ENDEVCO INC - FORM 10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTER ENDED MARCH 31, 2010

OR

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

COMMISSION FILE NUMBER 001-31433

ENDEVCO, INC.
(Exact name of registrant as specified in its charter)

Texas		74-2142545
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

Three Riverway, Suite 825, Houston, TX 77056

(Address of principal executive offices, including zip code)

(713) 977-4662

(Registrant's telephone number, including area code)

Securities registered under Section 12(b) of the Exchange Act

None

Securities registered pursuant to 12(g) of the Exchange Act

Common Stock, no par value

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 [ 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. See definition of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

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 ].

The number of shares outstanding of the registrant's common stock as of May 1, 2010 was 87,077,774.

ENDEVCO, INC. AND SUBSIDIARIES
TABLE OF CONTENTS
MARCH 31, 2010

PART I - FINANCIAL INFORMATION

	ITEM 1. Financial Statements
		Consolidated Balance Sheets - March 31, 2010 (Unaudited) and December 31, 2009	3
		Consolidated Statements of Operations (Unaudited) - Three Months Ended March 31, 2010 and 2009	4
		Consolidated Statements of Cash Flows (Unaudited) - Three Months Ended March 31, 2010 and 2009	5
		Notes to Consolidated Financial Statements (Unaudited)	6-7

	ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations		8-13

	ITEM 3. Controls and Procedures		14

PART II - OTHER INFORMATION

	ITEM 1 through ITEM 6		14-15

SIGNATURES AND CERTIFICATIONS			16-20

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

EnDevCo, Inc. and Subsidiaries
Consolidated Balance Sheets
March 31, 2010 and December 31, 2009

				2010 (Unaudited)	2009 (Audited)

ASSETS
Current Assets
	Cash			$ (1,171)	$ (7,288)
	Accounts receivable			39,401	36,303
	Accounts receivable - Joint			3,339	3,339
	Accounts receivable - Other			40,639	33,030
	Prepaid expense			3,069	3,068
		Total Current Assets		85,276	68,453

Property and Equipment
	Oil and gas properties and equipment under full cost method			24,112,273	24,112,273
	Less accumulated depreciation depletion and amortization			(1,345,318)	(1,335,479)
		Net Property and Equipment		22,766,955	22,776,795
			Total Assets	$ 22,852,231	$ 22,845,247
				==========	==========

LIABILITIES
Current Liabilities
	Accounts payable			$ 4,895,556	$ 4,863,933
	Accrued liabilities			2,040,738	1,808,027
	Hedging liability			--	--
	Revenue payable			47,778	45,986
	Taxes payable			467,539	455,879
	Payable to related party			18,393	643
	Note payable - related party			1,313,224	1,313,224
	Notes payable - current			15,642,041	15,064,950
		Total Current Liabilities		24,425,268	23,552,642

Long-Term Liabilities
		Total Long-Term Liabilities		--	--
		Total Liabilities		24,425,268	23,552,642

DEFICIT
Stockholder's Deficit
Preferred Stock
	10,000,000 shares authorized, $0.01 par value,
		No shares outstanding		--	--
Common Stock
	500,000,000 shares authorized, without par value
		87,077,774 shares outstanding March 31, 2010 and
		86,462,107 shares outstanding December 31, 2009		49,467,168	49,374,818
Additional Paid in Capital				6,826,682	6,826,682
Retained Deficit				(60,866,887)	(59,908,895)
	Total Stockholders' Deficit			(4,573,037)	(3,707,395)
Non-controlling Interest				3,000,000	3,000,000
		Total Deficit		(1,573,037)	(707,395)
			Total Liabilities and Deficit	$ 22,852,231	$ 22,845,247
				==========	===========

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

EnDevCo, Inc. and Subsidiaries
Consolidated Statements of Operations
(Unaudited)

			Three Months Ended March 31,
			2010	2009
Revenues
	Oil Sales		$ 64,790	$ 129,613
	Gas Sales		99	81
	Pipeline Transmission		--	1,255
Total Revenues			64,889	130,949

Cost of Revenues
	Lease Operating Cost		25,941	59,590
	Production Taxes		4,834	9,330
	Depletion		9,839	43,600
Total Cost of Revenues			40,614	112,520
Gross Profit			24,275	18,429

Costs and Expenses
	General and administrative		173,353	121,084
	Salaries and wages		230,000	355,245
	Shareholder services		--	265
Total Costs and Expenses			__ 403,353	__ 476,594
Loss from Operations			$ (379,078)	$ (458,165)

Other Income and (Expenses)
	Interest and other income		--	3
	Hedging income (loss)		--	--
	Interest expense		(578,914)	(550,375)
		Total Other Income(Expenses)	$__ (578,914)	$__ (550,372)
		Net Loss	$ (957,991)	$ (1,008,537)
			==========	==========
Basic and Diluted Loss Per Common Share			$ _ (0.01)	$ _ (0.01)

Weighted average number of common
	shares used in basic and diluted
	loss per share calculations		86,923,857	70,652,758
			==========	==========
The accompanying notes are integral part of the consolidated financial statements.

