10-Q
2012-03-31
false
ENERGY EDGE TECHNOLOGIES CORP.
0001495230
--12-31
Smaller Reporting Company
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<!--egx--><p style="text-align:justify; text-justify:inter-ideograph; padding:0; margin:0"><b><font style="color:black; font-weight:700">NOTE 1 – NATURE OF OPERATIONS</font></b></p><p style="text-align:left; padding:0; margin:0"><font style="color:black"> </font></p><p style="text-align:justify; text-justify:inter-ideograph; padding:0; margin:0"><font style="color:black">Energy Edge Technologies Corporation (“Energy Edge” and the “Company”) was incorporated in New Jersey in January, 2004 and was in the development stage until January 1, 2008 when the assets, liabilities, and operations of a sole proprietorship controlled by the Company’s sold stockholder were transferred in. The Company provides energy engineering and services specializing in the development and implementation of advanced, turnkey projects to reduce energy losses and increase the efficiency of new and existing buildings.  The Company is comprised of professional and industrial engineers, Leadership in Energy and Environmental Design (“LEED”) Accredited Professionals, and Green Building Coalition Certifying Agents.  Energy Edge is a Clean Energy Pay for Performance Partner and a Smart Start Building Trade Ally.  The Company’s custom designed projects are developed using proprietary methods and maximize energy savings by treating an entire facility based on its unique features and electricity and gas usage. </font></p><p style="text-align:left; padding:0; margin:0"><font style="color:black"> </font></p><p style="text-align:justify; text-justify:inter-ideograph; padding:0; margin:0"><font style="color:black">The Company applies a whole facility approach to energy cost reduction by applying different technologies and engineering approaches to treat most of the various electrical and gas consuming loads across facility such as lighting, HVAC, refrigeration and production equipment.  The energy projects developed and implemented by the Company are ideal for virtually any type of facility and have successfully resulted in tremendous savings in manufacturing plants, hospitals, entertainment venues, office buildings, restaurants, warehouses, etc.   </font></p><p style="text-align:left; padding:0; margin:0"><font style="color:black"> </font></p><p style="text-align:justify; text-justify:inter-ideograph; padding:0; margin:0"><font style="color:black">Revenues come primarily from engineering survey work and turnkey energy projects where the company takes responsibility for equipment procurement, installation labor, utility rebates, tax incentives, pre and post survey work, waste removal, certifications, and ongoing measurement and verification of results. </font></p>
<!--egx--><p style="text-align:justify; text-justify:inter-ideograph; padding:0; margin:0"><b><font style="color:black; font-weight:700">NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</font></b></p><p style="text-align:left; padding:0; margin:0"><font style="color:black"> </font></p><p style="text-align:justify; text-justify:inter-ideograph; padding:0; margin:0"><i><u><font style="font-style:italic; text-decoration:underline; color:black">Basis of Accounting</font></u></i></p><p style="text-align:justify; text-justify:inter-ideograph; padding:0; margin:0"><font style="color:black">Energy Edge uses the accrual basis of accounting for financial statement reporting. Accordingly, revenues are recognized when products are delivered and services are rendered, and expenses are recognized when the obligation is incurred. The Company recognizes revenues from contracts on the percentage-of-completion method, measured by the percentage of cost incurred to date to estimated total cost for each contract. The Company has selected a December 31 year end.</font></p><p style="text-align:left; padding:0; margin:0"><font style="color:black"> </font></p><p style="text-align:justify; text-justify:inter-ideograph; padding:0; margin:0"><i><u><font style="font-style:italic; text-decoration:underline; color:black">Basis of Presentation</font></u></i></p><p style="text-align:justify; text-justify:inter-ideograph; padding:0; margin:0"><font style="color:black">The accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (“SEC”), and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s Form 10-K filed with the SEC as of and for the year ended December 31, 2011.  In the opinion of management, all adjustments necessary for the financial statements to be not misleading for the interim periods presented have been reflected herein.  The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year.</font></p><p style="text-align:left; padding:0; margin:0"><font style="color:black"> </font></p><p style="text-align:justify; text-justify:inter-ideograph; padding:0; margin:0"><i><u><font style="font-style:italic; text-decoration:underline; color:black">Fair Value of Financial Instruments</font></u></i></p><p style="text-align:justify; text-justify:inter-ideograph; padding:0; margin:0"><font style="color:black">The Company's financial instruments consist of cash and cash equivalents, receivables, costs and estimated earnings in excess of billings on uncompleted contracts, prepaid consulting fees, accounts payable, accrued expenses and other current liabilities, loan payable – shareholder, and billings in excess of costs and estimated earnings on uncompleted contracts. The carrying amounts of these financial instruments approximate fair value due either to length of maturity or interest rates that approximate prevailing rates unless otherwise disclosed in these financial statements.</font></p><p style="text-align:left; padding:0; margin:0"><font style="color:black"> </font></p><p style="text-align:justify; text-justify:inter-ideograph; padding:0; margin:0"><i><u><font style="font-style:italic; text-decoration:underline; color:black">Contract Receivables</font></u></i></p><p style="text-align:justify; text-justify:inter-ideograph; padding:0; margin:0"><font style="color:black">Contract receivables are recorded when invoices are issued and are presented in the balance sheet net of the allowance for doubtful accounts. The Company extends credit to customers in the normal course of business. The Company monitors contract receivable balances and does not expect significant collection problems. Contract receivables are written off when they are determined to be uncollectible.</font></p><p style="text-align:left; padding:0; margin:0"><font style="color:black"> </font></p><p style="text-align:justify; text-justify:inter-ideograph; padding:0; margin:0"><i><u><font style="font-style:italic; text-decoration:underline; color:black">Use of Estimates</font></u></i></p><p style="text-align:justify; text-justify:inter-ideograph; padding:0; margin:0"><font style="color:black">The preparation of financial statements in conformity with generally accepted accounting principles of the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the year. Management bases its estimates on historical experience and on other assumptions considered to be reasonable under the circumstances. However, actual results may differ from the estimates.