p0742_10-q.htm

0001076542-11-000101.txt : 20110815 0001076542-11-000101.hdr.sgml : 20110815 20110815094340 ACCESSION NUMBER: 0001076542-11-000101 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 11 CONFORMED PERIOD OF REPORT: 20110630 FILED AS OF DATE: 20110815 DATE AS OF CHANGE: 20110815 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WINDGEN ENERGY, INC. CENTRAL INDEX KEY: 0000726037 STANDARD INDUSTRIAL CLASSIFICATION: PATENT OWNERS & LESSORS [6794] IRS NUMBER: 870397815 STATE OF INCORPORATION: UT FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-12968 FILM NUMBER: 111033505 BUSINESS ADDRESS: STREET 1: 14550 N. FRANK LLOYD WRIGHT BLVD. STREET 2: SUITE 100 CITY: SCOTTSDALE STATE: AZ ZIP: 85260 BUSINESS PHONE: 408-991-9500 MAIL ADDRESS: STREET 1: 14550 N. FRANK LLOYD WRIGHT BLVD. STREET 2: SUITE 100 CITY: SCOTTSDALE STATE: AZ ZIP: 85260 FORMER COMPANY: FORMER CONFORMED NAME: INMEDICA DEVELOPMENT CORP DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: INMED DEVELOPMENT CORP DATE OF NAME CHANGE: 19840815 10-Q 1 p0742_10-q.htm FORM 10-Q FOR QUARTER ENDED JUNE 30, 2011 p0742_10-q.htm

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

þ		QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the quarterly period ended June 30, 2011

o		TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the transition period from __________ to __________

Commission file number: 0-12968

WINDGEN ENERGY, INC.

(Exact name of registrant as specified in its charter)

Utah		87-0397815
(State or other jurisdiction of		(IRS Employer Identification No.)
incorporation or organization)

8432 E. Shea Blvd, Suite 101

Scottsdale, Arizona 85260

(Address of principal executive offices)

(480) 991-9500

(Registrant’s telephone number, including area code)

(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 o

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 þ No o

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

Large accelerated filer o	Accelerated filer o
Non-accelerated filer o	Small reporting company þ

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

As of August 15, 2011, 43,955,057 shares of the issuer’s common stock were outstanding.

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WINDGEN ENERGY, INC.

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		Page No.

Forward-Looking Statements		3

PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements	4

	Consolidated Balance Sheets as of June 30, 2011 and December 31, 2010	4

	Consolidated Statements of Operations for the Three and Six Months ended June 30, 2011 and 2010	5

	Consolidated Statements of Cash Flows for the Six Months ended June 30, 2011 and 2010	6

	Notes to the Consolidated Financial Statements	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	23

Item 4.	Controls and Procedures	23


PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	24

Item 1A.	Risk Factors	24

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	24

Item 3.	Defaults Upon Senior Securities	24

Item 4.	(Removed and Reserved)	24

Item 5.	Other Information	24

Item 6.	Exhibits	25

Signatures		26

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WINDGEN ENERGY, INC.

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (“Quarterly Report”) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and should be read in conjunction with the Financial Statements of WindGen Energy, Inc. (the “Company” or “WindGen”). Such statements are not historical facts and reflect our current views regarding matters such as operations and financial performance. In general, forward-looking statements are identified by such words or phrases as “expects,” “anticipates,” “believes,” “could,” “approximates,” “estimates,” “may,” “intends,” “predicts,” “projects,” “plans,” or “will,” or the negative of those words or other terminology. These statements are not guarantees of future performance and involve certain known and unknown inherent risks, uncertainties and other factors that are difficult to predict; our actual results could differ materially from those expressed in these forward-looking statements, including those risks and other factors described elsewhere in this Quarterly Report. The cautionary factors, risks and other factors presented should not be construed as exhaustive. Other risks not presently known to us, or that we currently believe are immaterial, could also adversely affect our business, financial condition or results of operations.

Each forward-looking statement should be read in context with, and with an understanding of, the various disclosures concerning our business made elsewhere in this Quarterly Report, as well as other public reports filed by us with the United States Securities and Exchange Commission. Readers should not place undue reliance on any forward-looking statement as a prediction of actual results of developments. Except as required by applicable law or regulation, we undertake no obligation to update or revise any forward-looking statement contained in this Quarterly Report.

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PART I.

FINANCIAL INFORMATION

Item 1.

Financial Statements

WINDGEN ENERGY, INC.

CONSOLIDATED BALANCE SHEETS

	June 30,			December 31,
	2011			2010
	(Unaudited)
ASSETS

Current Assets
Cash	$	22,066		$	33,278
Other Receivable		24,464			20,355
Prepaid Expenses & Other		23,709			50,601
Total Current Assets		70,239			104,234

Licensing Rights - Wind Sail Receptor, Inc.		190,000			190,000

TOTAL ASSETS	$	260,239		$	294,234

LIABILITIES & STOCKHOLDERS’ EQUITY

Current Liabilities
Related Party Consulting Fees Payable		140,750			125,500
Accounts Payable		29,935			3,987
Note Payable		25,000			–
Convertible Note Payable, net of debt discount of $0 and $27,273, respectively		10,000			23,451
Preferred Stock Dividends Payable		18,914			17,969
Total Current Liabilities		224,599			170,907

TOTAL LIABILITIES	$	224,599		$	170,907

STOCKHOLDERS' EQUITY (DEFICIT)
Preferred Stock, 10,000,000 shares authorized; Series A Cumulative convertible preferred stock, 8% cumulative, $4.50 par value, 1,000,000 shares designated, 5,254 shares outstanding at June 30, 2011 and December 31, 2010, respectively (aggregate liquidation preference of $42,558)		23,644			23,644
Common Stock, $.001 par value: 100,000,000 shares authorized, 43,411,356 and 41,238,429 shares outstanding at June 30, 2011 and December 31, 2010, respectively		43,411			41,238
Additional Paid-In Capital		9,539,890			9,429,263
Stock Subscription Receivable		(10,000	)		(10,000	)
Accumulated Deficit		(9,561,305	)		(9,360,818	)

TOTAL STOCKHOLDERS’ EQUITY		35,640			123,327

TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY		260,239			294,234

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WINDGEN ENERGY, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

	(Unaudited)						(Unaudited)
	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2011			2010			2011			2010

REVENUES	$	–		$	–		$	–		$	–

OPERATING EXPENSES
General & Administrative		44,532			44,729			77,183			73,783
Legal & Professional Fees		25,545			2,616			33,809			22,970
Related Party Consulting Fees		30,000			30,400			60,000			64,375
Total Operating Expenses		100,077			77,745			170,992			161,128

INCOME (LOSS) FROM OPERATIONS		(100,077	)		(77,745	)		(170,992	)		(161,128	)

OTHER INCOME (EXPENSE)
Interest Income (Expense)		(291	)		(312	)		(1,277	)		(648	)
Amortization of debt discount		(7,153	)		–			(27,272	)		–
Total Other Income (Expense), Net		(7,444	)		(312	)		(28,549	)		(648	)

NET INCOME (LOSS) FROM CONTINUING OPERATIONS		(107,521	)		(78,057	)		(199,541	)		(161,776	)

DISCONTINUED OPERATIONS (Note 7)
Income (Loss) from operations of MicroCor, Inc. (including gain on disposal of $355,000)		–			355,000			–			343,488

NET INCOME (LOSS)		(107,521	)		276,943			(199,541	)		181,712

PREFERRED STOCK DIVIDENDS		(473	)		(1,891	)		(946	)		(3,783	)

NET INCOME (LOSS) APPLICABLE TO COMMON STOCKHOLDERS	$	(107,994	)	$	275,052		$	(200,487	)	$	177,929

NET INCOME (LOSS) PER COMMON SHARE (BASIC & DILUTED)	$	(0.00	)	$	(0.01	)	$	(0.00	)	$	(0.00	)

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
BASIC		42,576,062			35,538,903			42,045,747			35,235,513
DILUTED		42,977,644			35,570,427			42,447,329			35,267,037

The accompanying notes are an integral part of these financial statements.

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WINDGEN ENERGY, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

	(Unaudited)
	For the Six Months Ended
	June 30,
	2011			2010

CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss/Income	$	(199,541	)	$	181,712
Adjustments to reconcile net loss to net cash used in operating activities:
Interest expense from debt discount		27,272			–
Related party consulting fee payable		15,250			50,000
Gain on deconsolidation of MicroCor		–			(355,000	)
Write-down of other receivable		–			21,119
Prepaid expense		26,892			(6,527	)
Accounts payable		25,948			(19,166	)
Related party payable		–			(28,445	)
Accrued interest payable		1,277			648
Other receivable		(4,110	)		(343	)
Net cash provided by (used in) Continuing Activities		(107,012	)		(156,002	)
Net cash provided by (used in) Discontinued Activities		–			7,120
Net cash provided by (used in) Operating Activities		(107,012	)		(148,882	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Net cash provided by Investing Activities		–			–

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sale of stock		70,800			181,423
Proceeds from note payable		25,000			–
Proceeds from stock subscription receivable		–			7,500
Payments on notes		–			(11,939	)
Payments on notes related party loan		–			(42,143	)
Net cash provided by Financing Activities		95,800			134,841

NET INCREASE (DECREASE) IN CASH		(11,212	)		(14,041	)
CASH AT BEGINNING OF PERIOD		33,278			14,118
CASH AT END OF PERIOD		22,066			77

SUPPLEMENTAL DISCLOSURE OF CASH FLOW
Cash paid during the year for interest	$	–		$	5,418
Cash paid during the year for income taxes	$	150		$	–

SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING & FINANCING ACTIVITIES:
Stock Subscription Receivable for exercise of stock options	$	10,000		$	10,000
Related Party Payables Converted to Common Stock	$	–		$	10,000
Notes Payable Converted to Common Stock	$	42,000		$	–

The accompanying notes are an integral part of these financial statements.

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WINDGEN ENERGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1 - NATURE OF OPERATIONS

Nature of Operations

From 1989 through 2008, InMedica Development Corporation (“InMedica”) and its then majority-owned subsidiary, MicroCor, Inc. (“MicroCor”) were engaged in research and development of a device to measure hematocrit non-invasively (the “Non-Invasive Hematocrit Technology” and/or the “Technology”). On June 24, 2010, WindGen terminated the former Development Agreement with Wescor and entered into a new agreement whereby WindGen transferred 230,000 shares of MicroCor commons stock owned by WindGen reducing WindGen’s holdings in MicroCor from 1,700,000 common shares to 1,470,000 common shares, reducing its ownership percentage from 57% to 49%. Since WindGen’s ownership percentage is now less than 50%, MicroCor’s financial statements are no longer consolidated with WindGen’s financial statements. Synergistic Equities, Ltd. has acquired all of the shares of MicroCor previously owned by Chi Lin Technology, Ltd.

On April 17, 2009, we entered into a license agreement (the “License”) with Wind Sail Receptor, Inc. of Boulder City, Nevada (“WSR”), pursuant to which we were granted the exclusive license to assemble and market WSR’s wind sail receptor energy generation devices using blades of 15 feet or less in length in the United States, Canada, the United Kingdom and Ireland, with nonexclusive rights in the rest of the world except Latin America and the Caribbean. Under the License, we must acquire 100 blades from WSR during the first year after WSR is able to manufacture the blades. WSR is currently in the final stages of selecting the electrical generator that it will connect to the WSR wind turbine blade.

During 2010, the Company issued 1,900,000 shares of the Company’s restricted common stock to WSR in consideration of amending its License. The proposed amendment to the License Agreement currently in existence between the Company and WSR has not yet been executed. The reasons are various and include, but are not limited to, finalizing details regarding the need for the Company to be involved in assembly of the wind turbines in various license territory outside the US, final pricing that the units will be sold by WSR to the Company, final terms of the product Warranty to be provided by WSR, and possible additional exclusive territory added to the License. Under the terms of the existing License, the Company intended to use its best efforts to obtain Federal, State, Local, or Private Grant Funds and to share these Grant Funds with WSR up to a sum of $1,000,000. To date the Company has not been successful in obtaining Grant Funds. The proposed amendment also could result in altering the various financial dealings between the two companies. No monetary disputes currently exist between the two companies. WSR is hopeful that it will begin production of complete wind turbine systems during the fourth quarter of 2011. WSR is currently in the process of finalizing its supply chain relationships for the production of the wind turbine generator/alternator system with various suppliers in China. The wind turbine blade will be made in Nevada USA. WSR still anticipates that the six foot diameter small wind turbine will be available to WindGen in the fourth quarter of this year. WindGen is currently beginning to finalize its distribution network for the Western US.

We anticipate our first three wind turbine products will have blade diameters of 3, 6 and 12 feet with towers from 25 to 75 feet in height. The first unit to be offered in the market place will be the six foot blade diameter unit. We are currently negotiating terms for the formation of the working capital required to bring our first products to market at some point during the fourth quarter of 2011. The progress of the Company in marketing its new small wind turbine products is dependent on obtaining additional capital.

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WINDGEN ENERGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1 - NATURE OF OPERATIONS (Continued)

Nature of Operations (Continued)

To date during 2011, WSR has been developing a well-organized approach to the manufacturing/assembly process to assure high-quality, rapid-development cycles and overall competiveness. The Generator/Alternators will be manufactured by Ginlong Technologies Inc, an experienced wind turbine generator manufacturer located in China. WSR will also be responsible for the manufacture of the critical blade component at its plant near Boulder City, Nevada. At this time suppliers have been located for all of the non-blade components for our products.

To launch into the important rural small wind turbine market in the central wind belt and the western part of the United States (our initial marketing objective), we hope to join forces with some excellent partners and distributorships. We intend to recruit existing well established wind turbine distributors currently representing our competitors. In addition, we are currently in contact with various major name brand farm equipment dealers who have a well-established rural network of dealers throughout America, all with the ability to provide excellent sales, installation, and maintenance services. We also plan to sell distributorships to other existing service-oriented organizations such as cell tower installers.

We are currently in the process of finalizing our six foot diameter wind turbine that should be available during the fourth quarter of 2011. Subject to availability of adequate capital, product roll out could follow quickly in the central wind belt and the western part of the United States.

On December 4, 2009, the Company changed its name from InMedica Development Corp to WindGen Energy, Inc.

Basis of Presentation

The Company’s unaudited consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The consolidated financial statements do not include any adjustment relating to recoverability and classification of recorded amounts of assets and liabilities that might be necessary should the Company be unable to continue as a going concern. The Company generated negative cash flows from operations of $107,012 and $148,882 for the six month periods ended June 30, 2011 and 2010, respectively, and net losses from operations of $199,541 and $161,776 for the six month periods ended June 30, 2011 and 2010, respectively. As of June 30, 2011, the Company had an accumulated deficit of $9,561,305 and a working capital deficit of $154,360. These conditions raise substantial doubt as to the Company’s ability to continue as a going concern. The Company’s continued existence is dependent upon its ability to execute its operating plan and to obtain additional debt or equity financing. There can be no assurance the necessary debt or equity financing will be available, or will be available on terms acceptable to the Company. Management’s operating plan includes pursuing additional fund raising as well as putting in place all the initial requirements in anticipation of the Company beginning operations and generating revenue during the fourth quarter of 2011.

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WINDGEN ENERGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1 - NATURE OF OPERATIONS (Continued)

Basis of Presentation (Continued)

The accompanying consolidated financial statements of the Company are unaudited. However, in management’s opinion, all adjustments, consisting only of normal recurring adjustments necessary for fair presentation of results for the interim periods shown, have been made. Results for interim periods are not necessarily indicative of those to be expected for the full year. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes to consolidated financial statements included in the Company’s annual report on form 10-K for the year ended December 31, 2010.

Principles of Consolidation

The consolidated financial statements include the accounts of WindGen Energy, Inc. (“WindGen”) and its majority owned subsidiary, MicroCor, Inc. (“MicroCor”) through June 24, 2010. As of June 24, 2010, MicroCor’s financial statements are no longer being consolidated with WindGen’s financial statements.

Research and Development

Research and development costs are expensed as incurred.

Net Loss per Common Share

Basic net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding during the year. Diluted net loss per common share (“Diluted EPS”) reflects the potential dilution that could occur if stock options or other common stock equivalents were exercised or converted into common stock. At June 30, 2011 and 2010, respectively, there were 401,582 and 31,524 potentially dilutive common stock equivalents. The computation of Diluted EPS does not assume exercise or conversion of securities that would have an anti-dilutive effect on net loss per common share.

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 the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Comprehensive Income

There are no components of comprehensive income other than the net loss.

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WINDGEN ENERGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1 - NATURE OF OPERATIONS (Continued)

Cash Equivalents

For the purpose of reporting cash flows, the Company considers all highly liquid debt instruments purchased with maturity of three months or less to be cash equivalents to the extent the funds are not being held for investment purposes.

Concentration of Credit Risk

The Company has no significant off-balance-sheet concentrations of credit risk such as foreign exchange contracts, options contracts or other foreign hedging arrangements. The Company maintains the majority of its cash balances with one financial institution, in the form of demand deposits.

Fair Value of Financial Instruments

The carrying value of the Company’s financial instruments, including receivables, accounts payable, accrued liabilities, and notes payable at June 30, 2011 and 2010 approximates their fair values due to the short-term nature of these financial instruments.

Goodwill and Other Intangible Assets

Goodwill and other intangible assets are recorded under the provisions of the Financial Accounting Standards Board (FASB) ASC 350 (formerly Statement ASC No. 142 (SFAS 142), Goodwill and Other Intangible Assets). ASC 350 requires that an intangible asset that is acquired either individually or with a group of other assets (but not those acquired in a business combination) shall be initially recognized and measured based on its fair value. Goodwill acquired in business combinations is initially computed as the amount paid by the acquiring company in excess of the fair value of the net assets acquired.

