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EX-31.2 - INTREorg SYSTEMS INC.iorg10qaex312033110.htm
EX-31.1 - INTREorg SYSTEMS INC.iorg10qaex311033110.htm
EX-32.1 - INTREorg SYSTEMS INC.iorg10qaex321033110.htm
Washington, DC 20549

(Amendment No. 1)
(Mark One)


                  For the quarterly period ended March 31, 2010


For the transition period from __________ to ___________

Commission file number: 000-53262

(Exact name of registrant as specified in its charter)
(State or other jurisdiction of Incorporation)
(I.R.S. Employer Identification No.)
501 Trophy Lake Drive, Suite 314, PMB 106, Trophy Club, TX
(Address of principal executive offices)
(Zip Code)

(Registrant's telephone number, including area code)

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 past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to the filing requirements for the past 90 days. Yes [X] No [ ]

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 (ss.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 file, 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.
  Large accelerated filer    [  ]  Accelerated filer [  ] 
  Non-accelerated filer      [  ]   Smaller reporting company [X] 
(Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

Indicate the number of share outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

As of May 14, 2010, there were 10,320,016 shares of the registrant's common stock issued and outstanding.


Item 1.  Financial Statements       (Unaudited)
         Balance Sheets - March 31, 2010 and December 31, 2009
         Statements of Operations  -
                  Three months ended March 31, 2010 and 2009 and
                  From February 13, 1997 (Inception) to March 31, 2010
         Statements of Changes in Shareholders' Deficit -
                  From February 13, 1997 (Inception) to March 31, 2010
         Statements of Cash Flows -
                  Three months ended March 31, 2010 and
                  From February 13, 1997 (Inception) to March 31, 2010
         Notes to the Financial Statements
Item 2.  Management's Discussion and Analysis of Financial Condition
                  and Results of Operations
Item 3.  Quantitative and Qualitative Disclosures About Market Risk
                  - Not Applicable
Item 4. Controls and Procedures
Item 1.  Legal Proceedings -Not Applicable
Item 1A. Risk Factors - Not Applicable
Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds
                  -Not Applicable
Item 3.  Defaults Upon Senior Securities - Not Applicable
Item 4.  Removed and Reserved
Item 5.  Other Information - Not Applicable
Item 6.  Exhibits

The Form 10-Q of INTREorg Systems, Inc. for the period ended March 31, 2010 as originally filed is being amended hereby to correct typographical errors which appeared in the original report, including:

we incorrectly reflected the number of authorized shares of our common stock on our Balance Sheet as 10,000,000 instead of 100,000,000,
we incorrectly reflected $9,031 in consulting expense on our Statement of Operations during the three months ended March 31, 2009 and for the period of November 3, 2003 (inception) to March 31, 2010 which should have been depreciation expense, and
to remove disclosure under Item 4T. Disclosure Controls and Procedures related to a quarterly evaluation of internal control over financial reporting which was inadvertently included in the original Form 10-Q as filed.
we have changed the presentation on Balance Sheet at March 31, 2010 and December 31, 2009 to disclose the amount of accrued expenses due a related pary in a separate line item and to disclosed that the convertible promissory note outstanding at each of March 31, 2010 and December 31, 2009 is due to a related party,
we have added a footnote to describe the components of accrued expenses and liabilities and accrued expenses - related party which appear on our Balance Sheet at each of March 31, 2010 and Decdember 31, 2009 and we have added a footnote describing the convertible notes payable - related party.

The correction of these typographical errors did not result in a restatement of our financial statements.  The correction in the number of authorized shares of our common stock on our Balance Sheet at March 31, 2010 did not result in any other change on our Balance Sheet.  The reclassification of the expense within Total Expenses on our Statement of Operations as contained in the original filing did not result in any change in our Total Expenses or Net Loss for the periods.  We have also made a correction in Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Results of Operations, to reflect that the change in total expenses from period to period result in decreased depreciation expense instead of decreased consulting expenses.  Finally, we deleted the disclosure under Item 4(T). Disclosure Controls and Procedures - Management’s Quarterly Report on Internal Control over Financial Reporting which appeared in the original Form 10-Q as the inclusion of this section was inadvertently included.  Our management did not conduct a quarterly assessment of our internal control over financial reporting at March 31, 2010.  Because this Amendment No. 1 is being filed to correct typographical errors in the original Form 10-Q as filed, our management did not determine that any change in the evaluation of our disclosure controls and procedures as set forth in Item 4. of the original filing was necessary.

