q.htm

10-Q 1 q.htm QUARTERLY FILING q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2009

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM ___________ TO __________

COMMISSION FILE NUMBER: 000–30215

(Exact name of small business issuer as specified in its charter)

Utah	87-9369569
(State or other jurisdiction of incorporation or	(IRS Employer Identification No.)
organization)

3940-7 Broad Street, #200, San Luis Obispo, CA 93401
(address of principal executive offices)

866-297-7192
(Registrant's telephone number)

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

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

Large accelerated filer 	Accelerated filer 
Non-accelerated filer 	Smaller reporting company X

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

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: As of March 31, 2009, the issuer had 28,956,884 shares of its common stock issued and outstanding.

Page - 1

POWER SAVE ENERGY COMPANY

FORM 10-QSB

QUARTER ENDED MARCH 31, 2009

TABLE OF CONTENTS

Part I - Financial Information

Item 1- Financial Statements

Balance Sheet at March 31, 2009

Statement of Operations for the three ended March 31, 2009 and 2008

Statement of Cash Flows for the three months ended March 31, 2009 and 2008

Notes to Financial Statements

Item 2 - Management's Discussion and Analysis or Plan of Operations

Item 3 Quantitative and Qualitative Disclosures about Market Risk

Item 4- Controls and Procedures

Part II - Other Information

Item 1 - Legal Proceedings

Item 1A- Risk Factors

Item 2 - Changes in Securities and Use of Proceeds

Item 3 - Default upon Senior Securities

Item 4 - Submission of Matters to a Vote of Security Holders

Item 5 - Other Information

Item 6 - Exhibits and Reports on Form 8-K

Signatures

Page - 2

PART 1 - FINANCIAL INFORMATION

POWER SAVE ENERGY COMPANY

BALANCE SHEET

AS OF MARCH 31, 2009

Unaudited

ASSETS

Current Assets

Cash and Cash Equivalents	$	375,438
Accounts receivable		662,037
Inventory		702,013
Prepaid expenses		289,641
Other current assets		40,935

Total current assets		2,070,064

Equipment, net of accumulated depreciation		52,976
Investments		60,000
Intangible assets, net of accumulated amortization		10,078
Other assets		28,705

Total assets	$	2,221,823

LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities
Current liabilities
Accounts payable	$	98,938
Other current liability		125,520
Income taxes payable		8,571

Total current liabilities		233,029

Stockholders' equity
Preferred stock, $.001 par value, 10,000,000 shares
Authorized, none issued and outstanding
Common stock, $.001 par value, 100,000,000 shares		28,957
Authorized, 28,956,884 issued and outstanding		28,957
Additional paid-in-capital		1,292,914
Retained earnings		666,923

Total stockholders' equity		1,988,794

Total liabilities and stockholders' equity	$	2,221,823

The accompanying notes are an integral part of these financial statements

F - 1

POWER-SAVE ENERGY COMPANY

STATEMENT OF OPERATIONS

FOR THE THREE ENDED MARCH 31, 2009 and 2008

Unaudited




	2009			2008

Revenue, net	$	1,344,061		$	654,807

Cost of sales
Merchandise		710,888			127,781
Other costs		61,525			24,833

Total cost of sales		772,413			152,614

Gross margin		571,648			502,193

Operating expenses
Advertising and promotion		136,808			41,674
Sales commissions		357,573			252,848
General and administrative		214,792			93,985

Total operating costs and expenses		709,173			388,507

Net income (loss) before provision for income taxes		(137,525	)		113,686

Provision for (revovery of) income taxes		(40,512	)		47,312

Net income (loss)	$	(97,013	)	$	66,374

Earnings per common share:	$	(0.003	)	$	0.002



Shares used in computing earnings per share		28,956,884			27,031,168

The accompanying notes are an integral part of these financial statements

F - 2

POWER SAVE ENERGY COMPANY.

STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31, 2009 AND 2008 (UNAUDITED)

	2009			2008
Cash flows from operating activities
Net income (loss)	$	(97,013	)	$	66,373
Adjustments to reconcile net income (loss) to net cash
Provided by operating activities:
Depreciation and amortization		2,317			532
Changes in operating assets and liabilities
( Increase) decrease in accounts receivable		283,016			15,578
( Increase) decrease in inventory		171,859			(303,168	)
( Increase) in prepaid expenses		(213,113	)		(50,000	)
(Increase) in other assets		(40,935	)
Increase in accounts payable and other liabilities		43,251			54,539
Increase (decrease) in taxes payable		(219,577	)		11,465

Net cash provided (used) by operating activities		(70,195	)		(204,681	)

Cash flows from investing activities
Increase in equipment		(7,616	)		(6,758	)
Investments		(60,000	)

Net cash provided (used) by investing activities		(67,616	)		(6,758	)

Cash flows from financing activities
Proceeds from sale of common stock					179,961

Net cash provided (used) by financing activities		0			179,961


Net increase (decrease) in cash and cash equivalents		(137,811	)		(31,476	)

Cash and cash equivalents at beginning of period		513,249			441,989

Cash and cash equivalents at end of period	$	375,438		$	410,513

Supplemental disclosure of cash flow information:

Income taxes paid		220,000			35,757

Interest Paid		0			564

The accompanying notes are an integral part of these financial statements

F - 3

POWER SAVE ENERGY COMPANY.

NOTES TO FINANCIAL STATEMENTS

The following financial information is submitted in response to the requirements of Form 10-Q and does not purport to be financial statements prepared in accordance with generally accepted accounting principles. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted, although Power Save Energy Company (the "Company") believes the disclosures that are made are adequate to make the information presented not misleading. Further, in the opinion of the management, the interim financial statements reflect fairly the financial position and results of operations for the periods indicated.

It is suggested that these interim financial statements be read in conjunction with the financial statements and notes thereto included in the Company's Form 10K containing the Company's audited financial statements as of and for the year ended December 31, 2008 filed with the Securities and Exchange Commission. The results of operations for the three months ended March 31, 2009 are not necessarily indicative of results to be expected for the entire fiscal year ending December 31, 2009.

Note 1 - Organization and Principal Activities

Organization and Description of Business

Power-Save Energy Company ("the Company") is the successor corporation of Mag Enterprises, Inc., a Utah corporation incorporated on July 30, 1980. On September 10, 1993, an Amendment to the Articles of Incorporation was filed to change its name from Mag Enterprises, Inc. to Safari Associates, Inc. On September 12, 2006, an amendment to the articles of incorporation was filed to change its name from Safari Associates, Inc. to Power-Save Energy Company.

The Company manufactures, markets, and sells renewable energy and energy savings products

Note 2 - Summary of Significant Accounting Policies

Basis of Presentation

The financial statements are prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of the financial statements requires management to make estimates and assumptions that affect the reported amounts in the financial statements, including the estimated useful lives of tangible and intangible assets. Management believes the estimates used in preparing the financial statements are reasonable and prudent. Actual results could differ from these estimates.

Financial Instruments

The Company's financial instruments include cash and cash equivalents, accounts receivable and accounts payable. As of March 31, 2009, the carrying cost of these instruments approximate their fair value.

Cash Equivalents

Cash equivalents include highly liquid investments with maturities of three months or less.

Accounts Receivable

Accounts receivable are trade receivables which are reviewed by management on a quarterly basis. The Company records a provision for uncollectible accounts when collectibility is in doubt.

Inventory

Inventory is stated at the lower of cost or market, with cost determined on a FIFO basis. Inventory includes electric savings devices and renewable energy solar systems.

Intangible Assets

In accordance with SFAS No. 142, "Goodwill and Other Intangible Assets," the Company evaluates intangible assets and other long-lived assets for impairment, at least on an annual basis and whenever events or changes in circumstances indicate that the carrying value may not be recoverable from its estimated future cash flows. Recoverability of intangible assets and other long-lived assets is measured by comparing their net book value to the related projected undiscounted cash flows from these assets, considering a number of factors including past operating results, budgets, economic projections, market trends and product development cycles. If the net book value of the asset exceeds the related undiscounted cash flows, the asset is considered impaired, and a second test is performed to measure the amount of impairment loss.