Costs of internally developing, maintaining and restoring intangible assets (including goodwill) that are not specifically identifiable, that have indeterminate lives, or that are inherent in a continuing business and related to an entity as a whole, are recognized as an expense when incurred.

An intangible asset (excluding goodwill) with a definite useful life is amortized; an intangible asset with an indefinite useful life is not amortized until its useful life is determined to be no longer indefinite. The remaining useful lives of intangible assets not being amortized are evaluated at least annually to determine whether events and circumstances continue to support an indefinite useful life. If and when an intangible asset is determined to no longer have an indefinite useful life, the asset shall then be amortized prospectively over its estimated remaining useful life and accounted for in the same manner as other intangibles that are subject to amortization.

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WINDGEN ENERGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1 - NATURE OF OPERATIONS (Continued)

Goodwill and Other Intangible Assets (Continued)

An intangible asset (including goodwill) that is not subject to amortization shall be tested for impairment annually or more frequently if events or changes in circumstances indicate that the asset might be impaired. The impairment test consists of a comparison of the fair value of the intangible assets with its carrying amount. If the carrying amount of an intangible asset exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess. In accordance with ASC 350, goodwill is not amortized.

It is the Company’s policy to test for impairment no less than annually, or when conditions occur that may indicate impairment. The Company’s intangible assets, which consist of licensing rights valued at $190,000 recorded in connection with the acquisition of the license related to the agreement with Wind Sail Receptor, Inc., were acquired in 2009 and will be tested for impairment in 2011. The licensing rights were determined to have an indefinite life as of December 31, 2010.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

Recent Accounting Standards

In December 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-29 (ASU 2010-29), Business Combinations (Topic 805) – Disclosure of Supplementary Pro Forma Information for Business Combinations. This Accounting Standards Update requires a public entity to disclose pro forma information for business combinations that occurred in the current reporting period. The disclosures include pro forma revenue and earnings of the combined entity for the current reporting period as though the acquisition date for all business combinations that occurred during the year had been as of the beginning of the annual reporting period. If comparative financial statements are presented, the pro forma revenue and earnings of the combined entity for the comparable prior reporting period should be reported as though the acquisition date for all business combinations that occurred during the current year had been as of the beginning of the comparable prior annual reporting period. The amendments in this Update affect any public entity as defined by Topic 805 that enters into business combinations that are material on an individual or aggregate basis. The amendments in this Update are effective prospectively for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2010. Early adoption is permitted. The Company does not expect the provisions of ASU 2010-29 to have a material effect on its financial position, results of operations or cash flows.

In August 2010, the FASB issued Accounting Standards Update 2010-22 (ASU 2010-22), Accounting for Various Topics -- Technical Corrections to SEC Paragraphs - An announcement made by the staff of the U.S. Securities and Exchange Commission. This Accounting Standards Update amends various SEC paragraphs based on external comments received and the issuance of SAB 112, which amends or rescinds portions of certain SAB topics. The Company does not expect the provisions of ASU 2010-22 to have a material effect on its financial position, results of operations or cash flows.

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WINDGEN ENERGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Continued)

Recent Accounting Standards (Continued)

In August 2010, the FASB issued Accounting Standards Update 2010-21 (ASU 2010-21), Accounting for Technical Amendments to Various SEC Rules and Schedules: Amendments to SEC Paragraphs Pursuant to Release No. 33-9026: Technical Amendments to Rules, Forms, Schedules and Codification of Financial Reporting Policies. The Company does not expect the provisions of ASU 2010-21 to have a material effect on its financial position, results of operations or cash flows.

In July 2010, the FASB issued Accounting Standards Update 2010-20 (ASU 2010-20), Receivables (Topic 310): Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses. The amendments in this Update are to provide financial statement users with greater transparency about an entity’s allowance for credit losses and the credit quality of its financing receivables. The disclosures about activity that occurs during the reporting period are effective for interim and annual reporting periods beginning on or after December 15, 2010. The Company does not expect the provisions of ASU 2010-20 to have a material effect on its financial position, results of operations or cash flows.

In April 2010, the FASB issued Accounting Standards Update 2010-17 (ASU 2010-17), Revenue Recognition – Milestone Method (Topic 605). ASU 2010-17 provides guidance on applying the milestone method of revenue recognition in arrangements with research and development activities. The amendments in this Update are effective on a prospective basis for milestones achieved in fiscal years, and interim periods within those years, beginning on or after June 15, 2010. The Company’s adoption of the provisions of ASU 2010-17 did not have a material impact on its revenue recognition.

In March 2010, the FASB issued Accounting Standards Update 2010-11 (ASU 2010-11), Derivatives and Hedging (Topic 815): Scope Exception Related to Embedded Credit Derivatives. The amendments in this Update are effective for each reporting entity at the beginning of its first fiscal quarter beginning after June 15, 2010. Early adoption is permitted at the beginning of each entity’s first fiscal quarter beginning after issuance of this Update. The Company’s adoption of the provisions of ASU 2010-11 did not have a material effect on its financial position, results of operations or cash flows.

In February 2010, the FASB Accounting Standards Update 2010-10 (ASU 2010-10), Consolidation (Topic 810): Amendments for Certain Investment Funds. The amendments in this Update are effective as of the beginning of a reporting entity’s first annual period that begins after November 15, 2009 and for interim periods within that first reporting period. Early application is not permitted. The Company’s adoption of provisions of ASU 2010-10 did not have a material effect on its financial position, results of operations or cash flows.

In February 2010, the FASB issued ASU No. 2010-09, Subsequent Events (ASC Topic 855) - Amendments to Certain Recognition and Disclosure Requirements (ASU 2010-09). ASU No. 2010-09 requires an entity that is an SEC filer to evaluate subsequent events through the date that the financial statements are issued and removes the requirement for an SEC filer to disclose a date, in both issued and revised financial statements, through which the filer had evaluated subsequent events. The adoption did not have an impact on the Company’s financial position, results of operations or cash flows.

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WINDGEN ENERGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Continued)

Recent Accounting Standards (Continued)

In January 2010, the FASB issued Accounting Standards Update 2010-06, Improving Disclosures about Fair Value Measurements (ASU 2010-09). ASU 2010-06 amends FASB Accounting Standards Codification (“ASC”) 820 and clarifies and provides additional disclosure requirements related to recurring and non-recurring fair value measurements and employers’ disclosures about postretirement benefit plan assets. This ASU is effective for interim and annual reporting periods beginning after December 15, 2009. The adoption of ASU 2010-06 did not have a material impact on the Company’s financial statements.

NOTE 3 – NOTES PAYABLE

On December 31, 2008, the Company converted $21,509 of accounts payable due to its attorney into a promissory note. At December 31, 2009, the balance due on this note was $22,799. During 2010, the Company paid-off the balance of this note by issuing 120,800 shares of the Company’s restricted common stock at $0.09 per share pursuant to the Company’s existing private placement offering and paying cash for the remainder of the balance.

On October 21, 2010, the Company borrowed $50,000 from a third party (the “8% Note Holder”). The note is due on July 21, 2011 and carries an interest rate of 8% per annum (the “8% Note”). The 8% Note is convertible after six months at a conversion price of 55% of the market price of the common stock. On April 25, 2011, the note holder converted $10,000 of its note to 227,273 shares of common stock pursuant to the conversion formula of the note. On May 4, 2011, the note holder converted $10,000 of its note to 246,914 shares of common stock pursuant to the conversion formula of the note. On May 11, 2011, the note holder converted $10,000 of its note to 278,552 shares of common stock pursuant to the conversion formula of the note. On June 24, 2011, the note holder converted $12,000 of its note to 476,190 shares of common stock pursuant to the conversion formula of the note. At June 30, 2011, the balance due on this note was $10,000, made up of $8,000 in principal and $2,000 in interest.

On June 30, 2011, the Company borrowed $25,000 from a third party (the “10% Note Holder”). The note is due 120 days from the date of the note and carries an interest rate of 10% per annum (the “10% Note”). In addition to the 10% interest factor, the 10% Note Holder will receive 100,000 shares of the Company's restricted common stock.

NOTE 4 – COMMON STOCK

The Company is authorized to issue 100,000,000 shares of common stock, $0.001 par value (the “Common Stock”), of which approximately 43,411,356 shares were issued and outstanding on June 30, 2011. All presently outstanding shares are duly authorized, fully-paid and non-assessable. Each share of the Common Stock is entitled to one vote on all matters to be voted on by the shareholders, such as the election of certain directors and other matters that directly impact the rights of the holders of such class. There is no cumulative voting in the election of directors. Holders of Common Stock are entitled to receive such dividends as may be declared from time to time by the Board of Directors out of funds legally available therefore. In the event of any dissolution, winding up or liquidation of the Company, the shares of Common Stock will share ratably in all the funds available for distribution after payment of all debts and obligations. The holders of Common Stock are subject to any rights that may be fixed for holders of preferred stock as designated upon issuance.

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WINDGEN ENERGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 4 – COMMON STOCK (Continued)

On December 4, 2009, the Company changed its total authorized common shares from 40,000,000 to 100,000,000 shares.

During 2009, the Company issued 15,000,000 shares of common stock for cash of $95,000 and a stock subscription receivable of $17,500. The stock issuances were the result of the exercise of a stock purchase option agreement with Law Investments CR, S.A., a Costa Rica corporation. During 2010, $7,500 was paid toward the subscription receivable, leaving a balance of $10,000 at June 30, 2011.

During 2010, the Company issued 4,222,969 shares of common stock for cash of $316,423 pursuant to the Company’s Private Placement Memorandum.

During 2010, the Company completed the conversion of three of the four existing 8% Series A cumulative preferred shareholders by issuing 246,834 of the Company’s restricted common shares at a price of $0.50 per share plus a $5,000 cash payment to each preferred shareholder. The conversion of these preferred shares reduced the dividends payable from $64,309 at December 31, 2009 to $17,969 at December 31, 2010. As of June 30, 2011, the total dividends payable on the remaining shares of Series A cumulative preferred is $18,914.

During 2010, the Company issued 254,133 shares of the Company’s restricted common stock for the conversion of debt in the amount of $20,875.

During 2010, the Company issued 1,900,000 shares of the Company’s restricted common stock to Wind Sail Receptor in consideration of an amendment to the Company’s 2009 License Agreement with Wind Sail Receptor. The shares were value at $.10 per share.

During 2010, the Company registered 3,000,000 shares of its common stock pursuant to regulation S-8. As of December 31, 2010, 700,000 of these shares had been issued for consulting services valued at $63,000. The consulting services were originally recorded as a prepaid expense. As of December 31, 2010, the prepaid expense related to this stock issuance was $47,250. At June 30, 2011, the prepaid expense related to this stock was $15,750.

During 2010, the Company issued 285,000 shares of the Company’s restricted common stock for services valued at $28,500.

During the first quarter of 2011, the Company issued 466,665 shares of restricted common stock for cash of $35,000, as part of the Company’s Private Placement Memorandum.

During the second quarter of 2011, the Company issued 477,333 shares of restricted common stock for cash of $35,800, as part of the Company’s Private Placement Memorandum.

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WINDGEN ENERGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 5 – PREFERRED STOCK

The Company is authorized to issue 10,000,000 shares of preferred stock. The Company’s board of directors designated 1,000,000 shares of this preferred stock as Series A Cumulative Convertible Preferred Stock (“Series A Preferred”) with a par value of $4.50 per share. Holders of the Series A Preferred receive annual cumulative dividends of 8%, payable quarterly, which dividends are required to be fully paid or set aside before any other dividend on any class or series of stock of the Company is paid. As of June 30, 2011, cumulative preferred stock dividends are due and payable in the amount of $18,914 Holders of the Series A Preferred receive no voting rights but do receive a liquidation preference of $4.50 per share, plus accrued and unpaid dividends. Series A Preferred stockholders have the right to convert each share of Series A Preferred to the Company’s common stock at a rate of 1.5 common shares to 1 preferred share.

On January 30, 2009, the Company entered into an agreement with MicroCor, its subsidiary (the “MicroCor Agreement”). The MicroCor Agreement provided for the Company to create a Series B class of preferred stock, without dividend or voting rights (the “Series B Preferred”), which would receive 100% of any future benefit from the sale, spin-off, merger or liquidation of MicroCor or the commercialization of its hematocrit technology. The shares of the Series B Preferred were to be distributed as a dividend, subject to compliance with federal and state securities laws and regulations, to the Company’s common stockholders, as of January 30, 2009. The creation of the Series B Preferred would prevent any holder of the Company’s common stock after January 30, 2009 from sharing in any future benefit of or to MicroCor through the expiration date of January 30, 2011. The Series B Preferred Stock was not issued to the common shareholders of record at January 30, 2009 inasmuch as no benefit occurred prior to the expiration date of January 30, 2011.

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WINDGEN ENERGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 6 – EARNINGS PER SHARE

The following data show the amounts used in computing earnings per share and the effect on income and the weighted average number of shares of dilutive potential common stock:

	For the Quarters Ended
	June 30,
	2011			2010

Net Income (Loss)	$	(107,521	)	$	276,943
Less: preferred dividends		(473	)		(1,891	)

Income (Loss) available to common stockholders used in basic EPS	$	(107,994	)	$	275,052

Convertible preferred stock		473			1,891
Convertible notes payable		–			–
Income (Loss) available to common stockholders after assumed
conversion of dilutive securities	$	(107,521	)	$	276,943

Weighted average number of common shares used in basic EPS		42,576,062			35,538,903
Effect of dilutive securities:
Convertible preferred stock		7,881			31,524
Convertible notes payable		393,701			–
Options		–			–
Weighted average number of common shares and dilutive potential
common stock used in diluted EPS		42,977,644			35,570,427

NOTE 7 – DISCONTINUED OPERATIONS

On June 24, 2010, WindGen Energy, Inc. entered into an agreement with MicroCor, Inc., Chi Lin Technology Co., Ltd. and Wescor, Inc., whereby WindGen transferred 230,000 shares of MicroCor common stock owned by WindGen to Wescor, reducing WindGen’s holdings in MicroCor from 1,700,000 common shares to 1,470,000 common shares. WindGen’s percentage of ownership of MicroCor was reduced from approximately 57% to 49%. Since WindGen’s ownership percentage is below 50%, MicroCor’s financial statements are no longer consolidated with WindGen’s financial statements.

Operating results of this discontinued operation for the six months ended June 30, 2011 are shown separately in the accompanying consolidated statement of operations. The operating statement for the six months ended June 30, 2010 has been restated to conform with the current year’s presentation and are also shown separately. The operating results of this discontinued operation for the six months ended June 30, 2011 and 2010 consist of:

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WINDGEN ENERGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 7 – DISCONTINUED OPERATIONS (Continued)

	For the Six Months Ended
	June 30,
	2011		2010

Sales	$	–	$	–
General and administrative		–		–
Legal and professional		–		–
Interest Expense		–		–
Gain on deconsolidation of MicroCor		–		355,000
Net Income (Loss) attributable to noncontolling interest		–		(11,512	)
Net Income (Loss) from discontinued operations	$	–	$	343,488

Operating results of this discontinued operation for the three months ended June 30, 2011 are shown separately in the accompanying consolidated statement of operations. The operating statement for the three months ended June 30, 2010 has been restated to conform with the current year’s presentation and are also shown separately. The operating results of this discontinued operation for the three months ended June 30, 2011 and 2010 consist of:

	For the Three Months Ended
	June 30,
	2011		2010

Sales	$	–	$	–
General and administrative		–		–
Legal and professional		–		–
Interest Expense		–		–
Gain on deconsolidation of MicroCor		–		355,000
Net Income (Loss) attributable to noncontolling interest		–		–
Net Income (Loss) from discontinued operations	$	–	$	355,000

NOTE 8 – RELATED PARTY TRANSACTIONS

During 2009, the Company accrued consulting expenses of $60,000 from officers of the Company. During 2010, the Company accrued additional consulting expenses from officers of $65,000. During the six months ending June 30, 2011, the Company accrued additional consulting expenses from officers of $15,250.

During 2009, an entity associated with Company, paid various expenses on behalf of the Company. At December 31, 2009, the Company owed $24,514 to the related entity. During 2010, the Company paid-off the balance due to the related party by issuing 133,333 shares of the Company’s restricted common stock at $0.075 per share pursuant to the Company’s existing private placement offering and paying cash for the remainder of the balance.

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WINDGEN ENERGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 9 – JOINT DEVELOPMENT AGREEMENT

On June 24, 2010, WindGen terminated the former Development Agreement with Wescor and entered into a new agreement whereby WindGen transferred 230,000 shares of MicroCor commons stock owned by WindGen reducing WindGen’s holdings in MicroCor from 1,700,000 common shares to 1,470,000 common shares, reducing its ownership percentage from 57% to 49%. Since WindGen’s ownership percentage is now less than 50%, MicroCor’s financial statements are no longer consolidated with WindGen’s financial statements. This transaction had the impact on WindGen’s financial statements of reducing the Company’s liabilities from December 31, 2009 in the amount of $570,019. Synergistic Equities Ltd acquired all of the shares of MicroCor previously owned by Chi Lin Technology, Ltd.

NOTE 10 – ROYALTY RIGHTS

At June 30, 2011, the Company had no outstanding Royalty Rights payable to any person or entity.

NOTE 11 – UNCERTAIN TAX POSITIONS

Effective January 1, 2007, the Company adopted the provisions of ASC 740 (formerly FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes – an interpretation of FASB Statement No. 109”). ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The adoption of the provisions of ASC 740 did not have a material impact on the Company’s condensed consolidated financial position and results of operations. At June 30, 2011, the Company had no liability for unrecognized tax benefits and no accrual for the payment of related interest.