EnDevCo, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)

			Three Months Ended March 31,
			2010	2009
Cash Flows from Operating Activities

Net Loss			$ (957,991)	$ (1,008,537)
Adjustments to Reconcile Net Loss to Net Cash
	Provided by operating activities:
		Issuance of stock for services	--	7,500
		Issuance of stock for salaries	92,350	92,350
		Issuance of stock for shareholder roundup	--	--
		Depletion	9,839	43,600
		Amortization of debt discount	--	30,809
		Hedging activity	--	--

	Changes in assets and liabilities:
		Accounts receivable	(3,097)	75,087
		Accounts receivable - joint interests	--	277
		Accounts receivable - other	(7,608)	163,329
		Revenue payable	1,792	12,524
		Accounts payable	31,623	28,574
		Accrued liabilities	232,711	185,945
		Taxes payable	11,660	36,905
		Payable to Related Party	_ _ 17,750	_ _ 43,133
Net Cash Provided (Used by) by Operating Activities			(570,973)	(288,504)

Cash Flows from Investing Activities:
Purchase oil and gas property			_ _ --	_ _ 631
Net cash Used by Investing Activities			--	631

Cash Flows from Financing Activities:
	Notes payable advances		577,091	258,878
	Notes payable payments		_ _ _ _ --	_ _ _ _ --
Net Cash Provided (Used) by Financing Activities			_ 577,091	_ 258,878
Net Change in Cash			6,118	(28,995)

Cash and cash equivalents
Cash Balance, Begin Period			(7,288)	46,391
Cash Balance, End Period			$ (1,171)	$ 17,396
			===========	==========
Supplemental Disclosures:
	Cash paid for Interest		$ 1,823	$ 506,300
	Stock issued for obligations		$ 0	$ 354,635

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

EnDevCo, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
MARCH 31, 2001

NOTE 1 - Summary of Significant Accounting Policies

The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions of Regulation S-B. They do not include all information and footnotes required by generally accepted accounting principles for complete financial statements. However, except as disclosed herein, there has been no material change in the information from the Company's financial statements for the year ended December 31, 2009 included on the Company's Report on Form 10-K. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three-month period ended March 31, 2010 are not necessarily indicative of the results that may be expected for the year ending December 31, 2010.

Basis of Presentation -- EnDevCo, Inc. was originally incorporated under the laws of the State of Texas on November 7, 1980 as Roberts Oil and Gas, Inc. On September 30, 2003, the Company filed a Restated Articles of Incorporation with the Secretary of State of the State of Texas to change its name to EnDevCo, Inc.

Principles of Consolidation -- The consolidated financial statements include the accounts of EnDevCo, Inc. and its subsidiaries, EnDevCo Eureka LLC, Superior Stock Transfer, Inc., EnDevCo Minerals, Inc., EnDevCo Refining Corporation, Africa Energy Group, Inc., Ouachita Gas Company, EnDevCo Colombia S.A. and EnDevCo Eureka del Peru S.A.C. (the Company). All material inter-company balances and transactions have been eliminated in consolidation. All subsidiaries except EnDevCo Eureka LLC and Superior Stock Transfer, Inc. (the Company's transfer agent) are inactive.

Cash and Cash Equivalents -- The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.
Fair value of financial instruments - Management estimates that the carrying value of financial instruments reported in the financial statements approximates their fair values.

Oil and Gas Properties -- The Company follows the full cost method of accounting for its oil and gas properties. Accordingly, all costs associated with acquisition, exploration and development of oil and gas reserves, including directly related overhead costs, are capitalized. All capitalized costs of oil and gas properties, including the estimated future costs to develop proved reserves, are amortized on the unit-of-production method using estimates of proved reserves. Depletion of oil and gas properties is computed using all capitalized costs and estimated future development and abandonment costs, exclusive of oil and gas properties not yet evaluated, on a unit of production method based on estimated proved reserves.

Depletion expense for the three months ending March 31, 2010 was $9,839. Depletion expense for the three months ending March 31, 2009 was $43,600.

Income Taxes -- The Company accounts for income taxes pursuant to the asset and liability method of computing deferred income taxes. Deferred tax assets and liabilities are established for the temporary differences between the financial reporting bases and the tax bases of the Company's assets and liabilities at enacted tax rates expected to be in effect when such amounts are realized or settled. When necessary, valuation allowances are established to reduce deferred tax assets to the amount expected to be realized.

Loss Per Share -- Basic loss per share is computed by dividing the loss by the weighted average number of common shares outstanding.

Diluted loss per share is computed using the weighted average number of common shares and the dilutive securities outstanding. Dilutive securities having an anti-dilutive effect on diluted loss per share are excluded from the calculation.

