Lustros Inc. - FORM 10-Q

Attached files

file	filename
EXCEL - IDEA: XBRL DOCUMENT - Lustros Inc.	Financial_Report.xls
EX-3.02 - EXHIBIT 3.02 - Lustros Inc.	exhibit3-02.htm
EX-31.01 - EXHIBIT 32.01 - Lustros Inc.	exhbit32-01.htm
EX-3.01 - EXHIBIT 3.01 - Lustros Inc.	exhibit3-01.htm
EX-31.01 - EXHIBIT 31.01 - Lustros Inc.	exhibit31-01.htm
EX-32.02 - EXHIBIT 32.02 - Lustros Inc.	exhibit32-02.htm
EX-31.02 - EXHIBIT 31.02 - Lustros Inc.	exhibit31-02.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

[Missing Graphic Reference]

FORM 10-Q

[Missing Graphic Reference]

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

For the quarterly period ended March 31, 2012

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

For the transition period from ______ to _______

Commission file number: 000-30215

LUSTROS INC.

(Formerly Power-Save Energy Company)

(Exact name of registrant as specified in its charter)

Utah	87-9369569
(state or other jurisdiction of incorporation or organization)	(I.R.S. Employer I.D. No.)

POWER-SAVE ENERGY COMPANY

(former name of former address, if changes since last report)

1005 South Center

Redlands, CA 92373

(Address of principal executive offices)

(866) 297-7192

(Issuer's telephone number)

with a copy to:

Zouvas Law Group, P.C.

2368 Second Avenue

San Diego, CA 92101

Telephone (619) 688-1116

Facsimile: (619) 688-1716

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.

x Yes o 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 (§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). o Yes o No (Not required)

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.

Large Accelerated Filer o Accelerated Filer o

Non-Accelerated Filer o 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).

o Yes x No

As of, March 31, 2012, there were 62,856,426 shares of the registrant’s $0.001 par value common stock issued and outstanding.

Page - 1

LUSTROS INC.

(FORMERLY POWER-SAVE ENERGY COMPANY*)

TABLE OF CONTENTS

		PAGE
PART I	FINANCIAL INFORMATION
ITEM 1.	FINANCIAL STATEMENTS	3
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	12
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	15
ITEM 4.	CONTROLS AND PROCEDURES	15
PART II	OTHER INFORMATION
ITEM 1.	LEGAL PROCEEDINGS	16
ITEM 1A.	RISK FACTORS	16
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	16
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	16
ITEM 4.	[REMOVED AND RESERVED]	16

ITEM 5.	OTHER INFORMATION	16
ITEM 6.	EXHIBITS	18

Special Note Regarding Forward-Looking Statements

Information included in this Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (“Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”). This information may involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Lustros Inc. (the “Company”), to be materially different from future results, performance or achievements expressed or implied by any forward-looking statements. Forward-looking statements, which involve assumptions and describe future plans, strategies and expectations of the Company, are generally identifiable by use of the words “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend,” or “project” or the negative of these words or other variations on these words or comparable terminology. These forward-looking statements are based on assumptions that may be incorrect, and there can be no assurance that these projections included in these forward-looking statements will come to pass. Actual results of the Company could differ materially from those expressed or implied by the forward-looking statements as a result of various factors. Except as required by applicable laws, the Company has no obligation to update publicly any forward-looking statements for any reason, even if new information becomes available or other events occur in the future.

*Please note that throughout this Quarterly Report, and unless otherwise noted, the words "we," "our," "us," the "Company," or "LSLD" refers to Lustros Inc.

Page - 2

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

INDEX
Unaudited Condensed Balance Sheet as of March 31, 2012	F-1
Unaudited Condensed Statement of Operations for the three Months Ended March 31, 2012 and Since Inception And Statement of Income for the period ending March 31, 2012 and Since Inception	F-2
Unaudited Condensed Statement of Cash Flows for the period Ended March 31, 2012	F-3
Notes to Financial Statements	F-4

Page - 3

Lustros, Inc.
(An Exploration Stage Company)
Consolidated Balance Sheets
(Unaudited)
	March 31, 2012
ASSETS
Current Assets
Cash	$	303,404
Notes receivable		52,004
Prepaid expenses		663,990
Total Current Assets		1,019,397

Non-Current Assets
Fixed asset, net		4,432,817
Intangible assets, net of impairment		4,462,000
Other assets		-
Total Non-Current Assets		8,894,817