Interest costs related to unrecognized tax benefits are classified as “Interest Expense, Net” in the accompanying consolidated statements of operations. Penalties, if any, would be recognized as a component of “Selling, general and administrative expenses.” The Company recognized $0 of interest expense related to unrecognized tax benefits for the year ended December 31, 2010. In many cases the Company’s uncertain tax positions are related to tax years that remain subject to examination by relevant tax authorities. With few exceptions, the Company is generally no longer subject to U.S. federal, state, local or non-U.S. income tax examinations by tax authorities for years before 2007. The following describes the open tax years, by major tax jurisdiction, as of June 30, 2011:

United States (a)		2007 – Present
__________
(a) Includes federal as well as state or similar local jurisdictions, as applicable.

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WINDGEN ENERGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 12 – SUBSEQUENT EVENTS

The Company adopted ASC 855, and has evaluated all events occurring after December 31, 2010, the date of the most recent balance sheet, for possible adjustment to the financial statements or disclosures through June 30, 2011, which is the date on which the financial statements were issued.

The lease for the Company’s office premises located at 14550 N. Frank Lloyd Wright Blvd., Suite 100, Scottsdale, Arizona 85260 expired on July 31, 2011. The Company’s new office address is 8432 E. Shea Blvd., Suite 101, Scottsdale, Arizona 85260. The Company’s phone/fax numbers remain unchanged.

On July 5, 2011, the 8% Note Holder converted the remaining $10,000 balance of its note to 393,701 shares of common stock pursuant to the conversion formula of the note. The remaining balance was made up of $8,000 in principal and $2,000 in interest. The note holder agreed to a flat fee of $2,000 for interest and has declared the note paid in full.

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WINDGEN ENERGY, INC.

Item 2.

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

Overview

InMedica Development Corporation (“InMedica” or the “Company”) was incorporated as a Utah corporation on June 16, 1983. On December 4, 2009, a majority of the Company’s shareholders executed a consent resolution to amend the Company’s Articles of Incorporation to change the Company’s name to WindGen Energy, Inc. (“WindGen” or the “Company”) and to increase the number of authorized common stock shares from 40,000,000 to 100,000,000. A Certificate of Amendment for such amendments was filed by the Company with the Secretary of State of Utah effective on December 16, 2009. The name change and the new trading symbol, “WGEI,” were approved by FINRA on March 16, 2010.

Plan of Operation

In January 2008, the Company’s plan of operation was to continue to work cooperatively with MicroCor and Wescor in the development of the Company’s portable Hematocrit device. In late 2008, Wescor ceased all research and development efforts on the Hematocrit technology. During 2008, the Company funded administrative operations with the proceeds of minimum royalty payments from MicroCor and from loans from the Company’s officers and Directors. These minimum payments to the Company from MicroCor have ceased. On June 24, 2010, the Company entered into an agreement with MicroCor, Chi Lin and Wescor, whereby the Company transferred 230,000 shares of MicroCor common stock owned by the Company to Wescor, reducing the Company’s holdings in MicroCor from 1,700,000 common shares to 1,470,000 common shares. The Company’s percentage of ownership of MicroCor was reduced from approximately 57% to 49%. Since the Company’s ownership percentage is below 50%, MicroCor’s financial statements are no longer consolidated with the Company’s financial statements. Development of the Hematocrit device remains dormant but has not been abandoned.

New Company Focus: Wind Energy

With new management, we have refocused the Company on wind energy devices. On April 17, 2009, we entered into a license agreement (the “License”) with Wind Sail Receptor, Inc. of Boulder City, Nevada (“WSR”), pursuant to which we were granted the exclusive license to assemble and market WSR’s wind sail receptor energy generation devices using blades of 15 feet or less in length in the United States, Canada, the United Kingdom and Ireland, with nonexclusive rights in the rest of the world except Latin America and the Caribbean. Under the License, we must acquire 100 blades from WSR during the first year after WSR is able to manufacture the blades. WSR is currently in the final stages of selecting the electrical generator that it will connect to the WSR wind turbine blade.

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WINDGEN ENERGY, INC.

Assembly and Marketing

Results of Operations

The Company had an accumulated deficit of $9,561,305 as of June 30, 2011. No revenues from operations were received during the three and six months ended June 30, 2011 and 2010. The Company had a net loss from continuing operations of $107,521 for the quarter ended June 30, 2011, compared to a net loss from continuing operations of $78,057 for the quarter ended June 30, 2010. The increase in net loss from continuing operations resulted primarily from increased General and Administrative Expenses and Related Party Consulting Fees. These types of expenses will continue to increase, subject to available funding, as we continue with our business plan.

The Company had a net loss from continuing operations for the six months ended June 30, 2011 of $199,541, as compared to a net loss from continuing operations of $161,776 for the six month period ended June 30, 2010. The increase in the net loss from continuing operations resulted primarily from increased General and Administrative Expenses and Related Party Consulting Fees. These types of expenses will continue to increase in the future, subject to available funding, as we continue our business plan.

Liquidity and Capital Resources

During the second quarter of 2011, we sold 477,333 shares of restricted common stock for total gross proceeds of $35,800. See “Part II, Item 2, Unregistered Sale of Equity Securities and Use of Proceeds” below.

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WINDGEN ENERGY, INC.

The Company’s independent registered public accounting firm has issued a going concern opinion on the Company’s consolidated financial statements for the year ended December 31, 2010. See Note 1 to the financial statements. The Company’s liquidity shortage will continue through the fourth quarter of 2011. The Company is currently negotiating terms for a new equity line of credit to be used in conjunction with the registration of shares of common stock to be issued by the Company in order to form new capital of up to $7,000,000 over twenty-four months from the effective date of an S-1 Registration Statement in order to implement its business plan in 2011 and 2012.

Implementation of our new business to market wind turbines is contingent upon our ability to acquire new capital in 2011. We currently estimate we will need to generate approximately $3,500,000 of new capital during the remainder of 2011 and first half of 2012 in order to fully implement the Company’s business plan. We also estimate $2,000,000 of new capital would permit us to implement enough of our plan to commence minimal marketing of our wind turbine units in fourth quarter of 2011 and first quarter of 2012.

We intend to acquire new capital during 2011 through the sale of equity or convertible debt or a combination of both in one or more private placements. Presently, we have no final agreement or understanding with any underwriter, investment banker or investor for any financing. There is no assurance we will be able to complete any substantial financing in the future.

Subsequent Events

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WINDGEN ENERGY, INC.

Item 3.

Quantitative and Qualitative Disclosures About Market Risk.

Not applicable.

Item 4.

Controls and Procedures.

Disclosure Controls and Procedures. The Company’s management, with the participation of the Company’s principal executive officer and principal financial officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)) as of the end of the period covered by this Report. Based on such evaluation, the Company’s principal executive officer and principal financial officer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures were effective.

Internal Control Over Financial Reporting. There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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WINDGEN ENERGY, INC.

PART II.

OTHER INFORMATION

Item 1.

Legal Proceedings. None.

Item 1A.

Risk Factors. Not applicable.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds.

During the second quarter of 2011, the Company issued 477,333 shares of restricted common stock for $35,800 to one (1) accredited investors and four (4) non-accredited investor as those terms are defined by SEC Rule 501, pursuant to a Rule 506 private placement we are currently conducting. These sales were made without public solicitation. There were no underwriting discounts or commissions paid on these sales of securities. The proceeds of this offering will be used by the Company for working capital expenses.

During the second quarter of 2011, no shares of the Company’s common stock were issued to employees or consultants pursuant to the Company’s 2010 Employee and Consultant Compensation Plan.

Subsequent Events

Item 3.

Defaults Upon Senior Securities. None.

Item 4.

(Removed and Reserved)

Item 5.

Other Information. None.

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WINDGEN ENERGY, INC.

Item 6.

Exhibits

Exhibit No.		Description

31.1		Certification by Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act *
31.2		Certification by Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act *
32.1		Certification by Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act *
32.2		Certification by Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act *
101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Extension Schema Document **
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document **
101.LAB		XBRL Taxonomy Extension Labels Linkbase Document **
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document **
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document **

__________________

*	Filed herewith.

**	In accordance with Rule 406T of Regulation S-T, this XBRL-related information shall be deemed to be “furnished” and not “filed.”

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WINDGEN ENERGY, INC.

Signatures

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

	WINDGEN ENERGY, INC.


Dated: August 15, 2011	By:	/s/ Ronald Conquest
		Ronald Conquest Chairman of the Board and Chief Executive Officer (Principal Executive Officer)

Dated: August 15, 2011	By:	/s/ Wendy Carriere
		Wendy Carriere Secretary/Treasurer, Chief Financial Officer and Director (Principal Accounting Officer)

EX-31.1 2 p0742_ex31-1.htm 302 CERTIFICATION OF CEO p0742_ex31-1.htm

Exhibit 31.1

CERTIFICATION PURSUANT TO

RULE 13a-14(a)/15d-14(a)

OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, Ronald Conquest, certify that:

I have reviewed this quarterly report on Form 10-Q of WindGen Energy, Inc.;

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;

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;

The registrant’s other certifying officers 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

The registrant’s other certifying officers 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: August 15, 2011

/s/ Ronald Conquest

Ronald Conquest Chief Executive Officer WindGen Energy, Inc.

EX-31.2 3 p0742_ex31-2.htm 302 CERTIFICATION OF CFO p0742_ex31-2.htm

Exhibit 31.2

CERTIFICATION PURSUANT TO

RULE 13a-14(a)/15d-14(a)

OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, Wendy Carriere, certify that:

I have reviewed this quarterly report on Form 10-Q of WindGen Energy, Inc.;

(a)

(b)

(c)

(d)

(a)

(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: August 15, 2011

/s/ Wendy Carriere

Wendy Carriere Chief Financial Officer WindGen Energy, Inc.

EX-32.1 4 p0742_ex32-1.htm 906 CERTIFICATION OF CEO p0742_ex32-1.htm

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 of WindGen Energy, Inc., a Utah corporation (the “Company”), on Form 10-Q for the period ended June 30, 2011, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Ronald Conquest, Chief Executive Officer of the Company, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant of Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)

The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; 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: August 15, 2011

/s/ Ronald Conquest

Ronald Conquest Chief Executive Officer WindGen Energy, Inc.

EX-32.2 5 p0742_ex32-2.htm 906 CERTIFICATION OF CFO p0742_ex32-2.htm

Exhibit 32.2

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 of WindGen Energy, Inc., a Utah corporation (the “Company”), on Form 10-Q for the period ended June 30, 2011, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Ronald Conquest, Chief Financial Officer of the Company, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant of Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; 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: August 15, 2011

/s/ Wendy Carriere

Wendy Carriere Chief Financial Officer WindGen Energy, Inc.

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<div><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-FAMILY: times new roman; TEXT-DECORATION: underline">NOTE 1 - NATURE OF OPERATIONS</font></div> <div><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman"> </font></div> <div style="TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; TEXT-DECORATION: underline">Nature of Operations</font></div> <div style="TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">  </font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">From 1989 through 2008, InMedica Development Corporation (“InMedica”) and its then majority-owned subsidiary, MicroCor, Inc. (“MicroCor”) were engaged in research and development of a device to measure hematocrit non-invasively (the “Non-Invasive Hematocrit Technology” and/or the “Technology”).  On June 24, 2010, WindGen terminated the former Development Agreement with Wescor and entered into a new agreement whereby WindGen transferred 230,000 shares of MicroCor commons stock owned by WindGen reducing WindGen’s holdings in MicroCor from 1,700,000 common shares to 1,470,000 common shares, reducing its ownership percentage from 57% to 49%. Since WindGen’s ownership percentage is now less than 50%, MicroCor’s financial statements are no longer consolidated with WindGen’s financial statements. Synergistic Equities, Ltd. has acquired all of the shares of MicroCor previously owned by Chi Lin Technology, Ltd.</font></div> <div style="TEXT-ALIGN: justify"> </div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">On April 17, 2009, we entered into a license agreement (the “License”) with Wind Sail Receptor, Inc. of Boulder City, Nevada (“WSR”), pursuant to which we were granted the exclusive license to assemble and market WSR’s wind sail receptor energy generation devices using blades of 15 feet or less in length in the United States, Canada, the United Kingdom and Ireland, with nonexclusive rights in the rest of the world except Latin America and the Caribbean. Under the License, we must acquire 100 blades from WSR during the first year after WSR is able to manufacture the blades.  WSR is currently in the final stages of selecting the electrical generator that it will connect to the WSR wind turbine blade.</font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"> <div style="LINE-HEIGHT: 1.3"><font style="DISPLAY: inline; FONT-FAMILY: times new roman"> </font></div> <div style="LINE-HEIGHT: 1.3"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">During 2010, the Company issued 1,900,000 shares of the Company’s restricted common stock to WSR in consideration of amending its License.  The proposed amendment to the License Agreement currently in existence between the Company and WSR has not yet been executed. The reasons are various and include, but are not limited to, finalizing details regarding the need for the Company to be involved in assembly of the wind turbines in various license territory outside the US, final pricing that the units will be sold by WSR to the Company, final terms of the product Warranty to be provided by WSR, and possible additional exclusive territory added to the License.  Under the terms of the existing License, the Company intended to use its best efforts to obtain Federal, State, Local, or Private Grant Funds and to share these Grant Funds with WSR up to a sum of $1,000,000. To date the Company has not been successful in obtaining Grant Funds. The proposed amendment also could result in altering the various financial dealings between the two companies. No monetary disputes currently exist between the two companies.  WSR is hopeful that it will begin production of complete wind turbine systems during the fourth quarter of 2011.  WSR is currently in the process of finalizing its supply chain relationships for the production of the wind turbine generator/alternator system with various suppliers in China. The wind turbine blade will be made in Nevada USA. WSR still anticipates that the six foot diameter small wind turbine will be available to WindGen in the fourth quarter of this year. WindGen is currently beginning to finalize its distribution network for the Western US.</font></div> <div style="LINE-HEIGHT: 1.3"> </div> <div style="LINE-HEIGHT: 1.3"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">We anticipate our first three wind turbine products will have blade diameters of 3, 6 and 12 feet with towers from 25 to 75 feet in height. The first unit to be offered in the market place will be the six foot blade diameter unit. We are currently negotiating terms for the formation of the working capital required to bring our first products to market at some point during the fourth quarter of 2011. The progress of the Company in marketing its new small wind turbine products is dependent on obtaining additional capital. </font></div></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"> <div style="LINE-HEIGHT: 1.3"><font style="DISPLAY: inline; FONT-FAMILY: times new roman"> </font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"> <div> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt; TEXT-ALIGN: left" align="center"> <div style="LINE-HEIGHT: 1.3"> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.4; MARGIN-RIGHT: 0pt" align="left"> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">To date during 2011, WSR has been developing a well-organized approach to the manufacturing/assembly process to assure high-quality, rapid-development cycles and overall competiveness.  The Generator/Alternators will be manufactured by Ginlong Technologies Inc, an experienced wind turbine generator manufacturer located in China. WSR will also be responsible for the manufacture of the critical blade component at its plant near Boulder City, Nevada.  At this time suppliers have been located for all of the non-blade components for our products.</font></div></div></div></div></div> <div><font style="DISPLAY: inline; FONT-FAMILY: times new roman"> </font></div> <div style="LINE-HEIGHT: 1.3"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">To launch into the important rural small wind turbine market in the central wind belt and the western part of the United States (our initial marketing objective), we hope to join forces with some excellent partners and distributorships.  We intend to recruit existing well established wind turbine distributors currently representing our competitors.  In addition, we are currently in contact with various major name brand farm equipment dealers who have a well-established rural network of dealers throughout America, all with the ability to provide excellent sales, installation, and maintenance services.  We also plan to sell distributorships to other existing service-oriented organizations such as cell tower installers.</font></div> <div><font style="DISPLAY: inline; FONT-FAMILY: times new roman"> </font></div> <div><font style="DISPLAY: inline; FONT-FAMILY: times new roman">We are currently in the process of finalizing our six foot diameter wind turbine that should be available during the fourth quarter of 2011.  Subject to availability of adequate capital, product roll out could follow quickly in the central wind belt and the western part of the United States.</font></div></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"> </div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">On December 4, 2009, the Company changed its name from InMedica Development Corp to WindGen Energy, Inc.</font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"> </div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; TEXT-DECORATION: underline">Basis of Presentation</font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman"> </font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">The Company’s unaudited consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.  The consolidated financial statements do not include any adjustment relating to recoverability and classification of recorded amounts of assets and liabilities that might be necessary should the Company be unable to continue as a going concern.  The Company generated negative cash flows from operations of $107,012 and $148,882 for the six month periods ended June 30, 2011 and 2010, respectively, and net losses from operations of $199,541 and $161,776 for the six month periods ended June 30, 2011 and 2010, respectively.   As of June 30, 2011, the Company had an accumulated deficit of $9,561,305 and a working capital deficit of $154,360. These conditions raise substantial doubt as to the Company’s ability to continue as a going concern.  The Company’s continued existence is dependent upon its ability to execute its operating plan and to obtain additional debt or equity financing.  There can be no assurance the necessary debt or equity financing will be available, or will be available on terms acceptable to the Company.  Management’s operating plan includes pursuing additional fund raising as well as putting in place all the initial requirements in anticipation of the Company beginning operations and generating revenue during the fourth quarter of 2011.</font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman"> </font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">The accompanying consolidated financial statements of the Company are unaudited. However, in management’s opinion, all adjustments, consisting only of normal recurring adjustments necessary for fair presentation of results for the interim periods shown, have been made. Results for interim periods are not necessarily indicative of those to be expected for the full year.  These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes to consolidated financial statements included in the Company’s annual report on form 10-K for the year ended December 31, 2010.</font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><br/> </div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; TEXT-DECORATION: underline">Principles of Consolidation</font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman"> </font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">The consolidated financial statements include the accounts of WindGen Energy, Inc. (“WindGen”) and its majority owned subsidiary, MicroCor, Inc. (“MicroCor”) through June 24, 2010.  As of June 24, 2010, MicroCor’s financial statements are no longer being consolidated with WindGen’s financial statements.</font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman"> </font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; TEXT-DECORATION: underline">Research and Development</font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman"> </font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">Research and development costs are expensed as incurred.</font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman"> </font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; TEXT-DECORATION: underline">Net Loss per Common Share</font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman"> </font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">Basic net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding during the year.  Diluted net loss per common share (“Diluted EPS”) reflects the potential dilution that could occur if stock options or other common stock equivalents were exercised or converted into common stock.  At June 30, 2011 and 2010, respectively, there were 401,582 and 31,524 potentially dilutive common stock equivalents.  The computation of Diluted EPS does not assume exercise or conversion of securities that would have an anti-dilutive effect on net loss per common share.</font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman"> </font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; TEXT-DECORATION: underline">Use of Estimates</font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman"> </font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">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 the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.</font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman"> </font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; TEXT-DECORATION: underline">Comprehensive Income</font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman"> </font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">There are no components of comprehensive income other than the net loss.</font><font style="DISPLAY: inline; FONT-FAMILY: times new roman"> </font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman"> </font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; TEXT-DECORATION: underline">Cash Equivalents</font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman"> </font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">For the purpose of reporting cash flows, the Company considers all highly liquid debt instruments purchased with maturity of three months or less to be cash equivalents to the extent the funds are not being held for investment purposes.</font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman"> </font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; TEXT-DECORATION: underline">Concentration of Credit Risk</font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman"> </font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">The Company has no significant off-balance-sheet concentrations of credit risk such as foreign exchange contracts, options contracts or other foreign hedging arrangements.  The Company maintains the majority of its cash balances with one financial institution, in the form of demand deposits.</font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman"> </font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; TEXT-DECORATION: underline">Fair Value of Financial Instruments</font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman"> </font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">The carrying value of the Company’s financial instruments, including receivables, accounts payable, accrued liabilities, and notes payable at June 30, 2011 and 2010 approximates their fair values due to the short-term nature of these financial instruments.</font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><br/> </div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; TEXT-DECORATION: underline">Goodwill and Other Intangible Assets</font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman"> </font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">Goodwill and other intangible assets are recorded under the provisions of the Financial Accounting Standards Board (FASB) ASC 350  (formerly Statement ASC No. 142 (SFAS 142), <font style="DISPLAY: inline; FONT-STYLE: italic; FONT-FAMILY: times new roman">Goodwill and Other Intangible Assets)</font>. ASC 350 requires that an intangible asset that is acquired either individually or with a group of other assets (but not those acquired in a business combination) shall be initially recognized and measured based on its fair value.  Goodwill acquired in business combinations is initially computed as the amount paid by the acquiring company in excess of the fair value of the net assets acquired.</font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman"> </font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">Costs of internally developing, maintaining and restoring intangible assets (including goodwill) that are not specifically identifiable, that have indeterminate lives, or that are inherent in a continuing business and related to an entity as a whole, are recognized as an expense when incurred.</font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman"> </font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">An intangible asset (excluding goodwill) with a definite useful life is amortized; an intangible asset with an indefinite useful life is not amortized until its useful life is determined to be no longer indefinite.  The remaining useful lives of intangible assets not being amortized are evaluated at least annually to determine whether events and circumstances continue to support an indefinite useful life.  If and when an intangible asset is determined to no longer have an indefinite useful life, the asset shall then be amortized prospectively over its estimated remaining useful life and accounted for in the same manner as other intangibles that are subject to amortization.</font><font style="DISPLAY: inline; FONT-FAMILY: times new roman"> </font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"> <div style="TEXT-ALIGN: left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman"> </font></div></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">An intangible asset (including goodwill) that is not subject to amortization shall be tested for impairment annually or more frequently if events or changes in circumstances indicate that the asset might be impaired.  The impairment test consists of a comparison of the fair value of the intangible assets with its carrying amount.  If the carrying amount of an intangible asset exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess.  In accordance with ASC 350, goodwill is not amortized.</font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman"> </font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">It is the Company’s policy to test for impairment no less than annually, or when conditions occur that may indicate impairment. The Company’s intangible assets, which consist of licensing rights valued at $190,000 recorded in connection with the acquisition of the license related to the agreement with Wind Sail Receptor, Inc., were acquired in 2009 and will be tested for impairment in 2011.  The licensing rights were determined to have an indefinite life as of December 31, 2010.</font></div></div>

