XTREME GREEN ELECTRIC VEHICLES INC. - FORM 10-Q

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EX-31 - XTREME GREEN ELECTRIC VEHICLES INC.	v187185_ex31.htm
EX-32 - XTREME GREEN ELECTRIC VEHICLES INC.	v187185_ex32.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2009

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

For the transition period from ______________ to ______________

Commission File Number 000-52502

XTREME GREEN PRODUCTS INC.

(Exact name of registrant as specified in its charter)

Nevada		26-2373311
(State or other jurisdiction of Incorporation or organization)		(I.R.S. Employer Identification Number)

5475 Wynn Road, Suite 100, Las Vegas, Nevada		89118
(Address of principal executive offices)		(Zip Code)

Registrant's telephone number, including area code:		(702) 233-4804

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 ¨ No x

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Sec. 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ¨ No x

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

Large accelerated filer ¨	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 issuer's common stock, $0.001 par value as of May 17, 2010: 43,243,225.

INDEX

		Page
PART I - Financial Information		3

Item 1: Financial Statements		3

Consolidated Balance Sheets as of September 30, 2009 (Unaudited) and December 31, 2008		3

Consolidated Statements of Operations For the Three and Nine Months Ended September 30, 2009 and 2008 (Unaudited) and the period from Inception to September 30, 2009 (Unaudited)		4

Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2009 and 2008 (Unaudited) and the period from Inception to September 30, 2009 (Unaudited)		5

Notes to Consolidated Financial Statements (Unaudited)		6

Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations		9

Item 4T: Controls and Procedures		12

PART II - Other Information		13

Item 1: Legal Proceedings		13

Item 2: Unregistered Sales of Equity Securities and Use of Proceeds		13

Item 5: Other Information		13

Item 6: Exhibits		13

Signatures		13

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

XTREME GREEN PRODUCTS INC.

(A Development Stage Company)

Consolidated Balance Sheets

	September 30,			December 31,
	2009			2008
	(Unaudited)
ASSETS
Current assets:
Cash	$	31,455		$	20,341
Loans receivable		127			8,766
Accounts receivable		65,250			-
Inventory		250,339			-
Prepaid expense		45,883			-
Total current assets		393,054			29,107

Property and equipment		90,370			-
TOTAL ASSETS	$	483,424		$	29,107

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable	$	101,895		$	13,334
Accrued expenses		285,783			20,000
Due to stockholders		121,288			107,993
Notes payable - related party		250,398			-
Total current liabilities		759,364			141,327

Stockholders' deficit:
Common stock, $0.0001 par value, 100,000,000 shares authorized; 40,108,225 and 38,943,800 shares issued and outstanding, respectively		4,011			3,894
Additional paid-in capital		1,820,374			1,234,754
Deficit accumulated during the development stage		(2,100,325	)		(1,350,868	)
Total stockholders' deficit		(275,940	)		(112,220	)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	483,424		$	29,107

See the accompanying notes to the financial statements.

XTREME GREEN PRODUCTS INC.

(A Development Stage Company)

Consolidated Statements of Operations - Unaudited

													For the
													Period From
													May 21, 2007
													(Inception)
													Through
	Three Months Ended September 30,						Nine Months Ended September 30,						September 30,
	2009			2008			2009			2008			2009
Sales	$	76,650		$	-		$	76,650		$	-		$	76,650

Cost of sales		42,298			-			42,298			-			42,298
Gross profit		34,352			-			34,352			-			34,352
Costs and expenses:
General and administrative		547,909			46,975			783,809			158,997			1,509,677
Impairment of investment in Belarus Capital Corp.		-			-			-			-			625,000
Total costs and expenses		547,909			46,975			783,809			158,997			2,134,677
Net loss	$	(513,557	)	$	(46,975	)	$	(749,457	)	$	(158,997	)	$	(2,100,325	)
Per share information - basic and diluted:
Loss per common share	$	(0.01	)	$	(0.00	)	$	(0.02	)	$	(0.00	)

Weighted average common shares outstanding		40,047,573			38,653,017			39,580,821			38,476,701

See the accompanying notes to the financial statements.