Use of Estimates -- Management uses estimates and assumptions in preparing financial statements. Those estimates and assumptions affect the amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could differ from those estimates.

EnDevCo, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
MARCH 31, 2010

NOTE 2 - Stockholders' Equity

The Board of Directors passed a Corporate Resolution that reads, "Pursuant to and in accordance with Article 2.13 of the Texas Business Corporation Act of the State of Texas the Company does hereby certify that, pursuant to the authority conferred on the Board of Directors by the Articles of Incorporation of the Corporation, and pursuant and in accordance with Article 2.13 of the Texas Business Corporation Act of the State of Texas, said Board of Directors, pursuant to unanimous written consent dated December 9, 2002, duly adopted a resolution providing for the authorization and issuance of 5,000,000 shares of Series A Convertible Preferred Stock, $0.01 par value per share (the Series A Preferred Stock)". At the annual shareholders meeting held on October 15, 2004, the shareholders approved an increase in the total number of authorized Series A convertible preferred shares with a $0.01 par value to 10,000,000. Since April 20, 2008 there have bee no preferred shares outstanding. During the quarter ended June 30, 2008 no shares of preferred stock were issued.

On March 10, 2008, the Company effected a 1 for 100 reverse stock split of its common stock. The weighted average number of common shares outstanding reflected in the statements of operations and the loss per share have both been restated to reflect the reverse stock split.

NOTE 3 - Note Payable - GASROCK CAPITAL LLC

The Company entered into an advancing term credit agreement for $30,000,000 on April 13, 2006 through its subsidiary EnDevCo Eureka, LLC with GasRock Capital, LLC to fund the purchase of the Short Junction Field in Cleveland County Oklahoma. This agreement was increased to $50,000,000 on April 2, 2007. The balance at March 31, 2010 was $15,642,041 and the Company paid interest of $1,823 during the quarter ended March 31, 2010. The note is secured by all of EnDevCo Eureka's assets and certain personal assets owned by Chris A. Dittmar, CEO of the Company. EnDevCo Eureka's assets are cross-collateralized on a $3,469,000 loan made by GasRock Capital, LLC to Alliance Energy Corporation, a related party. This loan is currently in default, with interest only payments being made.

On April 9, 2008, GasRock delivered to the Company a Notice of Events of Default and Unmatured Events of Default ("Default Notice") under the Credit Agreement. Due to these claimed Events of Default, interest under the Credit Agreement began accruing at the Default Rate of 15% and 100% of EnDevCo's Net Revenues were applied to Debt Service and other Obligations as of April 9, 2008. On April 16, 2008, GasRock delivered to the Company a Notice of Acceleration ("Acceleration Notice") under the Notes due to the continuing claimed Events of Default under the Credit Agreement. The Acceleration Notice declared the amounts due under the Note to be accelerated and due and owing in full as of April 16, 2008.

On July 22, 2008, GasRock, Eureka and Alliance Energy Corporation ("Alliance", and together with Eureka, the "Borrowers"), entered into that certain Limited Forbearance Agreement, pursuant to which GasRock agreed, subject to the terms thereof, to forbear from pursuing remedies under the Credit Agreement and Notes in respect of the Events of Default claimed as of that same date until the earlier of (i) November 15, 2008 and (ii) the date that GasRock gives Eureka notice of any additional payment default under the Credit Agreement. Alliance is controlled by the Company's CEO and is a guarantor of the Eureka Obligations under the Credit Agreement. GasRock is also a lender to Alliance under an Advancing Term Credit Agreement (the "Alliance Credit Agreement", and together with the Credit Agreement, the "Credit Agreements".

The Forbearance, is subject to the following conditions to be fulfilled:

1) On or before November 15, 2008, (i) the Borrowers must repay all Obligations (as defined in the Credit Agreements) or (ii) EnDevCo must have entered an agreement for the full or partial sale of the Short Junction Field, the proceeds of which would fully repay the Obligations owing under the Credit Agreements, and such sale shall close and repayment of the Obligations shall be made by December 31, 2008;

2) If the Obligations are not repaid by November 15, 2008, EnDevCo must assign a 5.0% net profits interest in the Short Junction Field to GasRock, effective as of November 1, 2008. The form of this assignment and the potential assignments discussed in paragraph 3, below, will be substantially in the form of the Conveyance of Net Profits Overriding Royalty Interests, attached as Exhibit A to the Forbearance Agreement;

3) If the Obligations are not repaid by December 15, 2008, EnDevCo must assign an additional 1.0% net profits interest in the Short Junction Field to GasRock, effective as of December 1, 2008, and will assign to GasRock an additional 1.0% net profits interest each subsequent month if the Obligations are not repaid by the 15th of such month;

4) EnDevCo shall escrow one 5% net profits interest conveyance and five 1% net profits interest conveyances to ensure it's delivery of any potential obligations under paragraphs 2 and 3, above;

5) Any and all Net Proceeds (as defined in the Forbearance Agreement) from any equity issuance, refinancing, or asset sale will be applied first to outstanding fees and expenses of GasRock, second to the accrued and unpaid interest on the Notes, and third to the outstanding principal balances on the Notes; and

6) The Borrowers must ensure that its hydrocarbon purchasers make payments relating to any of GasRock's overriding royalty interests in the Short Junction Field directly to GasRock.