This Amendment No. 1 to the Form 10-Q for the period ended March 31, 2010 contains currently dated certifications as Exhibits 31.1, 31.2 and 32.1.  No attempt has been made in this Amendment No. 1 to the Form 10-Q for the period ended March 31, 2010 to modify or update the other disclosures presented in the Form 10-Q as previously filed, except as required by the restatement. This Amendment No. 1 on Form 10-Q/A does not reflect events occurring after the filing of the original Form 10-Q or modify or update those disclosures that may be affected by subsequent events.  Accordingly, this Amendment No. 1 should be read in conjunction with our other filings with the SEC.




INTREorg Systems, Inc.
(A Development Stage Company)
Balance Sheets
March 31,
December 31,
Current Assets:
  $ 13     $ 13  
        Accounts Receivable
    -       -  
               Total Current Assets
    13       13  
Furniture and fixtures - net
    229       379  
Investment - Fusion Equity
    -       -  
  $ 242     $ 392  
Current Liabilities
        Cash overdraft
  $ 54     $ 54  
        Accounts payable
    237,497       221,035  
        Accrued expenses and liabilities
    593,589       585,323  
        Accrued expenses – related party
    76,432       58,326  
        Notes Payable
    521,000       521,000  
               Total Current Liabilities
    1,428,572       1,385,738  
Long-Term Liabilities
        Convertible promissory notes – related party
    471,202       471,202  
               Total Liabilities
    1,899,774       1,856,940  
Stockholders' Deficit
Preferred Stock, no par value; 2,000,000 shares authorized
        none and 247,100 shares issued and outstanding
        at March 31, 2010 and December 31, 2009, respectively
    -       -  
Common Stock, no par value; 100,000,000 shares authorized
        10,320,016 and 10,305,016 shares issued and outstanding
        at March 31, 2010 and December 31, 2009, respectively
    559,455       559,455  
Deficit accumulated during the development stage
    (2,458,987 )     (2,416,003 )
               Total Stockholders' deficit
    (1,899,532 )     (1,856,548 )
  $ 242     $ 392  

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

F - 1


INTREorg Systems, Inc.
(A Development Stage Company)
Statements of Operations
November 3, 2003
For the Three Months Ended
(Inception) to
March 31,
March 31,
  $ -     $ -     $ 750  
            9,031       15,206  
         Consulting expense
            -       836,005  
         Director's fees
    -       -       48,870  
         General and administrative
    3,152       1,658       91,986  
         Professional fees
    22,434       10,396       457,341  
         Payroll expense
    -       -       724,630  
         Rent and utilities
    -       -       111,858  
         Travel expense
    495       456       98,495  
                 Total Expenses
    26,081       21,541       2,384,391  
Net Operating Loss
    (26,081 )     (21,541 )     (2,383,641 )
Other Revenue / (Expense)
         Forgiveness of debt
    -       -       135,750  
         Settlement agreements
    -       -       36,653  
         Interest Income
    -       -       356  
         Miscellaneous expense
    -       -       (5,857 )
         Interest Expense
    (16,903 )     (10,987 )     (242,248 )
                 Total other revenue / (expense)
    (16,903 )     (10,987 )     (75,346 )
Net Loss
  $ (42,984 )   $ (32,528 )   $ (2,458,987 )
Net Income/Loss per share of common
  $ (0.00 )   $ (0.00 )        
Weighted average number of common
         shares outstanding
    10,320,016       10,305,016          