TOTAL ASSETS		9,914,214

LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities
Accounts payable		327,236
Notes payable		2,000,000
Total Liabilities		2,527,236

Stockholders' Equity
Common stock, $.001 par value, 100,000,000 shares authorized,
62,856,426 issued and outstanding		62,857
Paid in capital		10,460,377
Gain/loss on foreign currency conversion		(50,548	)
Other comprehensive loss		(2,121,581	)
Net income/(loss) accumulated during development stage		(964,128	)
Total Stockholders' Equity		7,386,978

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	9,914,214

See notes to consolidated financial statements

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

F - 1

(An Exploration Stage Company)
Consolidated Statements of Operations
(Unaudited)
	For the three months ended March 31, 2012			September 15, 2010 (Inception) to March 31, 2012

Revenue	$	12,532		$	12,532
Inventory obsolescence		-			-
Cost of goods sold		-			-
Gross profit/(loss)		12,532			12,532

Operating expenses
General and administrative		398,835			894,575
Legal and accounting		1,633			7,391
Mining costs		12,775			70,542
Research & development		3,445			23,055
Total expenses		416,688			995,563

Ordinary income (loss) from continued operations		(404,156	)		(983,032	)
Loss from discontinued operations		18,903			18,903

Other income (loss)		-			-

Net income (loss)	$	(385,253	)	$	(964,128	)

Income per share	$	(0.02	)

Weighted average common shares		18,021,261


Statements of Comprehensive Income (Loss)
(Unaudited)
	For the three months ended March 31, 2012			September 15, 2010 (Inception) to March 31, 2012

Net income (loss)	$	(385,253	)	$	(964,128	)

Gain/(loss) on foreign currency conversion		(50,548	)		(50,548	)

Total comprehensive income (loss)	$	(435,801	)	$	(1,014,676	)

See notes to consolidated financial statements

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

F - 2

Lustros, Inc.
(An Exploration Stage Company)
Consolidated Statements of Cash Flows
(Unaudited)
	September 15, 2010 (Inception) to March 31, 2012
Cash flows from operating activities
Net income/(loss)	$	(964,128	)

Non-cash transactions to reconcile cash used in operations
Loss from discontinued operations		(18,903	)

Cash used in operations
Other receivable		(52,004	)
Accounts payable		327,236
Prepaid expenses		(663,990	)
Total cash from operations		(1,371,790	)

Cash flows from investing activities
Purchase of intangible assets		-
Purchase of fixed assets		(4,432,817	)
Total cash used in investing activites		(4,432,817	)

Cash from financing activities
Stock sales		6,158,558
Total cash from financing activities		6,158,558

Effect if foreign currency exchange rate		(50,548	)

INCREASE (DECREASE) IN CASH		303,404

BEGINNING CASH		-

ENDING CASH	$	303,404


See notes to consolidated financial statements

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

F - 3

LUSTROS, INC.

NOTES TO UNAUDITED CONSOLIDATED

FINANCIAL STATEMENTS

Note 1 - Organization and Principal Activities

Organization and Description of Business

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

On February 29, 2012, Power-Save Energy Company entered into an agreement to acquire all of the capital stock of Bluestone S.A. On March 9, 2012, pursuant to a Share Exchange Agreement (the “Share Exchange Agreement”) with Bluestone, S.A., a Chilean corporation (“Bluestone”), and the shareholders of Bluestone, S.A. (“Bluestone Shareholders’), the Company acquired 100% of the outstanding shares of common stock of Bluestone (the “Bluestone Stock”) from Bluestone Shareholders. In exchange for the Bluestone Stock, the Company issued 60,000,000 shares of its common stock to the Bluestone Shareholders. As a result of closing the transaction, Bluestone Shareholders now hold approximately 96.7% of the Company’s issued and outstanding common stock. For accounting purposes, the Bluestone acquisition is treated as a reverse acquisition with Bluestone treated as the acquirer and the Company as the acquired party. As a result, the business and financial information included in the report is the business and financial information of Bluestone prior to March 9, 2012 and the combined entity after March 9, 2012.

On March 31, 2012 the Company agreed with the former management of Power-Save Energy Company to transfer the renewable energy and energy savings product business, including all assets, liabilities, and the name Power-Save Energy Company to the former management in lieu of unpaid salaries.

