10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

———————

FORM 10-Q

———————

þ	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
	ACT OF 1934
For the quarterly period ended: June 30, 2011
or
¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
	ACT OF 1934
For the transition period from: _____________ to _____________

———————

Andover Holdings, Inc.

(Exact name of registrant as specified in its charter)

———————

Florida	000-17746	64-1045849
(State or Other Jurisdiction	(Commission	(I.R.S. Employer
of Incorporation)	File Number)	Identification No.)

7300 N. Federal Highway Suite 207 Boca Raton, Florida 33487

(Address of Principal Executive Office) (Zip Code)

561 989 3600

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

———————

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	þ	No
Indicate by check mark whether the registrant has submitted 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	¨	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.
Large accelerated filer	¨	Accelerated filer			¨
Non-accelerated filer	¨	Smaller reporting company			þ
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).			¨	Yes	þ	No
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. As of June 30, 2011 was approximately 31,110,580.

PART I – FINANCIAL INFORMATION

Item 1.

Financial Statements

ANDOVER HOLDINGS, INC.

(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED BALANCE SHEETS

	June 30,			December 31,
	2011			2010
	(Unaudited)
ASSETS
Current assets
Cash	$	17,064		$	57,094
Total current assets		17,064			57,094
Total assets	$	17,064		$	57,094
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
Current Liabilities
Accounts payable and accrued expenses	$	102,124		$	189,386
Accounts payable and accrued expenses, related parties		301,774			294,329
Loans payable		300,500			277,500
Loans payable- related parties		185,869			185,869
Total current liabilities		890,267			947,084
Total liabilities		890,267			947,084
Commitments and contingencies
Stockholders' (deficit):
Preferred stock, $0.001 par value; 20,000,000 shares authorized; none issued and outstanding		—			—
Common stock, $0.001 par value, 50,000,000 shares authorized; 31,110,580 shares issued and outstanding, respectively		31,111			31,111
Additional paid-in capital		2,857,089			2,857,089
Deficit accumulated during the development stage		(3,761,403	)		(3,778,190	)
Total stockholders' (deficit)		(873,203	)		(889,990	)
Total liabilities and stockholders' (deficit)	$	17,064		$	57,094

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

1

ANDOVER HOLDINGS, INC.

(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

	Cumulative From
	Inception			For the						For the
	(June 28, 1999)			Three Months Ended						Six Months Ended
	To June 30,			June 30,						June 30,
	2011			2011			2010			2011			2010
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Revenue	$	—		$	—		$	—		$	—		$	—
Operating expenses		3,846,660			33,281			6,402			63,992			6,402
Operating (Loss)		(3,846,660	)		(33,281	)		(6,402	)		(63,992	)		(6,402	)
Other income (expense)
Cancellation of debt pursuant to agreement rescission		130,000			—			—			—			—
Cancellation of accounts payable		96,029			—			—			96,029			—
Interest (expense)		(140,772	)		(7,852	)		(8,090	)		(15,250	)		(16,035	)
Income (Loss) Before Provision for Income Taxes		(3,761,403	)		(41,133	)		(14,492	)		16,787			(22,437	)
Income Taxes		—			—			—			—			—
Net income (loss)	$	(3,761,403	)	$	(41,133	)	$	(14,492	)	$	16,787		$	(22,437	)
Net (Loss) Per Common Share -
Basic and Diluted				$	—		$	—		$	—		$	—
Weighted Average Shares of Common Stock Outstanding					31,110,580			31,110,580			31,110,580			31,110,580

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

2

ANDOVER HOLDINGS, INC.

(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Cumulative From
	Inception			For the
	(June 28, 1999)			Six Months Ended
	To June 30,			June 30,
	2011			2011			2010
	(Unaudited)			(Unaudited)			(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	(3,761,403	)	$	16,787		$	(22,437	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		2,885			—			—
Stock based compensation		1,405,600			—			—
Stock issued for liabilities		122,845			—			—
Cancellation of debt pursuant to agreement rescission		(130,000	)		—			—
Stock and note issued for purchased R & D		161,250			—			—
Accumulated loss of acquisition		8,711			—			—
Changes in operating assets and liabilities:
Other assets, security deposits		—			—			—
Accounts payable and accrued expenses		110,123			(87,262	)		2,858
Accounts payable and accrued expenses-related parties		726,279			7,445			8,176
Net cash used in operating activities		(1,353,710	)		(63,030	)		(11,403	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment		(2,885	)		—			—
Net cash used in investing activities		(2,885	)		—			—
CASH FLOWS FROM FINANCING ACTIVITIES:
Bank overdraft repayment		—			—			—
Loans payable proceeds, related parties		321,594			—			—
Loans payable repayments, related parties		(183,483	)		—			—
Proceeds from loans payable		300,500			23,000			75,000
Line of credit, net		—			—			—
Proceeds from sale of common stock		935,048			—			—
Net cash provided by financing activities		1,373,659			23,000			75,000
Net increase (decrease) in cash		17,064			(40,030	)		63,597
Cash and equivalents, beginning of period		—			57,094			—
Cash and equivalents, end of period	$	17,064		$	17,064		$	63,597

3

ANDOVER HOLDINGS, INC.