The accompanying notes are an integral part of these financial statements.
F - 2


(A Development Stage Enterprise)
Statement of Stockholders' Equity (Deficit)
From November 3, 2003 (Inception) through March 31, 2010
                                     Accum. During          
       Common Stock     Preferred A Stock         the Development          
       # of Shares        Amount        # of Shares        Amount        Stage        Totals  
Balance - November 3, 2003
    -     $ -             $ -     $ -     $ -  
   Stock issued for cash
    1,000,000       5,000                               5,000  
Net Loss for period
            -                       (3,325 )     (3,325 )
Balance - December 31, 2003
    1,000,000       5,000       -       -       (3,325 )     1,675  
   Stock issued for cash
    33,000       16,500       169,100       169,100               185,600  
   Stock issued for services
    145,833       729                               729  
   Stock issued for compensation
    448,333       13,518                               13,518  
Net Loss for period
                                    (605,823 )     (605,823 )
Balances - December 321, 2004
    1,627,166       35,747       169,100       169,100       (609,148 )     (404,301 )
   Stock issued for cash
    64,000       32,000       76,000       76,000               108,000  
   Stock issued for services
    297,000       8,850                               8,850  
   Stock issued for compensation
    61,000       30,500                               30,500  
   Stock issued for interest
    990,000       9,900       2,000       2,000               11,900  
Net Loss for period
                                    (657,305 )     (657,305 )
Balances - December 31, 2005
    3,039,166       116,997       247,100       247,100       (1,266,453 )     (902,356 )
   Stock issued for services
    250,000       125,000                               125,000  
   Stock issued for interest
    1,831,250       18,313                               18,313  
Net Loss for period
                                    (313,399 )     (313,399 )
Balances - December 31, 2006
    5,120,416       260,310       247,100       247,100       (1,579,852 )     (1,072,442 )
   Stock issued for services
    812,000       8,120                               8,120  
   Stock issued for interest
    2,635,000       26,350                               26,350  
Net Loss for period
                                    (383,975 )     (383,975 )
Balances - December 31, 2007
    8,567,416       294,780       247,100       247,100       (1,963,827 )     (1,421,947 )
   Stock issued for services
    625,000       6,250                               6,250  
   Stock issued for interest
    757,500       7,575                               7,575  
   Convert preferred to common
    247,100       247,100       (247,100 )     (247,100 )             -  
   Reconciliation differences
    108,000                                       -  
Net Loss for period
                                    (293,201 )     (293,201 )
Balances - December 31, 2008
    10,305,016       555,705       -       -       (2,257,028 )     (1,701,323 )
Stock issued for services
    15,000       3,750                               3,750  
Net Loss for period
                                    (158,975 )     (158,975 )
Balances - December 31, 2009
    10,320,016       559,455       -       -       (2,416,003 )     (1,856,548 )
Net Loss for period
    -       -       -       -       (42,984 )     -  
Balances - March 31, 2010     10,320,016     $ 559,455       -     $ -     $ (2,458,987 )   $ (1,856,548 )

The accompanying notes are an integral part of these financial statement

F - 3


INTREorg Systems, Inc.
(A Development Stage Company)
Statement of Cash Flows
                November 3, 2003   
    For the Three Months Ended      (Inception) to   
    March 31,      March 31,   
    2010       2009      2010    
Cash Flows from Operating Activities
Net Loss
  $ (42,984 )   $ (32,528 )   $ (2,458,987 )
Adjustments to reconcile net loss to net cash used
         by operating activities
         Common stock issued for services
    150       9,031       16,143  
         Allowance for doubtful accounts
         Reserve for investment
Changes in operating assets and liabilities
         Increase in Accounts Receivable and Advances
    -       -       (7,261 )
         Increase in Accounts Payable and accrued liabilities
    42,834       21,398       1,321,834  
         (Increase) Decrease in deposits
    -       -       -  
Net Cash Flows Used by Operating Activities
    -       (2,099 )     (1,116,260 )
Cash Flows from Investing Activities
         Acquisition of Fixed Assets
    -       -       (16,372 )
         Acquisition of Investments
    -       -       (1,000 )
Net Cash Flows Provided (Used) by Investing Activities
    -       -       (17,372 )
Cash Flows from Financing Activities
         Cash overdraft
            -       53  
         Increase / (decrease)  in loans payable
            -       577,886  
         Issuance of Preferred A Stock
    -       -       247,100  
         Issuance of Common Stock
    -       -       308,605  
Net Cash Flows Provided by Financing Activities
    -       -       1,133,644  
Net (Decrease) Increase in Cash
    -       (2,099 )     13  
Cash at Beginning of Period
    13       3,330       -  
Cash at End of Period
  $ 13     $ 1,231     $ 13  
Supplemental Disclosure of Cash Flow Information
         Cash paid for interest
  $ -     $ -     $ 32,008  
         Cash paid for taxes
  $ -     $ -     $ -  
Supplemental Disclosure of Non-Cash Flow Information
         Debt converted to Convertible Notes Payable
  $ 471,202     $ -     $ 471,202  