F - 4

POWER SAVE ENERGY COMPANY.

NOTES TO FINANCIAL STATEMENTS

Revenue Recognition

Revenue is recognized in accordance with SEC Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements". The Company recognizes revenue when the significant risks and rewards of ownership have been transferred to the customer pursuant to applicable laws and regulations, including factors such as when there has been evidence of a sales arrangement, delivery has occurred, or service have been rendered, the price to the buyer is fixed or determinable, and collection is reasonably assured. The Company is responsible for warehousing and shipping the merchandise.

Stock - Based Compensation

The Company may periodically issue shares of common stock for services rendered or for other costs and expenses. Such shares will be valued based on the market price of the shares on the transaction date.

The Company may periodically issue stock options to employees and stock options or warrants to non-employees in non-capital raising transactions for services and for financing costs.

The Company has adopted Statement of Financial Accounting Standards No. 123, “Accounting for Stock-Based Compensation” (“SFAS No. 123”), which establishes a fair value method of accounting for stock-based compensation plans.

The provisions of SFAS No. 123 allow companies to either record an expense in the financial statements to reflect the estimated fair value of stock options to employees, or to continue to follow the intrinsic value method set forth in Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees”, but to disclose on an annual basis the pro-forma effect on net income (loss) and net income (loss) per share had the fair value of the stock options been recorded in the financial statements. SFAS No. 123 was amended by SFAS No., 148, which now requires companies to disclose in interim financial statements the pro-forma effect on net income (loss) and net income (loss) per common share of the estimated fair value of stock options issued to employees.

In accordance with SFAS No. 123, the cost of stock options and warrants issued to non-employees is measured at the grant date based on the fair value of the award. The fair value of the stock-based award is determined using the Black-Scholes option-pricing model. The resulting amount is charged to expenses on the straight-line basis over the period in which the Company expects to receive benefit, which is generally the vesting period.

Pro Forma Financial Disclosure – In accordance with SFAS No. 123, the Company will provide footnote disclosure with respect to stock-based employee compensation. The value of a stock-based award will be determined using the Black-Scholes option-pricing model, whereby compensation cost is the fair value of the award as determined by the pricing model at the grant date or other measurement date. The resulting amount will be charged to expense on the straight-line basis over the period in which the Company expects to receive benefit, which is generally the vesting period.

Income Taxes

Income taxes are accounted for in accordance with SFAS 109, Accounting for Income Taxes, using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

Earnings Per Common Share

Statement of Financial Accounting Standards No. 128, “Earnings Per Share”, requires presentation of basic earnings per share (“Basic EPS”) and diluted earnings per share (“Diluted EPS”). Basic earnings (loss) per share is computed by dividing earnings (loss) available to common stockholders by the weighted average number of common shares outstanding (including shares reserved for issuance) during the period. Diluted earnings per share gives effect to all potentially dilutive common shares outstanding during the period.

Advertising

Advertising, promotion and marketing programs are charged to operations in the period incurred.

F - 5

POWER SAVE ENERGY COMPANY.

NOTES TO FINANCIAL STATEMENTS

Segmented Information

Management has determined that the Company operates in one dominant industry segment. Additional segment disclosure requirements will be evaluated as it expands its operations.

Concentration of Credit Risk

Financial instruments, which potentially subject the Company to concentrations of credit risk, consist of cash and cash equivalents and accounts receivables. The Company places its cash with high quality financial institutions and at times may exceed the FDIC $100,000 insurance limit. The Company extends credit based on an evaluation of the customer’s financial condition, generally without collateral. Exposure to losses on receivables is principally dependent on each customer’s financial condition. The Company monitors its exposure for credit losses and maintains allowances for anticipated losses, as required. Accounts are “written-off” when deemed uncollectible.

Special – purpose entities

The Company does not have any off-balance sheet financing activities.

