form10q.htm

POWERSAFE TECHNOLOGY CORP.

(A DEVELOPMENT STAGE COMPANY)

INDEX TO INTERIM FINANCIAL STATEMENTS

JUNE 30, 2008

(Unaudited)

Interim Financial Statements		Page No.

Balance Sheets as of June 30, 2008, and December 31, 2007		F-2

Statements of Operations for the Three Months Ended June 30, 2008, and 2007, the Six Months Ended June 30, 2008, the Period Ended June 30, 2007, and Cumulative from Inception		F-3

Statements of Cash Flows for the Six Months Ended June 30, 2008, the Period Ended June 30, 2007, and Cumulative from Inception		F-4

Notes to Financial Statements June 30, 2008, and 2007		F-5

F-1

POWERSAFE TECHNOLOGY CORP.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS (NOTE 2)
AS OF JUNE 30, 2008, AND DECEMBER 31, 2007
(Unaudited)

ASSETS

	2008			2007
Current Assets:
Cash in bank	$	-		$	3,405
Cash in escrow account		2,147			-
Prepaid expenses		5,098			-

Total current assets		7,245			3,405

Other Assets:
Patent, net of accumulated amortization of $1,735 and $1,031
in 2008, and 2007, respectively		10,831			11,535
Investment in Amplification Technologies, Inc. - Series C Preferred Stock		1,317,155			-
Due from affiliate - Amplification Technologies, Inc.		32,263			-

Total other assets		1,360,249			11,535

Total Assets	$	1,367,494		$	14,940

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
Accounts payable - Trade	$	56		$	56
Due to escrow agent		38,490			-
Accrued liabilities		35,543			6,807

Total current liabilities		74,089			6,863

Total liabilities		74,089			6,863

Commitments and Contingencies

Stockholders' Equity:
Common stock, par value $.0001 per share, 100,000,000 shares
authorized; 7,075,000 and 15,075,000 shares issued and
outstanding in 2008, and 2007, respectively		707			1,507
Additional paid-in capital		1,416,638			53,342
(Deficit) accumulated during the development stage		(123,940	)		(46,772	)

Total stockholders' equity		1,293,405			8,077

Total Liabilities and Stockholders' Equity	$	1,367,494		$	14,940

The accompanying notes to financial statements are

an integral part of these balance sheets.

F-2

POWERSAFE TECHNOLOGY CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS (NOTE 2)
FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2008, THE THREE MONTHS ENDED
AND PERIOD ENDED JUNE 30, 2007, AND CUMULATIVE FROM INCEPTION (FEBRUARY 5, 2007)
THROUGH JUNE 30, 2008
(Unaudited)


							Six
							Months Ended			Period Ended		Cumulative
	Three Months Ended June 30,						June 30,			June 30,		From
	2008			2007			2008			2007		Inception

Revenues	$	-		$	-		$	-		$	-	$	-

Expenses:
General and administrative-
Professional fees		30,212			11,000			35,712			12,750		73,628
Public Relations		37,859			-			37,859			-		37,859
Other		619			1,013			2,068			1,432		7,043
Legal fees - Incorporation		-			-			-			2,850		2,850
Amortization		352			312			704			330		1,735
Insurance		902			-			902			-		902

Total general and administrative expenses		69,944			12,325			77,245			17,362		124,017

(Loss) from Operations		(69,944	)		(12,325	)		(77,245	)		(17,362		(124,017	)

Other Income (Expense):
Interest income (expense)		77			-			77					77
Total other income (expense)		77			-			77					77

Provision for Income Taxes		-			-			-			-		-

Net (Loss)	$	(69,867	)	$	(12,325	)	$	(77,168	)	$	(17,362)	$	(123,940	)

(Loss) Per Common Share:
(Loss) per common share - Basic and Diluted	$	(0.01	)	$	(0.00	)	$	(0.01	)	$	(0.00

Weighted Average Number of Common Shares
Outstanding - Basic and Diluted		7,075,000			9,000,000			9,536,538			8,198,630

The accompanying notes to financial statements are

an integral part of these statements.