</font></p><p style="text-align:left; padding:0; margin:0"><font style="color:black"> </font></p><p style="text-align:justify; text-justify:inter-ideograph; padding:0; margin:0"><i><u><font style="font-style:italic; text-decoration:underline; color:black">Concentrations of Credit Risk</font></u></i></p><p style="text-align:justify; text-justify:inter-ideograph; padding:0; margin:0"><font style="color:black">The Company maintains its cash in bank deposit accounts, the balances of which at times may exceed federally insured limits. The Company continually monitors its banking relationships and consequently has not experienced any losses in such accounts. The Company believes it is not exposed to any significant credit risk on cash and cash equivalents.</font></p><p style="text-align:left; padding:0; margin:0"><font style="color:black"> </font></p><p style="text-align:justify; text-justify:inter-ideograph; padding:0; margin:0"><i><u><font style="font-style:italic; text-decoration:underline; color:black">Revenue Recognition</font></u></i></p><p style="text-align:justify; text-justify:inter-ideograph; padding:0; margin:0"><font style="color:black">The Company recognizes revenues from contracts on the percentage-of-completion method, measured by the percentage of cost incurred to date to estimated total cost for each contract. That method is used because management considers total cost to be the best available measure of progress on contracts. Because of inherent uncertainties in estimating costs, it is at least reasonably possible that the estimates used will change within the near term.</font></p><p style="text-align:left; padding:0; margin:0"><font style="color:black"> </font></p><p style="text-align:justify; text-justify:inter-ideograph; padding:0; margin:0"><font style="color:black">Contract costs include all direct material and labor costs and those indirect costs related to contract performance, such as indirect labor, supplies, tools, repairs and depreciation. Selling, general, and administrative costs are charged to expense as incurred. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Changes in job performance, job conditions, and estimated profitability may result in revisions to costs and income, which are recognized in the period in which the revisions are determined. Changes in estimated job profitability resulting from job performance, job conditions, contract penalty provisions, claims, change orders, and settlements, are accounted for as changes in estimates in the current period. No profit is recognized on change orders until they have been approved by the customer.</font></p><p style="text-align:left; padding:0; margin:0"><font style="color:black"> </font></p><p style="text-align:justify; text-justify:inter-ideograph; padding:0; margin:0"><font style="color:black">The asset, “Costs and estimated earnings in excess of billings on uncompleted contracts,” represents revenues recognized in excess of amounts billed. The liability, “Billings in excess of costs and estimated earnings on uncompleted contracts,” represents billings in excess of revenues recognized.</font></p><p style="text-align:left; padding:0; margin:0"><font style="color:black"> </font></p><p style="text-align:justify; text-justify:inter-ideograph; padding:0; margin:0"><i><u><font style="font-style:italic; text-decoration:underline; color:black">Income Taxes</font></u></i></p><p style="text-align:justify; text-justify:inter-ideograph; padding:0; margin:0"><font style="color:black">Income taxes are computed using the asset and liability method.  Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws.  A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized. It is the Company’s policy to classify interest and penalties on income taxes as interest expense or penalties expense. As of March 31, 2012, there have been no interest or penalties incurred on income taxes.</font></p><p style="text-align:left; padding:0; margin:0"><font style="color:black"> </font></p><p style="text-align:justify; text-justify:inter-ideograph; padding:0; margin:0"><i><u><font style="font-style:italic; text-decoration:underline; color:black">Research and Development</font></u></i></p><p style="text-align:justify; text-justify:inter-ideograph; padding:0; margin:0"><font style="color:black">The Company has not incurred any research and development costs to date.</font></p><p style="text-align:left; padding:0; margin:0"><font style="color:black"> </font></p><p style="text-align:justify; text-justify:inter-ideograph; padding:0; margin:0"><i><u><font style="font-style:italic; text-decoration:underline; color:black">Dividends</font></u></i></p><p style="text-align:justify; text-justify:inter-ideograph; padding:0; margin:0"><font style="color:black">The Company has not adopted any policy regarding payment of dividends. No dividends have been paid during the periods shown.</font></p><p style="text-align:left; padding:0; margin:0"><font style="color:black"> </font></p><p style="text-align:justify; text-justify:inter-ideograph; padding:0; margin:0"><i><u><font style="font-style:italic; text-decoration:underline; color:black">Recent Accounting Pronouncements</font></u></i></p><p style="text-align:justify; text-justify:inter-ideograph; padding:0; margin:0"><font style="color:black">Energy Edge does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company’s results of operations, financial position or cash flows.</font></p><p style="text-align:left; padding:0; margin:0"><font style="color:black"> </font></p><p style="text-align:justify; text-justify:inter-ideograph; padding:0; margin:0"><i><u><font style="font-style:italic; text-decoration:underline; color:black">Stock-Based Compensation</font></u></i></p><p style="text-align:justify; text-justify:inter-ideograph; padding:0; margin:0"><font style="color:black">The Company accounts for employee stock-based compensation in accordance with the guidance of FASB ASC Topic 718, <i>Compensation – Stock Compensation </i>which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values.  The fair value of the equity instrument is charged directly to compensation expense and credited to additional paid-in capital over the period during which services are rendered.</font></p><p style="text-align:left; padding:0; margin:0"><font style="color:black"> </font></p><p style="text-align:justify; text-justify:inter-ideograph; padding:0; margin:0"><font style="color:black">The Company follows ASC Topic 505-50, formerly EITF 96-18, “<i>Accounting for Equity Instruments that are Issued to Other than Employees for Acquiring, or in Conjunction with Selling Goods and Services</i>,” for stock options and warrants issued to consultants and other non-employees.  In accordance with ASC Topic 505-50, these stock options and warrants issued as compensation for services provided to the Company are accounted for based upon the fair value of the services provided or the estimated fair market value of the option or warrant, whichever can be more clearly determined.   The Company issued 1,500,000 shares to consultants or other non-employees to date in 2012.  The shares were valued at $1,500, including $188 charged to consulting expense in the current period.</font></p><p style="text-align:left; padding:0; margin:0"><font style="color:black"> </font></p><p style="text-align:justify; text-justify:inter-ideograph; padding:0; margin:0"><i><u><font style="font-style:italic; text-decoration:underline; color:black">Basic Income (Loss) Per Share</font></u></i></p><p style="text-align:justify; text-justify:inter-ideograph; padding:0; margin:0"><font style="color:black">Basic income (loss) per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company’s net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. There are no such common stock equivalents outstanding as of March 31, 2012.</font></p><p style="text-align:left; padding:0; margin:0"><font style="color:black"> </font></p><p style="text-align:justify; text-justify:inter-ideograph; padding:0; margin:0"><i><u><font style="font-style:italic; text-decoration:underline; color:black">Reclassifications</font></u></i></p><p style="text-align:justify; text-justify:inter-ideograph; padding:0; margin:0"><font style="color:black">Certain accounts and financial statement captions in the prior periods have been reclassified to conform to the current period financial statements.</font></p>