XTREME GREEN PRODUCTS INC.

(A Development Stage Company)

Consolidated Statements of Cash Flows - Unaudited

							For the
							Period From
							May 21, 2007
							(Inception)
							Through
	Nine Months Ended September 30,						September 30,
	2009			2008			2009

Cash flows from operating activities:
Net cash used in operating activities	$	(743,594	)	$	(142,000	)	$	(1,088,246	)

Cash flows from investing activities:
Purchase of property and equipment		(90,370	)		-			(90,370	)
Cash used in acquisition of Belarus Capital Corp.		-			-			(125,000	)
Net cash used in investing activities		(90,370	)		-			(215,370	)

Cash flows from financing activities:
Common stock issued for cash		567,000			240,000			949,000
Proceeds from notes payable - related party		250,000			-			250,000
Proceeds from loans payable		30,000			-			30,000
Loans from stockholders, net of repayments		(1,922	)		(4,097	)		106,071
Net cash provided by financing activities		845,078			235,903			1,335,071
Net increase in cash		11,114			93,903			31,455
Cash - beginning of period		20,341			5,909			-
Cash - end of period	$	31,455		$	99,812		$	31,455

Supplemental Cash Flow Information:
Value of common stock issued as consideration in acquisition of Belarus Capital Corp.	$	-		$	-		$	500,000

See the accompanying notes to the financial statements.

XTREME PRODUCTS, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

SEPTEMBER 30, 2009

(UNAUDITED)

(1)	Basis Of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles (GAAP) for interim financial information and Rule 8.03 of Regulation SX. They do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included.

The results of operations for the periods presented are not necessarily indicative of the results to be expected for the full year. For further information, refer to the consolidated financial statements of the Company as of and for the year ended December 31, 2008 on Form 10-K, including notes thereto.

(2)	Earnings Per Share

The Company calculates net income (loss) per share as required by Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 260, "Earnings per Share." Basic earnings (loss) per share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per share is calculated by dividing net income (loss) by the weighted average number of common shares and dilutive common stock equivalents outstanding. During periods when anti-dilutive common stock equivalents are not considered in the computation.

(3)	Basis of Reporting

The Company’s condensed consolidated financial statements are presented on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.

The Company has experienced a significant loss from operations as a result of its investment necessary to achieve its operating plan, which is long-term in nature. From inception to September 30, 2009, the Company incurred net losses of $2,100,325. In addition, the Company has a working capital deficit of $366,310 at September 30, 2009. The Company has no significant revenue generating operations.

The Company’s ability to continue as a going concern is contingent upon its ability to attain profitable operations and secure financing. In addition, the Company’s ability to continue as a going concern must be considered in light of the problems, expenses and complications frequently encountered by entrance into established markets and the competitive environment in which the Company operates.

The Company is pursuing financing for its operations and seeking additional private investments. In addition, the Company is seeking to establish its revenue base. Failure to secure such financing or to raise additional equity capital and to establish its revenue base may result in the Company depleting its available funds and not being able pay its obligations.

The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern.

XTREME PRODUCTS, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

SEPTEMBER 30, 2009

(UNAUDITED)

(4)	Notes Payable – Related Party

During the three months ended September 30, 2009, a director loaned the Company an aggregate of $250,000 with interest at 4.0% per annum. The note is due on demand. From inception through September 30, 2009, $398 of interest was added to the note balance.

On March 25, 2010, the principal amount of the note ($250,000) was converted into 500,000 shares of the Company’s common stock. In addition, the Company granted the director warrants to purchase additional shares as follows:

Three year warrant to purchase 500,000 shares of common stock at $0.50 per share.

Four year warrant to purchase 500,000 shares of common stock at $0.75 per share.