F-3

STATEMENTS OF CASH FLOWS (NOTE 2)

FOR THE SIX MONTHS ENDED JUNE 30, 2008, THE PERIOD ENDED

JUNE 30, 2007, AND CUMULATIVE FROM INCEPTION (FEBRUARY 5, 2007)

THROUGH JUNE 30, 2008

(Unaudited)

			Six
			Months Ended	Period Ended	Cumulative
			June 30,	June 30,	From
			2008	2007	Inception
Operating Activities:
	Net (loss)		$ (77,168)	$ (17,362)	$ (123,940)
	Adjustments to reconcile net (loss) to net cash
	provided by (used in) operating activities:
		Amortization	704	330	1,735
		Transfer agent fees paid by issued shares	-	-	525
		Changes in net assets and liabilities-
		Prepaid expenses	(5,098)	-	(5,098)
		Accounts payable - Trade	-	-	56
		Accrued liabilities	28,736	9,500	35,543
		Due to escrow agent	38,490	-	38,490

Net Cash (Used in) Operating Activities			(14,336)	(7,532)	(52,689)

Investing Activities:
	Investment in Amplification Technologies, Inc. - Preferred Stock		(1,317,155)	-	(1,317,155)
	Patent acquired		-	(10,180)	(12,566)

Net Cash (Used in) Investing Activities			(1,317,155)	(10,180)	(1,329,721)

Financing Activities:
	Issuance of common stock for cash		-	300	60,974
	Capital contributed by stockholders		1,360,000	-	1,360,000
	Due from affiliate - Amplification Technologies, Inc.		(32,263)	-	(32,263)
	Deferred offering costs		-	(20,000)	(21,500)
	Loans from related parties - Directors and stockholders		5,160	37,700	58,846
	Repayment of related parties loans		(2,664)	-	(41,500)

Net Cash Provided by Financing Activities			1,330,233	18,000	1,384,557

Net Increase (decrease) in Cash			(1,258)	288	2,147

Cash - Beginning of Period			3,405	-	-

Cash - End of Period			$ 2,147	$ 288	$ 2,147

Cash - End of Period Consisting of:

	Cash in bank		$ -	$ 288	$ -
	Cash in escrow account		2,147	-	2,147

Total			$ 2,147	$ 288	$ 2,147

Supplemental Disclosure of Cash Flow Information:
	Cash paid during the period for:
		Interest	$ -	$ -	$ -
		Income taxes	$ -	$ -	$ -

On July 11, 2007, the Company issued 75,000 (post forward split) shares of restricted common stock, valued at $525 for
payment of transfer agent fees.

On December 31, 2007, two former Directors and shareholders forgave the Company of a related party debt in the amount of $14,850 ($7,425 each).


On March 31, 2008, two former Directors and shareholders forgave the Company of a related party debt in the amount of $2,496 ($1,248 each).

The accompanying notes to financial statements are

an integral part of these statements.

F-4

POWERSAFE TECHNOLOGY CORP.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2008, AND 2007

(Unaudited)

(1) Summary of Significant Accounting Policies

Basis of Presentation and Organization

Powersafe Technology Corp. (“Powersafe” or the “Company”) is a Delaware corporation in the development stage. The Company was incorporated under the laws of the State of Delaware on February 5, 2007. Until the change of control (which occurred on March 31, 2008) of the Company described below, the initial business plan of the Company was to develop a commercial application utilizing the technology and patent pertaining to a multiple outlet power box with selectively protected outlet logic. The Company had planned to develop a prototype of the multiple outlet power box, and then to further develop, manufacture, and market the product, and/or seek third-party entities interested in potential partnership opportunities and licensing rights to manufacture and market the product. The accompanying financial statements of Powersafe were prepared from the accounts of the Company under the accrual basis of accounting.

In addition, in 2007, the Company commenced a capital formation activity to effect a Registration Statement on Form SB-2 with the Securities and Exchange Commission (“SEC”), and raise capital of up to $60,000 from a self-underwritten offering of 6,000,000 shares of newly issued common stock at a price of $0.01 per share (post forward stock split) in the public markets. The Registration Statement on Form SB-2 was filed with the SEC on June 8, 2007, and declared effective on June 21, 2007. Prior to December 31, 2007, the Company had received stock subscriptions for 6,000,000 shares of common stock, par value $0.0001 per share, at on offering price of $0.01 per share (post forward stock split), and deposited proceeds of approximately $60,000.