<!--egx--><p style="text-align:justify; text-justify:inter-ideograph; padding:0; margin:0"><b><font style="color:black; font-weight:700">NOTE 3 – PREPAID CONSULTING FEES</font></b></p><p style="text-align:left; padding:0; margin:0"><font style="color:black"> </font></p><p style="text-align:justify; text-justify:inter-ideograph; padding:0; margin:0"><font style="color:black">The Company entered into consulting agreement during the quarter ended March 31, 2012 to increase revenues by enhancing and expanding the Company’s sales network.  One consultant was paid $16,250 for services to be rendered over a period of one year beginning March 1, 2012.  Another consultant was issued 1,500,000 shares of the Company’s common stock valued at $1,500 for services to be rendered from January 1, 2012 through December 31, 2013.  Such consulting fees are being amortized ratably over the periods covered by the consulting agreements.  During the first quarter of 2012, consulting expense has been charged for $1,542 and $16,208 has been classified as prepaid expense.</font></p>
<!--egx--><p style="text-align:left; padding:0; margin:0"><b><font style="color:black; font-weight:700">NOTE 4 – PROPERTY AND EQUIPMENT</font></b></p><p style="text-align:left; padding:0; margin:0"><font style="color:black"> </font></p><p style="text-align:justify; text-justify:inter-ideograph; padding:0; margin:0"><font style="color:black">The Company’s policy is to depreciate the cost of property and equipment over the estimated useful lives of the assets by use of the straight-line method. The office equipment presently owned by the Company is being depreciated over an estimated useful life of five years. Depreciation expense for three months ended March 31, 2012 and 2011 were $430 and $429, respectively.</font></p>
<!--egx--><p style="text-align:justify; text-justify:inter-ideograph; padding:0; margin:0"><b><font style="color:black; font-weight:700">NOTE 5 – ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES</font></b></p><p style="text-align:left; padding:0; margin:0"><font style="color:black"> </font></p><p style="text-align:justify; text-justify:inter-ideograph; padding:0; margin:0"><font style="color:black">Accrued expenses and other current liabilities consisted of the following:</font></p><p style="text-align:left; padding:0; margin:0"><font style="color:black"> </font></p><table style="border-collapse:collapse; text-align:left; margin:auto auto auto 26.2pt" cellpadding="0" cellspacing="0"><tr style="border-collapse:collapse; text-align:left"><td width="440" style="border-collapse:collapse; text-align:left; width:329.65pt; padding:0 0 1.5pt 0" valign="bottom"><p style="text-align:left; padding:0; margin:0"><font style="color:black">  </font></p></td><td width="6" style="border-collapse:collapse; text-align:left; width:4.7pt; padding:0 0 1.5pt 0" valign="bottom"><p style="text-align:left; padding:0; margin:0"><b><font style="color:black; font-weight:700"> </font></b></p></td><td width="82" colspan="2" style="border-collapse:collapse; text-align:left; width:0.85in; padding:0; border-bottom:solid 1pt black" valign="bottom"><p style="text-align:center; padding:0; margin:0" align="center"><b><font style="color:black; font-weight:700">March 31, 2012</font></b></p></td><td width="6" style="border-collapse:collapse; text-align:left; width:4.7pt; padding:0 0 1.5pt 0" valign="bottom"><p style="text-align:left; padding:0; margin:0"><b><font style="color:black; font-weight:700"> </font></b></p></td><td width="6" style="border-collapse:collapse; text-align:left; width:4.7pt; padding:0 0 1.5pt 0" valign="bottom"><p style="text-align:left; padding:0; margin:0"><b><font style="color:black; font-weight:700"> </font></b></p></td><td width="82" colspan="2" style="border-collapse:collapse; text-align:left; width:0.85in; padding:0; border-bottom:solid 1pt black" valign="bottom"><p style="text-align:center; padding:0; margin:0" align="center"><b><font style="color:black; font-weight:700">December 31, 2011</font></b></p></td><td width="6" style="border-collapse:collapse; text-align:left; width:4.7pt; padding:0 0 1.5pt 0" valign="bottom"><p style="text-align:left; padding:0; margin:0"><b><font style="color:black; font-weight:700"> </font></b></p></td></tr><tr style="border-collapse:collapse; text-align:left"><td width="440" style="border-collapse:collapse; text-align:left; background-color:#cceeff; width:329.65pt; padding:0" valign="bottom"><p style="text-align:justify; text-justify:inter-ideograph; background-color:#cceeff; padding:0; margin:0 0 0 0.25in"><font style="color:black">Credit card balances</font></p></td><td width="6" style="border-collapse:collapse; text-align:left; background-color:#cceeff; width:4.7pt; padding:0" valign="bottom"><p style="text-align:right; background-color:#cceeff; padding:0; margin:0" align="right"><font style="color:black"> </font></p></td><td width="6" style="border-collapse:collapse; text-align:left; background-color:#cceeff; width:4.7pt; padding:0" valign="bottom"><p style="text-align:left; background-color:#cceeff; padding:0; margin:0"><font style="color:black">$</font></p></td><td width="75" style="border-collapse:collapse; text-align:left; background-color:#cceeff; width:56.5pt; padding:0" valign="bottom"><p style="text-align:right; background-color:#cceeff; padding:0; margin:0" align="right"><font style="color:black">26,053</font></p></td><td width="6" style="border-collapse:collapse; text-align:left; background-color:#cceeff; width:4.7pt; padding:0" valign="bottom"><p style="text-align:left; background-color:#cceeff; padding:0; margin:0"><font style="color:black"> </font></p></td><td width="6" style="border-collapse:collapse; text-align:left; background-color:#cceeff; width:4.7pt; padding:0" valign="bottom"><p style="text-align:right; background-color:#cceeff; padding:0; margin:0" align="right"><font style="color:black"> </font></p></td><td width="6" style="border-collapse:collapse; text-align:left; background-color:#cceeff; width:4.7pt; padding:0" valign="bottom"><p style="text-align:left; background-color:#cceeff; padding:0; margin:0"><font style="color:black">$</font></p></td><td width="75" style="border-collapse:collapse; text-align:left; background-color:#cceeff; width:56.5pt; padding:0" valign="bottom"><p style="text-align:right; background-color:#cceeff; padding:0; margin:0" align="right"><font style="color:black">25,351</font></p></td><td width="6" style="border-collapse:collapse; text-align:left; background-color:#cceeff; width:4.7pt; padding:0" valign="bottom"><p style="text-align:left; background-color:#cceeff; padding:0; margin:0"><font style="color:black"> </font></p></td></tr><tr style="border-collapse:collapse; text-align:left"><td