(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

(UNAUDITED)

	Cumulative From
	Inception		For the
	(June 28, 1999)		Six Months Ended
	To June 30,		June 30,
	2011		2011		2010
	(Unaudited)		(Unaudited)		(Unaudited)
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Payment of taxes	$	—	$	—	$	—
Payment of interest	$	10,120	$	—	$	—
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Stock Issued for Services	$	1,405,600	$	—	$	—
Contribution of debt by shareholder	$	370,222	$	—	$	—
Stock Issued for Acquisition of Timber Property, Inc.	$	8,711	$	—	$	—
Stock Issued for Purchased R & D	$	31,250	$	—	$	—

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

4

ANDOVER HOLDINGS, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2011

NOTE 1. – DESCRIPTION OF BUSINESS

The Company was incorporated under the laws of the State of Florida on June 28, 1999. We filed a Form 10SB with the Securities and Exchange Commission, thereby becoming a publicly reporting company. On October 29, 2001, the Company changed its name from Xelos, Inc. to Real Logic, Inc. On July 31, 2008, we changed the name from Real Logic, Inc. to Andover Energy Holdings, Inc. Management's intentions were to focus on Wind Energy Turbines manufacturing.  Due to a change in Management, the Company changed the name to Andover Holdings, Inc. on August 24. 2010.

NOTE 2. - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Development Stage Company

The Company is in its development stage since its formation in 1999 and has an accumulated deficit of $3,761,403..

Use of estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results may differ from these estimates. Estimates are used when accounting for allowance for bad debts, collect ability of accounts receivable, amounts due to service providers, depreciation, and litigation contingencies, among others.

Principles of consolidation

The consolidated financial statements will include the accounts of the Company and its future subsidiaries, in accordance with U.S. generally accepted accounting principles, under the rules and regulations of the U.S. Securities and Exchange Commission (SEC). All inter-company transactions and balances will be eliminated in consolidation.

Revenue recognition

Revenue will be recognized when the related service has been provided, and there is persuasive evidence of an arrangement, the fee is fixed or determinable, and collection is reasonably assured. Revenue from other professional services, will be recognized in the period the services are to be provided.  Deferred revenue will consist of amounts that have been prepaid and services which have not yet been rendered.

Net loss per common share

In accordance with FASB ASC 260 basic net loss per common share is computed using the weighted average number of common shares outstanding during each period presented, excluding unvested restricted stock awards subject to cancellation. Diluted net loss per common share is computed by using the weighted average number of common shares and potential common shares outstanding during the period. Potential common shares represent the incremental common shares issuable for stock options.

Cash and cash equivalents

The Company classifies cash on hand and deposits in the bank as cash and considers all highly liquid debt instruments with an original maturity of three months or less to be cash equivalents.

Concentrations of Risk

The Company’s revenues will primarily be derived from Independent Acquisitions Entities which will be structured as Subsidiaries to the Parent Holding Company.

5

Property and Equipment

Depreciation is computed on the straight-line method, based on the estimated useful lives of the asset of five to seven years. Expenditures for maintenance and repairs will be charged to operations as incurred. Upon retirement or sale, the cost of assets disposed of and related accumulated depreciation are removed from the accounts and any resulting gain or loss is credited or charged to operations. The Company had a minimal amount $2,885 of office equipment that it disposed of in 2008.

Share-Based Compensation

The Company will record compensation expense for share-based compensation in accordance with ASC Topic 718. Currently, there are no Share Options issued. For share options to certain officers and others, in the future, the Company will use the Black-Scholes pricing model to determine the fair value of stock options on the grant dates for stock option awards issued. The Black-Scholes valuation model requires the Company to make assumptions and judgments about the variables used in the calculation. These variables and assumptions include the fair value of our common stock, expected term, the expected volatility, and certain present values.

Income taxes

The Company’s U.S. Federal and state income tax returns prior to fiscal year December 31, 2008 are filed and management will continually evaluate expiring statutes of limitations, audits, proposed settlements, changes in tax law and new authoritative rulings. The Company recognizes interest and penalties associated with tax matters as part of the income tax provision and includes accrued interest and penalties with the related tax liability in the consolidated balance sheets. Deferred income taxes (benefits) are provided for certain income and expenses which are recognized in different periods for tax and financial reporting purposes.

The Company had cumulative net operating loss carry-forwards for income tax purposes at June 30, 2010 of approximately $3,761,403 expiring through December 31, 2023. The Company has established a 100% valuation allowance against this deferred tax asset, as the Company has no history of profitable operations.

Fair Value of Financial Instruments

The carrying amounts of cash and cash equivalents, accounts receivable, prepaid expenses, accounts payable and accrued expenses approximate fair value due to the immediate or short-term maturity of these financial instruments. The fair value of notes and loan payables is determined using current applicable rates which approximate market rates of such debt.