Unaudited Interim Financial Statements

The interim financial statements of the Company as of June 30, 2008, and for the three-month and six-month periods ended June 30, 2008, and 2007, and cumulative from inception are unaudited. However, in the opinion of management, the interim financial statements include all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the Company’s financial position as of June 30, 2008, and the results of its operations and its cash flows for the three-month and six-month periods ended June 30, 2008, and 2007, and cumulative from inception. These results are not necessarily indicative of the results expected for the calendar year ending December 31, 2008. The accompanying financial statements and notes thereto do not reflect all disclosures required under accounting principles generally accepted in the United States of America. Refer to the audited financial statements of the Company as of December 31, 2007, in its Annual Report on Form 10-K filed with the SEC for additional information, including significant accounting policies.

Cash and Cash Equivalents

For purposes of reporting within the statements of cash flows, the Company considers all cash on hand, cash accounts not subject to withdrawal restrictions or penalties, and all highly liquid debt instruments purchased with a maturity of three months or less to be cash and cash equivalents.

Revenue Recognition

The Company is in the development stage and has yet to realize revenues from planned operations.

For manufacturing and selling activities, revenues will be realized when the product is delivered to customers, and collection is reasonably assured.

For licensing activities, revenues from such agreements will be realized over the term and under the conditions of each specific license once all contract conditions have been met. Payments for licensing fees are generally received at the time the license agreements are executed, unless other terms for delayed payment are documented and agreed to between the parties.

F-5

POWERSAFE TECHNOLOGY CORP.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2008, AND 2007

(Unaudited)

Patent

The Company acquired a United States patent and all other intellectual property rights relating to the technology from the inventor on March 26, 2007, under the terms of a Patent Transfer and Sale Agreement. The patent was originally granted to the inventor by the United States Patent and Trademark Office on January 13, 1998. The cost of obtaining the patent has been capitalized by the Company, and is being amortized using the straight-line method over a period of approximately 10 years. For the six months ended June 30, 2008, the Company recorded patent amortization of $704.

Deferred Offering Costs

The Company defers as other assets the direct incremental costs of raising capital, if any, until such time as the offering is completed. At the time of the completion of the offering, the costs are charged against the capital raised. When an offering is terminated, deferred offering costs are charged to operations during the period in which the offering is terminated. As of December 31, 2007, $21,500 in deferred offering costs were charged against the capital raised upon completion of the offering discussed in Note 6.

Concentrations of Risk

Prior to March 31, 2008, the Company maintained its cash account in United States dollars at one commercial bank in Israel. The balance in the account was subject to the normal and customary risks of disbursement and withdrawal pertaining to a foreign currency account in that country. During the period ended June 30, 2008, the Company closed its commercial bank account in Israel and currently does not have a bank account.

Impairment of Long-Lived Assets

The Company evaluates the recoverability of long-lived assets and the related estimated remaining lives when events or circumstances lead management to believe that the carrying value of an asset may not be recoverable. For the periods ended June 30, 2008, and 2007, no events or circumstances occurred for which an evaluation of the recoverability of long-lived assets was required.

Loss Per Common Share

Basic loss per share is computed by dividing the net loss attributable to the common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted loss per share is computed similar to basic loss per share, except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. There were no dilutive financial instruments issued or outstanding for the period ended June 30, 2008.

Income Taxes

The Company accounts for income taxes pursuant to SFAS No. 109, “Accounting for Income Taxes” (“SFAS No. 109”). Under SFAS No. 109, deferred tax assets and liabilities are determined based on temporary differences between the basis of certain assets and liabilities for income tax and financial reporting purposes. The deferred tax assets and liabilities are classified according to the financial statement classification of the assets and liabilities generating the differences.

The Company maintains a valuation allowance with respect to deferred tax assets. The Company establishes a valuation allowance based upon the potential likelihood of realizing the deferred tax assets and taking into consideration the Company’s financial position and results of operations for the current period. Future realization of the deferred tax benefit depends on the existence of sufficient taxable income within the carryforward period under the Federal and state tax laws.

Changes in circumstances, such as the Company generating taxable income, could cause a change in judgment about the realizability of the related deferred tax assets. Any change in the valuation allowance will be included in income in the year of the change in estimate.

Foreign Currency Translation

The Company accounts for foreign currency translation pursuant to SFAS No. 52, “Foreign Currency Translation” (“SFAS No. 52”). The Company’s functional currency is the United States Dollar. However, certain accounts of the Company are denominated in Israeli New Shekels. Under SFAS No. 52, all assets and liabilities are translated into United States dollars using the current exchange rate at the end of each fiscal period. Revenues and expenses are translated using the average exchange rates prevailing throughout the respective periods. Translation adjustments are included in other comprehensive income loss for the period. Translation gains or losses related to such transactions are recognized for each reporting period in the related statement of operations and comprehensive income loss.