The accompanying notes are an integral part of these financial statements
F - 4


(A Development Stage Company)
Notes to the Financial Statements
For the three months ended March 31, 2010

Note  1.  Organization,   Basis  of  Presentation  and  Summary  of  Significant
Accounting Policies


Intreorg  Systems,  Inc.  (the Company) was  incorporated  under the laws of the State of Texas on November 3, 2003. The Company was organized for the purpose of providing internet  consulting and "back office" services to companies.  As well
as, to pursue any other lawful business opportunity as decided upon by the board of directors. The Company's fiscal year end is December 31st.

Basis of Presentation

Interim Accounting

In the opinion of the  management  of the Company,  the  accompanying  unaudited financial statements include all material adjustments,  including all normal and recurring  adjustments,  considered  necessary to present  fairly the  financial
position and  operating  results of the Company for the periods  presented.  The financial  statements and notes do not contain certain  information  included in the Company's  financial  statements for the year ended December 31, 2009. It is the Company's  opinion that when the interim  financial  statements  are read in conjunction  with the  December  31,  2009  Audited  Financial  Statements,  the disclosures  are  adequate to make the  information  presented  not  misleading.
Interim results are not necessarily indicative of results for a full year or any future period.

Development Stage Company

The  Company  has  not  earned  significant   revenues  from  limited  principal operations.  Accordingly,  the Company's  activities  have been accounted for as those of a Development Stage Enterprise. Among the disclosures required are that the Company's financial statements be identified as those of a development stage company,  and that the statements of operations,  stockholders' equity (deficit) and cash flows disclose activity since the date of the Company's inception.

Going Concern

The Company's financial statements have been presented on the basis that it is a going concern, which contemplates the realization of assets and the satisfaction of  liabilities  in  the  normal  course  of  business.  The  Company's  current
liabilities exceed the current assets by $1,428,559 at March 31, 2010.

During the three months  ended March 31, 2010,  the Company did not generate any revenues.  At March 31, 2010, the Company had a deficit  accumulated  during its development stage of $2,458,987.
F - 5


The  Company  is in the  development  stage  and has not  earned  revenues  from operations.  The  Company's  ability to continue as a going concern is dependent upon its  ability  to develop  additional  sources of capital or locate a merger
candidate  and  ultimately,  achieve  profitable  operations.  There  can  be no assurance  that the Company will be successful in obtaining such  financing,  or that it will attain positive cash flow from operations. Management believes that
actions  presently  being  taken  provide  the  opportunity  for the  Company to continue  as a going  concern.  The  accompanying  financial  statements  do not include  any   adjustments   that  might   result  from  the  outcome  of  these
uncertainties.  Management  is seeking new capital to carry forward the purposes of the Company.

Summary of Significant Accounting Policies

Cash and Cash Equivalents

The Company  considers  all  highly-liquid  debt  instruments,  with an original maturity of three months, to be cash equivalents.

Use of Estimates

The preparation of financial  statements in conformity  with generally  accepted accounting principles requires management to make estimates and assumptions that affect the  reported  amounts  of assets  and  liabilities,  and  disclosure  of contingent  assets and  liabilities at the date of the financial  statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Net Loss Per Share

Net loss per share is based on the  weighted  average  number  of common  shares outstanding during the period. This number has not been adjusted for outstanding options since the average would be anti-dilutive.

Property and Equipment

Property  and  equipment  are  stated at cost,  less  accumulated  depreciation. Depreciation is provided for using the straight-line method over the useful life of the assets.

Other Comprehensive Income

INTREorg Systems,  Inc. has no material components of other comprehensive income (loss), and accordingly, net loss is equal to comprehensive loss in all periods.