Use of estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the amounts reported in the financial statements. The Company bases its estimates on historical experience, management expectations for future performance, and other assumptions as appropriate. Key areas affected by estimates include the assessment of the recoverability of long-lived assets, which is based on such factors as estimated future cash flows. The Company re-evaluates its estimates on an ongoing basis. Actual results may vary from those estimates.

Website Development Costs

The Company accounts for website development costs in accordance with Emerging Issues Task Force (EITF) No. 00-2. Accordingly, all costs incurred in the planning stage are expensed as incurred, costs incurred in the website application and infrastructure development stage are accounted for in accordance with Statement of Position (SOP) 98-1 which requires the capitalization of certain costs that meet specific criteria, and costs incurred in the day to day operation of the website are expensed as incurred.

Note 3 – Recently issued accounting pronouncements

In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities an amendment of FASB Statement No. 133.” This Statement changes the disclosure requirements for derivative instruments and hedging activities. Entities are required to provide enhanced disclosures about (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under Statement 133 and its related interpretations, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. Based on current conditions, the Company does not expect the adoption of SFAS 161 to have a significant impact on its results of operations or financial position.

In April 2008, the FASB issued 142-3 “Determination of the useful life of Intangible Assets”, which amends the factors a company should consider when developing renewal assumptions used to determine the useful life of an intangible asset under SFAS142. This Issue is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. SFAS 142 requires companies to consider whether renewal can be completed without substantial cost or material modification of the existing terms and conditions associated with the asset. FSP 142-3 replaces the previous useful life criteria with a new requirement—that an entity consider its own historical experience in renewing similar arrangements. If historical experience does not exist then the Company would consider market participant assumptions regarding renewal including 1) highest and best use of the asset by a market participant, and 2) adjustments for other entity-specific factors included in SFAS 142. The Company is currently evaluating the impact that adopting SFAS No.142-3 will have on its financial statements.

In May 2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles.” This Statement identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles (GAAP) in the United States (the GAAP hierarchy). This Statement will not have an impact on the Company’s financial statements.

F - 6

POWER SAVE ENERGY COMPANY.

NOTES TO FINANCIAL STATEMENTS

In May 2008, the FASB issued SFAS No. 163, “Accounting for Financial Guarantee Insurance Contracts, an interpretation of FASB Statement No. 60.” The scope of this Statement is limited to financial guarantee insurance (and reinsurance) contracts, as described in this Statement, issued by enterprises included within the scope of Statement 60. Accordingly, this Statement does not apply to financial guarantee contracts issued by enterprises excluded from the scope of Statement 60 or to some insurance contracts that seem similar to financial guarantee insurance contracts issued by insurance enterprises (such as mortgage guaranty insurance or credit insurance on trade receivables). This Statement also does not apply to financial guarantee insurance contracts that are derivative instruments included within the scope of FASB Statement No. 133, “Accounting for Derivative Instruments and Hedging Activities.” This Statement will not have an impact on the Company’s financial statements.

Note 4 - Commitments and Contingencies

The Company entered into a lease for showroom and warehouse space beginning on June 15, 2008 for a period of five years expiring on June 14, 2013.

The following is a schedule of minimum future rental payments:


Year Ending
December 31,
2009	$34,049
2010	46,482
2011	47,877
2012	49,313
2013	25,021

Total minimum future rental payments	$202,742

The Company has negotiated a line of credit with a bank in the amount of $71,000. The line of credit bears interest at 12.00% as of March 31, 2009. The balance due on the line of credit is $-0-.

Note 5 - Income Taxes

The provision for income taxes consists of the following:

	2009			2008
Federal income tax	$	(32,026	)	$	36,735
State income tax		(8,486	)		11,477


Total		(40,512	)		46,852

Income taxes based on statutory tax rates are as follows

Federal income taxes		(46,758	)		38,652
State income tax		(8,687	)		10,050
Other		14,933			(1,850	)

Total	$	(40,512	)	$	46,852

F - 7

POWER SAVE ENERGY COMPANY.