Five year warrant to purchase 500,000 shares of common stock at $0.85 per share.

(5)	Stockholders’ (Deficit)

During the nine months ended September 30, 2009, the Company issued 1,134,000 shares of common stock pursuant to a private placement at a price of $0.50 per share and received cash proceeds of $567,000.

In addition during the nine months ended September 30, 2009, the Company issued an aggregate of 30,426 shares of common stock for services rendered and recorded stock based compensation of $15,213. The value ascribed to these shares of $0.50 per share was based on the price at which the Company had sold shares pursuant to a private placement.

(6)	Stock Options

During September 2009, the Company granted options to employees and consultants to purchase 505,000 shares of common stock, at a price of $0.50 per share, which was the fair value of the underlying common shares at the grant date based on sales of common shares for cash. The options expire in September 2014. These options vest over the stated term.

During September 2009, the company granted options to Directors to purchase 300,000 shares of common stock, at a price of $0.50 per share, which was the fair value of the underlying common shares at the grant date based on sales of common shares for cash. The options expire in September 2019. These options vest in equal annual amounts on the first three anniversary dates of the grant.

The fair value of each option award is estimated on the date of grant using the Black-Scholes option valuation model, using the assumptions noted in the following table. Expected volatility is based on the historical volatility of the Company’s stock, and other factors. Because the shares of the Company are not traded, volitality was estimated as 40 - 60%. The risk-free rates used to value the options are based on the U.S. Treasury yield curve in effect at the time of grant.

XTREME PRODUCTS, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

SEPTEMBER 30, 2009

(UNAUDITED)

The cost recognized for the period ended September 30, 2009 was $3,526, which was recorded as general and administrative expenses.

In valuing the options issued, the following assumptions were used;

Expected volatility	40 - 60	%
Expected dividends	0	%
Expected term (in years)	5.0 – 10.0
Risk-free rate	2.33 – 3.38	%

A summary of option activity under the Plan during the period ended September 30, 2009 is presented below:

Options	Shares		Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term		Intrinsic Value
Outstanding at December 31, 2008		-		-		-		-
Granted		805,000	$	0.50		6.9	$	0.00
Outstanding at September 30, 2009		805,000	$	0.50		6.9	$	0.00

The following table summarizes information about fixed price stock options at September 30, 2009:

Exercise Price		Number Outstanding		Weighted Average Contractual Life		Weighted Average Exercise Price		Number Exercisable		Exercise Price
$	0.50		805,000		6.9	$	0.50		—	$	—

(7)	Subsequent Events

Subsequent to September 30, 2009, the Company issued 135,000 shares of common stock pursuant to a private placement at a price of $0.50 per share and received cash proceeds of $67,500.

The Company also issued 2,500,000 shares of common stock pursuant to a private placement at a price of $0.40 per share and received cash proceeds of $1,000,000. These shares were sold to a director of the Company. In addition, the Company granted the director warrants to purchase additional shares as follows:

Three year warrant to purchase 2,500,000 shares of common stock at $0.40 per share.

Four year warrant to purchase 2,500,000 shares of common stock at $0.65 per share.

Five year warrant to purchase 2,500,000 shares of common stock at $0.75 per share.

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

Forward-Looking Statements

The information herein contains forward-looking statements. All statements other than statements of historical fact made herein are forward looking. In particular, the statements herein regarding industry prospects and future results of operations or financial position are forward-looking statements. These forward-looking statements can be identified by the use of words such as “believes,” “estimates,” “could,” “possibly,” “probably,” anticipates,” “projects,” “expects,” “may,” “will,” or “should” or other variations or similar words. No assurances can be given that the future results anticipated by the forward-looking statements will be achieved. Forward-looking statements reflect management’s current expectations and are inherently uncertain. Our actual results may differ significantly from management’s expectations.