Recently Issued Accounting Standards

Subsequent Events Disclosures

In February 2010, the FASB issued FASB ASU 2010-09, “Subsequent Events, Amendments to Certain Recognition and Disclosure Requirements,” which clarifies certain existing evaluation and disclosure requirements in ASC 855 “Subsequent Events” related to subsequent events. FASB ASU 2010-09 requires SEC filers to evaluate subsequent events through the date in which the financial statements are issued and is effective immediately. The new guidance does not have an effect on the Company’s consolidated results of operations and financial condition.

Fair Value Measurements

On January 1, 2009, the Company adopted accounting guidance issued by the Financial Accounting Standards Board ( "FASB") which had previously deferred the effective date of fair value measurements for all nonfinancial assets and nonfinancial liabilities, except for items that are recognized or disclosed in financial statements at fair value on a recurring basis ( at least annually). The adoption of this guidance did not have a material impact on the consolidated financial statements.

NOTE 3 - INCOME TAX

In February 1992, the Financial Standards Board issued Statement of Financial Accounting Standards No. 109, “Accounting for Income Taxes.” Under SFAS No. 109, deferred assets and liabilities are recognized for the estimated future tax consequences between the financial statement carrying amounts of the existing assets and their respective basis.

6

Deferred assets and liabilities are measured using enacted tax rates in effect for the year in which temporary differences are expected to be recovered or settled. Under SFAS No. 109, the effect on deferred assets and liabilities of a change in tax rates is recognized in the period that includes the enactment date. For the six months ending June 30, 2011 and for the year ending December 31, 2010 the effective income tax rate is:

	Period ending
	June 30, 2011	December 31, 2010
Statutory federal income tax rate	34%	34%
Valuation allowance	(34%)	(34%)
Effective tax rate	––%	––%

The Company has a net operating loss carry forward as of June 30, 2011 of approximately $3,761,403 which is offset by a 100% valuation allowance due to the uncertainty surrounding the ultimate realization of these assets. The loss carry-forwards expires at various dates through 2027.

NOTE 4 - RELATED PARTY TRANSACTIONS

Loan Payable

The Company’s officers and directors have advanced funds to the company for working capital. These advances are unsecured, bear interest at 7% per annum and have no scheduled repayment. For the six months ending June 30, 2011 interest expense of $15,250 has been accrued and the total accrued interest balance at June 30, 2011 is $140,772.

Management Fees

The Board of Directors approved an Executive Employment Agreement of $10,000 per month for Barbara Tolley, effective the Second Quarter of Y2010.

NOTE 5 - CAPITAL TRANSACTIONS

There were no capital transactions in the first quarter of Y2010.

NOTE 6 - NOTES AND LOANS PAYABLE

At June 30, 2011 and 2010, total notes and loans payable consisted of the following: Notes and loans payable to principal stockholders are unsecured and due upon demand, with interest at between 5% and 7%.

	June 30, 2011		June 30, 2010
Loans Payable	$	300,500	$	277,500
Loans Payable Related Parties	$	185,869	$	185,869

Interest expense was $15,250 and $16,035 for the quarters ended June 2011 and June 2010, respectively.

NOTE 7. - EQUITY TRANSACTIONS

The fair values of the Stock Options issued during March 31, 2008 have been valued at the fair market value of the Common Stock at Date of Issue.

The Company issued a total of 740,000 and 2,670,000, respectively of shares of common stock for a total value of $89,000 and $1,182,400, which has been recorded as compensation expense during the years ended December 31, 2008 and 2007.

The Company issued a total of 320,000 and 25,000, respectively of shares of common stock for a total value of $122,845 and $8,000, which satisfied liabilities during the years ended December 31, 2008 and 2007.

The Company sold 3,305,000 and 3,480,000, respectively of shares of common stock to investors for $348,000 and $142,500 during the years ended December 31, 2008 and 2007.

7

Effective December 31, 2008, the acting CEO and surviving relative of the deceased CEO Bradford Tolley, of the Company has authorized the contribution $370,222 which represents the balance of his cumulative unpaid accrued compensation to paid in capital of the Company.

The Company has not issued any additional shares resulting from subscription agreements for common stock since July 2008 to present.

NOTE 8. - SUBSEQUENT EVENTS

The Company has evaluated subsequent events through the filing date of this 10-Q and determined that no subsequent events have occurred that would require recognition in the financial statements or disclosure in the notes thereto other than as discussed in the accompanying notes.

8

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion should be read in conjunction with our consolidated financial statements. Certain statements contained in this report may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Because such statements include risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include those discussed in “Forward Looking Statements,” above.

Results of Operations

We are a development stage company as defined in the Statement of Financial Accounting Standards ASC 915 with limited operations. We have had no revenues since inception. The Companies' acquisition for the Duncan Motor Company did not materialize.