NOTE 4 - Payable to Related Party

On June 5, 2007, EnDevCo entered into a farm-out agreement with an effective date of September 5, 2007, with Alliance Energy Corporation (AEC), a related party, whereby AEC paid all costs to drill an initial well (the WSJU #109StH, which is in production at the time of filing this report) and up to three future development wells. On June 30, 2008, the parties agreed to terminate the farm-out agreement thereby cancelling AEC's right to drill three future wells and transferring 100 percent ownership of the WSJU #109StH well to EnDevCo effective March 1, 2008. In consideration, EnDevCo agreed to assume approximately $5.7 million in liabilities resulting from the actual cost of drilling the WSJU #109StH well.

On November 23, 2009, The Company issued 14,503,078 Shares of common stock to settle the amount payable to Alliance. The shares were priced at the closing price for the stock on that date.

NOTE 5 - Notes Payable - Related Party

The Company has two long term notes payable totaling $1,313,224. Both notes accrue interest at the LIBOR monthly average coupon rate (1.90%) at December 31, 2009. The two notes are in the amounts of $363,224 and $950,000 respectively and are due and payable December 31, 2009. The maker of this note consists of the following related parties managed by Campbell Evans: OCE Partners, LLC, and OCE Interests, LLC. Both notes are unsecured.

NOTE 6 - Going Concern

The Company has reported operating losses aggregating $7,800,675 for the two (2) year period ended December 31, 2009. At March 31, 2010, the consolidated balance sheet reported a working capital deficit of $24,339,992. The Company must raise significant amounts of cash to pay its current liabilities and to provide investment funds to continue development of its oil and gas leases. There can be no assurance the Company's management will be able to secure funding.

7

EnDevCo, Inc. and Subsidiaries
March 31, 2010

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This report, including Management's Discussion and Analysis of Financial Condition and Results of Operations, includes certain forward-looking statements. The forward-looking statements reflect the Company's expectations, objectives and goals with respect to future events and financial performance. They are based on assumptions and estimates, which the Company believes are reasonable. However, actual results could differ materially from anticipated results. Important factors that may impact actual results include, but are not limited to, commodity prices, political developments, market and economic conditions, industry competition, the weather, changes in financial markets and changing legislation and regulations. The forward-looking statements contained in this report are intended to qualify for the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934, as amended. The notes to Consolidated Financial Statements sections contain information that is pertinent to the following analysis.

GENERAL COMMENTS ON BUSINESS PLAN

EnDevCo, Inc., a shortened version of the "Energy Development Company", establishes an identity that is consistent with the business development activities currently underway in the Corporation. The Company is actively negotiating to participate in several oil and gas projects both domestically and internationally within the traditional industry scope of oil and gas exploration and production. These activities include production of oil and gas from interests held by the Company in the United States, Colombia and Peru. The Company is also investigating investment in the development of new technologies for the enhancement of oil and gas production and the utilization of that technology to further acquire oil and gas production.

OIL AND GAS EXPLORATION AND DEVELOPMENT

The Company is pursuing oil and gas exploration and development opportunities in both domestic and international venues. Domestically, the Company has secured certain development rights onshore and offshore in the Gulf of Mexico that will provide it with the opportunity to participate in the drilling of low risk development wells. As a result of recently acquired 3D seismic data that has been integrated with previously known geological and engineering data, several low risk development drilling opportunities have been identified. Participation in these types of relatively low risk and low cost wells will provide near term cash flow to support the activities of the Company.

Gulf of Mexico - The Company has entered into a farm-in agreement with BT Operating Co. wherein the Company will participate in the drilling and completion of four wells in Eugene Island Block 294 and/or Chandeleur Block 14 to earn a 50% working interest in each block prior to December 31, 2009.

The Company has also entered into a farm-in agreement with Mariner Energy, Inc. which grants the Company an assignment of their operating rights down to a depth of 12,800 feet upon the initial commercial completion of the OC sand in East Cameron Block 71. Open Choke Exploration, LLC has a 67% interest in the farm-in agreement and the Company has the remaining 33% interest.

The Company has designated Open Choke as the project Operator who will drill the East Cameron #71-9 well and attempt to complete the OC sand. In the event that this well is not successful, EnDevCo has the right to drill a replacement well to test the OC sand within a reasonable time frame.

Pursuant to a joint participation agreement between EnDevCo and Open Choke, the Company will have access to the production platforms on East Cameron Block 71/72 Field which are equipped with all necessary production facilities and pipelines to support increased oil and gas production resulting from drilling and completing new wells.