width="440" style="border-collapse:collapse; text-align:left; width:329.65pt; padding:0" valign="bottom"><p style="text-align:justify; text-justify:inter-ideograph; padding:0; margin:0 0 0 0.25in"><font style="color:black">Accrue professional fees</font></p></td><td width="6" style="border-collapse:collapse; text-align:left; width:4.7pt; padding:0" valign="bottom"><p style="text-align:right; padding:0; margin:0" align="right"><font style="color:black"> </font></p></td><td width="6" style="border-collapse:collapse; text-align:left; width:4.7pt; padding:0" valign="bottom"><p style="text-align:left; padding:0; margin:0"><font style="color:black"> </font></p></td><td width="75" style="border-collapse:collapse; text-align:left; width:56.5pt; padding:0" valign="bottom"><p style="text-align:right; padding:0; margin:0" align="right"><font style="color:black">7,000</font></p></td><td width="6" style="border-collapse:collapse; text-align:left; width:4.7pt; padding:0" valign="bottom"><p style="text-align:left; padding:0; margin:0"><font style="color:black"> </font></p></td><td width="6" style="border-collapse:collapse; text-align:left; width:4.7pt; padding:0" valign="bottom"><p style="text-align:right; padding:0; margin:0" align="right"><font style="color:black"> </font></p></td><td width="6" style="border-collapse:collapse; text-align:left; width:4.7pt; padding:0" valign="bottom"><p style="text-align:left; padding:0; margin:0"><font style="color:black"> </font></p></td><td width="75" style="border-collapse:collapse; text-align:left; width:56.5pt; padding:0" valign="bottom"><p style="text-align:right; padding:0; margin:0" align="right"><font style="color:black">12,000</font></p></td><td width="6" style="border-collapse:collapse; text-align:left; width:4.7pt; padding:0" valign="bottom"><p style="text-align:left; padding:0; margin:0"><font style="color:black"> </font></p></td></tr><tr style="border-collapse:collapse; text-align:left"><td width="440" style="border-collapse:collapse; text-align:left; background-color:#cceeff; width:329.65pt; padding:0" valign="bottom"><p style="text-align:justify; text-justify:inter-ideograph; background-color:#cceeff; padding:0; margin:0 0 0 0.25in"><font style="color:black">Payroll taxes payable</font></p></td><td width="6" style="border-collapse:collapse; text-align:left; background-color:#cceeff; width:4.7pt; padding:0" valign="bottom"><p style="text-align:right; background-color:#cceeff; padding:0; margin:0" align="right"><font style="color:black"> </font></p></td><td width="6" style="border-collapse:collapse; text-align:left; background-color:#cceeff; width:4.7pt; padding:0" valign="bottom"><p style="text-align:left; background-color:#cceeff; padding:0; margin:0"><font style="color:black"> </font></p></td><td width="75" style="border-collapse:collapse; text-align:left; background-color:#cceeff; width:56.5pt; padding:0" valign="bottom"><p style="text-align:right; background-color:#cceeff; padding:0; margin:0" align="right"><font style="color:black">125,957</font></p></td><td width="6" style="border-collapse:collapse; text-align:left; background-color:#cceeff; width:4.7pt; padding:0" valign="bottom"><p style="text-align:left; background-color:#cceeff; padding:0; margin:0"><font style="color:black"> </font></p></td><td width="6" style="border-collapse:collapse; text-align:left; background-color:#cceeff; width:4.7pt; padding:0" valign="bottom"><p style="text-align:right; background-color:#cceeff; padding:0; margin:0" align="right"><font style="color:black"> </font></p></td><td width="6" style="border-collapse:collapse; text-align:left; background-color:#cceeff; width:4.7pt; padding:0" valign="bottom"><p style="text-align:left; background-color:#cceeff; padding:0; margin:0"><font style="color:black"> </font></p></td><td width="75" style="border-collapse:collapse; text-align:left; background-color:#cceeff; width:56.5pt; padding:0" valign="bottom"><p style="text-align:right; background-color:#cceeff; padding:0; margin:0" align="right"><font style="color:black">128,208</font></p></td><td width="6" style="border-collapse:collapse; text-align:left; background-color:#cceeff; width:4.7pt; padding:0" valign="bottom"><p style="text-align:left; background-color:#cceeff; padding:0; margin:0"><font style="color:black"> </font></p></td></tr><tr style="border-collapse:collapse; text-align:left"><td width="440" style="border-collapse:collapse; text-align:left; width:329.65pt; padding:0 0 1.5pt 0" valign="bottom"><p style="text-align:justify; text-justify:inter-ideograph; padding:0; margin:0 0 0 0.25in"><font style="color:black">Sales tax payable</font></p></td><td width="6" style="border-collapse:collapse; text-align:left; width:4.7pt; padding:0 0 1.5pt 0" valign="bottom"><p style="text-align:right; padding:0; margin:0" align="right"><font style="color:black"> </font></p></td><td width="6" style="border-collapse:collapse; text-align:left; width:4.7pt; padding:0; border-bottom:solid 1pt black" valign="bottom"><p style="text-align:left; padding:0; margin:0"><font style="color:black"> </font></p></td><td width="75" style="border-collapse:collapse; text-align:left; width:56.5pt; padding:0; border-bottom:solid 1pt black" valign="bottom"><p style="text-align:right; padding:0; margin:0" align="right"><font style="color:black">15,082</font></p></td><td width="6" style="border-collapse:collapse; text-align:left; width:4.7pt; padding:0 0 1.5pt 0" valign="bottom"><p style="text-align:left; padding:0; margin:0"><font style="color:black"> </font></p></td><td width="6" style="border-collapse:collapse; text-align:left; width:4.7pt; padding:0 0 1.5pt 0" valign="bottom"><p style="text-align:right; padding:0; margin:0" align="right"><font style="color:black"> </font></p></td><td width="6" style="border-collapse:collapse; text-align:left; width:4.7pt; padding:0" valign="bottom"><p style="text-align:left; padding:0; margin:0"><font style="color:black"> </font></p></td><td width="75" style="border-collapse:collapse; text-align:left; width:56.5pt; padding:0 0 1.5pt 0" valign="bottom"><p style="text-align:right; padding:0; margin:0" align="right"><font style="color:black">15,082</font></p></td><td width="6" style="border-collapse:collapse; text-align:left; width:4.7pt; padding:0 0 1.5pt 0" valign="bottom"><p style="text-align:left; padding:0; margin:0"><font style="color:black"> </font></p></td></tr><tr style="border-collapse:collapse; text-align:left"><td width="440" style="border-collapse:collapse; text-align:left; background-color:#cceeff; width:329.65pt; padding:0 0 3pt 0" valign="bottom"><p style="text-align:left; background-color:#cceeff; padding:0; margin:0"><font style="color:black">Total accrued expenses and other current liabilities</font></p></td><td width="6" style="border-collapse:collapse; text-align:left; background-color:#cceeff; width:4.7pt; padding:0 0 3pt 0" valign="bottom"><p style="text-align:right; background-color:#cceeff; padding:0; margin:0" align="right"><font style="color:black"> </font></p></td><td width="6" style="border-collapse:collapse; text-align:left; background-color:#cceeff; width:4.7pt; padding:0; border-bottom:double 2.25pt black" valign="bottom"><p style="text-align:left; background-color:#cceeff; padding:0; margin:0"><font style="color:black">$</font></p></td><td width="75" style="border-collapse:collapse; text-align:left; background-color:#cceeff; width:56.5pt; padding:0; border-bottom:double 2.25pt black" valign="bottom"><p