There was no Stock based compensation in the Second Quarter of June 30, 2011. The Company's accumulated deficit in the Second Quarter was $3,761,403 and a working capital deficit of $873,203 compared to an accumulated deficit of $3,778,190 and a working capital deficit of $889,990 in 2010. Until we initiate and conclude an acquisition, the Company will continue to operate with a deficit.

.Interest expense was $7,852 for the quarter ended June 30, 2011, resulting in a cumulative balance since inception of $140,772.

Accounting fees were $13,500 for the Y 2011, compared to $3,500 in Y2010.

Legal fees were $17,500 for the Y 2011, compared to $1,000 in Y2010.

Liquidity and Capital Resources

The following table summarizes the cash flows for the quarters ended June 30, 2011 and 2010:

	For the Quarter Ended June 30,
Net cashed (used in) provided by:	2011		2010
Operating Activities	$	63,992	$	6,402
Investing Activities	$	—	$	—
Financing Activities	$	—	$	—

Critical Accounting Policies

Revenue recognition

Revenue is recognized when the related service has been provided, there is persuasive evidence of an arrangement, the fee is fixed or determinable, and collection is reasonably assured. The Company has had no revenue, to date.. The Company intends to recognize revenue for services as they are provided, beginning on the date that the customer commences our services and continuing over the term of the customer contract. Revenue from other professional services, including setup and direct installation activities are recognized in the period the services are provided. Amounts that have been invoiced are recorded in accounts receivable and either deferred revenues or revenues, depending on whether the revenue recognition criteria have been met. Therefore, deferred revenue consists of amounts that have been prepaid and services have not yet been rendered. Revenue from the sale of bundled infrastructure hardware is recognized at the time installation is complete.

The Company records compensation expense for share-based compensation in accordance with ASC Topic 718. For share options to certain officers and others, the Company used the Black-Scholes pricing model to determine the fair value of stock options on the grant dates for stock option awards issued. The Black-Scholes valuation model requires the Company to make assumptions and judgments about the variables used in the calculation. These variables and assumptions include the fair value of our common stock, expected term, the expected volatility, and certain present values.

9

Net Operating Loss Carry Forwards

The Company had cumulative net operating loss carry forwards for income tax purposes at June 30 2011 of approximately $3,761,403 expiring through December 31, 2024. The Company has established a 100% valuation allowance against this deferred tax asset, as the Company has no history of profitable operations.

Going Concern

There is no assurance that we will be able to successfully raise the funds necessary to fund operations through any means available. Further, there is no assurance that we will be able to successfully grow operations even if we are successful in acquiring the funds necessary, which may have a material impact on our consolidated financial position and results of operations. The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result should we be unable to continue as a going concern.

Item 3.

Quantitative and Qualitative disclosure about Market Risk

Not required by smaller reporting companies.

Item 4.

Controls and Procedures.

We carried out an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of September 30, 2010 (the “Evaluation Date”).  This evaluation included reviews of the documentation of controls, evaluation of the design effectiveness of controls, and a conclusion on this evaluation. This evaluation was carried out under the supervision and with the participation of our President, as Principal Executive Officer, and our Chief Financial Officer. Based upon that evaluation, management concluded that, as of the end of such period, our disclosure controls and procedures were effective.

Disclosure controls and procedures are those controls and procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act are recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our President and our Chief Financial Officer, to allow timely decisions regarding required disclosure.

Management recognizes that there are inherent limitations in the effectiveness of any system of internal control, and accordingly, even effective internal control can provide only reasonable assurance with respect to financial statement preparation and may not prevent or detect material misstatements. In addition, effective internal control at a point in time may become ineffective in future periods because of changes in conditions or due to deterioration in the degree of compliance with our established policies and procedures.

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PART II – OTHER INFORMATION

Item 1.

Legal Proceedings.

There have been no Legal claims or Procedures

Item 1A.

Risk Factors.

Not required by smaller reporting companies.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds.

There has been no sales of Equity Securities and Use of Proceeds

Item 3.

Defaults Upon Senior Securities.

There has been no default upon Senior Securities

Item 4.

Mine Safety Disclosures.

Not applicable.

Item 5.

Other Information.

None

Item 6.

Exhibits.

Exhibit No.	Description
31.1	Certificate of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act.
31.2	Certificate of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act.
32.1	Certificate of Principal Executive and Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act.
101	XBRL Interactive Data*

———————

*

Attached as Exhibit 101 to this report are the following financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2011 formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Cash Flows, and (iv) related notes to these financial statements tagged as blocks of text. The XBRL-related information in Exhibit 101 to this Quarterly Report on Form 10-Q shall not be deemed “filed” or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, and is not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of those sections.

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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.

Date:  May 25, 2012

Andover Holdings, Inc.
By:	/s/ Barbara Lang Tolley
	Barbara Lang Tolley
	CEO

12

EX-31.1

EXHIBIT 31.1

CERTIFICATION PURSUANT TO
RULE 13A-14(a) OR RULE 15d-14(a) OF THE SECURITIES EXCHANGE ACT OF 1934

I, Barbara L. Tolley, certify that:

1.