Block XXIV, Peru - Following an extensive bidding process, a consortium including EnDevCo was awarded the exclusive concession to develop the Block XXIV prospect area located in northwest Peru. EnDevCo owns 20% of the consortium. Covering more than 276 thousand acres, the block contains both onshore and offshore prospects. The area is bracketed by recent discoveries to the immediate north (Olympic) and south (Olympic and Petrotech). The primary target horizon for the off shore area is the naturally fractured Amotape formation of Paleozoic age (quartzites, slates, etc.). This target formation boasts similar characteristics to those that have produced oil in the nearby Portachuelo Field and, more recently, the offshore San Pedro discovery. The reinterpretation of well logs using new technology indicates pay in target formation. Northwest Peru has solid infrastructure and substantial power demand, creating a ready-market for gas. For EnDevCo, the region represents an excellent opportunity for an integrated gas-to-power project.

8

EnDevCo, Inc. and Subsidiaries
March 31, 2010

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (cont)

OIL AND GAS EXPLORATION AND DEVELOPMENT (cont)

Cleveland County, Oklahoma - On April 13, 2006, the Company acquired a 98.712% working interest with a 70.085% net revenue interest in the West Short Junction Unit and a 100% working interest with a 71% net revenue interest in the Central Short Junction Unit hereinafter referred to as the ("Short Junction Field and/or the Field") located in Oklahoma City, Oklahoma through its subsidiary EnDevCo Eureka, LLC for a purchase price of $11.5 million. EnDevCo Eureka, LLC is owned 55% by its parent EnDevCo, Inc. and 45% by private investors who are related parties. These investors contributed $3.0 million in equity to enable EnDevCo to consummate the transaction. EnDevCo Eureka, LLC, managed by EnDevCo personnel, is the Operator for the Field which has an acquisition date of January 01, 2006.

The 12,000 acre fully unitized Field currently consists of 24 oil wells and 2 gas wells, 4 central collection and metering stages and 4 salt water disposal wells. The Field is currently producing 47 barrels of oil equivalent (BOE) per day comprised of 41 barrels of oil and 35 Mcf of gas from 25 vertical wells. Production from the single horizontal well is currently shut-in awaiting repair of the electric submersible pump.

Since acquiring the Field, the Company has methodically performed maintenance activities on all oil wells to include improved chemical and hot oil treatments; new pump jacks, existing pump jack re-alignment, bearing and rod replacement, beam compressor installation and pipeline integrity testing and cleanout. EnDevCo has also installed new pumps, a new water knockout and two new heater treaters for improved oil separation at the central collection and metering stages and terminated the re-injection of water into the Hunton reservoir by re-piping and installing a new salt water disposal well.

The Field purchase included full ownership rights to a field wide gas pipeline and gathering system that offers two independent taps to the interstate gas transmission system.

Short Junction Field was originally developed by Conoco using vertical wells drilled on a 40 acre well spacing, resulting in oil and gas production from 270 active wells within the 12,000 acre leasehold. The Field currently contains 34 unplugged production well bores of which 26 are currently active. EnDevCo plans to continue a workover and recompletion program to further increase the current daily production.

Historically the primary zone of interest has remained the Hunton formation for oil production. However, above the Hunton, the Bartlesville, Prue, Red Fork and Skinner Sandstones along with the Pink Lime zones are present and most are indicated as productive based on well log analysis.

Current bottom hole pressures recently measured in the Hunton indicate that formation pressure today is essentially the same as when the Field was originally placed on production. This unique characteristic occurs as a result of the fact that Conoco instituted a water flood pressure maintenance program in the early stages of developing the field. As a result of this pressure maintenance, the original gas cap in the Hunton reservoir has never been produced.

EnDevCo plans to implement a 3D seismic program over the leasehold in order to pursue an aggressive horizontal drilling program in the Hunton formation to increase oil and gas production from that reservoir and to develop identified shallow gas sand reservoirs indicated on the subsurface well control.

ENERGY TECHNOLOGY DEVELOPMENT

Development and implementation of new energy technologies will become a key new business focus for the Company. The identification of and early participation in the implementation of these types of technologies opens several avenues for potential revenue generation and profits. In some instances, the technology can be manufactured and sold to end users once the market accepts the technology. In other instances, the technology might provide a unique competitive advantage that can be successfully leveraged by the Company in the acquisition and development of existing energy projects. Initially, the Company will limit its scope of investigation to those technologies that directly compliment the oil and gas, and power industries.

POWER GENERATION

EnDevCo's management team has extensive experience and expertise in the area of power plant development, operations and commercial management. The Company intends to leverage these capabilities by developing integrated gas-to-power and greenfield development projects in markets that create additional value through the gas-power delivery option.

