XTREME GREEN ELECTRIC VEHICLES INC. - FORM 10-Q

Attached files

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EX-31 - XTREME GREEN ELECTRIC VEHICLES INC.	v196228_ex31.htm
EX-32 - XTREME GREEN ELECTRIC VEHICLES INC.	v196228_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 March 31, 2010

¨	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)

2191 Mendenhall Dr. Suite 101, North Las Vegas, NV		89801
(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 ¨

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 September 3, 2010: 43,601,870.

INDEX

		Page
PART I - Financial Information		3

Item 1: Financial Statements		3

Condensed Consolidated Balance Sheets as of March 31, 2010 (Unaudited) and December 31, 2009		3

Condensed Consolidated Statements of Operations For the Three Months Ended March 31, 2010 and 2009 (Unaudited)		4

Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2010 and 2009 (Unaudited)		5

Notes to Condensed 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

XTREME GREEN PRODUCTS INC.

Consolidated Balance Sheets

March 31, 2010 and December 31, 2009

	March 31,			December 31,
	2010			2009
	(Unaudited)
ASSETS
Current assets:
Cash	$	115,388		$	73,700
Accounts receivable		24,550			11,000
Inventory		352,856			214,787
Prepaid expenses		125,035			-
Total current assets		617,829			299,487
Property and equipment		140,605			88,498

Other assets		36,186			12,901
TOTAL ASSETS	$	794,620		$	400,886

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable	$	60,841		$	119,483
Accrued expenses - related parties		210,000			240,000
Accrued expenses		57,554			3,395
Line of credit		-			150,000
Note payable - related party		5,442			252,935
Customer deposits		40,960			40,960
Stockholder loans		143,400			157,830
Total current liabilities		518,197			964,603

Commitments and contingencies

Stockholders' equity (deficit):
Common stock, $0.0001 par value, 100,000,000 shares
authorized; 43,143,225 and 40,143,225 shares
issued and outstanding		4,314			4,014
Additional paid-in capital		3,098,148			1,848,448
Accumulated deficit		(2,826,039	)		(2,416,179	)
Total stockholders' equity (deficit)		276,423			(563,717	)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)	$	794,620		$	400,886

See the accompanying notes to the financial statements.

XTREME GREEN PRODUCTS INC.

Consolidated Statements of Operations

For the Three Months Ended March 31, 2010 and 2009

(Unaudited)

	2010			2009
Sales	$	33,600		$	-

Cost of sales		51,013			-
Gross margin		(17,413	)		-
Costs and expenses:
General and administrative		385,036			149,765
Interest expense		7,411			-
Total costs and expenses		392,447			149,765
Net loss	$	(409,860	)	$	(149,765	)
Per share information - basic and diluted:

Loss per common share	$	(0.01	)	$	(0.00	)

Weighted average common shares outstanding		41,996,003			39,137,022

See the accompanying notes to the financial statements.

XTREME GREEN PRODUCTS INC.

Consolidated Statements of Cash Flows

For the Three Months Ended March 31, 2010 and 2009

(Unaudited)

	2010			2009
Cash flows from operating activities:
Net cash used in operating activities	$	(737,737	)	$	(113,220	)
Cash flows from investing activities:
Purchase of property and equipment		(56,145	)		(51,504	)
Net cash used in investing activities		(56,145	)		(51,504	)
Cash flows from financing activities:
Common stock issued for cash		1,000,000			134,000
Proceeds from (repayment of) line of credit		(150,000	)		-
Stockholders loans, net		(14,430	)		13,050
Net cash provided by financing activities		835,570			147,050
Net increase in cash		41,688			(17,674	)
Cash - beginning of period		73,700			20,341
Cash - end of period	$	115,388		$	2,667

Supplemental Cash Flow Information:
Cash paid for interest	$	-		$	-
Cash paid for income taxes	$	-		$	-

Non Cash Investing and Financing Activities:
Conversion of related party note to common stock	$	250,000		$	-

See the accompanying notes to the financial statements.