NOTES TO FINANCIAL STATEMENTS

Note 6 - Intangible Assets

Intangible assets consist of those acquired in the asset purchase agreement with Advanced Builder Energy Technologies LLC (ABET), and U.S. Energy Conservation Corp. which includes ,logos, rights, licenses, designs and approvals, the customer lists. A summary of intangible assets as of March 31, 2009 is as follows:

Intangible assets, at cost	$	12,510

Less - amortization allowed		2,432

	$	10,078

Note 7 - Common Stock

Private Placement

During the period ended June 30, 2008, the Company issued a total of 1,925,716 shares of restricted common stock in a private placement with net proceeds of $1,033,871 received by the Company. The company issued a warrant to the underwriter to purchase 75,078 share of restricted common stock at $.58 per share. The Company intends to account for the fair value of the warrant as an expense of the private offering resulting in a charge directly to stockholders’ equity. The Company estimates that the fair value of this warrant is approximately $109,853 ($ 1.46 Per Unit) using a Black-Scholes option pricing model. The fair value of the warrant granted to the underwriter is estimated as of the date of grant using the following assumptions: (I) expected volatility of 40 %, (2) risk free interest rate of 2.75 % and (3) expected life of 2 years.

Preferred Stock

On May 5, 2008, the Company amended its Articles of Incorporation to include authorization to issue up to 10,000,000 preferred shares at $.001 par value. The Preferred Stock will be designated as “Series a Preferred Stock” which will carry 100 to 1 conversion and voting rights and entitles the holder thereof to 100 common votes for each one Preferred Share. There are no preferred shares issued.

Note 8 -Acquisition

Power-Save Energy Co. has made an investment into a well established solar energy integrator by purchasing 10% of Arizona Power-Save. Arizona Power-Save located at 4111 E. Valley Auto Dr. #103 in Mesa, AZ is owned and operated by General Manager Ray Baxter. Arizona Power-Save specializes in the sales and installation of energy saving and renewable energy products to homeowners throughout Arizona.

Note 9 - Litigation

On or about September 2007, the Company was served with lawsuit from a former director/officer in the United States District Court, Southern District of New York (Case No. 07CIV4770 (SCR)), for breach of contract, quantum meruit, and unjust enrichment. Between November 2000 and April 2006, the former director / officer claim the company owes $113,400.00 from loans the defendant made and approximately $500,000.00 in compensation. The Company was unaware of the allegations prior to the commencement of the lawsuit. The company's former Chief Executive Officer, on behalf of the Company, hired counsel to defend the lawsuit. On February 13, 2009, judgment was entered against the Company in the amount of $99,500, plus interest of $26,020.

F - 8

Item 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FORWARD-LOOKING STATEMENTS

This quarterly report contains forward-looking statements as that term is defined in Section 27A of the United States Securities Act of 1933 and section 21E of the United States Securities Exchange Act of 1934. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled “Risk Factors” that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Our financial statements are stated in United States dollars and are prepared in conformity with generally accepted accounting principles in the United States of America for interim financial statements. The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this quarterly report.

The following discussion should be read in conjunction with the Company’s interim consolidated financial statements and the notes related thereto included in item 1 above which have been prepared in accordance with the accounting principles generally accepted in the United States of America. The discussion of results, causes and trends should not be construed to imply any conclusion that such results, causes or trend will necessarily continue in the future.

(a) Plan of Operation

Power-Save Energy Co. manufactures, markets, and sells electricity saving devices for homeowners, Power-Save 1200, 3200, and 3400.Power-Save also markets and sells renewable energy devices, photovoltaic electric electricity systems, Power-Save Solar and Power-Save Wind Turbine that produce electricity generated from wind energy. The product lines are intended to reduce the homeowner's electricity consumption, generate renewable energy and overall reduce the consumer's electric utility bill. Power-Save Energy Company intends to market quality, tested products and continue to seek out and offer innovative new energy savings products to the consumer.

Power-Save will continue to utilize the power of television and purchase national cable commercial time to run its 60 second and 120 second DRTV spot. Power-Save will continue to sell its residential unit directly to the public and continue to add value to its brand through aggressive advertisement.

Cash Requirements and of Need for additional funds: twelve months. We continue to face certain minimal cash requirements for corporate maintenance, legal and professional and auditing expenses. Our cash requirements for these purposes are not in issue.