I have reviewed this Quarterly Report on Form 10-Q of Andover Holdings, Inc.;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 25, 2012

/s/ Barbara L. Tolley

Barbara L. Tolley

Chief Executive Officer 

(Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION PURSUANT TO
RULE 13A-14(a) OR RULE 15d-14(a) OF THE SECURITIES EXCHANGE ACT OF 1934

I, Barbara L. Tolley, certify that:

1.

I have reviewed this Quarterly Report on Form 10-Q of Andover Holdings, Inc.;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 25, 2012

/s/ Barbara L. Tolley

Barbara L. Tolley

Treasurer

(Principal Financial Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q Andover Holdings, Inc. (the “Company”) for the period ending June 30, 2011 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned Chief Executive Officer and Treasurer of the Company hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that based on her knowledge:

(1)

the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)

the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:  May 25, 2012

/s/ Barbara L. Tolley

Barbara L. Tolley

Chief Executive Officer and Treasurer

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RELATED PARTY TRANSACTIONS

6 Months Ended

Jun. 30, 2011

Notes to Financial Statements

RELATED PARTY TRANSACTIONS

NOTE 4 - RELATED PARTY TRANSACTIONS

Loan Payable

The Company’s officers and directors have advanced funds to the company for working capital. These advances are unsecured, bear interest at 7% per annum and have no scheduled repayment. For the six months ending June 30, 2011 interest expense of $15,250 has been accrued and the total accrued interest balance at June 30, 2011 is $140,772.

Management Fees

The Board of Directors approved an Executive Employment Agreement of $10,000 per month for Barbara Tolley, effective the Second Quarter of Y2010.

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INCOME TAX

6 Months Ended

Jun. 30, 2011

Notes to Financial Statements

INCOME TAX

NOTE 3 - INCOME TAX

In February 1992, the Financial Standards Board issued Statement of Financial Accounting Standards No. 109, “Accounting for Income Taxes.” Under SFAS No. 109, deferred assets and liabilities are recognized for the estimated future tax consequences between the financial statement carrying amounts of the existing assets and their respective basis.

Deferred assets and liabilities are measured using enacted tax rates in effect for the year in which temporary differences are expected to be recovered or settled. Under SFAS No. 109, the effect on deferred assets and liabilities of a change in tax rates is recognized in the period that includes the enactment date. For the six months ending June 30, 2011 and for the year ending December 31, 2010 the effective income tax rate is:

	Period ending
	June 30, 2011	December 31, 2010
Statutory federal income tax rate	34%	34%
Valuation allowance	(34%)	(34%)
Effective tax rate	––%	––%

The Company has a net operating loss carry forward as of June 30, 2011 of approximately $3,761,403 which is offset by a 100% valuation allowance due to the uncertainty surrounding the ultimate realization of these assets. The loss carry-forwards expires at various dates through 2027.

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CONSOLIDATED BALANCE SHEETS (USD $)	Jun. 30, 2011	Dec. 31, 2010
ASSETS
Cash	$ 17,064	$ 57,094
Total current assets	17,064	57,094
Total assets	17,064	57,094
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
Accounts payable and accrued expenses	102,124	189,386
Accounts payable and accrued expenses, related parties	301,774	294,329
Loans payable	300,500	277,500
Loans payable- related parties	185,869	185,869
Total current liabilities	890,267	947,084
Total liabilities	890,267	947,084
Commitments and contingencies
Stockholders' (deficit):
Preferred stock, $0.001 par value; 20,000,000 shares authorized; none issued and outstanding
Common stock, $0.001 par value, 50,000,000 shares authorized; 31,110,580 shares issued and outstanding, respectively	31,111	31,111
Additional paid-in capital	2,857,089	2,857,089
Deficit accumulated during the development stage	(3,761,403)	(3,778,190)
Total stockholders' (deficit)	(873,203)	(889,990)
Total liabilities and stockholders' (deficit)	$ 17,064	$ 57,094

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DESCRIPTION OF BUSINESS

6 Months Ended

Jun. 30, 2011

Notes to Financial Statements

DESCRIPTION OF BUSINESS

NOTE 1. – DESCRIPTION OF BUSINESS

The Company was incorporated under the laws of the State of Florida on June 28, 1999. We filed a Form 10SB with the Securities and Exchange Commission, thereby becoming a publicly reporting company. On October 29, 2001, the Company changed its name from Xelos, Inc. to Real Logic, Inc. On July 31, 2008, we changed the name from Real Logic, Inc. to Andover Energy Holdings, Inc. Management's intentions were to focus on Wind Energy Turbines manufacturing. Due to a change in Management, the Company changed the name to Andover Holdings, Inc. on August 24. 2010.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Jun. 30, 2011

Notes to Financial Statements

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 2. - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Development Stage Company

The Company is in its development stage since its formation in 1999 and has an accumulated deficit of $3,761,403.