<div><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-FAMILY: times new roman; TEXT-DECORATION: underline">NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES</font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman"> </font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; TEXT-DECORATION: underline">Recent Accounting Standards</font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman"> </font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">In December 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-29 (ASU 2010-29), <font style="DISPLAY: inline; FONT-STYLE: italic; FONT-FAMILY: times new roman">Business Combinations (Topic 805) – Disclosure of Supplementary Pro Forma Information for Business Combinations</font>. This Accounting Standards Update requires a public entity to disclose pro forma information for business combinations that occurred in the current reporting period. The disclosures include pro forma revenue and earnings of the combined entity for the current reporting period as though the acquisition date for all business combinations that occurred during the year had been as of the beginning of the annual reporting period. If comparative financial statements are presented, the pro forma revenue and earnings of the combined entity for the comparable prior reporting period should be reported as though the acquisition date for all business combinations that occurred during the current year had been as of the beginning of the comparable prior annual reporting period. The amendments in this Update affect any public entity as defined by Topic 805 that enters into business combinations that are material on an individual or aggregate basis. The amendments in this Update are effective prospectively for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2010.  Early adoption is permitted. The Company does not expect the provisions of ASU 2010-29 to have a material effect on its financial position, results of operations or cash flows.</font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"> </div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">In August 2010, the FASB issued Accounting Standards Update 2010-22 (ASU 2010-22), <font style="DISPLAY: inline; FONT-STYLE: italic; FONT-FAMILY: times new roman">Accounting for Various Topics -- Technical Corrections to SEC Paragraphs - An announcement made by the staff of the U.S. Securities and Exchange Commission</font>. This Accounting Standards Update amends various SEC paragraphs based on external comments received and the issuance of SAB 112, which amends or rescinds portions of certain SAB topics.  The Company does not expect the provisions of ASU 2010-22 to have a material effect on its financial position, results of operations or cash flows.</font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman"> </font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">In August 2010, the FASB issued Accounting Standards Update 2010-21 (ASU 2010-21), <font style="DISPLAY: inline; FONT-STYLE: italic; FONT-FAMILY: times new roman">Accounting for Technical Amendments to Various SEC Rules and Schedules</font>: <font style="DISPLAY: inline; FONT-STYLE: italic; FONT-FAMILY: times new roman">Amendments to SEC Paragraphs Pursuant to Release No. 33-9026: Technical Amendments to Rules, Forms, Schedules and Codification of Financial Reporting Policies</font>. The Company does not expect the provisions of ASU 2010-21 to have a material effect on its financial position, results of operations or cash flows.</font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman"> </font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">In<font style="DISPLAY: inline; FONT-STYLE: italic; FONT-FAMILY: times new roman"> </font>July 2010, the FASB issued Accounting Standards Update 2010-20 (ASU 2010-20), <font style="DISPLAY: inline; FONT-STYLE: italic; FONT-FAMILY: times new roman">Receivables (Topic 310): Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses. </font>The amendments in this Update are to provide financial statement users with greater transparency about an entity’s allowance for credit losses and the credit quality of its financing receivables. The disclosures about activity that occurs during the reporting period are effective for interim and annual reporting periods beginning on or after December 15, 2010.  The Company does not expect the provisions of ASU 2010-20 to have a material effect on its financial position, results of operations or cash flows.</font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman"> </font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">In April 2010, the FASB issued Accounting Standards Update 2010-17 (ASU 2010-17), <font style="DISPLAY: inline; FONT-STYLE: italic; FONT-FAMILY: times new roman">Revenue Recognition – Milestone Method (Topic 605)</font>.  ASU 2010-17 provides guidance on applying the milestone method of revenue recognition in arrangements with research and development activities. The amendments in this Update are effective on a prospective basis for milestones achieved in fiscal years, and interim periods within those years, beginning on or after June 15, 2010.  The Company’s adoption of the provisions of ASU 2010-17 did not have a material impact on its revenue recognition.</font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman"> </font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">In March 2010, the FASB issued Accounting Standards Update 2010-11 (ASU 2010-11), <font style="DISPLAY: inline; FONT-STYLE: italic; FONT-FAMILY: times new roman">Derivatives and Hedging (Topic 815): Scope Exception Related to Embedded Credit Derivatives</font>.  The amendments in this Update are effective for each reporting entity at the beginning of its first fiscal quarter beginning after June 15, 2010.  Early adoption is permitted at the beginning of each entity’s first fiscal quarter beginning after issuance of this Update.  The Company’s adoption of the provisions of ASU 2010-11 did not have a material effect on its financial position, results of operations or cash flows.</font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman"> </font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">In February 2010, the FASB Accounting Standards Update 2010-10 (ASU 2010-10), <font style="DISPLAY: inline; FONT-STYLE: italic; FONT-FAMILY: times new roman">Consolidation (Topic 810): Amendments for Certain Investment Funds</font>. The amendments in this Update are effective as of the beginning of a reporting entity’s first annual period that begins after November 15, 2009 and for interim periods within that first reporting period. Early application is not permitted.  The Company’s adoption of provisions of ASU 2010-10 did not have a material effect on its financial position, results of operations or cash flows.</font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman"> </font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">In February 2010, the FASB issued ASU No. 2010-09, <font style="DISPLAY: inline; FONT-STYLE: italic; FONT-FAMILY: times new roman">Subsequent Events (ASC Topic 855) - Amendments to Certain Recognition and Disclosure Requirements</font> (ASU 2010-09).  ASU No. 2010-09 requires an entity that is an SEC filer to evaluate subsequent events through the date that the financial statements are issued and removes the requirement for an SEC filer to disclose a date, in both issued and revised financial statements, through which the filer had evaluated subsequent events. The adoption did not have an impact on the Company’s financial position, results of operations or cash flows.</font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman"> </font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">In January 2010, the FASB issued Accounting Standards Update 2010-06, <font style="DISPLAY: inline; FONT-STYLE: italic; FONT-FAMILY: times new roman">Improving Disclosures about Fair Value Measurements</font> (ASU 2010-09). ASU 2010-06 amends FASB Accounting Standards Codification (“ASC”) 820 and clarifies and provides additional disclosure requirements related to recurring and non-recurring fair value measurements and employers’ disclosures about postretirement benefit plan assets. This ASU is effective for interim and annual reporting periods beginning after December 15, 2009. The adoption of ASU 2010-06 did not have a material impact on the Company’s financial statements.</font></div>

<div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-FAMILY: times new roman; TEXT-DECORATION: underline">NOTE 3 – NOTES PAYABLE</font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman"> </font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">On December 31, 2008, the Company converted $21,509 of accounts payable due to its attorney into a promissory note.  At December 31, 2009, the balance due on this note was $22,799.   During 2010, the Company paid-off the balance of this note by issuing 120,800 shares of the Company’s restricted common stock at $0.09 per share pursuant to the Company’s existing private placement offering and paying cash for the remainder of the balance.</font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"> </div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">On October 21, 2010, the Company borrowed $50,000 from a third party (the "8% Note Holder"). The note is due on July 21, 2011 and carries an interest rate of 8% per annum (the "8% Note Holder"). The 8% Note is convertible after six months at a conversion price of 55% of the market price of the common stock.   On April 25, 2011, the note holder converted $10,000 of its note to 227,273 shares of common stock pursuant to the conversion formula of the note.  On May 4, 2011, the note holder converted $10,000 of its note to 246,914 shares of common stock pursuant to the conversion formula of the note. On May 11, 2011, the note holder converted $10,000 of its note to 278,552 shares of common stock pursuant to the conversion formula of the note. On June 24, 2011, the  note holder converted $12,000 of its note to 476,190 shares of common stock pursuant to the conversion formula of the note. At June 30, 2011, the balance due on this note was $10,000, made up of $8,000 in principal and $2,000 in interest.</font><font style="DISPLAY: inline; FONT-FAMILY: times new roman"><font color="#000000"> </font></font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"> </div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">On June 30, 2011 the Company borrowed $25,000 from a third party (the “10% Note Holder”). The note is due 120 days from the date of the note and carries an interest rate of 10% per annum (the “10% Note”). In addition to the 10% interest factor, the 10% Note Holder will receive 100,000 shares of the Company's restricted common stock.</font></div> <div style="TEXT-ALIGN: justify"> </div>

<div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"> <div style="TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-FAMILY: times new roman; TEXT-DECORATION: underline">NOTE 4 – COMMON STOCK</font></div></div></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"> </div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">The Company is authorized to issue 100,000,000 shares of common stock, $0.001 par value (the “Common Stock”), of which 43,411,356 shares were issued and outstanding on June 30, 2011.  All presently outstanding shares are duly authorized, fully-paid and non-assessable.  Each share of the Common Stock is entitled to one vote on all matters to be voted on by the shareholders, such as the election of certain directors and other matters that directly impact the rights of the holders of such class. There is no cumulative voting in the election of directors. Holders of Common Stock are entitled to receive such dividends as may be declared from time to time by the Board of Directors out of funds legally available therefore. In the event of any dissolution, winding up or liquidation of the Company, the shares of Common Stock will share ratably in all the funds available for distribution after payment of all debts and obligations. The holders of Common Stock are subject to any rights that may be fixed for holders of preferred stock as designated upon issuance.</font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"> </div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">On December 4, 2009, the Company changed its total authorized common shares from 40,000,000 to 100,000,000 shares.</font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman"> </font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">During 2009, the Company issued 15,000,000 shares of common stock for cash of $95,000 and a stock subscription receivable of $17,500.  The stock issuances were the result of the exercise of a stock purchase option agreement with Law Investments CR, S.A., a Costa Rica corporation.  During 2010, $7,500 was paid toward the subscription receivable, leaving a balance of $10,000 at June 30, 2011.</font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman"> </font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">During 2010, the Company issued 4,222,969 shares of common stock for cash of $316,423 pursuant to the Company’s Private Placement Memorandum.</font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman"> </font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">During 2010, the Company completed the conversion of three of the four existing 8% Series A cumulative preferred shareholders by issuing 246,834 of the Company’s restricted common shares at a price of $0.50 per share plus a $5,000 cash payment to each preferred shareholder. The conversion of these preferred shares reduced the dividends payable from $64,309 at December 31, 2009 to $17,969 at December 31, 2010.  As of June 30, 2011, the total dividends payable on the remaining shares of Series A cumulative preferred is $18,914.</font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman"> </font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">During 2010, the Company issued 254,133 shares of the Company’s restricted common stock for the conversion of debt in the amount of $20,875.</font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">  </font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">During 2010, the Company issued 1,900,000 shares of the Company’s restricted common stock to Wind Sail Receptor in consideration of an amendment to the Company’s 2009 License Agreement with Wind Sail Receptor.  The shares were value at $.10 per share. </font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">  </font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">During 2010, the Company registered 3,000,000 shares of its common stock pursuant to regulation S-8. As of December 31, 2010, 700,000 of these shares had been issued for consulting services valued at $63,000.  The consulting services were originally recorded as a prepaid expense.  As of December 31, 2010, the prepaid expense related to this stock issuance was $47,250.  At June 30, 2011, the prepaid expense related to this stock was $15,750.</font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"> </div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">During 2010, the Company issued 285,000 shares of the Company’s restricted common stock for services valued at $28,500.</font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman"> </font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">During the first quarter of 2011, the Company issued 466,665 shares of restricted common stock for cash of $35,000, as part of the Company’s Private Placement Memorandum.</font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman"> </font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">During the second quarter of 2011, the Company issued 477,333 shares of restricted common stock for cash of $35,800, as part of the Company’s Private Placement Memorandum.</font></div>  <div style="LINE-HEIGHT: 1.4; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-FAMILY: times new roman; TEXT-DECORATION: underline">NOTE 5 – PREFERRED STOCK</font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman"> </font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">The Company is authorized to issue 10,000,000 shares of preferred stock.  The Company’s board of directors designated 1,000,000 shares of this preferred stock as Series A Cumulative Convertible Preferred Stock (“Series A Preferred”) with a par value of $4.50 per share.  Holders of the Series A Preferred receive annual cumulative dividends of 8%, payable quarterly, which dividends are required to be fully paid or set aside before any other dividend on any class or series of stock of the Company is paid.  As of June 30, 2011, cumulative preferred stock dividends are due and payable in the amount of $18,914   Holders of the Series A Preferred receive no voting rights but do receive a liquidation preference of $4.50 per share, plus accrued and unpaid dividends.  Series A Preferred stockholders have the right to convert each share of Series A Preferred to the Company’s common stock at a rate of 1.5 common shares to 1 preferred share.</font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman"> </font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">During 2010, the Company completed the conversion of three of the four existing 8% Series A cumulative preferred shareholders by issuing 246,834 of the Company’s restricted common shares at a price of $0.50 per share plus a $5,000 cash payment to each preferred shareholder. The conversion of these preferred shares reduced the dividends payable from $64,309 at December 31, 2009 to $17,969 at December 31, 2010.  As of June 30, 2011, the total dividends payable on the remaining shares of Series A cumulative preferred is $18,914.</font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman"> </font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">On January 30, 2009, the Company entered into an agreement with MicroCor, its subsidiary (the “MicroCor Agreement”).  The MicroCor Agreement  provided for the Company to create a Series B class of preferred stock, without dividend or voting rights (the “Series B Preferred”), which would receive 100% of any future benefit from the sale, spin-off, merger or liquidation of MicroCor or the commercialization of its hematocrit technology.  The shares of the Series B Preferred were to be distributed as a dividend, subject to compliance with federal and state securities laws and regulations, to the Company’s common stockholders, as of January 30, 2009.  The creation of the Series B Preferred would prevent any holder of the Company’s common stock after January 30, 2009 from sharing in any future benefit of or to MicroCor through the expiration date of January 30, 2011.  The Series B Preferred Stock was not issued to the common shareholders of record at January 30, 2009 inasmuch as no benefit occurred prior to the expiration date of January 30, 2011.</font></div> <div style="LINE-HEIGHT: 1.4; TEXT-ALIGN: justify"> <div style="LINE-HEIGHT: 1.4; TEXT-ALIGN: justify"> <div style="TEXT-ALIGN: left"> </div></div></div>