Cautionary Statement: There can be no assurance that we will be successful in raising capital through private placements or otherwise. Even if we are successful in raising capital through the sources specified, there can be no assurances that any such financing would be available in a timely manner or on terms acceptable to us and our current shareholders. Additional equity financing could be dilutive to our then existing shareholders, and any debt financing could involve restrictive covenants with respect to future capital raising activities and other financial and operational matters.

Critical Accounting Policies and Recent Accounting Pronouncements

Management believes the estimates, assumptions and judgments involved in the accounting policies described below have the greatest potential impact on the Company’s financial statements. Because of the uncertainty inherent in these matters, actual results could differ from the estimates used in applying the critical accounting policies. Within the context of these critical accounting policies, management is not currently aware of any reasonably likely event that would result in materially different amounts being reported.

Recent accounting pronouncements

Page - 11

(b) Management's Discussion and Analysis of Financial Condition and Results of Operations. This discussion and analysis of our financial condition and results of operations includes "forward-looking" statements that reflect our current views with respect to future events and financial performance. We use words such as "expect," "anticipate," "believe," and "intend" and similar expressions to identify forward-looking statements. You should be aware that actual results may differ materially from our expressed expectations because of risks and uncertainties inherent in future events and you should not rely unduly on these forward looking statements. We will not necessarily update the information in this discussion if any forward-looking statement later turns out to be inaccurate. Reference in the following discussion to "our", "us" and "we" refer to our operations and the operations of our subsidiaries, except where the context otherwise indicates or requires.

This discussion and analysis of financial condition and results of operations should be read in conjunction with our audited Financial Statements included in this filing. Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, and reflect our historical financial position, results of operations, and cash flows. The financial information included in this filing, is not necessarily indicative of our future performance.

Revenue for the three months ended March 31, 2009 was $1,344,061. Revenue for the three months ended March 31, 2008 was $654,807. The increase over the three months ended March 31, 2008 was $689,254 (105%). Approximately 60% of the increase in revenue was attributable to the PS1200 power savings devices for home usage. Sales of Solar units accounted for approximately $290,000 of the increase. The Company introduced its solar product during the third quarter of 2008. The sale of solar units decreased in the first quarter compared to the third and fourth quarters of 2008 due to seasonal demand and the downturn in the economy in California southwestern areas of the United States. The gross profit for the three months ended March 31, 2009 was $571,648 compared to $502,193 for the three months ended March 31, 2008. This was an increase of $69,456 (13.8%). The gross profit margin for the three months ended March 31, 2009 was 42.5% compared to 76.7% for the three months ended March 31, 2008. Factors contributing to the decrease in gross profit margin are: (1) Increased sales through resellers which are sold at wholesale. This is typical for the months between November and April due to a decrease in retail seasonal demand. (2) Sale of solar products which are sold in a more competitive market and is a material cost when renovating residences and commercial buildings. Solar typically has a low gross profit margin at the Power-Save Solar price points retail and wholesale, and (3) Inventory was written down on solar products in inventory to reflect the current replacement cost. This write down to reflect lower replacement costs was approximately $70,000 which reduced the gross profit margin for the quarter by approximately 5%.

Advertising and marketing expense for the three months ended March 31, 2009 was $136,808 compared to $41,674 for the three months ended March 31, 2008. This is an increase of $95,134 (228%). Television advertising during the three months ended March 31, 2009 was $61,000 compared to $20,000 for the three months ended March 31, 2008, an increase of $41,000. In the first quarter of 2009, Power-Save commissioned the creation of a DRTV spot for its newly launched ES35 Kit. Power-Save also launched test DRTV spots on National Cable Television accounting for the majority of the increase in marketing expense. During the first quarter of 2009, the company completed the installation of a demonstration model of a solar paneled roof incorporating the solar panels as a component of the roof tile as an alternating to using a rack system and solar panels. Power-Save Energy incorporated Open Energy solar tiles in this demonstration installation. Power-Save intends to begin marketing solar tiles in 2009. The cost of the model was $41,000.