style="text-align:right; background-color:#cceeff; padding:0; margin:0" align="right"><font style="color:black">174,092</font></p></td><td width="6" style="border-collapse:collapse; text-align:left; background-color:#cceeff; width:4.7pt; padding:0 0 3pt 0" valign="bottom"><p style="text-align:left; background-color:#cceeff; padding:0; margin:0"><font style="color:black"> </font></p></td><td width="6" style="border-collapse:collapse; text-align:left; background-color:#cceeff; width:4.7pt; padding:0 0 3pt 0" valign="bottom"><p style="text-align:right; background-color:#cceeff; padding:0; margin:0" align="right"><font style="color:black"> </font></p></td><td width="6" style="border-collapse:collapse; text-align:left; background-color:#cceeff; width:4.7pt; padding:0; border-bottom:double 2.25pt black" valign="bottom"><p style="text-align:left; background-color:#cceeff; padding:0; margin:0"><font style="color:black">$</font></p></td><td width="75" style="border-collapse:collapse; text-align:left; background-color:#cceeff; width:56.5pt; padding:0; border-bottom:double 2.25pt black" valign="bottom"><p style="text-align:right; background-color:#cceeff; padding:0; margin:0" align="right"><font style="color:black">180,641</font></p></td><td width="6" style="border-collapse:collapse; text-align:left; background-color:#cceeff; width:4.7pt; padding:0 0 3pt 0" valign="bottom"><p style="text-align:left; background-color:#cceeff; padding:0; margin:0"><font style="color:black"> </font></p></td></tr></table>
<!--egx--><p style="text-align:justify; text-justify:inter-ideograph; padding:0; margin:0"><b><font style="color:black; font-weight:700">NOTE 6 – RELATED PARTY TRANSACTIONS</font></b></p><p style="text-align:left; padding:0; margin:0"><font style="color:black"> </font></p><p style="text-align:justify; text-justify:inter-ideograph; padding:0; margin:0"><font style="color:black">Shareholder loans are unsecured, non-interest bearing, and has no formal terms of repayment. The loan was repaid in the quarter ended March 31, 2012.</font></p>
<!--egx--><p style="text-align:justify; text-justify:inter-ideograph; padding:0; margin:0"><b><font style="color:black; font-weight:700">NOTE 7 – CAPITAL STOCK</font></b></p><p style="text-align:left; padding:0; margin:0"><font style="color:black"> </font></p><p style="text-align:justify; text-justify:inter-ideograph; padding:0; margin:0"><font style="color:black">On March 26, 2010, the Company amended its Articles of Incorporation to increase the number of authorized shares to 100,000,000 with a par value of $.00001.</font></p><p style="text-align:left; padding:0; margin:0"><font style="color:black"> </font></p><p style="text-align:left; padding:0; margin:0"><font style="color:black">During 2011, the Company sold 30,000 shares of common stock at $.10 per share under a private placement to an unrelated third party for total proceeds of $3,000.</font></p><p style="text-align:left; padding:0; margin:0"><font style="color:black"> </font></p><p style="text-align:justify; text-justify:inter-ideograph; padding:0; margin:0"><font style="color:black">During 2011, the Company issued 28,270,000 shares of stock valued at $48,200 to consultants. The shares were valued at prices ranging from $.0015 to $.10 per share.</font></p><p style="text-align:left; padding:0; margin:0"><font style="color:black"> </font></p><p style="text-align:justify; text-justify:inter-ideograph; padding:0; margin:0"><font style="color:black">During 2011, the Company issued 3,974,380 shares of stock valued at $138,838 for legal services. The shares were valued based on the value of the legal services provided.</font></p><p style="text-align:left; padding:0; margin:0"><font style="color:black"> </font></p><p style="text-align:justify; text-justify:inter-ideograph; padding:0; margin:0"><font style="color:black">On January 23, 2012, the Company issued 1,500,000 shares of common stock valued at $1,500 for consulting services to be rendered from January 1, 2012 through December 31, 2013.</font></p><p style="text-align:left; padding:0; margin:0"><font style="color:black"> </font></p><p style="text-align:justify; text-justify:inter-ideograph; padding:0; margin:0"><font style="color:black">On February 14, 2012, the Company purchased 50,000 shares of the Company’s outstanding common stock at a cost of $5,000.  The shares are being held as Treasury Stock.</font></p><p style="text-align:left; padding:0; margin:0"><font style="color:black"> </font></p><p style="text-align:left; padding:0; margin:0"><font style="color:black">As of March 31, 2012, The Company has no warrants or options outstanding.</font></p>
<!--egx--><p style="text-align:justify; text-justify:inter-ideograph; padding:0; margin:0"><b><font style="color:black; font-weight:700">NOTE 8 – INCOME TAXES</font></b></p><p style="text-align:left; padding:0; margin:0"><font style="color:black"> </font></p><p style="text-align:left; padding:0; margin:0"><font style="color:black">For the three months ended March 31, 2012 and 2011, the Company has incurred a net loss and, therefore, has no tax liability.  The net deferred tax asset was generated by the loss carry-forward of approximately $2,091,000 at December 31, 2011, and will expire beginning in 2030.</font></p><p style="text-align:left; padding:0; margin:0"><font style="color:black"> </font></p><p style="text-align:left; padding:0; margin:0"><font style="color:black">The provision for federal income tax consists of the following at March 31, 2012 and 2011:</font></p><p style="text-align:left; padding:0; margin:0"><font style="color:black"> </font></p><table style="border-collapse:collapse; text-align:left; margin:auto auto auto 26.2pt" cellpadding="0" cellspacing="0"><tr style="border-collapse:collapse; text-align:left"><td width="440" style="border-collapse:collapse; text-align:left; width:329.65pt; padding:0 0 1.5pt 0" valign="bottom"><p style="text-align:left; padding:0; margin:0"><font style="color:black">  </font></p></td><td width="6" style="border-collapse:collapse; text-align:left; width:4.7pt; padding:0 0 1.5pt 0" valign="bottom"><p style="text-align:left; padding:0; margin:0"><font style="color:black"> </font></p></td><td width="82" colspan="2" style="border-collapse:collapse; text-align:left; width:0.85in; padding:0; border-bottom:solid 1pt black" valign="bottom"><p style="text-align:center; padding:0; margin:0" align="center"><font style="color:black">March 31, 2012</font></p></td><td width="6" style="border-collapse:collapse; text-align:left; width:4.7pt; padding:0 0 1.5pt 0" valign="bottom"><p style="text-align:center; padding:0; margin:0" align="center"><font style="color:black"> </font></p></td><td width="6" style="border-collapse:collapse; text-align:left; width:4.7pt; padding:0 0 1.5pt 0" valign="bottom"><p style="text-align:center; padding:0; margin:0" align="center"><font style="color:black"> </font></p></td><td width="82" colspan="2" style="border-collapse:collapse; text-align:left; width:0.85in; padding:0; border-bottom:solid 1pt black" valign="bottom"><p style="text-align:center; padding:0; margin:0" align="center"><font style="color:black">March 31, 2011</font></p></td><td width="6" style="border-collapse:collapse; text-align:left; width:4.7pt; padding:0 0 1.5pt 0" valign="bottom"><p style="text-align:left; padding:0; margin:0"><font style="color:black"> </font></p></td></tr><tr style="border-collapse:collapse; text-align:left"><td