Fair Value of Financial Instruments

The Company estimates the fair value of financial instruments using the available market information and valuation methods. Considerable judgment is required in estimating fair value. Accordingly, the estimates of fair value may not be indicative of the amounts the Company could realize in a current market exchange. As of June 30, 2008, the carrying value of accounts payable and accrued liabilities approximated fair value due to the short-term maturity and nature of these instruments.

F-6

POWERSAFE TECHNOLOGY CORP.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2008, AND 2007

(Unaudited)

Estimates

The financial statements are prepared on the basis of accounting principles generally accepted in the United States of America. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of June 30, 2008, and expenses for the periods ended June 30, 2008, and 2007, and cumulative from inception. Actual results could differ from those estimates made by management.

(2) Development Stage Activities and Going Concern

The Company is currently in the development stage, and had difficulties in developing a commercial application utilizing the technology and patent pertaining to a multiple outlet power box with selectively protected outlet logic. On March 31, 2008, all the shareholders of the Company executed stock purchase agreements (the “Stock Purchase Agreements”) providing for, among other things, the sale of all our issued and outstanding stock. The purchase price of the stock, 95% of which was acquired by a group of unaffiliated investors, and 5% of which was given to persons who assisted in the transaction, was $625,000. Mr. Jack N. Mayer, the sole director and chief executive and accounting officer of the company, and his wife, acquired approximately 27.2% of the issued and outstanding shares of Powersafe in the transaction

On March 31, 2008, we executed an agreement (the “Merger Agreement”) with Amplification Technologies, Inc. (“ATI”) providing, among other things, for the merger of our wholly owned subsidiary, with and into ATI, with ATI surviving as our wholly-owned subsidiary.

ATI is a privately held Delaware corporation formed in May 2002, whose scientists have invented an extremely sensitive photodetector technology. We believe that this technology has significant performance and cost advantages over traditional technology and is positioned as a next generation solid state technology for low level light detection. ATI’s platform semiconductor technology, which allows amplification of weak signals with very low noise, has been patented to encompass detection of signals other than light, and thus could in principle be used to create biological, radiological, electrical, and chemical sensors. Mr. Mayer is the controlling stockholder of ATI.

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. The Company has incurred an operating loss since inception, had negative working capital as of June 30, 2008, and the cash resources of the Company are insufficient to carryout its business plan. These and other factors raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern.

(3) Patent

The Company acquired a United States patent for a multiple outlet power box with selectively protected outlet logic, and all other intellectual property rights relating to the technology from an unrelated third-party inventor on March 26, 2007, under the terms of a Patent Transfer and Sale Agreement (the “Patent Sale Agreement”) for total consideration of $9,000. The patent was originally granted to the inventor on January 13, 1998, for a period of 20 years from the filing date (March 12, 1996) by the United States Patent and Trademark Office. The Company paid $4,000 to the inventor under the terms of the Patent Sale Agreement on March 26, 2007, the date of execution of the Agreement. The Company was also obligated to pay to the inventor an additional $4,000 under the Patent Sale Agreement at the time of recording the assignment of the patent with the United States Patent and Trademark Office. The assignment of the patent was recorded on April 12, 2007, and the additional consideration of $4,000 was paid to the inventor on April 24, 2007. The remaining $1,000 due under the agreement was paid as of December 31, 2007. The cost of the patent amounted to $12,566 consisting of the patent acquisition cost and related legal fees. The Company has no continuing or contingent obligation to pay royalties under the Patent Sale Agreement. Further, the inventor is not a promoter or stockholder of the Company.

(4) Change in Management

On March 31, 2008, Einat Krasney resigned from her positions as President and Director of the Company, and Jack N. Mayer, the controlling stockholder of Amplification Technologies, Inc., was appointed as a Director and President of Powersafe (See Note 8).

On March 31, 2008, the Board of Directors appointed Jack N. Mayer as President and Treasurer. Mordechai Schwartz resigned from the Board of Directors as of April 2, 2008.

(5) Related Party Transactions

During the period ended March 31, 2008, advances for working capital purposes from two former Directors and officers, who were also stockholders of the Company, were received and subsequently partially repaid by the Company. On March 31, 2008, two former Directors and stockholder forgave the Company of the debt due in the amount of $2,496 ($1,248 each). The amount forgiven was recorded as additional paid-in capital.