Sales commissions for the three months ended March 31, 2009 were $357,573 compared to $252,848 for the three months ended March 31, 2008. This was an increase of $104,725 (41.4%). This was less than the increase of sales of the Company’s power saving devices since the Company increased sales through resellers.

Page - 12

General and administrative expenses for the three months ended March 31, 2009 were $214,792 compared to $93,985 for the three months ended March 31, 2008. This is an increase of $120,807 (159%).The following categories accounted for almost all of the increase in general and administrative expenses. (1) During the first quarter of 2009 officer compensation was $40,000, there was no compensation in the first quarter of 2008. (2) Credit and processing fees for internet and credit card sales increased by approximately $23,000in the first quarter of 2009 compared to 2008. (3) Warehouse and storage costs for the first quarter of 2009 were $18,000, there were comparable costs in 2008. (4) Professional fees during the first quarter of 2009 increased by $15,000 over the first quarter of 2008. (5) Travel and entertainment expense in the first quarter increased by $24,000 over the comparable period in 2008. All other general and administrative expenses had increases or decreases that were not material.

Liquidity and Capital Resources.

As of March 31, 2009 the current assets exceeded the current liabilities by $1,988,794. The Company has been able to generate sufficient funds from its current operations to fund its current level of activity.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Investors should consider each of the following risk factors and the other information in this Quarterly Report, including Power-Save’s financial statements and the related notes, in evaluating the Company’s business and prospects. The risks and uncertainties described below are not the only ones that impact on Power-Save’s business. Additional risks and uncertainties not presently known to the Company or the Company currently considers immaterial may also impair its business operations. If any of the following risks actually occur, the Company’s business and financial results could be harmed. In that case, the trading price of Power-Save’s Common Stock could decline.

1. Power-Save’s stock price is volatile with wide fluctuations in the past that are likely to continue in the future. The Company’s common stock trades domestically on the OTC-BB, a relatively illiquid and extremely volatile market. In order to maintain its listing status on the OTC-BB, the Company must file periodic reports with the SEC in a timely manner. If the Company does not maintain its reporting status it may have its securities delisted from the OTC-BB.

2. A small number of Power-Save’s stockholders own a substantial amount of the Company's Common Stock, and if such stockholders were to sell those shares in the public market within a short period of time, the price of Power-Save’s Common Stock could drop significantly.

3. Power-Save may not be able to attract and retain qualified personnel necessary for the implementation of its business strategy. If the Company is not able to attract or retain qualified personnel, it is likely that the Company would be unable to remain competitive in its business resulting in a material adverse effect on Power-Save’s operations.

4. Power-Save does not expect to pay dividends in the foreseeable future. Because the Company does not intend to pay dividends in the foreseeable future, the potential return on an investor’s investment in the Company’s common stock cannot include any dividend income.

5. “Penny Stock” rules may make buying or selling Power-Save’s Common Stock difficult, and severely limit market liquidity. The Company’s common stock is defined as a “penny stock” under applicable federal securities laws. As such, the Company’s shares are more difficult to purchase and sell than other securities not subject to the “penny stock” rules.

6. Future Equity Financings May Dilute Your Ownership Interests. The Company relies upon the availability of equity capital to fund its growth, which financing may or may not be available on favorable terms or at all. We cannot guarantee that additional financing, refinancing or other capital will be available in the amounts we desire or on favorable terms.

7. As of the date of this Report, we have raised equity capital through the issuance of shares of our restricted common stock and will continue to do so for the foreseeable future. Subject to the implementation of our ongoing plan of operations and any revenues generated in relation thereto, we anticipate continuing to rely on equity sales of our common stock in order to fund our business operations. Issuances of additional shares will result in dilution to our existing stockholders. There is no assurance that we will achieve any additional sales of our equity securities or arrange for debt or other financing to fund our planned business activities.

8. The Company does not carry Officer and Director Liability Insurance coverage which would reduce the ability of investors to recover damages in the case of a claim against the Company and or its officers and directors for breach of duties or other liability claims.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) that are designed to be effective in providing reasonable assurance that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission (the “SEC”), and that such information is accumulated and communicated to our management to allow timely decisions regarding required disclosure.