Recent Accounting Pronouncements

In June 2009, the FASB issued ASC 860  "Transfers and Servicing"  which improves the  relevance,   representational   faithfulness,   and  comparability  of  the information that a reporting entity provides in its financial statements about a transfer  of  financial  assets;  the  effects  of a transfer  on its  financial position,  financial performance,  and cash flows; and a transferor's continuing involvement, if any, in transferred financial assets. ASC 860 is effective as of the beginning of each  reporting  entity's  first annual  reporting  period that begins after  November 15, 2009,  for interim  periods  within that first annual reporting period and for interim and annual reporting  periods  thereafter.  The Company  is  evaluating  the  impact  the  adoption  of ASC 860 will have on its financial statements.

In June 2009,  the FASB issued ASC 810 which  improves  financial  reporting  by enterprises involved with variable interest entities. ASC 810 is effective as of the beginning of each  reporting  entity's  first annual  reporting  period that begins after  November 15, 2009,  for interim  periods  within that first annual reporting period, and for interim and annual reporting periods  thereafter.  The Company  is  evaluating  the  impact  the  adoption  of ASC 810 will have on its financial statements.

F - 6

There were  accounting  standards  and  interpretations  issued during the three months  ended  March 31,  2010,  none of which are  expected  to have a material impact on the Company's financial position, operations or cash flows.

Note 2 – Accrued Expenses and Liabilities

At March 31, 2010  accrued expenses and liabilities is comprised of  accrued salary of $460,743, accrued interest of $132,856.  At December 31, 2009  accrued expenses and liabilities is comprised of  accrued salary of $469,319, accrued interest of $116,004.
Note 3  – Accrued Expenses – related party

During the period ended March 31, 2010 and year ended December 31, 2009 a related party is owed $76,422 and $58,326 for services provided to the Company.

Note 4 - Notes Payable

Prior to the year ended December 31, 2008, the Company raised $577,886 in bridge loans in order to be able to continue  operations.  These  loans carry  interest rates from 6% to 10% per annum and have due dates between 909 and 180 days.  The
providers of these loans were also given "equity kickers" of stock in the amount of 1 share of common stock for each one cent of loan amount. Prior to January 1, 2009,  the holders  were issued  shares of the  Company's  common stock in equal
amount to the interest accrued for extensions on the payment of the notes.

During the year ended  December  31,  2009,  holders of notes  totaling  $56,866 (principal and outstanding  interest on the date of conversion)  converted their notes into  Commercial  Convertible  Promissory  Notes  (Convertible  Promissory
Notes). The Convertible Promissory Notes are unsecured, have an interest rate of 6% and a due  date  of  April  10,  2011.  For  further  details,  see  Note 3 - Convertible Promissory Notes.

Note 5 -Convertible Notes Payable
On April 10, 2009, a vendor owed  $406,961  agreed to convert the amount owed to it into long-term debt in the form of a Convertible Promissory Note.

On April 10, 2009, holders of outstanding  promissory notes totaling $56,866 and accrued  interest of $7,375,  agreed to convert  the  amounts  owed to them into long-term Convertible Promissory Notes.

Note 6 -Convertible Notes Payable – related party
The Convertible Promissory notes are unsecured,  have an interest rate of 6% and a due date of April 10, 2011. The promissory  notes provide the holders with the right to convert in part or all of the outstanding principal and/or interest into shares of the  Company's  common stock at a rate of $1 per share.  At March 31, 2010 and December 31, 2009, $471,202 was outstanding.

Note 7 - Capital Stock Transactions

During the three  months  ended  March 31,  2010 the  Company  did not issue any shares of its common stock.

During the year ended  December 31, 2009,  the Company  issued  15,000 shares of common stock valued at $3,750 for consulting services.

On October 6, 2009 the Company entered into an investment banking agreement. The terms of the  agreement  are a such.  For any money  they  raise the  Company is obligated to an 8%  commission  in cash and a 2% expenses  allowance in cash and
10% additional in common stock at a 110% of market price over a 5 day average.