EnDevCo, Inc. and Subsidiaries
March 31, 2010

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (cont)

RESULTS OF OPERATIONS

COMPARISON OF THREE MONTHS ENDED MARCH 31,

Line	Description		Three Months Ended March 31,
			2010	2009

1	Revenues		$ 64,889	$ 130,949
2	Cost of Revenues		$ 40,614	$ 112,500
3	Costs and Expenses		$ 403,353	$ 476,594
4		General and Administrative Expense	$ 173,353	$ 121,084
5		Salaries and Wages	$ 230,000	$ 355,245
6		Shareholder Services	$ --	$ 265
7	Other Income and (Expenses)		$ (578,914)	$ (550,372)
8		Interest and Other Income	$ --	$ 3
9		Hedging Loss	$ --	$ --
10		Interest Expense	$ (578,914)	$ (550,375)

Analysis of Three Months Comparison

Line 1 - Revenue decreased overall by $66,060 during the first quarter of 2010 as compared to 2009. This is due to lower production from the Short Junction Field.

Line 2 - Costs of revenues decreased overall $71,906 due to lower LOE, production taxes and depletion.

Line 3 - Total costs and expenses decreased overall $73,241 during the first quarter of 2010 as compared to same quarter in 2009. The detail explaining this decrease is shown on lines 4 and 6 below.

Line 4 - This increase of $52,269 is due to the greater use by the Company of external financial consultants and accounting services during the quarter.

Line 5 - Salaries and wages were lower by $125,245 as compared to the previous year.

Line 6 - This is due to a timing difference.

Line 7 - The Company reports an unfavorable change in other income and expenses of $28,542 in the current period. The detail explaining this increase is shown on lines 8 through 11 below.

Line 8 - There was a slight decrease in other income of $3.

Line 10 - Interest expense increased by $28,539 due to a higher loan balance.

11

EnDevCo, Inc. and Subsidiaries
March 31, 2010

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (cont)

LIQUIDITY AND CAPITAL RESOURCES

Sources and Uses of Cash		Three Months Ended March 31,
		2010	2009

Net cash provided by/(used in)
	Operating activities	$ (570,973)	$ (288,504)
	Investing activities	--	631
	Financing activities	577,091	258,878
Increase/(decrease) in cash and cash equivalents		$ 6,118	$ (28,995)
		==========	==========
Cash and cash equivalents		$ (1,171)	$ 17,396
		==========	==========

Cash Flow from Operating Activities

2010
Cash used by operating activities totaled $570,973 during 2010. This represents a negative variance of $282,469 over the same quarter in 2009.

2009
Cash used by operating activities totaled $288,504 during 2009.

Cash Flow from Investing Activities

2010
The Company did not acquired any oil and gas properties during the first quarter of 2010.

2009
The Company acquired oil and gas property during 2009 in the amount of $631.

EnDevCo, Inc. and Subsidiaries
March 31, 2010

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (cont)

LIQUIDITY AND CAPITAL RESOURCES (cont)

Cash Flow from Financing Activities

2010
The Company increased its note payable for the Short Junction Field by $577,091.

2009
The Company increased its note payable for the Short Junction Field by $258,878.

Directors and Officers Compensation

The Company currently has nominal cash reserves and cash flow from operations. Until such time as the financial condition of the Company improves, the Company's Directors and Officers have agreed to have their salaries and fees accrued.

Project Development Guidelines

In recognition of the status of current financial resources available to the Company, executive management is committed to identifying and implementing projects that can be primarily project financed. This strategy reduces financial risk to the Company, but necessarily adds additional lead time before projects can be secured and announced to the shareholders.

There are no assurances, however, that the Company will be able to identify and implement financing to develop its projects or that it will be able to generate sufficient revenue growth and improvements in working capital.

The Company intends to raise working capital through the sale of its Common stock. No assurance can be given that funds will be available from any source when needed by the Company or, if available upon terms and conditions reasonably acceptable to the Company.

The Company is exploring debt and equity financing.

EnDevCo, Inc. and Subsidiaries
March 31, 2010

ITEM 3. CONTROLS AND PROCEDURES

As required by Rule 13a-15(b), Company's executive management, including the Chief Executive Officer, Chief Operating Officer and Chief Financial Officer, conducted an evaluation as of the end of the period covered by this report, of the effectiveness of the Company's disclosure controls and procedures as defined in Exchange Act Rule 13a-15(e). Based on that evaluation, the Chief Executive Officer, Chief Operating Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective as of the end of the period covered by this report. As required by Rule 13a-15(d), the Company's executive management, including the Chief Executive Officer, Chief Operating Officer and Chief Financial Officer, also conducted an evaluation of the Company's internal control over financial reporting to determine whether any changes occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting. Based on that evaluation, there has been no such change during the period covered by this report.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Legal Proceedings for the Quarter ended March 31, 2010:

As of June 1, 2007, the law firm of Phillips & Akers, P.C. ("P&A"), are the attorneys of record for the Company in a case styled: Cause No: 2006-34662; Farzad Askari v. EnDevCo, Inc.
Mr. Askari filed a breach of contract case claiming the Company (the Defendant) had not paid Mr. Askari (the Plaintiff) for work he did as an alleged consultant in 2002 for John W. Adair and Adair International Oil & Gas, Inc. The Company believed that Mr. Askari was never a consultant for the Company and never performed any work for the Company and therefore was not entitled to receive any compensation from the Company.
The case went to trial and the jury's verdict was that Mr. Askari was not entitled to any compensation and that judgment was entered on January 11, 2008. All of Mr. Askari's post trial motions to date have been unsuccessful; however, he filed notice of appeal in the 14th Court of Appeals. Appellate briefs were filed by both parties and after receiving them the Court declined to hear oral arguments.