The following discussion and analysis should be read in conjunction with our financial statements, included herewith. This discussion should not be construed to imply that the results discussed herein will necessarily continue into the future, or that any conclusion reached herein will necessarily be indicative of actual operating results in the future. Such discussion represents only the best present assessment of our management.

Overview

Xtreme Green Products Inc. (“Xtreme”, “we”, “our”, “us”) was incorporated under the laws of the State of Nevada on May 21, 2007. We are a development stage company and as such, we have not generated any significant revenue since our inception. We have developed a line of electric powered products such as personal mobility vehicles, motor scooters, light trucks (UTV) and ATVs. We also intend to develop additional products such as, people movers and golf cars. Our product line will be based on our proprietary “green” energy management system and electric propulsion system. These products will have the power and ability of gas powered engines, but without the particulate pollution or noise pollution.

Pursuant to the terms of a Share Purchase Agreement dated August 16, 2007, we purchased 5,000,000 shares of common stock of Belarus Capital Corp. (“Belarus” or the “Company”) in a private purchase transaction in exchange for $125,000 in cash and 1,000,000 shares of our common stock. At the time of the closing of this transaction, the 5,000,000 shares represented 100% of the issued and outstanding shares of common stock of Belarus. We funded the cash portion of the purchase cost through a combination of a $40,000 loan from one of our founding stockholders and from the proceeds of a private placement of 184,000 shares of our common stock at $0.50 per share. The value ascribed to the 1,000,000 shares of Xtreme stock issued in this transaction was $500,000 ($0.50 per share) which resulted in a total purchase cost of $625,000 related to the purchase of the Belarus shares. As a result of this transaction, Belarus became a wholly-owned subsidiary of Xtreme.

Recent Developments

On November 12, 2008, the shareholders of Xtreme entered into a Share Exchange Agreement (the “Exchange Agreement”) with Belarus pursuant to which Belarus purchased from the Xtreme shareholders 37,837,800 shares of Xtreme common stock which represented approximately 97.43% of the then issued and outstanding shares of Xtreme in exchange for the issuance of 37,837,800 shares of common stock of Belarus. In connection with the Exchange Agreement, Xtreme surrendered to Belarus for cancellation, all 5,000,000 shares of common stock of Belarus that it owned and as a result, Xtreme became a subsidiary of Belarus and Belarus succeeded to the business of Xtreme as its sole business. Subsequently, Belarus changed its name to Xtreme Green Products Inc.

Results of Operations

Comparison of three months ended September 30, 2009 to the three months ended September 30, 2008

Sales for the three months ended September 30, 2009 were $76,650. We did not generate any sales in the three month period ended September 30, 2008.

Cost of sales for the three months ended September 30, 2009 was $42,298 which resulted in a gross profit of $34,352 or 44.8%.

General and administrative expenses were $547,909 for the three months ended September 30, 2009 compared to $46,975 for the three months ended September 30, 2008. Our general and administrative expenses consist primarily of (i) salaries and wages, (ii) product design and other related product development costs, (iii) professional fees such as legal and accounting fees, (iv) general expenses such as rent and insurance and (v) stock based compensation. The overall increase in general and administrative expenses is attributable to the fact that we commenced manufacturing operations during the first half of 2009.

During the three months ended September 30, 2009, we incurred stock based compensation expense of $3,526 compared to $25,000 for the three months ended September 30, 2008. Stock based compensation expense for the three months ended September 30, 2009 was related to the fair value of 805,000 stock options which were issued to various employees, consultants and directors in September 2009. These options have an exercise price of $0.50 per share and terms ranging from 5 to 10 years. Vesting periods range from 3 to 4 years. We determined the fair value of these options using the Black-Scholes model and the following assumptions: expected future volatility 40-60%; expected dividends 0%, expected holding period of 5-10 years and a risk-free interest rates ranging from 2.33-3.38%.

Stock based compensation expense of $25,000 for the three months ended September 30, 2008 was related to the issuance of 50,000 shares of our restricted common stock to a consultant in exchange for services rendered. These shares were valued at $0.50 per share which was the price at we which we sold shares for cash during the same period.