The escrow agent, a former officer of the Company, advanced the Company $38,490.

F-7

POWERSAFE TECHNOLOGY CORP.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2008, AND 2007

(Unaudited)

(6) Common Stock

On February 18, 2007, the Company issued 9,000,000 shares of common stock (post forward stock split) to two Directors and officers of the Company for proceeds of $300.

On July 11, 2007, the Company issued 75,000 shares of restricted common stock (post forward stock split) in payment for transfer agent fees. The transaction was valued at $525.

In addition, in 2007, the Company commenced a capital formation activity to affect a Registration Statement on Form SB-2 with the SEC, and raise capital of up to $60,000 from a self-underwritten offering of 6,000,000 shares of newly issued common stock at a price of $0.01 per share (post forward stock split) in the public markets. The Registration Statement on Form SB-2 was filed with the SEC on June 8, 2007, and declared effective on June 21, 2007. Since June 21, 2007, the Company has received stock subscriptions for 6,000,000 shares of common stock, par value $0.0001 per share, at an offering price of $0.01 per share (post forward stock split), and deposited proceeds of approximately $60,000. In addition, as of December 31, 2007, the Company recognized $21,500 of deferred offering costs related to this capital formation activity.

On October 29, 2007, the Company notified the NASD of its intention to implement a 3-for-1 forward stock

split of its issued and outstanding common stock to the holders of record as of November 7, 2007. Such

forward stock split was effective as of November 8, 2007. The accompanying financial statements and related notes thereto have been adjusted accordingly to reflect this forward stock split.

On December 31, 2007, two former Directors and shareholders of the Company forgave the Company of a related party debt. The balance of the debt was $14,850, which was an increase to additional paid-in capital.

On February 26, 2008, two former Directors and shareholders of the Company returned to the Company 8,000,000 shares of the Company’s common stock for no consideration.

For the period ended March 31, 2008, two former Directors and shareholders of the Company forgave the Company of a related party debt. The balance of the debt was $2,496, which was recorded as additional paid-in capital.

In connection with the reverse merger, described in Note 8, the new stockholders of the Company contributed $1,360,000 of capital to the Company. The Company used 1,310,227 of the funds to purchase non convertible Series C Preferred Stock issued by Amplification Technologies, Inc. (“ATI”), a Delaware company. The Company incurred $6,928 in legal fees and other fees associated with the stock purchase. The Series C Preferred Stock of ATI have a 2% monthly pay in kind dividend, restrictive covenants including a prohibition on funded debt and the issuance of securities which are senior or pari passu to the Series C Preferred, are redeemable by ATI on February 14, 2009, and are slated to be retired as part of the merger.

(7) Income Taxes

The provision (benefit) for income taxes for the period ended June 30, 2008, and 2007, was as follows (assuming an effective federal and state tax rate of 23%):

	2008			2007

Current Tax Provision:
Federal and state-
Taxable income	$	-		$	-

Total current tax provision	$	-		$	-

Deferred Tax Provision:
Federal and state-
Loss carryforwards	$	17,749		$	4,150
Change in valuation allowance		(17,749	)		(4,150	)

Total deferred tax provision	$	-		$	-

F-8

POWERSAFE TECHNOLOGY CORP.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2008, AND 2007

(Unaudited)

The Company had deferred income tax assets as of June 30, 2008, as follows:


	2008			2007

Loss carryforwards	$	13,333		$	4,150
Less - Valuation allowance		(13,333	)		(4,150	)

Total net deferred tax assets	$	-		$	-

As of June 30, 2008, the Company had net operating loss carryforwards for income tax reporting purposes of approximately $123,940 that may be offset against future taxable income. The net operating loss carryforwards expire in the year 2028. Current tax laws limit the amount of loss available to be offset against future taxable income when a substantial change in ownership occurs or a change in the nature of the business. Therefore, the amount available to offset future taxable income may be limited.

No tax benefit has been reported in the financial statements for the realization of loss carryforwards, as the Company believes there is high probability that the carryforwards will not be utilized in the foreseeable future. Accordingly, the potential tax benefits of the loss carryforwards are offset by a valuation allowance of the same amount.