Use of estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results may differ from these estimates. Estimates are used when accounting for allowance for bad debts, collect ability of accounts receivable, amounts due to service providers, depreciation, and litigation contingencies, among others.

Principles of consolidation

The consolidated financial statements will include the accounts of the Company and its future subsidiaries, in accordance with U.S. generally accepted accounting principles, under the rules and regulations of the U.S. Securities and Exchange Commission (SEC). All inter-company transactions and balances will be eliminated in consolidation.

Revenue recognition

Revenue will be recognized when the related service has been provided, and there is persuasive evidence of an arrangement, the fee is fixed or determinable, and collection is reasonably assured. Revenue from other professional services, will be recognized in the period the services are to be provided.  Deferred revenue will consist of amounts that have been prepaid and services which have not yet been rendered.

Net loss per common share

In accordance with FASB ASC 260 basic net loss per common share is computed using the weighted average number of common shares outstanding during each period presented, excluding unvested restricted stock awards subject to cancellation. Diluted net loss per common share is computed by using the weighted average number of common shares and potential common shares outstanding during the period. Potential common shares represent the incremental common shares issuable for stock options.

Cash and cash equivalents

The Company classifies cash on hand and deposits in the bank as cash and considers all highly liquid debt instruments with an original maturity of three months or less to be cash equivalents.

Concentrations of Risk

The Company’s revenues will primarily be derived from Independent Acquisitions Entities which will be structured as Subsidiaries to the Parent Holding Company. 

Property and Equipment

Depreciation is computed on the straight-line method, based on the estimated useful lives of the asset of five to seven years. Expenditures for maintenance and repairs will be charged to operations as incurred. Upon retirement or sale, the cost of assets disposed of and related accumulated depreciation are removed from the accounts and any resulting gain or loss is credited or charged to operations. The Company had a minimal amount $2,885 of office equipment that it disposed of in 2008.

Share-Based Compensation

The Company will record compensation expense for share-based compensation in accordance with ASC Topic 718. Currently, there are no Share Options issued. For share options to certain officers and others, in the future, the Company will use the Black-Scholes pricing model to determine the fair value of stock options on the grant dates for stock option awards issued. The Black-Scholes valuation model requires the Company to make assumptions and judgments about the variables used in the calculation. These variables and assumptions include the fair value of our common stock, expected term, the expected volatility, and certain present values.

Income taxes

The Company’s U.S. Federal and state income tax returns prior to fiscal year December 31, 2008 are filed and management will continually evaluate expiring statutes of limitations, audits, proposed settlements, changes in tax law and new authoritative rulings. The Company recognizes interest and penalties associated with tax matters as part of the income tax provision and includes accrued interest and penalties with the related tax liability in the consolidated balance sheets. Deferred income taxes (benefits) are provided for certain income and expenses which are recognized in different periods for tax and financial reporting purposes.

The Company had cumulative net operating loss carry-forwards for income tax purposes at June 30, 2010 of approximately $3,761,403 expiring through December 31, 2023. The Company has established a 100% valuation allowance against this deferred tax asset, as the Company has no history of profitable operations.

Fair Value of Financial Instruments

The carrying amounts of cash and cash equivalents, accounts receivable, prepaid expenses, accounts payable and accrued expenses approximate fair value due to the immediate or short-term maturity of these financial instruments. The fair value of notes and loan payables is determined using current applicable rates which approximate market rates of such debt.

Recently Issued Accounting Standards

Subsequent Events Disclosures

In February 2010, the FASB issued FASB ASU 2010-09, “Subsequent Events, Amendments to Certain Recognition and Disclosure Requirements,” which clarifies certain existing evaluation and disclosure requirements in ASC 855 “Subsequent Events” related to subsequent events. FASB ASU 2010-09 requires SEC filers to evaluate subsequent events through the date in which the financial statements are issued and is effective immediately. The new guidance does not have an effect on the Company’s consolidated results of operations and financial condition.

Fair Value Measurements

On January 1, 2009, the Company adopted accounting guidance issued by the Financial Accounting Standards Board ( "FASB") which had previously deferred the effective date of fair value measurements for all nonfinancial assets and nonfinancial liabilities, except for items that are recognized or disclosed in financial statements at fair value on a recurring basis ( at least annually). The adoption of this guidance did not have a material impact on the consolidated financial statements.