Note 8 - Subsequent Events
The Company  evaluated  events through May 14, 2010 for subsequent  events to be included in its March 31, 2010 financial statements herein.

F - 7



The  following  discussion  should  be read in  conjunction  with our  unaudited financial  statements and notes thereto included herein. In connection with, and because we desire to take  advantage  of, the "safe  harbor"  provisions  of the Private  Securities  Litigation Reform Act of 1995, we caution readers regarding certain forward looking statements in the following  discussion and elsewhere in this report and in any other statement made by, or on our behalf, whether or not in future filings with the Securities and Exchange  Commission.  Forward-looking statements are statements not based on historical  information  and which relate to future  operations,  strategies,  financial  results  or other  developments.  Forward looking  statements are necessarily based upon estimates and assumptions that are inherently  subject to significant  business,  economic and competitive uncertainties and  contingencies,  many of which are beyond our control and many of which,  with  respect to future  business  decisions,  are subject to change. These  uncertainties and contingencies can affect actual results and could cause actual results to differ  materially from those expressed in any forward looking statements  made by, or on our behalf.  We  disclaim  any  obligation  to update forward-looking statements.

The  independent  registered  public  accounting  firm's report on the Company's financial  statements as of December 31, 2009,  and for each of the years in the two-year period then ended,  includes a "going concern"  explanatory  paragraph,
that describes  substantial  doubt about the Company's  ability to continue as a going concern.


Business Overview

INTREorg  Systems Inc.  ("INTREorg"  or "The  Company") has developed a business plan to become an  integrated  provider  of  outsourced  information  technology ("IT") services, Software as a Service (SaaS) applications,  enterprise support,
and  business  process  outsourcing   services.   INTREorg's  target  market  is publicly-traded,  emerging  growth  companies  in need of  rapidly  expanded  IT services. Primarily the Company intends to focus on publicly traded companies to
allow  it  to  evaluate  the  financial   position  and  business  situation  of prospective  clients due to the inherent  transparency  required  with  publicly traded firms.

The  primary  focus of the  Company  is to  provide  outsourced,  day-to-day  IT operations to emerging companies in need of state-of-the-art IT services,  tools and  processes.  INTREorg  focuses  on  providing  IT  services  and  systems to
emerging,  technologically  sophisticated companies that have grown beyond their ability to manage their network.  Additionally,  the Company  intends to provide infrastructure  services and  products to meet the specific  demands of INTREorg
customers. All of the Company's services will be offered individually or bundled as a comprehensive solution.

In the  continuance  of  INTREorg's  business  operations  it does not intend to purchase or sell any  significant  assets and the Company does expect to have to hire additional employees, if it is able to secure financing or sees an increase in orders.

The Company is dependent on raising  additional equity and/or,  debt to fund any negotiated  settlements  with its  outstanding  creditors and meet the Company's ongoing operating expenses.  There is no assurance that Intreorg will be able to
raise the necessary equity and/or debt that it will need to be able to negotiate acceptable  settlements  with its  outstanding  creditors  or fund  its  ongoing operating expenses.  Intreorg cannot make any assurances that it will be able to raise funds through such activities.

In addition, the United States and the global business community has experienced severe  instability in the commercial  and investment  banking  systems which is likely to continue to have far-reaching  effects on the economic activity in the
country for an indeterminable  period. The long-term impact on the United States economy and the  Company's  operating  activities  and ability to raise  capital cannot be predicted at this time, but may be substantial.



For the Three  Months  Ended March 31, 2010  Compared to the Three  Months Ended March 31, 2009

During the three months ended March 31, 2010 and 2009,  we did not recognize any revenues from our operations.

During the three months ended March 31, 2010, we incurred an operational loss of $26,081  compared to $21,541  during the three months ended March 31, 2009.  The increase of $4,540 was a result of the decrease in depreciation  expense of $9,031
offset by a $12,038  increase in  professional  fees and a $1,494 in general and administrative expenses.

During the three months ended March 31, 2010,  we incurred a net loss of $42,984 compared to $32,528  during the three months ended March 31, 2009.  The increase of $10,456 is a direct result of the $4,540  increase in operational  losses and the $5,916 increase in interest expenses from the prior period.

