenship
	Daro Blankenship
	President and Chief Executive Officer
	(principal executive officer)



Date: October 17, 2013	By: /s/ Martin N. Mayrath
	Martin N. Mayrath
	Chief Financial Officer
	(principal financial officer)

Filing Compare · VADDA ENERGY CORP