Page - 13

In designing and evaluating disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute assurance of achieving the desired objectives. Also, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. The design of any system of controls is based, in part, upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of management, including our chief executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based upon that evaluation, management concluded that our disclosure controls and procedures are effective as of March 31, 2009 to cause the information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods prescribed by SEC, and that such information is accumulated and communicated to management, including our chief executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Item 4(T). CONTROLS AND PROCEDURES

Evaluation of and Report on Internal Control over Financial Reporting

The management of Power-Save Energy Company is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of, the company’s principal executive and principal financial officers and effected by the company’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America and includes those policies and procedures that:

Page - 14


	−	Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company;

	−	Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and

	−	Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.

Management assessed the effectiveness of the Company’s internal control over financial reporting as of June 30, 2008. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework.

Based on its assessment, management concluded that, as of March 31, 2009, the Company’s internal control over financial reporting is effective based on those criteria.

Changes in Internal Control over Financial Reporting

There was no change in our internal controls over financial reporting identified in connection with the requisite evaluation that occurred during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Page - 15

PART II - OTHER INFORMATION

ITEM 1 Legal Proceeding.

ITEM 1A. Risk Factors.

None.

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

None.

ITEM 3 Defaults upon Senior Securities.

None.

ITEM 4 Submissions of Matters to a Vote of Security Holders.

None.

ITEM 5 Other Information.

None.

ITEM 6 Exhibits.


Exhibit No.	Description	Location
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed herewith
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed herewith
32.1	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	Filed herewith
32.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	Filed herewith

SIGNATURES

In accordance with the requirements of the Exchange Act, the Registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

POWER SAVE ENERGY COMPANY

Date: May 5, 2009	By /s/ Michael Forster
	Michael Forster
	Chief Executive Officer

Date: May 5, 2009	By /s/ Louis Fox
	Louis Fox
	Chief Financial Officer

Page - 16

EXHIBIT 31.1

CERTIFICATION PURSUANT TO RULE 13a-14 AND 15d-14 UNDER

THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, Michael Forster, Chief Executive Officer of Power-Save Energy Company, certify that:

I have reviewed this quarterly report on Form 10-Q of Power-Save Energy Company;

1. Based on my knowledge, this quarterly 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 quarterly report;

2. Based on my knowledge, the financial statements, and other financial information included in this quarterly 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 quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company, as of, and for, the period presented in this Report;

4. I and the other certifying officers of the Company are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company 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 Company, including any consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Report is being prepared;

	(b) Evaluated the effectiveness of the Company'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

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

5. I and the other certifying officers have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company's auditors and to the audit committee of the Company'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 Company'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 Company's internal control over financial reporting.

Dated: May 5, 2009	By: /s/ Michael Forster
	Michael Forster
	Chief Executive Officer

Page - 17

EXHIBIT 31.2

CERTIFICATION PURSUANT TO RULE 13a-14 AND 15d-14 UNDER

THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, Louis Fox, Chief Financial Officer of Power-Save Energy Company, certify that:

I have reviewed this quarterly report on Form 10-Q of Power-Save Energy Company;

	(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 Company, including any consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Report is being prepared;

	(b) Evaluated the effectiveness of the Company'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

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

	((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 Company'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 Company's internal control over financial reporting.

Dated: May 5, 2009	By: /s/ Louis Fox
	Louis Fox
	Chief Financial Officer

Page - 18

EXHIBIT 32.1

CERTIFICATE 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 Power-Save Energy Company (the "Company") on Form 10-Q for the three months ended March 31, 2009 as filed with the Securities & Exchange Commission (the "Report"), each of the undersigned, in the capacities and on the dates indicated below, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to 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.

Dated: May 5, 2009	By: /s/ Michael Forster
	Michael Forster
	Chief Executive Officer

Page - 19

EXHIBIT 32.2

CERTIFICATE PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

	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.

Dated: May 5, 2009	By: /s/ Louis Fox
	Louis Fox
	Chief Financial Officer

Page - 20