XTREME PRODUCTS, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

MARCH 31, 2010

(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, 2009, 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 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 loss from operations as a result of its investment necessary to achieve its operating plan, which is long-range in nature. The Company incurred net losses through March 31, 2010, aggregating $2,826,039.

The Company’s ability to continue as a going concern is contingent upon its ability to secure additional financing, increase ownership equity and develop profitable operations. 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 expand its revenue base. Failure to secure such financing or to raise additional equity capital and to expand 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.

(4) Notes payable – Related Parties

At December 31, 2009 an aggregate of $157,830 was due to three. During the three months ended March 31, 2010, $14,430 was repaid leaving a balance of $143,400 at March 31, 2010. The loans are due on demand and bear interest at 4%.

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 was due on demand.

On March 25, 2010, the principal amount of the note ($250,000) was converted into 500,000 shares of the Company’s common stock (see Note 6). 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.

The balance of the note including the unpaid interest accrual at March 31, 2010, was $5,442.

(5) Line of Credit

During December 2009 the Company secured a line of credit with a financial institution for $150,000 bearing interest at 6% per annum maturing during December 2010. The line is secured by certain assets of a related party. The balance of the line at December 31, 2009, of $150,000 was repaid during the period ended March 31, 2010 and the unused portion of the line at March 31, 2010, was $150,000. Subsequent to March 31, 2010, the Company borrowed the balance of the line of $150,000.

(6) Stockholders’ (Deficit)

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 in January 2010 for a purchase price of $500,000. The remainder was issued on March 2010 for a purchase price of $500,000.

(7) 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.

The cost recognized for the period ended March 31, 2010 was $10,578, 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 March 31, 2010 is presented below:

Options	Shares		Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term		Intrinsic Value
Outstanding at December 31, 2009		-		-		-		-
Granted		-		-		-		-
Outstanding at March 31, 2010		805,000	$	0.50		6.6	$	0.00

The following table summarizes information about fixed price stock options at March 31, 2010:

Exercise Price				Number Outstanding				Weighted Average Contractual Life				Weighted Average Exercise Price				Number Exercisable				Exercise Price
$	0.50				805,000				6.6			$	0.50				—			$	—

(8) Subsequent Events

Common Stock

During April 2010 the Company sold 100,000 shares of common stock at $0.50 per share and received proceeds of $50,000.

During June 2010 the Company sold 102,995 shares of common stock at $0.50 per share and received proceeds of $51,498. In addition, 36,000 shares to a consultant for services rendered. The shares were valued at $0.50 per share.

During July 2010 the Company sold 199,750 shares of common stock at $0.50 per share and received proceeds of $99,875.

During August 2010 the Company sold 19,900 shares of common stock at $0.50 per share and received proceeds of $9,950.

Other

On June 22, 2010, a family trust of which a director is a trustee agreed to lend to the Company an aggregate of $1,000,000 at an annual interest rate of 12% in three tranches. The first tranche of $250,000 was advanced on July 9, 2010. The second tranche in the amount of $500,000 is to be funded on August 9, 2010. The balance is scheduled to be released on September 9, 2010. The loans are scheduled to be repaid on September 8, 2011. At any time prior to that date, at the option of the lender the loan is convertible into common stock at $0.40 per share. Upon conversion, the lender will also receive warrants to purchase 7,500,000 shares of common stock, 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.

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 have developed a line of electric powered products such as personal mobility vehicles, motor scooters, light trucks (UTV) and ATVs. 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.

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 March 31, 2010 to the three months ended March 31, 2009

Sales for the three months ended March 31, 2010 were $33,600. We did not generate any sales in the three months ended March 31, 2009.

Cost of sales for the three months ended March 31, 2010 was $51,013 which resulted in a gross loss of $17,413.