width="440" style="border-collapse:collapse; text-align:left; background-color:#cceeff; width:329.65pt; padding:0" valign="bottom"><p style="text-align:left; background-color:#cceeff; padding:0; margin:0"><font style="color:black">Federal income tax benefit attributable to:</font></p></td><td width="6" style="border-collapse:collapse; text-align:left; background-color:#cceeff; width:4.7pt; padding:0" valign="bottom"><p style="text-align:left; background-color:#cceeff; padding:0; margin:0"><font style="color:black"> </font></p></td><td width="82" colspan="2" style="border-collapse:collapse; text-align:left; background-color:#cceeff; width:0.85in; padding:0" valign="bottom"><p style="text-align:left; background-color:#cceeff; padding:0; margin:0"><font style="color:black"> </font></p></td><td width="6" style="border-collapse:collapse; text-align:left; background-color:#cceeff; width:4.7pt; padding:0" valign="bottom"><p style="text-align:left; background-color:#cceeff; padding:0; margin:0"><font style="color:black"> </font></p></td><td width="6" style="border-collapse:collapse; text-align:left; background-color:#cceeff; width:4.7pt; padding:0" valign="bottom"><p style="text-align:left; background-color:#cceeff; padding:0; margin:0"><font style="color:black"> </font></p></td><td width="82" colspan="2" style="border-collapse:collapse; text-align:left; background-color:#cceeff; width:0.85in; padding:0" valign="bottom"><p style="text-align:left; background-color:#cceeff; padding:0; margin:0"><font style="color:black"> </font></p></td><td width="6" style="border-collapse:collapse; text-align:left; background-color:#cceeff; width:4.7pt; padding:0" valign="bottom"><p style="text-align:left; background-color:#cceeff; padding:0; margin:0"><font style="color:black"> </font></p></td></tr><tr style="border-collapse:collapse; text-align:left"><td width="440" style="border-collapse:collapse; text-align:left; width:329.65pt; padding:0" valign="bottom"><p style="text-align:left; padding:0; margin:0"><font style="color:black">Current operations</font></p></td><td width="6" style="border-collapse:collapse; text-align:left; width:4.7pt; padding:0" valign="bottom"><p style="text-align:left; padding:0; margin:0"><font style="color:black"> </font></p></td><td width="6" style="border-collapse:collapse; text-align:left; width:4.7pt; padding:0" valign="bottom"><p style="text-align:left; padding:0; margin:0"><font style="color:black">$</font></p></td><td width="75" style="border-collapse:collapse; text-align:left; width:56.5pt; padding:0" valign="bottom"><p style="text-align:right; padding:0; margin:0" align="right"><font style="color:black">4,700</font></p></td><td width="6" style="border-collapse:collapse; text-align:left; width:4.7pt; padding:0" valign="bottom"><p style="text-align:left; padding:0; margin:0"><font style="color:black"> </font></p></td><td width="6" style="border-collapse:collapse; text-align:left; width:4.7pt; padding:0" valign="bottom"><p style="text-align:left; padding:0; margin:0"><font style="color:black"> </font></p></td><td width="6" style="border-collapse:collapse; text-align:left; width:4.7pt; padding:0" valign="bottom"><p style="text-align:left; padding:0; margin:0"><font style="color:black">$</font></p></td><td width="75" style="border-collapse:collapse; text-align:left; width:56.5pt; padding:0" valign="bottom"><p style="text-align:right; padding:0; margin:0" align="right"><font style="color:black">52,000</font></p></td><td width="6" style="border-collapse:collapse; text-align:left; width:4.7pt; padding:0" valign="bottom"><p style="text-align:left; padding:0; margin:0"><font style="color:black"> </font></p></td></tr><tr style="border-collapse:collapse; text-align:left"><td width="440" style="border-collapse:collapse; text-align:left; background-color:#cceeff; width:329.65pt; padding:0 0 1.5pt 0" valign="bottom"><p style="text-align:left; background-color:#cceeff; padding:0; margin:0"><font style="color:black">Less: valuation allowance</font></p></td><td width="6" style="border-collapse:collapse; text-align:left; background-color:#cceeff; width:4.7pt; padding:0 0 1.5pt 0" valign="bottom"><p style="text-align:left; background-color:#cceeff; padding:0; margin:0"><font style="color:black"> </font></p></td><td width="6" style="border-collapse:collapse; text-align:left; background-color:#cceeff; width:4.7pt; padding:0; border-bottom:solid 1pt black" valign="bottom"><p style="text-align:left; background-color:#cceeff; padding:0; margin:0"><font style="color:black"> </font></p></td><td width="75" style="border-collapse:collapse; text-align:left; background-color:#cceeff; width:56.5pt; padding:0; border-bottom:solid 1pt black" valign="bottom"><p style="text-align:right; background-color:#cceeff; padding:0; margin:0" align="right"><font style="color:black">(4,700</font></p></td><td width="6" style="border-collapse:collapse; text-align:left; background-color:#cceeff; width:4.7pt; padding:0 0 1.5pt 0" valign="bottom"><p style="text-align:left; background-color:#cceeff; padding:0; margin:0"><font style="color:black">)</font></p></td><td width="6" style="border-collapse:collapse; text-align:left; background-color:#cceeff; width:4.7pt; padding:0 0 1.5pt 0" valign="bottom"><p style="text-align:left; background-color:#cceeff; padding:0; margin:0"><font style="color:black"> </font></p></td><td width="6" style="border-collapse:collapse; text-align:left; background-color:#cceeff; width:4.7pt; padding:0; border-bottom:solid 1pt black" valign="bottom"><p style="text-align:left; background-color:#cceeff; padding:0; margin:0"><font style="color:black"> </font></p></td><td width="75" style="border-collapse:collapse; text-align:left; background-color:#cceeff; width:56.5pt; padding:0; border-bottom:solid 1pt black" valign="bottom"><p style="text-align:right; background-color:#cceeff; padding:0; margin:0" align="right"><font style="color:black">(52,000</font></p></td><td width="6" style="border-collapse:collapse; text-align:left; background-color:#cceeff; width:4.7pt; padding:0 0 1.5pt 0" valign="bottom"><p style="text-align:left; background-color:#cceeff; padding:0; margin:0"><font style="color:black">)</font></p></td></tr><tr style="border-collapse:collapse; text-align:left"><td width="440" style="border-collapse:collapse; text-align:left; width:329.65pt; padding:0 0 3pt 0" valign="bottom"><p style="text-align:left; padding:0; margin:0"><font style="color:black">Net provision for Federal income taxes</font></p></td><td width="6" style="border-collapse:collapse; text-align:left; width:4.7pt; padding:0 0 3pt 0" valign="bottom"><p style="text-align:left; padding:0; margin:0"><font style="color:black"> </font></p></td><td width="6" style="border-collapse:collapse; text-align:left; width:4.7pt; padding:0; border-bottom:double 2.25pt black" valign="bottom"><p style="text-align:left; padding:0; margin:0"><font style="color:black">$</font></p></td><td width="75" style="border-collapse:collapse; text-align:left; width:56.5pt; padding:0; border-bottom:double 2.25pt black" valign="bottom"><p style="text-align:right; padding:0; margin:0" align="right"><font style="color:black">0</font></p></td><td width="6" style="border-collapse:collapse; text-align:left; width:4.7pt; padding:0 0 3pt 0" valign="bottom"><p style="text-align:left; padding:0; margin:0"><font style="color:black"> </font></p></td><td width="6" style="border-collapse:collapse; text-align:left; width:4.7pt; padding:0 0 3pt 0" valign="bottom"><p