<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.4; MARGIN-RIGHT: 0pt" align="left"> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"> <div><font style="FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: times new roman; TEXT-DECORATION: underline">NOTE 12 – SUBSEQUENT EVENTS</font></div></div> <div style="TEXT-ALIGN: justify"> </div> <div style="TEXT-ALIGN: justify"> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">The Company adopted ASC 855, and has evaluated all events occurring after December 31, 2010, the date of the most recent balance sheet, for possible adjustment to the financial statements or disclosures through June 30, 2011, which is the date on which the financial statements were issued.  </font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman"> </font></div></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">The lease for the Company’s office premises located at 14550 N. Frank Lloyd Wright Blvd., Suite 100, Scottsdale, Arizona 85260 expired on July 31, 2011. The Company’s new office address is 8432 E. Shea Blvd., Suite 101, Scottsdale, Arizona 85260. The Company’s phone/fax numbers remain unchanged.</font></div> <div style="TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-FAMILY: times new roman"><br/> </font></font></div></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">On July 5, 2011, the 8% Note Holder converted the remaining $10,000 balance of its note to 393,701 shares of common stock pursuant to the conversion formula of the note. The remaining balance was made up of $8,000 in principal and $2,000 in interest. The note holder agreed to a flat fee of $2,000 for interest and has declared the note paid in full.</font></div></div> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.4; MARGIN-RIGHT: 0pt" align="left"> <div style="TEXT-ALIGN: left"> <div> <div> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.4; MARGIN-RIGHT: 0pt; TEXT-ALIGN: left"> <div> </div></div></div></div></div></div>

<div style="TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-FAMILY: times new roman; TEXT-DECORATION: underline">NOTE 10 – ROYALTY RIGHTS</font> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"> </div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman">At June 30, 2011, the Company had no outstanding Royalty Rights payable to any person or entity.</font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"> </div>  </div>

<div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"> <div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-FAMILY: times new roman; TEXT-DECORATION: underline">NOTE 7 – DISCONTINUED OPERATIONS</font></div></div></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman"> </font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">On June 24, 2010, WindGen Energy, Inc. entered into an agreement with MicroCor, Inc., Chi Lin Technology Co., Ltd. and Wescor, Inc., whereby WindGen transferred 230,000 shares of MicroCor common stock owned by WindGen to Wescor, reducing WindGen’s holdings in MicroCor from 1,700,000 common shares to 1,470,000 common shares.  WindGen’s percentage of ownership of MicroCor was reduced from approximately 57% to 49%. Since WindGen’s ownership percentage is below 50%, MicroCor’s financial statements are no longer consolidated with WindGen’s financial statements.</font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman"> </font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">Operating results of this discontinued operation for the six months ended June 30, 2011 are shown separately in the accompanying consolidated statement of operations.  The operating statement for the six months ended June 30, 2010 has been restated to conform with the current year’s presentation and are also shown separately.  The operating results of this discontinued operation for the six months ended June 30, 2011 and 2010 consist of:</font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"> <div style="LINE-HEIGHT: 1.3"> <div style="TEXT-ALIGN: justify"> <div style="TEXT-ALIGN: left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman"> </font></div></div></div></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"> <div style="LINE-HEIGHT: 1.3"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman"><br/> </font></div> <div style="LINE-HEIGHT: 1.3" align="center"> <table cellpadding="0" cellspacing="0" style="FONT-SIZE: 10pt; LINE-HEIGHT: 1.3; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman" width="80%"> <tr style="LINE-HEIGHT: 1.3;"> <td align="left" style="LINE-HEIGHT: 1.3" valign="bottom" width="70%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" style="LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td colspan="6" style="LINE-HEIGHT: 1.3; TEXT-ALIGN: center" valign="bottom" width="28%"> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-FAMILY: times new roman">For the Six Months Ended</font></div></td> <td style="LINE-HEIGHT: 1.3; TEXT-ALIGN: center" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td></tr> <tr> <td style="PADDING-BOTTOM: 2px; LINE-HEIGHT: 1.3; TEXT-ALIGN: center" valign="bottom" width="70%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td style="PADDING-BOTTOM: 2px; LINE-HEIGHT: 1.3; TEXT-ALIGN: center" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td colspan="6" style="LINE-HEIGHT: 1.3; BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: center" valign="bottom" width="28%"> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-FAMILY: times new roman">June 30,</font></div></td> <td style="PADDING-BOTTOM: 2px; LINE-HEIGHT: 1.3; TEXT-ALIGN: center" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td></tr> <tr> <td style="PADDING-BOTTOM: 2px; LINE-HEIGHT: 1.3; TEXT-ALIGN: center" valign="bottom" width="70%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td style="PADDING-BOTTOM: 2px; LINE-HEIGHT: 1.3; TEXT-ALIGN: center" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td colspan="2" style="LINE-HEIGHT: 1.3; BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: center" valign="bottom" width="13%"> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-FAMILY: times new roman">2011</font></div></td> <td style="PADDING-BOTTOM: 2px; LINE-HEIGHT: 1.3; TEXT-ALIGN: center" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td style="PADDING-BOTTOM: 2px; LINE-HEIGHT: 1.3; TEXT-ALIGN: center" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td colspan="2" style="LINE-HEIGHT: 1.3; BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: center" valign="bottom" width="13%"> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-FAMILY: times new roman">2010</font></div></td> <td align="left" style="PADDING-BOTTOM: 2px; LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td></tr> <tr> <td align="left" style="LINE-HEIGHT: 1.3" valign="bottom" width="70%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" style="LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td colspan="2" align="left" style="LINE-HEIGHT: 1.3" valign="bottom" width="13%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"> </font></td> <td align="left" style="LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" style="LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td colspan="2" align="left" style="LINE-HEIGHT: 1.3" valign="bottom" width="13%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"> </font></td> <td align="left" style="LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td></tr> <tr bgcolor="#cceeff"> <td align="left" style="LINE-HEIGHT: 1.3" valign="bottom" width="70%"> <div style="LINE-HEIGHT: 1.3"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">Sales</font></div></td> <td align="right" style="LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" style="LINE-HEIGHT: 1.3" valign="bottom" width="1%"> <div style="LINE-HEIGHT: 1.3"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">$</font></div></td> <td align="right" style="LINE-HEIGHT: 1.3" valign="bottom" width="12%"> <div style="LINE-HEIGHT: 1.3"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">–</font></div></td> <td style="LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="right" style="LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" style="LINE-HEIGHT: 1.3" valign="bottom" width="1%"> <div style="LINE-HEIGHT: 1.3"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">$</font></div></td> <td align="right" style="LINE-HEIGHT: 1.3" valign="bottom" width="12%"> <div style="LINE-HEIGHT: 1.3"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">–</font></div></td> <td align="left" style="LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td></tr> <tr bgcolor="white"> <td align="left" style="LINE-HEIGHT: 1.3" valign="bottom" width="70%"> <div style="LINE-HEIGHT: 1.3"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">General and administrative</font></div></td> <td align="right" style="LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" style="LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="right" style="LINE-HEIGHT: 1.3" valign="bottom" width="12%"> <div style="LINE-HEIGHT: 1.3"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">–</font></div></td> <td style="LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="right" style="LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" style="LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="right" style="LINE-HEIGHT: 1.3" valign="bottom" width="12%"> <div style="LINE-HEIGHT: 1.3"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">–</font></div></td> <td align="left" style="LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td></tr> <tr bgcolor="#cceeff"> <td align="left" style="LINE-HEIGHT: 1.3" valign="bottom" width="70%"> <div style="LINE-HEIGHT: 1.3"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">Legal and professional</font></div></td> <td align="right" style="LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" style="LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="right" style="LINE-HEIGHT: 1.3" valign="bottom" width="12%"> <div style="LINE-HEIGHT: 1.3"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">–</font></div></td> <td style="LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="right" style="LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" style="LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="right" style="LINE-HEIGHT: 1.3" valign="bottom" width="12%"> <div style="LINE-HEIGHT: 1.3"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">–</font></div></td> <td align="left" style="LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td></tr> <tr bgcolor="white"> <td align="left" style="LINE-HEIGHT: 1.3" valign="bottom" width="70%"> <div style="LINE-HEIGHT: 1.3"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">Interest Expense</font></div></td> <td align="right" style="LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" style="LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="right" style="LINE-HEIGHT: 1.3" valign="bottom" width="12%"> <div style="LINE-HEIGHT: 1.3"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">–</font></div></td> <td style="LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="right" style="LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" style="LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="right" style="LINE-HEIGHT: 1.3" valign="bottom" width="12%"> <div style="LINE-HEIGHT: 1.3"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">–</font></div></td> <td align="left" style="LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td></tr> <tr bgcolor="#cceeff"> <td align="left" style="LINE-HEIGHT: 1.3" valign="bottom" width="70%"> <div style="LINE-HEIGHT: 1.3"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">Gain on deconsolidation of MicroCor</font></div></td> <td align="right" style="LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" style="LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="right" style="LINE-HEIGHT: 1.3" valign="bottom" width="12%"> <div style="LINE-HEIGHT: 1.3"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">–</font></div></td> <td style="LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="right" style="LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" style="LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="right" style="LINE-HEIGHT: 1.3" valign="bottom" width="12%"> <div style="LINE-HEIGHT: 1.3"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">355,000</font></div></td> <td align="left" style="LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td></tr> <tr bgcolor="white"> <td align="left" style="PADDING-BOTTOM: 2px; LINE-HEIGHT: 1.3" valign="bottom" width="70%"> <div style="LINE-HEIGHT: 1.3"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">Net Income (Loss) attributable to noncontolling interest</font></div></td> <td align="right" style="PADDING-BOTTOM: 2px; LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" style="LINE-HEIGHT: 1.3; BORDER-BOTTOM: black 2px solid" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="right" style="LINE-HEIGHT: 1.3; BORDER-BOTTOM: black 2px solid" valign="bottom" width="12%"> <div style="LINE-HEIGHT: 1.3"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">–</font></div></td> <td style="PADDING-BOTTOM: 2px; LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="right" style="PADDING-BOTTOM: 2px; LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" style="LINE-HEIGHT: 1.3; BORDER-BOTTOM: black 2px solid" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="right" style="LINE-HEIGHT: 1.3; BORDER-BOTTOM: black 2px solid" valign="bottom" width="12%"> <div style="LINE-HEIGHT: 1.3"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">(11,512</font></div></td> <td align="left" style="PADDING-BOTTOM: 2px; LINE-HEIGHT: 1.3" valign="bottom" width="1%"> <div style="LINE-HEIGHT: 1.3"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">)</font></div></td></tr> <tr bgcolor="#cceeff"> <td align="left" style="PADDING-BOTTOM: 4px; LINE-HEIGHT: 1.3" valign="bottom" width="70%"> <div style="LINE-HEIGHT: 1.3"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">Net Income (Loss) from discontinued operations</font></div></td> <td align="right" style="PADDING-BOTTOM: 4px; LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" style="LINE-HEIGHT: 1.3; BORDER-BOTTOM: black 4px double" valign="bottom" width="1%"> <div style="LINE-HEIGHT: 1.3"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">$</font></div></td> <td align="right" style="LINE-HEIGHT: 1.3; BORDER-BOTTOM: black 4px double" valign="bottom" width="12%"> <div style="LINE-HEIGHT: 1.3"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">–</font></div></td> <td style="PADDING-BOTTOM: 4px; LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="right" style="PADDING-BOTTOM: 4px; LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" style="LINE-HEIGHT: 1.3; BORDER-BOTTOM: black 4px double" valign="bottom" width="1%"> <div style="LINE-HEIGHT: 1.3"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">$</font></div></td> <td align="right" style="LINE-HEIGHT: 1.3; BORDER-BOTTOM: black 4px double" valign="bottom" width="12%"> <div style="LINE-HEIGHT: 1.3"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">343,488</font></div></td> <td align="left" style="PADDING-BOTTOM: 4px; LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td></tr></table></div> <div style="LINE-HEIGHT: 1.3"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman"> </font></div> <font style="DISPLAY: inline; FONT-FAMILY: times new roman">Operating results of this discontinued operation for the three months ended June 30, 2011 are shown separately in the accompanying consolidated statement of operations.  The operating statement for the three months ended June 30, 2010 has been restated to conform with the current year’s presentation and are also shown separately.  The operating results of this discontinued operation for the three months ended June 30, 2011 and 2010 consist of:</font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"> <div><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; TEXT-DECORATION: underline"><br/> </font></font></div> <div align="center"> <table cellpadding="0" cellspacing="0" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman" width="80%"> <tr> <td align="left" valign="bottom" width="70%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td colspan="6" style="LINE-HEIGHT: 1.3; TEXT-ALIGN: center" valign="bottom" width="28%"> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-FAMILY: times new roman">For the Three Months Ended</font></div></td> <td style="LINE-HEIGHT: 1.3; TEXT-ALIGN: center" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td></tr> <tr> <td style="PADDING-BOTTOM: 2px; LINE-HEIGHT: 1.3; TEXT-ALIGN: center" valign="bottom" width="70%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td style="PADDING-BOTTOM: 2px; LINE-HEIGHT: 1.3; TEXT-ALIGN: center" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td colspan="6" style="LINE-HEIGHT: 1.3; BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: center" valign="bottom" width="28%"> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-FAMILY: times new roman">June 30,</font></div></td> <td style="PADDING-BOTTOM: 2px; LINE-HEIGHT: 1.3; TEXT-ALIGN: center" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td></tr> <tr> <td style="PADDING-BOTTOM: 2px; LINE-HEIGHT: 1.3; TEXT-ALIGN: center" valign="bottom" width="70%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td style="PADDING-BOTTOM: 2px; LINE-HEIGHT: 1.3; TEXT-ALIGN: center" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td colspan="2" style="LINE-HEIGHT: 1.3; BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: center" valign="bottom" width="13%"> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-FAMILY: times new roman">2011</font></div></td> <td style="PADDING-BOTTOM: 2px; LINE-HEIGHT: 1.3; TEXT-ALIGN: center" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td style="PADDING-BOTTOM: 2px; LINE-HEIGHT: 1.3; TEXT-ALIGN: center" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td colspan="2" style="LINE-HEIGHT: 1.3; BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: center" valign="bottom" width="13%"> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-FAMILY: times new roman">2010</font></div></td> <td align="left" style="PADDING-BOTTOM: 2px; LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td></tr> <tr> <td align="left" style="LINE-HEIGHT: 1.3" valign="bottom" width="70%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" style="LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td colspan="2" align="left" style="LINE-HEIGHT: 1.3" valign="bottom" width="13%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"> </font></td> <td align="left" style="LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" style="LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td colspan="2" align="left" style="LINE-HEIGHT: 1.3" valign="bottom" width="13%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"> </font></td> <td align="left" style="LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td></tr> <tr bgcolor="#cceeff"> <td align="left" style="LINE-HEIGHT: 1.3" valign="bottom" width="70%"> <div style="LINE-HEIGHT: 1.3"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">Sales</font></div></td> <td align="right" style="LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" style="LINE-HEIGHT: 1.3" valign="bottom" width="1%"> <div style="LINE-HEIGHT: 1.3"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">$</font></div></td> <td align="right" style="LINE-HEIGHT: 1.3" valign="bottom" width="12%"> <div style="LINE-HEIGHT: 1.3"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">–</font></div></td> <td style="LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="right" style="LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" style="LINE-HEIGHT: 1.3" valign="bottom" width="1%"> <div style="LINE-HEIGHT: 1.3"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">$</font></div></td> <td align="right" style="LINE-HEIGHT: 1.3" valign="bottom" width="12%"> <div style="LINE-HEIGHT: 1.3"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">–</font></div></td> <td align="left" style="LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td></tr> <tr bgcolor="white"> <td align="left" style="LINE-HEIGHT: 1.3" valign="bottom" width="70%"> <div style="LINE-HEIGHT: 1.3"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">General and administrative</font></div></td> <td align="right" style="LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" style="LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="right" style="LINE-HEIGHT: 1.3" valign="bottom" width="12%"> <div style="LINE-HEIGHT: 1.3"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">–</font></div></td> <td style="LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="right" style="LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" style="LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="right" style="LINE-HEIGHT: 1.3" valign="bottom" width="12%"> <div style="LINE-HEIGHT: 1.3"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">–</font></div></td> <td align="left" style="LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td></tr> <tr bgcolor="#cceeff"> <td align="left" style="LINE-HEIGHT: 1.3" valign="bottom" width="70%"> <div style="LINE-HEIGHT: 1.3"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">Legal and professional</font></div></td> <td align="right" style="LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" style="LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="right" style="LINE-HEIGHT: 1.3" valign="bottom" width="12%"> <div style="LINE-HEIGHT: 1.3"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">–</font></div></td> <td style="LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="right" style="LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" style="LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="right" style="LINE-HEIGHT: 1.3" valign="bottom" width="12%"> <div style="LINE-HEIGHT: 1.3"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">–</font></div></td> <td align="left" style="LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td></tr> <tr bgcolor="white"> <td align="left" style="LINE-HEIGHT: 1.3" valign="bottom" width="70%"> <div style="LINE-HEIGHT: 1.3"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">Interest Expense</font></div></td> <td align="right" style="LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" style="LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="right" style="LINE-HEIGHT: 1.3" valign="bottom" width="12%"> <div style="LINE-HEIGHT: 1.3"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">–</font></div></td> <td style="LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="right" style="LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" style="LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="right" style="LINE-HEIGHT: 1.3" valign="bottom" width="12%"> <div style="LINE-HEIGHT: 1.3"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">–</font></div></td> <td align="left" style="LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td></tr> <tr bgcolor="#cceeff"> <td align="left" style="LINE-HEIGHT: 1.3" valign="bottom" width="70%"> <div style="LINE-HEIGHT: 1.3"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">Gain on deconsolidation of MicroCor</font></div></td> <td align="right" style="LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" style="LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="right" style="LINE-HEIGHT: 1.3" valign="bottom" width="12%"> <div style="LINE-HEIGHT: 1.3"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">–</font></div></td> <td style="LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="right" style="LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" style="LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="right" style="LINE-HEIGHT: 1.3" valign="bottom" width="12%"> <div style="LINE-HEIGHT: 1.3"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">355,000</font></div></td> <td align="left" style="LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td></tr> <tr bgcolor="white"> <td align="left" style="PADDING-BOTTOM: 2px; LINE-HEIGHT: 1.3" valign="bottom" width="70%"> <div style="LINE-HEIGHT: 1.3"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">Net Income (Loss) attributable to noncontolling interest</font></div></td> <td align="right" style="PADDING-BOTTOM: 2px; LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" style="LINE-HEIGHT: 1.3; BORDER-BOTTOM: black 2px solid" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="right" style="LINE-HEIGHT: 1.3; BORDER-BOTTOM: black 2px solid" valign="bottom" width="12%"> <div style="LINE-HEIGHT: 1.3"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">–</font></div></td> <td style="PADDING-BOTTOM: 2px; LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="right" style="PADDING-BOTTOM: 2px; LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" style="LINE-HEIGHT: 1.3; BORDER-BOTTOM: black 2px solid" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="right" style="LINE-HEIGHT: 1.3; BORDER-BOTTOM: black 2px solid" valign="bottom" width="12%"> <div style="LINE-HEIGHT: 1.3"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">–</font></div></td> <td align="left" style="PADDING-BOTTOM: 2px; LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td></tr> <tr bgcolor="#cceeff"> <td align="left" style="PADDING-BOTTOM: 4px; LINE-HEIGHT: 1.3" valign="bottom" width="70%"> <div style="LINE-HEIGHT: 1.3"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">Net Income (Loss) from discontinued operations</font></div></td> <td align="right" style="PADDING-BOTTOM: 4px; LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" style="LINE-HEIGHT: 1.3; BORDER-BOTTOM: black 4px double" valign="bottom" width="1%"> <div style="LINE-HEIGHT: 1.3"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">$</font></div></td> <td align="right" style="LINE-HEIGHT: 1.3; BORDER-BOTTOM: black 4px double" valign="bottom" width="12%"> <div style="LINE-HEIGHT: 1.3"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">–</font></div></td> <td style="PADDING-BOTTOM: 4px; LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="right" style="PADDING-BOTTOM: 4px; LINE-HEIGHT: 1.3" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" style="LINE-HEIGHT: 1.3; BORDER-BOTTOM: black 4px double" valign="bottom" width="1%"> <div style="LINE-HEIGHT: 1.3"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">$</font></div></td> <td align="right" style="LINE-HEIGHT: 1.3; BORDER-BOTTOM: black 4px double" valign="bottom" width="12%"> <div style="LINE-HEIGHT: 1.3"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">355,000</font></div></td> <td align="left" style="PADDING-BOTTOM: 4px" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td></tr></table></div> <div><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-FAMILY: Times New Roman"> </font></div></div>