On July 02, 2009, the 14th Court of Appeals ruled that the trial court judgment in all things and in all ways was affirmed. The time for further appeals has expired and this matter is now closed.

P&A are the attorneys of record for the Company in a case styled: Cause No: CJ 07 1859 L; Basic Energy Services, LP v. EnDevCo Eureka, LLC. et al. Basic Energy Services has filed a breach of contract case claiming EnDevCo Eureka, LLC (the "Defendant") has not paid for goods and services, totaling $1,315,910, that are in dispute between the parties. Following a review of all disputed invoices, the Company signed a settlement agreement on July 07, 2008 with the Plaintiff. The Company has paid sixty (60) percent of the settlement amount, but remains in default until the remaining balance is paid.

P&A and J. John Hager, are the attorneys of record for the Company in a case styled: Cause No: CIV-08-0395-HE; KAL Drilling Inc. v. EnDevCo Eureka, LLC. et al. KAL Drilling has filed a breach of contract case claiming EnDevCo Eureka, LLC (the "Defendant") has not paid for goods and services that are in dispute between the parties. The Company has denied all of Plaintiff's allegations and filed a counterclaim against the Plaintiff on May 15, 2008 for breach of contract, misrepresentations, fraud, negligence and gross negligence.

P&A are the attorneys of record for the Company in a case styled: Cause No. 2009-16668; Hamm & Phillips Service, Co. Inc. v. EnDevCo, et al; in the 152nd Judicial District Court of Harris County, Texas. This is a case involving approximately $75,000 in past due bills, plus interest, and is a suit on sworn account. Judgment has been entered on this admitted due amount in the amount of $86,532.40.

P&A are the attorneys of record for the Company in a case styled: Cause No. CJ-2009-627L; Integrated Production Services, Inc. v. EnDevCo, et al; in the District Court of Oklahoma County, Oklahoma. This is a case involving $70,000 in past due bills, plus interest, and is a suit and is a suit on sworn account.

P&A are the attorneys of record for the Company in a case styled: Cause No. 944221; Pason Systems USA Corp. v. Endevco, Inc. aka Endevco Eureka, LLC, et al; in the County Civil Court at Law No. 2 of Harris County, Texas. This is a case involving $25,000 in past due bills, plus interest, and is a suit on sworn account.

The Company is a party to various claims, but is not a party to any other litigation at this time. Although no assurances can be given, the Company believes based on its experience to date, that the ultimate resolution of such items, individually or in the aggregate, would not have a material adverse impact on the Company's financial position or results of operations.

EnDevCo, Inc. and Subsidiaries
March 31, 2010

ITEM 2. CHANGES IN SECURITIES
None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES
On April 9, 2008, GasRock delivered to the Company a Notice of Events of Default and Unmatured Events of Default ("Default Notice") under the Credit Agreement. Due to these claimed Events of Default, interest under the Credit Agreement began accruing at the Default Rate of 15% and 100% of EnDevCo's Net Revenues were applied to Debt Service and other Obligations as of April 9, 2008. On April 16, 2008, GasRock delivered to the Company a Notice of Acceleration ("Acceleration Notice") under the Notes due to the continuing claimed Events of Default under the Credit Agreement. The Acceleration Notice declared the amounts due under the Note to be accelerated and due and owing in full as of April 16, 2008.

The Forbearance, is subject to the following conditions to be fulfilled:

4) EnDevCo shall escrow one 5% net profits interest conveyance and five 1% net profits interest conveyances to ensure it's delivery of any potential obligations under paragraphs 2 and 3, above;

6) The Borrowers must ensure that its hydrocarbon purchasers make payments relating to any of GasRock's overriding royalty interests in the Short Junction Field directly to GasRock.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.

ITEM 5. OTHER INFORMATION
None.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8 -K

(a) Exhibits

31.1 Certification by CEO and CFO pursuant to Section 302 of Sarbanes-Oxley Act of 2002.
32.2 Certification by CEO and CFO pursuant to Section 906 of Sarbanes-Oxley Act of 2002.

(b) Reports on Form 8-K

None.

EnDevCo, Inc. and Subsidiaries
March 31, 2010

In accordance with the requirements of Section 13 of 15(d) of the Exchange Act, the Registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on May 14, 2010.

ENDEVCO, INC.