style="text-align:left; padding:0; margin:0"><font style="color:black"> </font></p></td><td width="6" style="border-collapse:collapse; text-align:left; width:4.7pt; padding:0; border-bottom:double 2.25pt black" valign="bottom"><p style="text-align:left; padding:0; margin:0"><font style="color:black">$</font></p></td><td width="75" style="border-collapse:collapse; text-align:left; width:56.5pt; padding:0; border-bottom:double 2.25pt black" valign="bottom"><p style="text-align:right; padding:0; margin:0" align="right"><font style="color:black">0</font></p></td><td width="6" style="border-collapse:collapse; text-align:left; width:4.7pt; padding:0 0 3pt 0" valign="bottom"><p style="text-align:left; padding:0; margin:0"><font style="color:black"> </font></p></td></tr></table><p style="text-align:left; padding:0; margin:0"><font style="color:black"> </font></p><p style="text-align:left; padding:0; margin:0"><font style="color:black">The cumulative tax effect at the expected rate of 34% of significant items comprising our net deferred tax amount is as follows:</font></p><p style="text-align:left; padding:0; margin:0"><font style="color:black"> </font></p><table style="border-collapse:collapse; text-align:left; margin:auto auto auto 26.2pt" cellpadding="0" cellspacing="0"><tr style="border-collapse:collapse; text-align:left"><td width="440" style="border-collapse:collapse; text-align:left; width:329.65pt; padding:0 0 1.5pt 0" valign="bottom"><p style="text-align:left; padding:0; margin:0"><font style="color:black">  </font></p></td><td width="6" style="border-collapse:collapse; text-align:left; width:4.7pt; padding:0 0 1.5pt 0" valign="bottom"><p style="text-align:left; padding:0; margin:0"><font style="color:black"> </font></p></td><td width="82" colspan="2" style="border-collapse:collapse; text-align:left; width:0.85in; padding:0; border-bottom:solid 1pt black" valign="bottom"><p style="text-align:center; padding:0; margin:0" align="center"><font style="color:black">March 31, 2012</font></p></td><td width="6" style="border-collapse:collapse; text-align:left; width:4.7pt; padding:0 0 1.5pt 0" valign="bottom"><p style="text-align:center; padding:0; margin:0" align="center"><font style="color:black"> </font></p></td><td width="6" style="border-collapse:collapse; text-align:left; width:4.7pt; padding:0 0 1.5pt 0" valign="bottom"><p style="text-align:center; padding:0; margin:0" align="center"><font style="color:black"> </font></p></td><td width="82" colspan="2" style="border-collapse:collapse; text-align:left; width:0.85in; padding:0; border-bottom:solid 1pt black" valign="bottom"><p style="text-align:center; padding:0; margin:0" align="center"><font style="color:black">December 31, 2011</font></p></td><td width="6" style="border-collapse:collapse; text-align:left; width:4.7pt; padding:0 0 1.5pt 0" valign="bottom"><p style="text-align:left; padding:0; margin:0"><font style="color:black"> </font></p></td></tr><tr style="border-collapse:collapse; text-align:left"><td width="440" style="border-collapse:collapse; text-align:left; background-color:#cceeff; width:329.65pt; padding:0" valign="bottom"><p style="text-align:left; background-color:#cceeff; padding:0; margin:0"><font style="color:black">Deferred tax asset attributable to:</font></p></td><td width="6" style="border-collapse:collapse; text-align:left; background-color:#cceeff; width:4.7pt; padding:0" valign="bottom"><p style="text-align:left; background-color:#cceeff; padding:0; margin:0"><font style="color:black"> </font></p></td><td width="82" colspan="2" style="border-collapse:collapse; text-align:left; background-color:#cceeff; width:0.85in; padding:0" valign="bottom"><p style="text-align:left; background-color:#cceeff; padding:0; margin:0"><font style="color:black"> </font></p></td><td width="6" style="border-collapse:collapse; text-align:left; background-color:#cceeff; width:4.7pt; padding:0" valign="bottom"><p style="text-align:left; background-color:#cceeff; padding:0; margin:0"><font style="color:black"> </font></p></td><td width="6" style="border-collapse:collapse; text-align:left; background-color:#cceeff; width:4.7pt; padding:0" valign="bottom"><p style="text-align:left; background-color:#cceeff; padding:0; margin:0"><font style="color:black"> </font></p></td><td width="82" colspan="2" style="border-collapse:collapse; text-align:left; background-color:#cceeff; width:0.85in; padding:0" valign="bottom"><p style="text-align:left; background-color:#cceeff; padding:0; margin:0"><font style="color:black"> </font></p></td><td width="6" style="border-collapse:collapse; text-align:left; background-color:#cceeff; width:4.7pt; padding:0" valign="bottom"><p style="text-align:left; background-color:#cceeff; padding:0; margin:0"><font style="color:black"> </font></p></td></tr><tr style="border-collapse:collapse; text-align:left"><td width="440" style="border-collapse:collapse; text-align:left; width:329.65pt; padding:0" valign="bottom"><p style="text-align:left; padding:0; margin:0"><font style="color:black">Net operating loss carryover</font></p></td><td width="6" style="border-collapse:collapse; text-align:left; width:4.7pt; padding:0" valign="bottom"><p style="text-align:left; padding:0; margin:0"><font style="color:black"> </font></p></td><td width="6" style="border-collapse:collapse; text-align:left; width:4.7pt; padding:0" valign="bottom"><p style="text-align:left; padding:0; margin:0"><font style="color:black">$</font></p></td><td width="75" style="border-collapse:collapse; text-align:left; width:56.5pt; padding:0" valign="bottom"><p style="text-align:right; padding:0; margin:0" align="right"><font style="color:black">678,700</font></p></td><td width="6" style="border-collapse:collapse; text-align:left; width:4.7pt; padding:0" valign="bottom"><p style="text-align:left; padding:0; margin:0"><font style="color:black"> </font></p></td><td width="6" style="border-collapse:collapse; text-align:left; width:4.7pt; padding:0" valign="bottom"><p style="text-align:left; padding:0; margin:0"><font style="color:black"> </font></p></td><td width="6" style="border-collapse:collapse; text-align:left; width:4.7pt; padding:0" valign="bottom"><p style="text-align:left; padding:0; margin:0"><font style="color:black">$</font></p></td><td width="75" style="border-collapse:collapse; text-align:left; width:56.5pt; padding:0" valign="bottom"><p style="text-align:right; padding:0; margin:0" align="right"><font style="color:black">674,000</font></p></td><td width="6" style="border-collapse:collapse; text-align:left; width:4.7pt; padding:0" valign="bottom"><p style="text-align:left; padding:0; margin:0"><font style="color:black"> </font></p></td></tr><tr style="border-collapse:collapse; text-align:left"><td width="440" style="border-collapse:collapse; text-align:left; background-color:#cceeff; width:329.65pt; padding:0 0 1.5pt 0" valign="bottom"><p style="text-align:left; background-color:#cceeff; padding:0; margin:0"><font style="color:black">Less: valuation allowance</font></p></td><td width="6" style="border-collapse:collapse; text-align:left; background-color:#cceeff; width:4.7pt; padding:0 0 1.5pt 0" valign="bottom"><p style="text-align:left; background-color:#cceeff; padding:0; margin:0"><font style="color:black"> </font></p></td><td width="6" style="border-collapse:collapse; text-align:left; background-color:#cceeff; width:4.7pt; padding:0; border-bottom:solid 1pt black" valign="bottom"><p style="text-align:left; background-color:#cceeff; padding:0; margin:0"><font