Our net loss for the three months ended September 30, 2009 was $513,557 or $0.01 per share compared to a net loss of $46,975 or $0.00 per share for the three months ended September 30, 2008.

Comparison of nine months ended September 30, 2009 to the nine months ended September 30, 2008

Sales for the nine months ended September 30, 2009 were $76,650. We did not generate any sales in the nine month period ended September 30, 2008.

Cost of sales for the nine months ended September 30, 2009 was $42,298 which resulted in a gross profit of $34,352 or 44.8%.

General and administrative expenses were $783,809 for the nine months ended September 30, 2009 compared to $158,997 for the nine months ended September 30, 2008. Our general and administrative expenses consist primarily of (i) salaries and wages, (ii) product design and other related product development costs, (iii) professional fees such as legal and accounting fees, (iv) general expenses such as rent and insurance and (v) stock based compensation. The overall increase in general and administrative expenses is attributable to the fact that we commenced manufacturing operations during the first half of 2009.

During the nine months ended September 30, 2009, we incurred stock based compensation expense of $18,739 compared to $25,000 for the nine months ended September 30, 2008. Stock based compensation expense for the nine months ended September 30, 2009 was related to (i) the fair value of 805,000 stock options which were issued to various employees, consultants and directors in September 2009 and, (ii) the issuance of 30,425 shares of restricted common stock in exchange for services rendered.

The options have an exercise price of $0.50 per share and terms ranging from 5 to 10 years. Vesting periods range from 3 to 4 years. We determined the fair value of these options using the Black-Scholes model and the following assumptions: expected future volatility 40-60%; expected dividends 0%, expected holding period of 5-10 years and a risk-free interest rates ranging from 2.33-3.38%.

The 30,425 shares of restricted common stock that were issued in exchange for services were valued at $0.50 per share which was the price at we which we sold shares for cash during the same period. Accordingly we recorded $15,213 of stock based compensation. Stock based compensation expense of $25,000 for the nine months ended September 30, 2008 was related to the issuance of 50,000 shares of our restricted common stock to a consultant in exchange for services rendered. These shares were valued at $0.50 per share which was the price at we which we sold shares for cash during the same period.

Our net loss for the nine months ended September 30, 2009 was $749,457 or $0.02 per share compared to a net loss of $158,997 or $0.00 per share for the nine months ended September 30, 2008.

Liquidity and Capital Resources

Since our inception on May 21, 2007, we have financed the costs associated with our operational and investing activities through (i) the sale of shares of our common stock pursuant to private placements, and (ii) loans from certain of our stockholders. From inception through September 30, 2009, we have incurred a cumulative net loss of $2,100,325. The notes to our unaudited financial statements include language that raises doubt about our ability to continue as a going concern. At September 30, 2009, we had cash of $31,455, a net working capital deficit of $366,310 and we owed our stockholders an aggregate of $371,686. These stockholders are also officers and directors of our Company. Of the total due to stockholders, $83,265 was due in full on December 31, 2009, and $250,000 was converted into 500,000 shares of common stock on March 25, 2010. The remaining stockholder loans are due on demand.

During the nine months ended September 30, 2009, we sold 1,134,000 shares of restricted common stock at a price per share of $0.50 per share and received proceeds $567,000. These proceeds were used for general working capital purposes. Subsequent to September 30, 2009 and through December 31, 2009 we sold an additional 35,000 shares of common stock pursuant to a private placement at a price of $0.50 per shares and received cash proceeds of $17,500.