<div style="TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-FAMILY: times new roman; TEXT-DECORATION: underline">NOTE 6 – EARNINGS PER SHARE</font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman"> </font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">The following data show the amounts used in computing earnings per share and the effect on income and the weighted average number of shares of dilutive potential common stock:</font></div> <div style="LINE-HEIGHT: 1.3; TEXT-ALIGN: justify"> <div><br/> </div> <div align="center"> <table cellpadding="0" cellspacing="0" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman" width="80%"> <tr> <td align="left" valign="bottom" width="60%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td colspan="6" style="TEXT-ALIGN: center" valign="bottom" width="28%"> <div style="TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-FAMILY: times new roman">For the Quarters Ended</font></div></td> <td style="TEXT-ALIGN: center" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td></tr> <tr> <td style="PADDING-BOTTOM: 2px; TEXT-ALIGN: center" valign="bottom" width="60%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td style="PADDING-BOTTOM: 2px; TEXT-ALIGN: center" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td colspan="6" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: center" valign="bottom" width="28%"> <div style="TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-FAMILY: times new roman">June 30,</font></div></td> <td style="PADDING-BOTTOM: 2px; TEXT-ALIGN: center" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td></tr> <tr> <td style="PADDING-BOTTOM: 2px; TEXT-ALIGN: center" valign="bottom" width="60%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td style="PADDING-BOTTOM: 2px; TEXT-ALIGN: center" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td colspan="2" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: center" valign="bottom" width="13%"> <div style="TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-FAMILY: times new roman">2011</font></div></td> <td style="PADDING-BOTTOM: 2px; TEXT-ALIGN: center" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td style="PADDING-BOTTOM: 2px; TEXT-ALIGN: center" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td colspan="2" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: center" valign="bottom" width="13%"> <div style="TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-FAMILY: times new roman">2010</font></div></td> <td align="left" style="PADDING-BOTTOM: 2px" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td></tr> <tr> <td align="left" valign="bottom" width="60%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td colspan="2" align="left" valign="bottom" width="13%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"> </font></td> <td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td colspan="2" align="left" valign="bottom" width="13%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"> </font></td> <td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td></tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="60%"> <div><font style="DISPLAY: inline; FONT-FAMILY: times new roman">Net Income (Loss)</font></div></td> <td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" valign="bottom" width="1%"> <div><font style="DISPLAY: inline; FONT-FAMILY: times new roman">$</font></div></td> <td align="right" valign="bottom" width="12%"> <div><font style="DISPLAY: inline; FONT-FAMILY: times new roman">(107,521</font></div></td> <td align="left" valign="bottom" width="1%"> <div><font style="DISPLAY: inline; FONT-FAMILY: times new roman">)</font></div></td> <td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" valign="bottom" width="1%"> <div><font style="DISPLAY: inline; FONT-FAMILY: times new roman">$</font></div></td> <td align="right" valign="bottom" width="12%"> <div><font style="DISPLAY: inline; FONT-FAMILY: times new roman">276,943</font></div></td> <td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td></tr> <tr bgcolor="white"> <td align="left" style="PADDING-BOTTOM: 2px" valign="bottom" width="60%"> <div><font style="DISPLAY: inline; FONT-FAMILY: times new roman">Less: preferred dividends</font></div></td> <td align="right" style="PADDING-BOTTOM: 2px" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="right" style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="12%"> <div><font style="DISPLAY: inline; FONT-FAMILY: times new roman">(473</font></div></td> <td align="left" style="PADDING-BOTTOM: 2px" valign="bottom" width="1%"> <div><font style="DISPLAY: inline; FONT-FAMILY: times new roman">)</font></div></td> <td align="right" style="PADDING-BOTTOM: 2px" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="right" style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="12%"> <div><font style="DISPLAY: inline; FONT-FAMILY: times new roman">(1,891</font></div></td> <td align="left" style="PADDING-BOTTOM: 2px" valign="bottom" width="1%"> <div><font style="DISPLAY: inline; FONT-FAMILY: times new roman">)</font></div></td></tr> <tr bgcolor="white"> <td align="left" valign="bottom" width="60%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td valign="bottom" width="12%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="right" valign="bottom" width="12%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td></tr> <tr bgcolor="#cceeff"> <td align="left" style="PADDING-BOTTOM: 2px" valign="bottom" width="60%"> <div><font style="DISPLAY: inline; FONT-FAMILY: times new roman">Income (Loss) available to common stockholders used in basic EPS</font></div></td> <td align="right" style="PADDING-BOTTOM: 2px" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="1%"> <div><font style="DISPLAY: inline; FONT-FAMILY: times new roman">$</font></div></td> <td align="right" style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="12%"> <div><font style="DISPLAY: inline; FONT-FAMILY: times new roman">(107,994</font></div></td> <td align="left" style="PADDING-BOTTOM: 2px" valign="bottom" width="1%"> <div><font style="DISPLAY: inline; FONT-FAMILY: times new roman">)</font></div></td> <td align="right" style="PADDING-BOTTOM: 2px" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="1%"> <div><font style="DISPLAY: inline; FONT-FAMILY: times new roman">$</font></div></td> <td align="right" style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="12%"> <div><font style="DISPLAY: inline; FONT-FAMILY: times new roman">275,052</font></div></td> <td align="left" style="PADDING-BOTTOM: 2px" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td></tr> <tr bgcolor="white"> <td align="left" valign="bottom" width="60%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td valign="bottom" width="12%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="right" valign="bottom" width="12%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td></tr> <tr bgcolor="white"> <td align="left" valign="bottom" width="60%"> <div><font style="DISPLAY: inline; FONT-FAMILY: times new roman">Convertible preferred stock</font></div></td> <td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="right" valign="bottom" width="12%"> <div><font style="DISPLAY: inline; FONT-FAMILY: times new roman">473</font></div></td> <td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="right" valign="bottom" width="12%"> <div><font style="DISPLAY: inline; FONT-FAMILY: times new roman">1,891</font></div></td> <td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td></tr> <tr bgcolor="#cceeff"> <td align="left" style="PADDING-BOTTOM: 2px" valign="bottom" width="60%"> <div><font style="DISPLAY: inline; FONT-FAMILY: times new roman">Convertible notes payable</font></div></td> <td align="right" style="PADDING-BOTTOM: 2px" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="right" style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="12%"> <div> <div><font style="DISPLAY: inline; FONT-FAMILY: times new roman">–</font></div></div></td> <td style="PADDING-BOTTOM: 2px" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="right" style="PADDING-BOTTOM: 2px" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="right" style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="12%"> <div><font style="DISPLAY: inline; FONT-FAMILY: times new roman">–</font></div></td> <td align="left" style="PADDING-BOTTOM: 2px" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td></tr> <tr bgcolor="white"> <td align="left" valign="bottom" width="60%"> <div><font style="DISPLAY: inline; FONT-FAMILY: times new roman">Income (Loss) available to common stockholders after assumed</font></div></td> <td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td valign="bottom" width="12%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="right" valign="bottom" width="12%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td></tr> <tr bgcolor="white"> <td align="left" style="PADDING-BOTTOM: 2px" valign="bottom" width="60%"> <div><font style="DISPLAY: inline; FONT-FAMILY: times new roman">     conversion of dilutive securities</font></div></td> <td align="right" style="PADDING-BOTTOM: 2px" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="1%"> <div><font style="DISPLAY: inline; FONT-FAMILY: times new roman">$</font></div></td> <td align="right" style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="12%"> <div><font style="DISPLAY: inline; FONT-FAMILY: times new roman">(107,521</font></div></td> <td align="left" style="PADDING-BOTTOM: 2px" valign="bottom" width="1%"> <div><font style="DISPLAY: inline; FONT-FAMILY: times new roman">)</font></div></td> <td align="right" style="PADDING-BOTTOM: 2px" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="1%"> <div><font style="DISPLAY: inline; FONT-FAMILY: times new roman">$</font></div></td> <td align="right" style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="12%"> <div><font style="DISPLAY: inline; FONT-FAMILY: times new roman">276,943</font></div></td> <td align="left" style="PADDING-BOTTOM: 2px" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td></tr> <tr bgcolor="white"> <td align="left" valign="bottom" width="60%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td valign="bottom" width="12%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="right" valign="bottom" width="12%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td></tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="60%"> <div><font style="DISPLAY: inline; FONT-FAMILY: times new roman">Weighted average number of common shares used in basic EPS</font></div></td> <td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="right" valign="bottom" width="12%"> <div><font style="DISPLAY: inline; FONT-FAMILY: times new roman">42,576,062</font></div></td> <td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="right" valign="bottom" width="12%"> <div><font style="DISPLAY: inline; FONT-FAMILY: times new roman">35,538,903</font></div></td> <td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td></tr> <tr bgcolor="white"> <td align="left" valign="bottom" width="60%"> <div><font style="DISPLAY: inline; FONT-FAMILY: times new roman">Effect of dilutive securities:</font></div></td> <td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td valign="bottom" width="12%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="right" valign="bottom" width="12%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td></tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="60%"> <div><font style="DISPLAY: inline; FONT-FAMILY: times new roman">     Convertible preferred stock</font></div></td> <td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="right" valign="bottom" width="12%"> <div><font style="DISPLAY: inline; FONT-FAMILY: times new roman">7,881</font></div></td> <td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="right" valign="bottom" width="12%"> <div><font style="DISPLAY: inline; FONT-FAMILY: times new roman">31,524</font></div></td> <td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td></tr> <tr bgcolor="white"> <td align="left" valign="bottom" width="60%"> <div><font style="DISPLAY: inline; FONT-FAMILY: times new roman">     Convertible notes payable</font></div></td> <td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="right" valign="bottom" width="12%"> <div><font style="DISPLAY: inline; FONT-FAMILY: times new roman">393,701</font></div></td> <td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="right" valign="bottom" width="12%"> <div><font style="DISPLAY: inline; FONT-FAMILY: times new roman">–</font></div></td> <td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td></tr> <tr bgcolor="#cceeff"> <td align="left" style="PADDING-BOTTOM: 2px" valign="bottom" width="60%"> <div><font style="DISPLAY: inline; FONT-FAMILY: times new roman">     Options</font></div></td> <td align="right" style="PADDING-BOTTOM: 2px" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="right" style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="12%"> <div> <div><font style="DISPLAY: inline; FONT-FAMILY: times new roman">–</font></div></div></td> <td style="PADDING-BOTTOM: 2px" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="right" style="PADDING-BOTTOM: 2px" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="right" style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="12%"> <div><font style="DISPLAY: inline; FONT-FAMILY: times new roman">–</font></div></td> <td align="left" style="PADDING-BOTTOM: 2px" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td></tr> <tr bgcolor="white"> <td align="left" valign="bottom" width="60%"> <div><font style="DISPLAY: inline; FONT-FAMILY: times new roman">Weighted average number of common shares and dilutive potential</font></div></td> <td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td valign="bottom" width="12%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="right" valign="bottom" width="12%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td></tr> <tr bgcolor="#cceeff"> <td align="left" style="PADDING-BOTTOM: 4px" valign="bottom" width="60%"> <div><font style="DISPLAY: inline; FONT-FAMILY: times new roman">     common stock used in diluted EPS</font></div></td> <td align="right" style="PADDING-BOTTOM: 4px" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" style="BORDER-BOTTOM: black 4px double" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="right" style="BORDER-BOTTOM: black 4px double" valign="bottom" width="12%"> <div><font style="DISPLAY: inline; FONT-FAMILY: times new roman">42,977,644</font></div></td> <td style="PADDING-BOTTOM: 4px" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="right" style="PADDING-BOTTOM: 4px" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="left" style="BORDER-BOTTOM: black 4px double" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td> <td align="right" style="BORDER-BOTTOM: black 4px double" valign="bottom" width="12%"> <div><font style="DISPLAY: inline; FONT-FAMILY: times new roman">35,570,427</font></div></td> <td align="left" style="PADDING-BOTTOM: 4px" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">  </font></td></tr></table></div> <div> <div style="TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-FAMILY: times new roman"> </font><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-FAMILY: times new roman"> </font></div></div></div>

43955057 WINDGEN ENERGY, INC. 0000726037 --12-31 Smaller Reporting Company 10-Q 2011-06-30 2011 Q2 false

10000000

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TOTAL ASSETS TOTAL ASSETS LIABILITIES AND STOCKHOLDER'S EQUITY Current Liabilities Related Party Consulting Fees Payable Carrying amount as of the balance sheet date of obligations due all related parties for consulting fees. For classified balance sheets, represents the current portion of such liabilities (due within one year or within the normal operating cycle if longer). Accounts Payable Convertible Note Payable, net of debt discount of $7,153 Preferred Stock Dividends Payable Carrying value as of the balance sheet date of preferred stock dividends declared but unpaid on equity securities issued by the entity and outstanding. Used to reflect the current portion of the liabilities (due within one year or within the normal operating cycle if longer). 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CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	6 Months Ended	12 Months Ended
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Jun. 30, 2011	Dec. 31, 2010
Current Liabilities
Convertible Note Payable, debt discount	$ 0	$ 27,273
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred Stock, shares authorized (in shares)	10,000,000	10,000,000
Common Stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common Stock, shares authorized (in shares)	43,411,356	41,238,429
Common Stock, shares outstanding (in shares)	43,411,356	41,238,429
Series A \| Cumulative convertible preferred stock
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred Stock, shares authorized (in shares)	1,000,000	1,000,000
Preferred Stock, cumulative rate percentage	8.00%	8.00%
Preferred Stock, par value (in dollars per share)	$ 4.50	$ 4.50
Preferred Stock, aggregate liquidation preference	$ 42,558	$ 42,558
Preferred Stock, shares outstanding (in shares)	5,254	5,254

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CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
CONSOLIDATED STATEMENTS OF OPERATIONS
REVENUES	$ 0	$ 0	$ 0	$ 0
OPERATING EXPENSES
General and Administrative	44,532	44,729	77,183	73,783
Legal and Professional Fees	25,545	2,616	33,809	22,970
Related Party Consulting Fees	30,000	30,400	60,000	64,375
Total Operating Expenses	100,077	77,745	170,992	161,128
INCOME (LOSS) FROM OPERATIONS	(100,077)	(77,745)	(170,992)	(161,128)
OTHER INCOME (EXPENSE)
Interest Income (Expense)	(291)	(312)	(1,277)	(648)
Amortization of debt discount	(7,153)	0	(27,272)	0
Total Other Income (Expense), Net	(7,444)	(312)	(28,549)	(648)
NET INCOME (LOSS) FROM CONTINUING OPERATIONS	(107,521)	(78,057)	(199,541)	(161,776)
DISCONTINUED OPERATIONS (Note 7)
Income (Loss) from operations of MicroCor, Inc. (including gain on disposal of $355,000)	0	355,000	0	343,488
NET INCOME (LOSS)	(107,521)	276,943	(199,541)	181,712
PREFERRED STOCK DIVIDENDS	(473)	(1,891)	(946)	(3,783)
NET INCOME (LOSS) APPLICABLE TO COMMON STOCKHOLDERS	$ (107,994)	$ 275,052	$ (200,487)	$ 177,929
NET INCOME (LOSS) PER COMMON SHARE (BASIC & DILUTED) (in dollars per share)	$ 0	$ (0.01)	$ 0	$ 0
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
BASIC (in shares)	42,576,062	35,538,903	42,045,747	35,235,513
DILUTED (in shares)	42,977,644	35,570,427	42,447,329	35,267,037

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Document and Entity Information	6 Months Ended
Document and Entity Information	Jun. 30, 2011	Aug. 15, 2011
Document and Entity Information [Abstract]
Entity Registrant Name	WINDGEN ENERGY, INC.
Entity Central Index Key	0000726037
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Document Type	10-Q
Document Period End Date	Jun. 30, 2011
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	Q2
Amendment Flag	false
Entity Common Stock, Shares Outstanding		43,955,057

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EARNINGS PER SHARE

6 Months Ended

Jun. 30, 2011

Earnings Per Share [Abstract]

EARNINGS PER SHARE

NOTE 6 – EARNINGS PER SHARE

The following data show the amounts used in computing earnings per share and the effect on income and the weighted average number of shares of dilutive potential common stock:

	For the Quarters Ended
	June 30,
	2011			2010

Net Income (Loss)	$	(107,521	)	$	276,943
Less: preferred dividends		(473	)		(1,891	)

Income (Loss) available to common stockholders used in basic EPS	$	(107,994	)	$	275,052

Convertible preferred stock		473			1,891
Convertible notes payable		–			–
Income (Loss) available to common stockholders after assumed
conversion of dilutive securities	$	(107,521	)	$	276,943

Weighted average number of common shares used in basic EPS		42,576,062			35,538,903
Effect of dilutive securities:
Convertible preferred stock		7,881			31,524
Convertible notes payable		393,701			–
Options		–			–
Weighted average number of common shares and dilutive potential
common stock used in diluted EPS		42,977,644			35,570,427

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The entire disclosure for earnings per share.