style="color:black"> </font></p></td><td width="75" style="border-collapse:collapse; text-align:left; background-color:#cceeff; width:56.5pt; padding:0; border-bottom:solid 1pt black" valign="bottom"><p style="text-align:right; background-color:#cceeff; padding:0; margin:0" align="right"><font style="color:black">(678,700</font></p></td><td width="6" style="border-collapse:collapse; text-align:left; background-color:#cceeff; width:4.7pt; padding:0 0 1.5pt 0" valign="bottom"><p style="text-align:left; background-color:#cceeff; padding:0; margin:0"><font style="color:black">)</font></p></td><td width="6" style="border-collapse:collapse; text-align:left; background-color:#cceeff; width:4.7pt; padding:0 0 1.5pt 0" valign="bottom"><p style="text-align:left; background-color:#cceeff; padding:0; margin:0"><font style="color:black"> </font></p></td><td width="6" style="border-collapse:collapse; text-align:left; background-color:#cceeff; width:4.7pt; padding:0; border-bottom:solid 1pt black" valign="bottom"><p style="text-align:left; background-color:#cceeff; padding:0; margin:0"><font style="color:black"> </font></p></td><td width="75" style="border-collapse:collapse; text-align:left; background-color:#cceeff; width:56.5pt; padding:0; border-bottom:solid 1pt black" valign="bottom"><p style="text-align:right; background-color:#cceeff; padding:0; margin:0" align="right"><font style="color:black">(674,000</font></p></td><td width="6" style="border-collapse:collapse; text-align:left; background-color:#cceeff; width:4.7pt; padding:0 0 1.5pt 0" valign="bottom"><p style="text-align:left; background-color:#cceeff; padding:0; margin:0"><font style="color:black">)</font></p></td></tr><tr style="border-collapse:collapse; text-align:left"><td width="440" style="border-collapse:collapse; text-align:left; width:329.65pt; padding:0 0 3pt 0" valign="bottom"><p style="text-align:left; padding:0; margin:0"><font style="color:black">Net deferred tax asset</font></p></td><td width="6" style="border-collapse:collapse; text-align:left; width:4.7pt; padding:0 0 3pt 0" valign="bottom"><p style="text-align:left; padding:0; margin:0"><font style="color:black"> </font></p></td><td width="6" style="border-collapse:collapse; text-align:left; width:4.7pt; padding:0; border-bottom:double 2.25pt black" valign="bottom"><p style="text-align:left; padding:0; margin:0"><font style="color:black">$</font></p></td><td width="75" style="border-collapse:collapse; text-align:left; width:56.5pt; padding:0; border-bottom:double 2.25pt black" valign="bottom"><p style="text-align:right; padding:0; margin:0" align="right"><font style="color:black">0</font></p></td><td width="6" style="border-collapse:collapse; text-align:left; width:4.7pt; padding:0 0 3pt 0" valign="bottom"><p style="text-align:left; padding:0; margin:0"><font style="color:black"> </font></p></td><td width="6" style="border-collapse:collapse; text-align:left; width:4.7pt; padding:0 0 3pt 0" valign="bottom"><p style="text-align:left; padding:0; margin:0"><font style="color:black"> </font></p></td><td width="6" style="border-collapse:collapse; text-align:left; width:4.7pt; padding:0; border-bottom:double 2.25pt black" valign="bottom"><p style="text-align:left; padding:0; margin:0"><font style="color:black">$</font></p></td><td width="75" style="border-collapse:collapse; text-align:left; width:56.5pt; padding:0; border-bottom:double 2.25pt black" valign="bottom"><p style="text-align:right; padding:0; margin:0" align="right"><font style="color:black">0</font></p></td><td width="6" style="border-collapse:collapse; text-align:left; width:4.7pt; padding:0 0 3pt 0" valign="bottom"><p style="text-align:left; padding:0; margin:0"><font style="color:black"> </font></p></td></tr></table><p style="text-align:left; padding:0; margin:0"><font style="color:black"> </font></p><p style="text-align:left; padding:0; margin:0"><font style="color:black">As of December 31, 2011, the Company had net operating loss carry forwards of approximately $2,091,000 that may be available to reduce future years’ taxable income through 2031. Future tax benefits which may arise as a result of these losses have not been recognized in these financial statements, as their realization is determined not likely to occur and accordingly, the Company has recorded a valuation allowance for the deferred tax asset relating to these tax loss carry-forwards.</font></p><p style="text-align:left; padding:0; margin:0"><font style="color:black"> </font></p><p style="text-align:left; padding:0; margin:0"><font style="color:black">Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards of $2,091,000 for federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur, net operating loss carry forwards may be limited as to use in future years.</font></p>
<!--egx--><p style="text-align:left; padding:0; margin:0"><b><font style="color:black; font-weight:700">NOTE 9 – GOING CONCERN</font></b></p><p style="text-align:left; padding:0; margin:0"><font style="color:black"> </font></p><p style="text-align:left; padding:0; margin:0"><font style="color:black">The Company has negative working capital, and has suffered a significant loss from operations.  These factors create substantial doubt about the Company’s ability to continue as a going concern.  The financial statements do not include any adjustment that might be necessary if the Company is unable to continue as a going concern.</font></p><p style="text-align:left; padding:0; margin:0"><font style="color:black"> </font></p><p style="text-align:left; padding:0; margin:0"><font style="color:black">The ability of Energy Edge Technologies Corporation to continue as a going concern is dependent on the Company generating cash from the sale of its common stock and/or obtaining debt financing and attaining future profitable operations or acquiring or merging with a profitable company.  Management’s plans include selling its equity securities and obtaining debt financing to fund its capital requirements; however, there can be no assurance the Company will be successful in these efforts.</font></p>
<!--egx--><p style="text-align:justify; text-justify:inter-ideograph; padding:0; margin:0"><b><font style="color:black; font-weight:700">NOTE 10 – COMMITMENTS AND CONTINGENCIES</font></b></p><p style="text-align:left; padding:0; margin:0"><font style="color:black"> </font></p><p style="text-align:left; padding:0; margin:0"><font style="color:black">The Company neither owns nor leases any real property. An officer has provided office services without charge.  There is no obligation for the officer to continue this arrangement.  Such costs are immaterial to the financial statements and accordingly are not reflected herein.</font></p>
<!--egx--><p style="text-align:justify; text-justify:inter-ideograph; padding:0; margin:0"><b><font style="color:black; font-weight:700">NOTE 11 – SUBSEQUENT EVENTS</font></b></p><p style="text-align:left; padding:0; margin:0"><font style="color:black"> </font></p><p style="text-align:left; padding:0; margin:0"><font style="color:black">In accordance with ASC 855-10, the Company has analyzed its operations subsequent to March 31, 2012 to the date these financial statements were issued, and has determined that it does not have any material subsequent events to disclose in these financial statements.</font></p>
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shares
iso4217:USD
shares
at $.10 per share