General and administrative expenses were $385,036 for the three months ended March 31, 2010 compared to $149,765 for the three months ended March 31, 2009. 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. The overall increase in general and administrative expenses is primarily attributable to an increase in the number of full-time employees. We had 12 full-time employees during the three months ended March 31, 2010 compared to two full-time employees during the comparable period in 2009.

Interest expense for three months ended March 31, 2010 was $7,411. Interest expense consists primarily of amounts due under a note payable to one of our directors and interest incurred under various short term lines of credit. We did not incur any interest expense during the three months ended March 31, 2009.

Our net loss for the three months ended March 31, 2010 was $409,860 or $0.01 per share compared to a net loss of $149,765 or $0.00 per share for the comparable prior year period.

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 March 31, 2010, we have incurred a cumulative net loss of $2,826,039. The notes to our financial statements include language that raises doubt about our ability to continue as a going concern. At March 31, 2010, we had cash of $115,388, net working capital of $99,632 and we owed our stockholders an aggregate of $143,400. Some of 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 has not been paid. The remaining stockholder loans are due on demand.

During the year ended December 31, 2009, we sold 1,169,000 shares of restricted common stock at a price per share of $0.50 per share and received proceeds $584,500. These proceeds were used for general working capital purposes. During the quarter ended March 31, 2010, one of our directors purchased 2,500,000 shares of our common stock for total cash consideration of $1,000,000. We also issued warrants to this director as follows: (i) a three year warrant to purchase 2,500,000 shares at $0.40 per share; (ii) a four year warrant to purchase 2,500,000 shares at $0.65 per share and; (iii) a five year warrant to purchase 2,500,000 shares at $0.75 per share.

Subsequent to March 31, 2010 and through September 3, 2010, we sold an additional 458,645 shares of common stock pursuant to private placements at a price of $0.50 per share and received cash proceeds of $229,323.

On June 22, 2010, a family trust of which one of our directors is a trustee (“the lender”) agreed to lend us an aggregate of $1,000,000 at an annual interest rate of 12% in three tranches. The first tranche of $250,000 was advanced on July 9, 2010. The second tranche in the amount of $500,000 was funded on August 9, 2010. The balance is scheduled to be released on September 9, 2010. The loans are scheduled to be repaid on September 8, 2011. At any time prior to that date, at the option of the lender the loan is convertible into common stock at $0.40 per share. Upon conversion, the lender will also receive warrants to purchase 7,500,000 shares of common stock, 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.

During December 2009 we secured a line of credit with a financial institution for $150,000 bearing interest at 6% per annum maturing during December 2010. The line is secured by certain assets of a related party. The balance of the line at December 31, 2009, of $150,000 was repaid during the period ended March 31, 2010, and the unused portion of the line at March 31, 2010, was $150,000. During the period ended June 30, 2010, we borrowed the entire balance of the line of $150,000.

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

We account for stock based compensation in accordance with ASC 718 Stock Compensation. 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.

Revenue Recognition

In general, we record revenue when persuasive evidence of an arrangement exists, services have been rendered or product delivery has occurred, the sales price to the customer is fixed or determinable, and collectability is reasonably assured. The following policies reflect specific criteria for our various revenues streams:

Revenue is recognized at the time the product is delivered or the service is performed. Provision for sales returns is estimated based on our historical return experience.

Deferred revenue is recorded for amounts received in advance of the time at which services are performed and included in revenue at the completion of the related services.

Going Concern

Our 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.

We have 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 March 31, 2010, we have incurred a cumulative net loss totaling $2,826,039. Our ability to continue as a going concern is contingent upon our ability to attain profitable operations and secure financing. In addition, our 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 we operate.

We are pursuing financing for our operations and we are seeking additional private investments. In addition, we are seeking to grow our revenue base. Failure to secure such financing, raise additional equity capital and establish our revenue base may result in the depletion of available funds and as a result, we may not be able pay our obligations.