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CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Jun. 30, 2011	Dec. 31, 2010
Shareholders' Equity
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, authorized	20,000,000	20,000,000
Preferred stock, issued
Preferred stock, outstanding
Common stock, par value	$ 0.001	$ 0.001
Common stock, authorized	50,000,000	50,000,000
Common stock, issued	31,110,580	31,110,580
Common stock, outstanding	31,110,580	31,110,580

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Document and Entity Information	6 Months Ended
	Jun. 30, 2011	May 25, 2012
Document And Entity Information
Entity Registrant Name	Andover Holdings, Inc./FL
Entity Central Index Key	0001126533
Document Type	10-Q
Document Period End Date	Jun. 30, 2011
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	No
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		31,110,580
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2011

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CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)	3 Months Ended		6 Months Ended		144 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011
Income Statement [Abstract]
Revenue
Operating expenses	33,281	6,402	63,992	6,402	3,846,660
Operating (Loss)	(33,281)	(6,402)	(63,992)	(6,402)	(3,846,660)
Other income (expense)
Cancellation of debt pursuant to agreement rescission					130,000
Cancellation of accounts payable			96,029		96,029
Interest (expense)	(7,852)	(8,090)	(15,250)	(16,035)	(140,772)
Income (Loss) Before Provision for Income Taxes	(41,133)	(14,492)	16,787	(22,437)	(3,761,403)
Income Taxes
Net income (loss)	$ (41,133)	$ (14,492)	$ 16,787	$ (22,437)	$ (3,761,403)
Net (Loss) Per Common Share - Basic and Diluted
Weighted Average Shares of Common Stock Outstanding	31,110,580	31,110,580	31,110,580	31,110,580

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EQUITY TRANSACTIONS

6 Months Ended

Jun. 30, 2011

Notes to Financial Statements

EQUITY TRANSACTIONS

NOTE 7. - EQUITY TRANSACTIONS

The fair values of the Stock Options issued during March 31, 2008 have been valued at the fair market value of the Common Stock at Date of Issue.

The Company issued a total of 740,000 and 2,670,000, respectively of shares of common stock for a total value of $89,000 and $1,182,400, which has been recorded as compensation expense during the years ended December 31, 2008 and 2007.

The Company issued a total of 320,000 and 25,000, respectively of shares of common stock for a total value of $122,845 and $ 8,000, which satisfied liabilities during the years ended December 31, 2008 and 2007.

The Company sold 3,305,000 and 3,480,000, respectively of shares of common stock to investors for $348,000 and $142,500 during the years ended December 31, 2008 and 2007.

Effective December 31, 2008, the acting CEO and surviving relative of the deceased CEO Bradford Tolley, of the Company has authorized the contribution $ 370,222 which represents the balance of his cumulative unpaid accrued compensation to paid in capital of the Company.

The Company has not issued any additional shares resulting from subscription agreements for common stock since July 2008 to present.

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NOTES AND LOANS PAYABLE

6 Months Ended

Jun. 30, 2011

Notes to Financial Statements

NOTES AND LOANS PAYABLE

NOTE 6 - NOTES AND LOANS PAYABLE

At June 30, 2011 and 2010, total notes and loans payable consisted of the following: Notes and loans payable to principal stockholders are unsecured and due upon demand, with interest at between 5% and 7%.

	June 30, 2011		June 30, 2010
Loans Payable	$	300,500	$	277,500
Loans Payable Related Parties	$	185,869	$	185,869

Interest expense was $15,250 and $16,035 for the quarters ended June, 2011 and June, 2010, respectively.

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SUBSEQUENT EVENTS

6 Months Ended

Jun. 30, 2011

Notes to Financial Statements

SUBSEQUENT EVENTS

NOTE 8. - SUBSEQUENT EVENTS

The Company has evaluated subsequent events through the filing date of this 10-Q and determined that no subsequent events have occurred that would require recognition in the financial statements or disclosure in the notes thereto other than as discussed in the accompanying notes.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

6 Months Ended

Jun. 30, 2011

Notes to Financial Statements

Development Stage Company

Development Stage Company

The Company is in its development stage since its formation in 1999 and has an accumulated deficit of $3,761,403.

Use of estimates

Use of estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results may differ from these estimates. Estimates are used when accounting for allowance for bad debts, collect ability of accounts receivable, amounts due to service providers, depreciation, and litigation contingencies, among others.

Principles of consolidation

Principles of consolidation

The consolidated financial statements will include the accounts of the Company and its future subsidiaries, in accordance with U.S. generally accepted accounting principles, under the rules and regulations of the U.S. Securities and Exchange Commission (SEC). All inter-company transactions and balances will be eliminated in consolidation.

Revenue recognition

Revenue recognition

Revenue will be recognized when the related service has been provided, and there is persuasive evidence of an arrangement, the fee is fixed or determinable, and collection is reasonably assured. Revenue from other professional services, will be recognized in the period the services are to be provided.  Deferred revenue will consist of amounts that have been prepaid and services which have not yet been rendered.

Net loss per common share

Net loss per common share

In accordance with FASB ASC 260 basic net loss per common share is computed using the weighted average number of common shares outstanding during each period presented, excluding unvested restricted stock awards subject to cancellation. Diluted net loss per common share is computed by using the weighted average number of common shares and potential common shares outstanding during the period. Potential common shares represent the incremental common shares issuable for stock options.

Cash and cash equivalents

Cash and cash equivalents

The Company classifies cash on hand and deposits in the bank as cash and considers all highly liquid debt instruments with an original maturity of three months or less to be cash equivalents.