(8) Commitments and Contingencies

On July 5, 2007, the Company entered into a Consulting Agreement with Island Capital Management, LLC dba Island Stock Transfer (“Island Stock Transfer”) for consulting and advisory services. Under the Agreement, the Company agreed to pay Island Stock Transfer initial fees amounting to $2,525 plus transaction fees payable as follows: (1) $1,000 due at the time of execution of the Agreement; and, $1,000 within 60 days; (2) the issuance of 75,000 shares (post forward stock split) of the Company’s common stock with a value of $525; and (3) transaction fees in accordance with the fee schedule for services of Island Stock Transfer. The Company also has the right under the Agreement to repurchase the 75,000 shares (post forward stock split) of common stock from Island Stock Transfer for a period of 12 months for $10,000. Prior to December 31, 2007, the Company paid $2,000 to Island Stock Transfer and had issued them 75,000 shares (post forward stock split) of common stock for such services with a value of $525 in satisfaction of the agreement.

On March 31, 2008, the Company entered into a merger agreement with Amplification Technologies, Inc. (“ATI”) a privately held Delaware corporation. Pursuant to the terms of the merger agreement, ATI will merge with Powersafe in exchange for approximately 31,500,000 shares of Powersafe’s common stock to be newly issued to stockholders of ATI. Powersafe will also assume approximately $700,000 of non-convertible preferred stock. As of the date of the merger, Powersafe had 7,075,000 shares of common stock issued and outstanding and no other issued securities, warrants or options in its capital structure. As a requisite for the agreement to close, certain conditions must be met. As of August 15, 2008, the agreement has not closed.

(9) Recent Accounting Pronouncements

On March 19, 2008, the FASB issued FASB Statement No. 161, “Disclosures about Derivative Instruments and Hedging Activities – an amendment of FASB Statement 133” (“SFAS No. 161”). SFAS No. 161 enhances required disclosures regarding derivatives and hedging activities, including enhanced disclosures regarding how: (a) an entity uses derivative instruments; (b) derivative instruments and related hedged items are accounted for under FASB Statement No. 133, “Accounting for Derivative Instruments and Hedging Activities”; and (c) derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. Specifically, SFAS No. 161 requires:

·	Disclosure of the objectives for using derivative instruments be disclosed in terms of underlying risk and accounting designation;

·	Disclosure of the fair values of derivative instruments and their gains and losses in a tabular format;

·	Disclosure of information about credit-risk-related contingent features; and

·	Cross-reference from the derivative footnote to other footnotes in which derivative-related information is disclosed.

SFAS No. 161 is effective for fiscal years and interim periods beginning after November 15, 2008. Early application is encouraged.

On May 9, 2008, the FASB issued FASB Statement No. 162, “The Hierarchy of Generally Accepted Accounting Principles” (“SFAS No. 162”). SFAS No. 162 is intended to improve financial reporting by identifying a consistent framework, or hierarchy, for selecting accounting principles to be used in preparing financial statements that are presented in conformity with U.S. generally accepted accounting principles (“GAAP”) for nongovernmental entities.

Prior to the issuance of SFAS No. 162, GAAP hierarchy was defined in the American Institute of Certified Public Accountants (“AICPA”) Statement on Auditing Standards (“SAS”) No. 69, “The Meaning of Present Fairly in Conformity with Generally Accept Accounting Principles.” SAS No. 69 has been criticized because it is directed to the auditor rather than the entity. SFAS No. 162 addresses these issues by establishing that the GAAP hierarchy should be directed to entities because it is the entity (not the auditor) that is responsible for selecting accounting principles for financial statements that are presented in conformity with GAAP.

The sources of accounting principles that are generally accepted are categorized in descending order as follows:

FASB Statements of Financial Accounting Standards and Interpretations, FASB Statement 133 Implementation Issues, FASB Staff Positions, and American Institute of Certified Public Accountants (AICPA) Accounting Research Bulletins and Accounting Principles Board Opinions that are not superseded by actions of the FASB.

b)	FASB Technical Bulletins and, if cleared by the FASB, AICPA Industry Audit and Accounting Guides and Statements of Position.

c)	AICPA Accounting Standards Executive Committee Practice Bulletins that have been cleared by the FASB, consensus positions of the FASB Emerging Issues Task Force (EITF), and the Topics discussed in Appendix D of EITF Abstracts (EITF D-Topics).

d)	Implementation guides (Q&As) published by the FASB staff, AICPA Accounting Interpretations, AICPA Industry Audit and Accounting Guides and Statements of Position not cleared by the FASB, and practices that are widely recognized and prevalent either generally or in the industry.