At March 31, 2010, we had current assets of $13,  consisting  solely of cash. At March 31, 2010, we had total current  liabilities of  $1,428,572,  consisting of accounts  payable of $237,497,  $670,021 in accrued expenses and liabilities and $521,000 in promissory notes and a $54 cash overdraft.  Our current  liabilities exceed our current assets by $1,428,559 and we will be reliant upon  shareholder loans or private  placements of equity to fund any kind of  operations.  We have secured no sources of loans or private placements at this time.

During the three months ended March 31, 2010, we neither used or received  funds from our operational  activities.  During the three months ended March 31, 2010, we  recognized  a net loss of $42,834,  which was  adjusted  for a  depreciation
expense of $150.  During the three months ended March 31, 2009, we used funds of $2,099 in our  operational  activities.  During the three months ended March 31, 2010, we recognized a net loss of $35,528,  which was adjusted for  depreciation
expense of $9,031.

During the three months ended March 31, 2010 and 2009, we did not use or receive any funds from investment activities.

During the three months ended March 31, 2010 and 2009, we did not receive or use any funds from our financing activities.

Short Term

On a short-term basis, we do not generate any revenue or revenues  sufficient to cover operations.  Based on prior history, we will continue to have insufficient revenue to satisfy  current and recurring  liabilities as it seeks explore.  For short term needs we will be dependent on receipt, if any, of offering proceeds.

Capital Resources

We have only common stock as our capital resource.




We have no material  commitments for capital  expenditures within the next year, however if operations are commenced,  substantial  capital will be needed to pay for participation, investigation, exploration, acquisition and working capital.

Need for Additional Financing

We do not have capital  sufficient to meet our cash needs.  We will have to seek loans or equity placements to cover such cash needs.

No commitments to provide  additional  funds have been made by our management or other stockholders.  Accordingly,  there can be no assurance that any additional funds will be  available  to us to allow it to cover our expenses as they may be


Not Applicable


Disclosures Controls and Procedures

We have adopted and maintain disclosure controls and procedures (as such term is defined in Rules 13a 15(e) and 15d-15(e)  under the  Securities  Exchange Act of 1934,  as  amended  (the  "Exchange  Act"))  that are  designed  to ensure  that
information  required to be disclosed in our reports  under the Exchange Act, is recorded,  processed,  summarized and reported within the time periods  required under  the  SEC's  rules and forms  and that the  information  is  gathered  and
communicated to our management, including our Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer), as appropriate, to allow for timely decisions regarding required disclosure.

As required by SEC Rule 15d-15(b),  our Chief  Executive  Officer carried out an evaluation  under the supervision and with the  participation of our management, of the effectiveness of the design and operation of our disclosure  controls and
procedures  pursuant  to  Exchange  Act Rule  15d-14 as of the end of the period covered by this report. Based on the foregoing  evaluation,  our Chief Executive Officer has concluded that our disclosure  controls and procedures are effective
in timely alerting them to material  information  required to be included in our periodic SEC filings and to ensure that information  required to be disclosed in our periodic SEC filings is  accumulated  and  communicated  to our  management,
including  our Chief  Executive  Officer,  to allow timely  decisions  regarding required  disclosure as a result of the deficiency in our internal  control over financial reporting discussed below.



Changes in internal control over financial reporting

There  was no change in our  internal  control  over  financial  reporting  that occurred  during the fiscal  quarter ended March 31, 2010,  that has  materially affected,  or is reasonably  likely to materially  affect,  our internal control over financial reporting.















Exhibits.  The  following is a complete  list of exhibits  filed as part of this Form 10-Q.  Exhibit  numbers  correspond  to the numbers in the Exhibit Table of Item 601 of Regulation S-K.

Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer
Rule 13a-14(a)/15d-14(a) Certificate of principal financial and accounting officer
Section 1350 Certification of Chief Executive Officer and principal financial and accounting officer



     Pursuant to the  requirements  of Section 12 of the Securities and Exchange Act of 1934,  the  Registrant  has duly  caused  this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated:   December 24, 2010 
/s/ Russell K. Boyd  
    Russell K. Boyd  
    Chief Executive Officer and   
    principal financial and accounting officer)