Concentrations of Risk

Concentrations of Risk

The Company’s revenues will primarily be derived from Independent Acquisitions Entities which will be structured as Subsidiaries to the Parent Holding Company. 

Property and Equipment

Property and Equipment

Depreciation is computed on the straight-line method, based on the estimated useful lives of the asset of five to seven years. Expenditures for maintenance and repairs will be charged to operations as incurred. Upon retirement or sale, the cost of assets disposed of and related accumulated depreciation are removed from the accounts and any resulting gain or loss is credited or charged to operations. The Company had a minimal amount $2,885 of office equipment that it disposed of in 2008.

Share-Based Compensation

Share-Based Compensation

The Company will record compensation expense for share-based compensation in accordance with ASC Topic 718. Currently, there are no Share Options issued. For share options to certain officers and others, in the future, the Company will use the Black-Scholes pricing model to determine the fair value of stock options on the grant dates for stock option awards issued. The Black-Scholes valuation model requires the Company to make assumptions and judgments about the variables used in the calculation. These variables and assumptions include the fair value of our common stock, expected term, the expected volatility, and certain present values.

Income taxes

Income taxes

The Company’s U.S. Federal and state income tax returns prior to fiscal year December 31, 2008 are filed and management will continually evaluate expiring statutes of limitations, audits, proposed settlements, changes in tax law and new authoritative rulings. The Company recognizes interest and penalties associated with tax matters as part of the income tax provision and includes accrued interest and penalties with the related tax liability in the consolidated balance sheets. Deferred income taxes (benefits) are provided for certain income and expenses which are recognized in different periods for tax and financial reporting purposes.

The Company had cumulative net operating loss carry-forwards for income tax purposes at June 30, 2010 of approximately $3,761,403 expiring through December 31, 2023. The Company has established a 100% valuation allowance against this deferred tax asset, as the Company has no history of profitable operations.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The carrying amounts of cash and cash equivalents, accounts receivable, prepaid expenses, accounts payable and accrued expenses approximate fair value due to the immediate or short-term maturity of these financial instruments. The fair value of notes and loan payables is determined using current applicable rates which approximate market rates of such debt.

Recently Issued Accounting Standards

Recently Issued Accounting Standards

Subsequent Events Disclosures

In February 2010, the FASB issued FASB ASU 2010-09, “Subsequent Events, Amendments to Certain Recognition and Disclosure Requirements,” which clarifies certain existing evaluation and disclosure requirements in ASC 855 “Subsequent Events” related to subsequent events. FASB ASU 2010-09 requires SEC filers to evaluate subsequent events through the date in which the financial statements are issued and is effective immediately. The new guidance does not have an effect on the Company’s consolidated results of operations and financial condition.

Fair Value Measurements

On January 1, 2009, the Company adopted accounting guidance issued by the Financial Accounting Standards Board ( "FASB") which had previously deferred the effective date of fair value measurements for all nonfinancial assets and nonfinancial liabilities, except for items that are recognized or disclosed in financial statements at fair value on a recurring basis ( at least annually). The adoption of this guidance did not have a material impact on the consolidated financial statements.

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CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	6 Months Ended		144 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$ 16,787	$ (22,437)	$ (3,761,403)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation			2,885
Stock based compensation			1,405,600
Stock issued for liabilities			122,845
Cancellation of debt pursuant to agreement rescission			(130,000)
Stock and note issued for purchased R & D			161,250
Accumulated loss of acquisition			8,711
Changes in operating assets and liabilities:
Other assets, security deposits
Accounts payable and accrued expenses	(87,262)	2,858	110,123
Accounts payable and accrued expenses-related parties	7,445	8,176	726,279
Net cash used in operating activities	(63,030)	(11,403)	(1,353,710)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment			(2,885)
Net cash used in investing activities			(2,885)
CASH FLOWS FROM FINANCING ACTIVITIES:
Bank overdraft repayment
Loans payable proceeds, related parties			321,594
Loans payable repayments, related parties			(183,483)
Proceeds from loans payable	23,000	75,000	300,500
Line of credit, net
Proceeds from sale of common stock			935,048
Net cash provided by financing activities	23,000	75,000	1,373,659
Net increase (decrease) in cash	(40,030)	63,597	17,064
Cash and equivalents, beginning of period	57,094
Cash and equivalents, end of period	17,064	63,597	17,064
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Payment of taxes
Payment of interest			10,120
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Stock Issued for Services			1,405,600
Contribution of debt by shareholder			370,222
Stock Issued for Acquisition of Timber Property, Inc.			8,711
Stock Issued for Purchased R & D			$ 31,250

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CAPITAL TRANSACTIONS

6 Months Ended

Jun. 30, 2011

Notes to Financial Statements

CAPITAL TRANSACTIONS

NOTE 5 - CAPITAL TRANSACTIONS

There were no capital transactions in the first quarter of Y2010.