On January 28, 2010, the Company entered into and consummated the transaction contemplated under a Subscription Agreement with one investor. Under the terms of the Agreement, the Company agreed to issue 2,500,000 shares of its common stock at $0.40 per share and warrants to purchase an additional 7,500,000 shares in three tranches, as follows: a three year warrant to purchase 2,500,000 shares of common stock at $0.40 per share; a four year warrant to purchase 2,500,000 shares at $0.65 per share; and a five year warrant to purchase 2,500,000 shares of common stock at $0.75 per share. One half of the securities were issued on January 28, 2010 for a purchase price of $500,000. The remainder was issued at a second closing that occurred on March 1, 2010.

We commenced selling our products during the quarter ended September 30, 2009, however, we are not profitable. The resulting lack of available cash from our operations may have an adverse impact on our liquidity, activities and operations. Until we successfully develop, manufacture, market and sell our products, we will not generate significant revenues and we may not be successful. There can be no assurances that we will achieve sufficient revenues during the next twelve months or at all. If we cannot generate sufficient revenues to continue operations, we may be forced to suspend or cease operations.

To the extent that it becomes necessary to raise additional cash in the future, we may seek to raise it though the sale of debt or equity securities or from additional loans from our stockholders. There can be no assurances that we will be able to continue to sell shares of our common stock or borrow additional funds from any of our stockholders or third parties in order to fund the costs associated with our future operating and investing activities.

If we are successful at raising additional equity capital, it may be on terms which would result in substantial dilution to existing shareholders. If our costs and expenses prove to be greater than we currently anticipate, or if we change our current business plan in a manner that will increase our costs, we may be forced to suspend or cease operations.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. As the number of variables and assumptions affecting the probable future resolution of the uncertainties increase, these judgments become even more subjective and complex. Actual results may differ from these estimates.

We have identified the following critical accounting policies, described below, that are the most important to the portrayal of our current financial condition and results of operations.

Stock-Based Compensation

In December 2004, the FASB issued SFAS 123 (revised 2004) "Share-Based Payment". This Statement requires that the cost resulting from all share-based transactions be recorded in the financial statements. The Statement establishes fair value as the measurement objective in accounting for share-based payment arrangements and requires all entities to apply a fair-value-based measurement in accounting for share-based payment transactions with employees. The Statement also establishes fair value as the measurement objective for transactions in which an entity acquires goods or services from non-employees in share-based payment transactions. The Statement replaces SFAS 123 "Accounting for Stock-Based Compensation" and supersedes APB Opinion No. 25 "Accounting for Stock Issued to Employees". The provisions of this Statement were effective for the Company beginning with its fiscal year ending December 31, 2007.

Going Concern

Off-Balance Sheet Arrangements

We do not have any off balance sheet arrangements that are reasonably likely to have a current or future effect on our financial condition, revenues, results of operations, liquidity or capital expenditures.

Item 4T. Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file under the Exchange Act is accumulated and communicated to our management, including our principal executive and financial officers, as appropriate to allow timely decisions regarding required disclosure.

The Company’s management, under the supervision and with the participation of the Company's Chief Executive Officer and Chief Financial (and principal accounting) Officer, carried out an evaluation of the effectiveness of the design and operation of the Company's disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) of the Exchange Act) as of September 30, 2009. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were ineffective as of the end of the period covered by this report.

The Company continues to improve procedures with regard to its disclosure controls and procedures.

(b) Changes in Internal Controls.

There was no change in our internal controls over financial reporting that has materially affected, or is reasonable likely to materially affect, our internal control over financial reporting during the quarter covered by this Report.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. Except as described below, we are currently not aware of any such legal proceedings that we believe will have, individually or in the aggregate, a material adverse affect on our business, financial condition or operating results.

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

Item 5. Other Information

None.

Item 6. Exhibits

31	Certifications of the Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(a)

32	Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

SIGNATURES

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

	Xtreme Green Products Inc. (Registrant)

Date: June 3, 2010		/s/ Sanford Leavitt
		Sanford Leavitt
		Chief Executive Officer (Principal Executive Officer)

Date: June 3, 2010		/s/ Neil Roth
		Neil Roth
		Chief Financial Officer (Principal Financial and Accounting Officer)

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