F-9

POWERSAFE TECHNOLOGY CORP.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2008, AND 2007

(Unaudited)

SFAS No. 162 is effective 60 days following the SEC’s approval of the Public Company Accounting Oversight Board amendment to its authoritative literature. It is only effective for nongovernmental entities; therefore, the GAAP hierarchy will remain in SAS 69 for state and local governmental entities and federal governmental entities.

On May 26, 2008, the FASB issued FASB Statement No. 163, “Accounting for Financial Guarantee Insurance Contracts” (“SFAS No. 163”). SFAS No. 163 clarifies how FASB Statement No. 60, “Accounting and Reporting by Insurance Enterprises” (“SFAS No. 60”), applies to financial guarantee insurance contracts issued by insurance enterprises, including the recognition and measurement of premium revenue and claim liabilities. It also requires expanded disclosures about financial guarantee insurance contracts.

The accounting and disclosure requirements of SFAS No. 163 are intended to improve the comparability and quality of information provided to users of financial statements by creating consistency. Diversity exists in practice in accounting for financial guarantee insurance contracts by insurance enterprises under SFAS No. 60, “Accounting and Reporting by Insurance Enterprises.” That diversity results in inconsistencies in the recognition and measurement of claim liabilities because of differing views about when a loss has been incurred under FASB Statement No. 5, “Accounting for Contingencies” (“SFAS No. 5”). SFAS No. 163 requires that an insurance enterprise recognize a claim liability prior to an event of default when there is evidence that credit deterioration has occurred in an insured financial obligation. It also requires disclosure about (a) the risk-management activities used by an insurance enterprise to evaluate credit deterioration in its insured financial obligations and (b) the insurance enterprise’s surveillance or watch list.

SFAS No. 163 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and all interim periods within those fiscal years, except for disclosures about the insurance enterprise’s risk-management activities. Disclosures about the insurance enterprise’s risk-management activities are effective the first period beginning after issuance of SFAS No. 163. Except for those disclosures, earlier application is not permitted. The management of the Company does not expect the adoption of this pronouncement to have material impact on its financial statements.

(10) Subsequent Event

On August 7, 2008, the Company filed a Proxy Statement on Schedule 14A with the SEC. In September of 2008, the Company will hold a meeting of shareholders to vote upon the following items: (1) to grant discretionary authority to our Board of Directors to implement a reverse stock split of our common stock, on the basis of up to five pre-consolidation shares for each one post-consolidation share, to occur at some time within 12 months of the date of the meeting with the exact time of the stock split to be determined by the Board of Directors; (2) to grant discretionary authority to our Board of Directors to implement a forward stock split of our common stock, on the basis of one pre-split share for up to two post-split shares, to occur at some time within 12 months of the date of the meeting with the exact time of the stock split to be determined by the Board of Directors; (3) to approve an amendment to the Articles of Incorporation of Powersafe Technology Corp. to authorize a class of blank check preferred stock, consisting of 5,000,000 authorized shares, which may be issued in one or more series, with such rights, preferences, privileges and restrictions as shall be fixed by our Board of Directors; and (4) to transact such other business as may properly be brought before the meeting or any adjournment thereof.

Large accelerated filer o	Accelerated filer o
Non-accelerated filer o	Smaller reporting company x

	Page
PART I
Item 1. Financial Statements	F-1
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operation	2
Item 3 Quantitative and Qualitative Disclosures About Market Risk	3
Item 4. Controls and Procedures	3

PART II
Item 1. Legal Proceedings	4
Item IA. Risk Factors	4
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	4
Item 3. Defaults Upon Senior Securities	4
Item 4. Submission of Matters to a Vote of Security Holders	4
Item 5. Other Information	4
Item 6. Exhibits	4

Exhibit No.		Description
31.1		Rule 13a-14(a)/15d-14(a) Certifications of Jack N. Mayer, the President, Chief Executive Officer, Treasurer, and Director (attached hereto)

32.1		Section 1350 Certifications of Jack N. Mayer, the President, Chief Executive Officer, Treasurer, and Director (attached hereto)

		POWERSAFE TECHNOLOGY CORP.

Dated: August 18, 2008		By: /s/Jack N. Mayer Name: Jack N. Mayer
		Title: President, Chief Executive Officer, Treasurer and Director (Principal Executive, Financial and Accounting Officer)