CHRIS A. DITTMAR
CHRIS A. DITTMAR
CHIEF EXECUTIVE OFFICER AND DIRECTOR

RICHARD G. BOYCE
RICHARD G. BOYCE
CHIEF OPERATING OFFICER AND DIRECTOR

CHARLES R. CLOSE
CHARLES R. CLOSE
CHIEF FINANCIAL OFFICER AND DIRECTOR

JOHN A. BRUSH
JOHN A. BRUSH
NON-EXECUTIVE DIRECTOR

FREDERICK CEDOZ
FREDERICK CEDOZ
NON-EXECUTIVE DIRECTOR

EnDevCo, Inc. and Subsidiaries
March 31, 2010

EXHIBIT 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO RULE 13A-14(A) OR 15D-14(A) UNDER THE SECURITIES EXCHANGE ACT OF 1934

In connection with the Quarterly Report of EnDevCo, Inc. (the "Company") on Form 10Q (the "Report") for the quarter ended March 31, 2010 (the "Reporting Period"), as filed with the Securities Exchange Commission on the date hereof under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the undersigned, Chris A. Dittmar, Chief Executive Officer of the Company, certifies pursuant to Rule 13a-14(a) or 15d-14(a) under the Exchange Act that:

1. I have reviewed the Report.

2. Based on my knowledge, the 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 they are made, not misleading with respect to the Reporting Period.

3. Based on my knowledge, the consolidated financial statements and other financial information included in the Report fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of the date and for the periods reported therein.

4.   The Company's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) for the Company and internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) for the Company, and we have:

     (a) designed those disclosure controls and procedures, or caused them to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by other personnel employed by the Company and its subsidiaries, particularly within the Reporting Period;

     (b) designed those internal controls over financial reporting, or caused them to be designed under our supervision, to provide reasonable assurances 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 Company's disclosure controls and procedures and presented in the Report our conclusions about the effectiveness of those disclosure controls and procedures, as of the end of the Reporting Period based on that evaluation; and

(d) disclosed in the Report any change in the Company's internal control over financial reporting that occurred during the last fiscal quarter of the Reporting Period that has materially affected or is reasonably likely to materially affect the Company's internal control over financial reporting.

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

(a) all significant deficiencies and material weaknesses in the design or operation of internal controls 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.

CHRIS A. DITTMAR
CHRIS A. DITTMAR
CHIEF EXECUTIVE OFFICER
May 14, 2010

EnDevCo, Inc. and Subsidiaries
March 31, 2010

EXHIBIT 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO RULE 13A-14(A) OR 15D-14(A) UNDER THE SECURITIES EXCHANGE ACT OF 1934

In connection with the Quarterly Report of EnDevCo, Inc. (the "Company") on Form 10Q (the "Report") for the quarter ended March 31, 2010 (the "Reporting Period"), as filed with the Securities Exchange Commission on the date hereof under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the undersigned, Charles R. Close, Chief Financial Officer of the Company, certifies pursuant to Rule 13a-14(a) or 15d-14(a) under the Exchange Act that:

1. I have reviewed the Report.

(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.

CHARLES R. CLOSE
CHARLES R. CLOSE
CHIEF FINANCIAL OFFICER
May 14, 2010

EnDevCo, Inc. and Subsidiaries
March 31, 2010

EXHIBIT 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO RULE 13A-14(B) OR 15D-14(A) UNDER THE SECURITIES EXCHANGE ACT OF 1934 AND SECTION 1350 OF CHAPTER 63 OF TITLE 18 OF THE UNITED STATES CODE

In connection with the Quarterly Report of EnDevCo, Inc. (the "Company") on Form 10Q (the "Report") for the quarter ended March 31, 2010, as filed with the Securities Exchange Commission on the date hereof under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the undersigned, Chris A. Dittmar, Chief Executive Officer, certifies pursuant to Rule 13a-14(b) or 15d-14(a) under the Securities Exchange Act of 1934 and Section 1350 of Chapter 63 of Title 18 of the United States Code, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the date and for the periods reported therein.

CHRIS A. DITTMAR
CHRIS A. DITTMAR
CHIEF EXECUTIVE OFFICER
May 14, 2010

EnDevCo, Inc. and Subsidiaries
March 31, 2010

EXHIBIT 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO RULE 13A-14(B) OR 15D-14(A) UNDER THE SECURITIES EXCHANGE ACT OF 1934 AND SECTION 1350 OF CHAPTER 63 OF TITLE 18 OF THE UNITED STATES CODE

In connection with the Quarterly Report of EnDevCo, Inc. (the "Company") on Form 10Q (the "Report") for the quarter ended March 31, 2010, as filed with the Securities Exchange Commission on the date hereof under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the undersigned, Charles R. Close, Chief Financial Officer of the Company, certifies pursuant to Rule 13a-14(b) or 15d-14(a) under the Securities Exchange Act of 1934 and Section 1350 of Chapter 63 of Title 18 of the United States Code, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results o