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UNCERTAIN TAX POSITIONS

6 Months Ended

Jun. 30, 2011

Uncertain Tax Positions [Abstract]

UNCERTAIN TAX POSITIONS

NOTE 11 – UNCERTAIN TAX POSITIONS

United States (a)		2007 – Present
__________
(a) Includes federal as well as state or similar local jurisdictions, as applicable.

- Definition

Disclosure of accounting policy for tax positions taken in the Company's tax return filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities (i.e., uncertain tax positions) and other types of contingencies related to income taxes.

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SIGNIFICANT ACCOUNTING POLICIES	6 Months Ended
SIGNIFICANT ACCOUNTING POLICIES	Jun. 30, 2011
Significant Accounting Policies [Abstract]
SIGNIFICANT ACCOUNTING POLICIES	NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES Recent Accounting Standards In December 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-29 (ASU 2010-29), Business Combinations (Topic 805) – Disclosure of Supplementary Pro Forma Information for Business Combinations. This Accounting Standards Update requires a public entity to disclose pro forma information for business combinations that occurred in the current reporting period. The disclosures include pro forma revenue and earnings of the combined entity for the current reporting period as though the acquisition date for all business combinations that occurred during the year had been as of the beginning of the annual reporting period. If comparative financial statements are presented, the pro forma revenue and earnings of the combined entity for the comparable prior reporting period should be reported as though the acquisition date for all business combinations that occurred during the current year had been as of the beginning of the comparable prior annual reporting period. The amendments in this Update affect any public entity as defined by Topic 805 that enters into business combinations that are material on an individual or aggregate basis. The amendments in this Update are effective prospectively for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2010. Early adoption is permitted. The Company does not expect the provisions of ASU 2010-29 to have a material effect on its financial position, results of operations or cash flows. In August 2010, the FASB issued Accounting Standards Update 2010-22 (ASU 2010-22), Accounting for Various Topics -- Technical Corrections to SEC Paragraphs - An announcement made by the staff of the U.S. Securities and Exchange Commission. This Accounting Standards Update amends various SEC paragraphs based on external comments received and the issuance of SAB 112, which amends or rescinds portions of certain SAB topics. The Company does not expect the provisions of ASU 2010-22 to have a material effect on its financial position, results of operations or cash flows. In August 2010, the FASB issued Accounting Standards Update 2010-21 (ASU 2010-21), Accounting for Technical Amendments to Various SEC Rules and Schedules: Amendments to SEC Paragraphs Pursuant to Release No. 33-9026: Technical Amendments to Rules, Forms, Schedules and Codification of Financial Reporting Policies. The Company does not expect the provisions of ASU 2010-21 to have a material effect on its financial position, results of operations or cash flows. In July 2010, the FASB issued Accounting Standards Update 2010-20 (ASU 2010-20), Receivables (Topic 310): Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses. The amendments in this Update are to provide financial statement users with greater transparency about an entity’s allowance for credit losses and the credit quality of its financing receivables. The disclosures about activity that occurs during the reporting period are effective for interim and annual reporting periods beginning on or after December 15, 2010. The Company does not expect the provisions of ASU 2010-20 to have a material effect on its financial position, results of operations or cash flows. In April 2010, the FASB issued Accounting Standards Update 2010-17 (ASU 2010-17), Revenue Recognition – Milestone Method (Topic 605). ASU 2010-17 provides guidance on applying the milestone method of revenue recognition in arrangements with research and development activities. The amendments in this Update are effective on a prospective basis for milestones achieved in fiscal years, and interim periods within those years, beginning on or after June 15, 2010. The Company’s adoption of the provisions of ASU 2010-17 did not have a material impact on its revenue recognition. In March 2010, the FASB issued Accounting Standards Update 2010-11 (ASU 2010-11), Derivatives and Hedging (Topic 815): Scope Exception Related to Embedded Credit Derivatives. The amendments in this Update are effective for each reporting entity at the beginning of its first fiscal quarter beginning after June 15, 2010. Early adoption is permitted at the beginning of each entity’s first fiscal quarter beginning after issuance of this Update. The Company’s adoption of the provisions of ASU 2010-11 did not have a material effect on its financial position, results of operations or cash flows. In February 2010, the FASB Accounting Standards Update 2010-10 (ASU 2010-10), Consolidation (Topic 810): Amendments for Certain Investment Funds. The amendments in this Update are effective as of the beginning of a reporting entity’s first annual period that begins after November 15, 2009 and for interim periods within that first reporting period. Early application is not permitted. The Company’s adoption of provisions of ASU 2010-10 did not have a material effect on its financial position, results of operations or cash flows. In February 2010, the FASB issued ASU No. 2010-09, Subsequent Events (ASC Topic 855) - Amendments to Certain Recognition and Disclosure Requirements (ASU 2010-09). ASU No. 2010-09 requires an entity that is an SEC filer to evaluate subsequent events through the date that the financial statements are issued and removes the requirement for an SEC filer to disclose a date, in both issued and revised financial statements, through which the filer had evaluated subsequent events. The adoption did not have an impact on the Company’s financial position, results of operations or cash flows. In January 2010, the FASB issued Accounting Standards Update 2010-06, Improving Disclosures about Fair Value Measurements (ASU 2010-09). ASU 2010-06 amends FASB Accounting Standards Codification (“ASC”) 820 and clarifies and provides additional disclosure requirements related to recurring and non-recurring fair value measurements and employers’ disclosures about postretirement benefit plan assets. This ASU is effective for interim and annual reporting periods beginning after December 15, 2009. The adoption of ASU 2010-06 did not have a material impact on the Company’s financial statements.

- Definition

The entire disclosure for all significant accounting policies of the reporting entity.

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RELATED PARTY TRANSACTIONS	6 Months Ended
RELATED PARTY TRANSACTIONS	Jun. 30, 2011
Related Party Transactions [Abstract]
RELATED PARTY TRANSACTIONS	NOTE 8 – RELATED PARTY TRANSACTIONS During 2009, the Company accrued consulting expenses of $60,000 from officers of the Company. During 2010, the Company accrued additional consulting expenses from officers of $65,000. During the six months ending June 30, 2011, the Company accrued additional consulting expenses from officers of $15,250. During 2009, an entity associated with Company, paid various expenses on behalf of the Company. At December 31, 2009, the Company owed $24,514 to the related entity. During 2010, the Company paid-off the balance due to the related party by issuing 133,333 shares of the Company’s restricted common stock at $0.075 per share pursuant to the Company’s existing private placement offering and paying cash for the remainder of the balance.

- Definition

The entire disclosure for related party transactions, including the nature of the relationship(s), a description of the transactions, the amount of the transactions, the effects of any change in the method of establishing the terms of the transaction from the previous period, stated interest rate, expiration date, terms and manner of settlement per the agreement with the related party, and amounts due to or from related parties. If the entity and one or more other entities are under common ownership or management control and this control affects the operating results or financial position, disclosure includes the nature of the control relationship even if there are no transactions between the entities. Disclosure may also include the aggregate amount of current and deferred tax expense for each statement of earnings presented where the entity is a member of a group that files a consolidated tax return, the amount of any tax related balances due to or from affiliates as of the date of each statement of financial position presented, the principal provisions of the method by which the consolidated amount of current and deferred tax expense is allocated to the members of the group and the nature and effect of any changes in that method. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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-Paragraph 1
-Subparagraph (SX 210.4-08.(k))
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Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 57
-Paragraph 1-4
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 6: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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JOINT DEVELOPMENT AGREEMENT	6 Months Ended
JOINT DEVELOPMENT AGREEMENT	Jun. 30, 2011
Joint Development Agreement [Abstract]
JOINT DEVELOPMENT AGREEMENT	NOTE 9 – JOINT DEVELOPMENT AGREEMENT On June 24, 2010, WindGen terminated the former Development Agreement with Wescor and entered into a new agreement whereby WindGen transferred 230,000 shares of MicroCor commons stock owned by WindGen reducing WindGen’s holdings in MicroCor from 1,700,000 common shares to 1,470,000 common shares, reducing its ownership percentage from 57% to 49%. Since WindGen’s ownership percentage is now less than 50%, MicroCor’s financial statements are no longer consolidated with WindGen’s financial statements. This transaction had the impact on WindGen’s financial statements of reducing the Company’s liabilities from December 31, 2009 in the amount of $570,019. Synergistic Equities Ltd acquired all of the shares of MicroCor previously owned by Chi Lin Technology, Ltd.

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DISCONTINUED OPERATIONS

6 Months Ended

Jun. 30, 2011

Discontinued Operations [Abstract]

DISCONTINUED OPERATIONS

NOTE 7 – DISCONTINUED OPERATIONS

	For the Six Months Ended
	June 30,
	2011		2010

Sales	$	–	$	–
General and administrative		–		–
Legal and professional		–		–
Interest Expense		–		–
Gain on deconsolidation of MicroCor		–		355,000
Net Income (Loss) attributable to noncontolling interest		–		(11,512	)
Net Income (Loss) from discontinued operations	$	–	$	343,488

	For the Three Months Ended
	June 30,
	2011		2010

Sales	$	–	$	–
General and administrative		–		–
Legal and professional		–		–
Interest Expense		–		–
Gain on deconsolidation of MicroCor		–		355,000
Net Income (Loss) attributable to noncontolling interest		–		–
Net Income (Loss) from discontinued operations	$	–	$	355,000

- Definition

The entire disclosure for the facts and circumstances leading to the completed or expected disposal, manner and timing of disposal, the gain (loss) recognized in the income statement and the income statement caption that includes that gain (loss), amounts of revenues and pretax profit or loss reported in discontinued operations, the segment in which the disposal group was reported, and the classification (whether sold or classified as held for sale) and carrying value of the assets and liabilities comprising the disposal group. Includes all disposal groups, including those classified as components of the entity (discontinued operations).

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-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 144
-Paragraph 43-48
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

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CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (USD $)	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss/Income	$ (199,541)	$ 181,712
Adjustments to reconcile net loss to net cash used in operating activities:
Interest expense from debt discount	27,272	0
Related party consulting fee payable	15,250	50,000
Gain on deconsolidation of MicroCor	0	(355,000)
Write-down of other receivable	0	21,119
Prepaid expense	26,892	(6,527)
Accounts payable	25,948	(19,166)
Related party payable	0	(28,445)
Accrued interest payable	1,277	648
Other receivable	(4,110)	(343)
Net cash provided by (used in) Continuing Activities	(107,012)	(156,002)
Net cash provided by (used in) Discontinued Activities	0	7,120
Net cash provided by (used in) Operating Activities	(107,012)	(148,882)
CASH FLOWS FROM INVESTING ACTIVITIES:
Net cash provided by Investing Activities	0	0
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sale of stock	70,800	181,423
Proceeds from note payable	25,000	0
Proceeds from stock subscription receivable	0	7,500
Payments on notes	0	(11,939)
Payments on notes related party loan	0	(42,143)
Net cash provided by Financing Activities	95,800	134,841
NET INCREASE (DECREASE) IN CASH	(11,212)	(14,041)
CASH AT BEGINNING OF PERIOD	33,278	14,118
CASH AT END OF PERIOD	22,066	77
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
Cash paid during the year for interest	0	5,418
Cash paid during the year for income taxes	150	0
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
Stock Subscription Receivable for Exercise of Stock Options	10,000	10,000
Related Party Payables Converted to Common Stock	0	10,000
Notes Payable Converted to Common Stock	$ 42,000	$ 0

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NOTES PAYABLE	6 Months Ended
NOTES PAYABLE	Jun. 30, 2011
Notes Payable [Abstract]
NOTES PAYABLE	NOTE 3 – NOTES PAYABLE On December 31, 2008, the Company converted $21,509 of accounts payable due to its attorney into a promissory note. At December 31, 2009, the balance due on this note was $22,799. During 2010, the Company paid-off the balance of this note by issuing 120,800 shares of the Company’s restricted common stock at $0.09 per share pursuant to the Company’s existing private placement offering and paying cash for the remainder of the balance. On October 21, 2010, the Company borrowed $50,000 from a third party (the "8% Note Holder"). The note is due on July 21, 2011 and carries an interest rate of 8% per annum (the "8% Note Holder"). The 8% Note is convertible after six months at a conversion price of 55% of the market price of the common stock. On April 25, 2011, the note holder converted $10,000 of its note to 227,273 shares of common stock pursuant to the conversion formula of the note. On May 4, 2011, the note holder converted $10,000 of its note to 246,914 shares of common stock pursuant to the conversion formula of the note. On May 11, 2011, the note holder converted $10,000 of its note to 278,552 shares of common stock pursuant to the conversion formula of the note. On June 24, 2011, the note holder converted $12,000 of its note to 476,190 shares of common stock pursuant to the conversion formula of the note. At June 30, 2011, the balance due on this note was $10,000, made up of $8,000 in principal and $2,000 in interest. On June 30, 2011 the Company borrowed $25,000 from a third party (the “10% Note Holder”). The note is due 120 days from the date of the note and carries an interest rate of 10% per annum (the “10% Note”). In addition to the 10% interest factor, the 10% Note Holder will receive 100,000 shares of the Company's restricted common stock.

- Definition

The entire disclosure for short-term debt.

+ References+ Details

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COMMON STOCK	6 Months Ended
COMMON STOCK	Jun. 30, 2011
Common Stock [Abstract]
COMMON STOCK	NOTE 4 – COMMON STOCK The Company is authorized to issue 100,000,000 shares of common stock, $0.001 par value (the “Common Stock”), of which 43,411,356 shares were issued and outstanding on June 30, 2011. All presently outstanding shares are duly authorized, fully-paid and non-assessable. Each share of the Common Stock is entitled to one vote on all matters to be voted on by the shareholders, such as the election of certain directors and other matters that directly impact the rights of the holders of such class. There is no cumulative voting in the election of directors. Holders of Common Stock are entitled to receive such dividends as may be declared from time to time by the Board of Directors out of funds legally available therefore. In the event of any dissolution, winding up or liquidation of the Company, the shares of Common Stock will share ratably in all the funds available for distribution after payment of all debts and obligations. The holders of Common Stock are subject to any rights that may be fixed for holders of preferred stock as designated upon issuance. On December 4, 2009, the Company changed its total authorized common shares from 40,000,000 to 100,000,000 shares. During 2009, the Company issued 15,000,000 shares of common stock for cash of $95,000 and a stock subscription receivable of $17,500. The stock issuances were the result of the exercise of a stock purchase option agreement with Law Investments CR, S.A., a Costa Rica corporation. During 2010, $7,500 was paid toward the subscription receivable, leaving a balance of $10,000 at June 30, 2011. During 2010, the Company issued 4,222,969 shares of common stock for cash of $316,423 pursuant to the Company’s Private Placement Memorandum. During 2010, the Company completed the conversion of three of the four existing 8% Series A cumulative preferred shareholders by issuing 246,834 of the Company’s restricted common shares at a price of $0.50 per share plus a $5,000 cash payment to each preferred shareholder. The conversion of these preferred shares reduced the dividends payable from $64,309 at December 31, 2009 to $17,969 at December 31, 2010. As of June 30, 2011, the total dividends payable on the remaining shares of Series A cumulative preferred is $18,914. During 2010, the Company issued 254,133 shares of the Company’s restricted common stock for the conversion of debt in the amount of $20,875. During 2010, the Company issued 1,900,000 shares of the Company’s restricted common stock to Wind Sail Receptor in consideration of an amendment to the Company’s 2009 License Agreement with Wind Sail Receptor. The shares were value at $.10 per share. During 2010, the Company registered 3,000,000 shares of its common stock pursuant to regulation S-8. As of December 31, 2010, 700,000 of these shares had been issued for consulting services valued at $63,000. The consulting services were originally recorded as a prepaid expense. As of December 31, 2010, the prepaid expense related to this stock issuance was $47,250. At June 30, 2011, the prepaid expense related to this stock was $15,750. During 2010, the Company issued 285,000 shares of the Company’s restricted common stock for services valued at $28,500. During the first quarter of 2011, the Company issued 466,665 shares of restricted common stock for cash of $35,000, as part of the Company’s Private Placement Memorandum. During the second quarter of 2011, the Company issued 477,333 shares of restricted common stock for cash of $35,800, as part of the Company’s Private Placement Memorandum.