Our 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 inability to continue as a going concern.

Recent Accounting Pronouncements

The following Accounting Standards Codification Updates have been issued, or became effective, since the beginning of the current period covered by these financial statements:

Pronouncement	Issued	Title

ASU No. 2010-01	January 2010	Equity (Topic 505): Accounting for Distributions to Shareholders with Components of Stock and Cash – a consensus of the FASB Emerging Issues Task Force

ASU No. 2010-02	January 2010	Consolidation (Topic 810): Accounting and Reporting for Decreases in Ownership of a Subsidiary – a Scope Clarification

ASU No. 2012-03	January 2010	Extractive Activities – Oil and Gas (Topic 932): Oil and Gas Reserve Estimation and Disclosures

ASU No. 2010-04	January 2010	Accounting for Various Topics: Technical Corrections to SEC Paragraphs

ASU No. 2010-05	January 2010	Compensation - Stock Compensation (Topic718): Escrowed Share Arrangements and the Presumption of Compensation

ASU No. 2010-06	January 2010	Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements

ASU No. 2010-07	January 2010	Not-for-Profit Entities (Topic 958): Not-for-Profit Entities – Mergers and Acquisitions

ASU No. 2010-08	February 2010	Technical Corrections to Various Topics

ASU No. 2010-09	February 2010	Subsequent Events (Topic 855): Amendments to Certain Recognition and Disclosure Requirements

ASU No. 2010-10	February 2010	Consolidation (Topic 810): Amendments for Certain Investment Funds

ASU No. 2010-11	March 2010	Derivatives and Hedging (Topic 815): Scope Exception Related to Embedded Credit Derivatives

ASU No. 2010-12	April 2010	Income Taxes (Topic 740): Accounting for Certain Tax Effects of the 2010 Health Care Reform Acts (SEC Update)

ASU No. 2010-13	April 2010	Compensation—Stock Compensation (Topic 718): Effect of Denominating the Exercise Price of a Share-Based Payment Award in the Currency of the Market in Which the Underlying Equity Security Trades—a consensus of the FASB Emerging Issues Task Force

ASU No. 2010-14	April 2010	Accounting for Extractive Activities—Oil & Gas—Amendments to Paragraph 932-10-S99-1 (SEC Update)

ASU No. 2010-15	April 2010	Financial Services—Insurance (Topic 944): How Investments Held through Separate Accounts Affect an Insurer’s Consolidation Analysis of Those Investments—a consensus of the FASB Emerging Issues Task Force

ASU No. 2010-16	April 2010	Entertainment—Casinos (Topic 924): Accruals for Casino Jackpot Liabilities—a consensus of the FASB Emerging Issues Task Force

ASU No. 2010-17	April 2010	Revenue Recognition—Milestone Method (Topic 605): Milestone Method of Revenue Recognition—a consensus of the FASB Emerging Issues Task Force

ASU No. 2010-18	April 2010	Receivables (Topic 310): Effect of a Loan Modification When the Loan is Part of a Pool That is Accounted for as a Single Asset—a consensus of the FASB Emerging Issues Task Force

To the extent appropriate, the guidance in the above Accounting Standards Codification Updates is already reflected in our condensed consolidated financial statements and management does not anticipate that these accounting pronouncements will have any future effect on our condensed consolidated financial statements.

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 March 31, 2010. 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

During the three months ended March 31, 2010, we sold 2,500,000 shares of restricted common stock at a price per share of $0.40 per share and received proceeds $1,000,000. These proceeds were used for general working capital purposes.

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: September 15, 2010		/s/ Sanford Leavitt
		Sanford Leavitt
		Chief Executive Officer (Principal Executive Officer)

Date: September 15, 2010		/s/ Neil Roth
		Neil Roth
		Chief Financial Officer (Principal Financial and Accounting Officer)

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XTREME GREEN ELECTRIC VEHICLES INC. Reports