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SUBSEQUENT EVENTS	6 Months Ended
SUBSEQUENT EVENTS	Jun. 30, 2011
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	NOTE 12 – SUBSEQUENT EVENTS The Company adopted ASC 855, and has evaluated all events occurring after December 31, 2010, the date of the most recent balance sheet, for possible adjustment to the financial statements or disclosures through June 30, 2011, which is the date on which the financial statements were issued. The lease for the Company’s office premises located at 14550 N. Frank Lloyd Wright Blvd., Suite 100, Scottsdale, Arizona 85260 expired on July 31, 2011. The Company’s new office address is 8432 E. Shea Blvd., Suite 101, Scottsdale, Arizona 85260. The Company’s phone/fax numbers remain unchanged. On July 5, 2011, the 8% Note Holder converted the remaining $10,000 balance of its note to 393,701 shares of common stock pursuant to the conversion formula of the note. The remaining balance was made up of $8,000 in principal and $2,000 in interest. The note holder agreed to a flat fee of $2,000 for interest and has declared the note paid in full.

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PREFERRED STOCK
6 Months Ended

Jun. 30, 2011

Preferred Stock [Abstract]

PREFERRED STOCK
NOTE 5 – PREFERRED STOCK

The Company is authorized to issue 10,000,000 shares of preferred stock.  The Company’s board of directors designated 1,000,000 shares of this preferred stock as Series A Cumulative Convertible Preferred Stock (“Series A Preferred”) with a par value of $4.50 per share.  Holders of the Series A Preferred receive annual cumulative dividends of 8%, payable quarterly, which dividends are required to be fully paid or set aside before any other dividend on any class or series of stock of the Company is paid.  As of June 30, 2011, cumulative preferred stock dividends are due and payable in the amount of $18,914   Holders of the Series A Preferred receive no voting rights but do receive a liquidation preference of $4.50 per share, plus accrued and unpaid dividends.  Series A Preferred stockholders have the right to convert each share of Series A Preferred to the Company’s common stock at a rate of 1.5 common shares to 1 preferred share.

During 2010, the Company completed the conversion of three of the four existing 8% Series A cumulative preferred shareholders by issuing 246,834 of the Company’s restricted common shares at a price of $0.50 per share plus a $5,000 cash payment to each preferred shareholder. The conversion of these preferred shares reduced the dividends payable from $64,309 at December 31, 2009 to $17,969 at December 31, 2010.  As of June 30, 2011, the total dividends payable on the remaining shares of Series A cumulative preferred is $18,914.

On January 30, 2009, the Company entered into an agreement with MicroCor, its subsidiary (the “MicroCor Agreement”).  The MicroCor Agreement  provided for the Company to create a Series B class of preferred stock, without dividend or voting rights (the “Series B Preferred”), which would receive 100% of any future benefit from the sale, spin-off, merger or liquidation of MicroCor or the commercialization of its hematocrit technology.  The shares of the Series B Preferred were to be distributed as a dividend, subject to compliance with federal and state securities laws and regulations, to the Company’s common stockholders, as of January 30, 2009.  The creation of the Series B Preferred would prevent any holder of the Company’s common stock after January 30, 2009 from sharing in any future benefit of or to MicroCor through the expiration date of January 30, 2011.  The Series B Preferred Stock was not issued to the common shareholders of record at January 30, 2009 inasmuch as no benefit occurred prior to the expiration date of January 30, 2011.

XML 29 R5.htm IDEA: XBRL DOCUMENT

CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
DISCONTINUED OPERATIONS (Note 7)
Income (Loss) from operations of MicroCor, Inc., gain on disposal	$ 355,000	$ 355,000	$ 355,000	$ 355,000

- Definition

Gain (loss) after tax expense or benefit, not previously recognized and resulting from the sale of a business component, which is recognized at the date of sale. A gain (loss) reflects the amount by which the consideration received exceeds (is exceeded by) the net carrying amount (reflecting previous provisions for loss on disposal, if any) of the disposal group.

+ References+ Details

XML 30 R7.htm IDEA: XBRL DOCUMENT

NATURE OF OPERATIONS	6 Months Ended
NATURE OF OPERATIONS	Jun. 30, 2011
Nature Of Operations [Abstract]
NATURE OF OPERATIONS	NOTE 1 - NATURE OF OPERATIONS Nature of Operations From 1989 through 2008, InMedica Development Corporation (“InMedica”) and its then majority-owned subsidiary, MicroCor, Inc. (“MicroCor”) were engaged in research and development of a device to measure hematocrit non-invasively (the “Non-Invasive Hematocrit Technology” and/or the “Technology”). On June 24, 2010, WindGen terminated the former Development Agreement with Wescor and entered into a new agreement whereby WindGen transferred 230,000 shares of MicroCor commons stock owned by WindGen reducing WindGen’s holdings in MicroCor from 1,700,000 common shares to 1,470,000 common shares, reducing its ownership percentage from 57% to 49%. Since WindGen’s ownership percentage is now less than 50%, MicroCor’s financial statements are no longer consolidated with WindGen’s financial statements. Synergistic Equities, Ltd. has acquired all of the shares of MicroCor previously owned by Chi Lin Technology, Ltd. On April 17, 2009, we entered into a license agreement (the “License”) with Wind Sail Receptor, Inc. of Boulder City, Nevada (“WSR”), pursuant to which we were granted the exclusive license to assemble and market WSR’s wind sail receptor energy generation devices using blades of 15 feet or less in length in the United States, Canada, the United Kingdom and Ireland, with nonexclusive rights in the rest of the world except Latin America and the Caribbean. Under the License, we must acquire 100 blades from WSR during the first year after WSR is able to manufacture the blades. WSR is currently in the final stages of selecting the electrical generator that it will connect to the WSR wind turbine blade. During 2010, the Company issued 1,900,000 shares of the Company’s restricted common stock to WSR in consideration of amending its License. The proposed amendment to the License Agreement currently in existence between the Company and WSR has not yet been executed. The reasons are various and include, but are not limited to, finalizing details regarding the need for the Company to be involved in assembly of the wind turbines in various license territory outside the US, final pricing that the units will be sold by WSR to the Company, final terms of the product Warranty to be provided by WSR, and possible additional exclusive territory added to the License. Under the terms of the existing License, the Company intended to use its best efforts to obtain Federal, State, Local, or Private Grant Funds and to share these Grant Funds with WSR up to a sum of $1,000,000. To date the Company has not been successful in obtaining Grant Funds. The proposed amendment also could result in altering the various financial dealings between the two companies. No monetary disputes currently exist between the two companies. WSR is hopeful that it will begin production of complete wind turbine systems during the fourth quarter of 2011. WSR is currently in the process of finalizing its supply chain relationships for the production of the wind turbine generator/alternator system with various suppliers in China. The wind turbine blade will be made in Nevada USA. WSR still anticipates that the six foot diameter small wind turbine will be available to WindGen in the fourth quarter of this year. WindGen is currently beginning to finalize its distribution network for the Western US. We anticipate our first three wind turbine products will have blade diameters of 3, 6 and 12 feet with towers from 25 to 75 feet in height. The first unit to be offered in the market place will be the six foot blade diameter unit. We are currently negotiating terms for the formation of the working capital required to bring our first products to market at some point during the fourth quarter of 2011. The progress of the Company in marketing its new small wind turbine products is dependent on obtaining additional capital. To date during 2011, WSR has been developing a well-organized approach to the manufacturing/assembly process to assure high-quality, rapid-development cycles and overall competiveness. The Generator/Alternators will be manufactured by Ginlong Technologies Inc, an experienced wind turbine generator manufacturer located in China. WSR will also be responsible for the manufacture of the critical blade component at its plant near Boulder City, Nevada. At this time suppliers have been located for all of the non-blade components for our products. To launch into the important rural small wind turbine market in the central wind belt and the western part of the United States (our initial marketing objective), we hope to join forces with some excellent partners and distributorships. We intend to recruit existing well established wind turbine distributors currently representing our competitors. In addition, we are currently in contact with various major name brand farm equipment dealers who have a well-established rural network of dealers throughout America, all with the ability to provide excellent sales, installation, and maintenance services. We also plan to sell distributorships to other existing service-oriented organizations such as cell tower installers. We are currently in the process of finalizing our six foot diameter wind turbine that should be available during the fourth quarter of 2011. Subject to availability of adequate capital, product roll out could follow quickly in the central wind belt and the western part of the United States. On December 4, 2009, the Company changed its name from InMedica Development Corp to WindGen Energy, Inc. Basis of Presentation The Company’s unaudited consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The consolidated financial statements do not include any adjustment relating to recoverability and classification of recorded amounts of assets and liabilities that might be necessary should the Company be unable to continue as a going concern. The Company generated negative cash flows from operations of $107,012 and $148,882 for the six month periods ended June 30, 2011 and 2010, respectively, and net losses from operations of $199,541 and $161,776 for the six month periods ended June 30, 2011 and 2010, respectively. As of June 30, 2011, the Company had an accumulated deficit of $9,561,305 and a working capital deficit of $154,360. These conditions raise substantial doubt as to the Company’s ability to continue as a going concern. The Company’s continued existence is dependent upon its ability to execute its operating plan and to obtain additional debt or equity financing. There can be no assurance the necessary debt or equity financing will be available, or will be available on terms acceptable to the Company. Management’s operating plan includes pursuing additional fund raising as well as putting in place all the initial requirements in anticipation of the Company beginning operations and generating revenue during the fourth quarter of 2011. The accompanying consolidated financial statements of the Company are unaudited. However, in management’s opinion, all adjustments, consisting only of normal recurring adjustments necessary for fair presentation of results for the interim periods shown, have been made. Results for interim periods are not necessarily indicative of those to be expected for the full year. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes to consolidated financial statements included in the Company’s annual report on form 10-K for the year ended December 31, 2010. Principles of Consolidation The consolidated financial statements include the accounts of WindGen Energy, Inc. (“WindGen”) and its majority owned subsidiary, MicroCor, Inc. (“MicroCor”) through June 24, 2010. As of June 24, 2010, MicroCor’s financial statements are no longer being consolidated with WindGen’s financial statements. Research and Development Research and development costs are expensed as incurred. Net Loss per Common Share Basic net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding during the year. Diluted net loss per common share (“Diluted EPS”) reflects the potential dilution that could occur if stock options or other common stock equivalents were exercised or converted into common stock. At June 30, 2011 and 2010, respectively, there were 401,582 and 31,524 potentially dilutive common stock equivalents. The computation of Diluted EPS does not assume exercise or conversion of securities that would have an anti-dilutive effect on net loss per common share. 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 the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Comprehensive Income There are no components of comprehensive income other than the net loss. Cash Equivalents For the purpose of reporting cash flows, the Company considers all highly liquid debt instruments purchased with maturity of three months or less to be cash equivalents to the extent the funds are not being held for investment purposes. Concentration of Credit Risk The Company has no significant off-balance-sheet concentrations of credit risk such as foreign exchange contracts, options contracts or other foreign hedging arrangements. The Company maintains the majority of its cash balances with one financial institution, in the form of demand deposits. Fair Value of Financial Instruments The carrying value of the Company’s financial instruments, including receivables, accounts payable, accrued liabilities, and notes payable at June 30, 2011 and 2010 approximates their fair values due to the short-term nature of these financial instruments. Goodwill and Other Intangible Assets Goodwill and other intangible assets are recorded under the provisions of the Financial Accounting Standards Board (FASB) ASC 350 (formerly Statement ASC No. 142 (SFAS 142), Goodwill and Other Intangible Assets). ASC 350 requires that an intangible asset that is acquired either individually or with a group of other assets (but not those acquired in a business combination) shall be initially recognized and measured based on its fair value. Goodwill acquired in business combinations is initially computed as the amount paid by the acquiring company in excess of the fair value of the net assets acquired. Costs of internally developing, maintaining and restoring intangible assets (including goodwill) that are not specifically identifiable, that have indeterminate lives, or that are inherent in a continuing business and related to an entity as a whole, are recognized as an expense when incurred. An intangible asset (excluding goodwill) with a definite useful life is amortized; an intangible asset with an indefinite useful life is not amortized until its useful life is determined to be no longer indefinite. The remaining useful lives of intangible assets not being amortized are evaluated at least annually to determine whether events and circumstances continue to support an indefinite useful life. If and when an intangible asset is determined to no longer have an indefinite useful life, the asset shall then be amortized prospectively over its estimated remaining useful life and accounted for in the same manner as other intangibles that are subject to amortization. An intangible asset (including goodwill) that is not subject to amortization shall be tested for impairment annually or more frequently if events or changes in circumstances indicate that the asset might be impaired. The impairment test consists of a comparison of the fair value of the intangible assets with its carrying amount. If the carrying amount of an intangible asset exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess. In accordance with ASC 350, goodwill is not amortized. It is the Company’s policy to test for impairment no less than annually, or when conditions occur that may indicate impairment. The Company’s intangible assets, which consist of licensing rights valued at $190,000 recorded in connection with the acquisition of the license related to the agreement with Wind Sail Receptor, Inc., were acquired in 2009 and will be tested for impairment in 2011. The licensing rights were determined to have an indefinite life as of December 31, 2010.

XML 31 R16.htm IDEA: XBRL DOCUMENT

ROYALTY RIGHTS	6 Months Ended
ROYALTY RIGHTS	Jun. 30, 2011
Royalty Rights [Abstract]
ROYALTY RIGHTS	NOTE 10 – ROYALTY RIGHTS At June 30, 2011, the Company had no outstanding Royalty Rights payable to any person or entity.

XML 32 R2.htm IDEA: XBRL DOCUMENT

CONSOLIDATED BALANCE SHEETS (USD $)	Jun. 30, 2011	Dec. 31, 2010
Current Assets
Cash	$ 22,066	$ 33,278
Other Receivable	24,464	20,355
Prepaid Expenses and Other	23,709	50,601
Total Current Assets	70,239	104,234
Licensing Rights - Wind Sail Receptor, Inc.	190,000	190,000
TOTAL ASSETS	260,239	294,234
Current Liabilities
Related Party Consulting Fees Payable	140,750	125,500
Accounts Payable	29,935	3,987
Note Payable	25,000	0
Convertible Note Payable, net of debt discount of $7,153	10,000	23,451
Preferred Stock Dividends Payable	18,914	17,969
Total Current Liabilities	224,599	170,907
TOTAL LIABILITIES	224,599	170,907
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred Stock, 10,000,000 shares authorized; Series A Cumulative convertible preferred stock, 8% cumulative, $4.50 par value, 1,000,000 shares designated, 5,254 shares outstanding at June 30, 2011 and December 31, 2010, respectively (aggregate liquidation preference of $42,558)	23,644	23,644
Common Stock, $.001 par value: 100,000,000 shares authorized, 43,411,356 and 41,238,429 shares outstanding at June 30, 2011 and December 31, 2010, respectively	43,411	41,238
Additional Paid-In Capital	9,539,890	9,429,263
Stock Subscription Receivable	(10,000)	(10,000)
Accumulated Deficit	(9,561,305)	(9,360,818)
TOTAL STOCKHOLDERS' EQUITY	35,640	123,327
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY	$ 260,239	$ 294,234

PREFERRED STOCK	6 Months Ended
PREFERRED STOCK	Jun. 30, 2011
Preferred Stock [Abstract]
PREFERRED STOCK	NOTE 5 – PREFERRED STOCK The Company is authorized to issue 10,000,000 shares of preferred stock. The Company’s board of directors designated 1,000,000 shares of this preferred stock as Series A Cumulative Convertible Preferred Stock (“Series A Preferred”) with a par value of $4.50 per share. Holders of the Series A Preferred receive annual cumulative dividends of 8%, payable quarterly, which dividends are required to be fully paid or set aside before any other dividend on any class or series of stock of the Company is paid. As of June 30, 2011, cumulative preferred stock dividends are due and payable in the amount of $18,914 Holders of the Series A Preferred receive no voting rights but do receive a liquidation preference of $4.50 per share, plus accrued and unpaid dividends. Series A Preferred stockholders have the right to convert each share of Series A Preferred to the Company’s common stock at a rate of 1.5 common shares to 1 preferred share. During 2010, the Company completed the conversion of three of the four existing 8% Series A cumulative preferred shareholders by issuing 246,834 of the Company’s restricted common shares at a price of $0.50 per share plus a $5,000 cash payment to each preferred shareholder. The conversion of these preferred shares reduced the dividends payable from $64,309 at December 31, 2009 to $17,969 at December 31, 2010. As of June 30, 2011, the total dividends payable on the remaining shares of Series A cumulative preferred is $18,914. On January 30, 2009, the Company entered into an agreement with MicroCor, its subsidiary (the “MicroCor Agreement”). The MicroCor Agreement provided for the Company to create a Series B class of preferred stock, without dividend or voting rights (the “Series B Preferred”), which would receive 100% of any future benefit from the sale, spin-off, merger or liquidation of MicroCor or the commercialization of its hematocrit technology. The shares of the Series B Preferred were to be distributed as a dividend, subject to compliance with federal and state securities laws and regulations, to the Company’s common stockholders, as of January 30, 2009. The creation of the Series B Preferred would prevent any holder of the Company’s common stock after January 30, 2009 from sharing in any future benefit of or to MicroCor through the expiration date of January 30, 2011. The Series B Preferred Stock was not issued to the common shareholders of record at January 30, 2009 inasmuch as no benefit occurred prior to the expiration date of January 30, 2011.