On April 12, 2012 an Amendment to the Articles of Incorporation was filed to change its name from Power-Save Energy Company to Lustros, Inc.

Note 2 - Summary of Significant Accounting Policies

Basis of Presentation

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

Principles of Consolidation

The consolidated financial statements include the financial statements of Lustros, Inc., its wholly owned subsidiary Bluestone, and the subsidiaries and mining projects owned by Bluestone. All significant inter-company balances and transactions have been eliminated in consolidation.

Foreign Currency Translation

The financial statements of the Company’s wholly-owned subsidiary, Bluestone are measured using the local currency (the Chilean Peso (CLP) is the functional currency). Assets and liabilities of Bluestone SA are translated at exchange rates as of the balance sheet date. Revenues and expenses are translated at average rates of exchange in effect during the period. The resulting cumulative translation adjustments have been recorded as a component of comprehensive income (loss), included as a separate item in the statement of operations. The exchange rate at March 31, 2012 was 489.76 Chilean Pesos per United States Dollar, based on historical rates from Banco Central de Chile.

The Company is exposed to movements in foreign currency exchange rates. In addition, the Company is subject to risks including adverse developments in the foreign political and economic environment, trade barriers, managing foreign operations, and potentially adverse tax consequences. There can be no assurance that any of these factors will not have a material negative impact on the Company's financial condition or results of operations in the future.

F - 4

Financial Instruments

The Company's financial instruments include cash and cash equivalents, accounts receivable and accounts payable. At March 31, 2012 the carrying cost of these instruments approximate their fair value.

Cash Equivalents

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

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation. Depreciation is computed principally on the straight-line method over the estimated useful life of each type of asset which ranges from three to five years. Major improvements are capitalized, while expenditures for repairs and maintenance are expensed when incurred. Upon retirement or disposition, the related costs and accumulated depreciation are removed from the accounts, and any resulting gains or losses are credited or charged to income.

Mining Properties and Equipment

The Company will follow the successful efforts method of accounting. All developmental costs will be capitalized. Depreciation and depletion of producing properties will be computed on the unit-of-production method based on estimated proved reserves. Repairs and maintenance will be expensed, while renewals and betterments will be generally capitalized.

At least quarterly, or more frequently if conditions indicate that long-term assets may be impaired, the carrying value of our properties will be compared to management's future estimated pre-tax cash flow from the properties. If undiscounted cash flows are less than the carrying value, then the asset value will be written down to fair value. Impairment of individually significant unproved properties will be assessed on a property-by-property basis, and impairment of other unproved properties is assessed and amortized on an aggregate basis.

Intangible Assets

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

Revenue Recognition

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

Stock - Based Compensation

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

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

The Company accounts for its stock-based compensation in accordance with ASC Topic 740, "Share-Based Payment, and an Amendment of FASB Statement No. 123." The Company recognizes in the statement of operations the grant-date fair value of stock options and other equity-based compensation issued to employees and non-employees.

In March 2012, an option was granted to both Zirk Engelbrecht, our Chief Executive Officer, and Gonzalo Troncoso, our President and Chief Operating Officer, to purchase 75,000 shares each of Preferred Stock at $5.00 per share.

Page - 8

Income Taxes

Income taxes are accounted for in accordance with ASC Topic 740, Accounting for Income Taxes, using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

Earnings Per Common Share

ASC Topic 260, “Earnings Per Share”, requires presentation of basic earnings per share (“Basic EPS”) and diluted earnings per share (“Diluted EPS”). Basic earnings (loss) per share is computed by dividing earnings (loss) available to common stockholders by the weighted average number of common shares outstanding (including shares reserved for issuance) during the period. Diluted earnings per share gives effect to all potential dilutive common shares outstanding during the period.

Going Concern

The Company’s financial statements are prepared using accounting principles generally accepted in the United States of America (“GAAP”) applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has incurred operating losses since inception. These factors affect the Company’s ability to continue as a going concern.

In order to continue as a going concern and achieve a profitable level of operations, the Company will require additional cash infusions from the sale of equity and will seek to generate income from several avenues.

Note 3 – Sulfatos Chile

On February 15, 2012, Bluestone purchased a 60% equity interest in Sulfatos Chile from Santa Teresa Minerals pursuant to the stock purchase agreement dated January 26, 2012, as amended. The interests in Sulfatos Chile were sold in exchange for (a) Santa Teresa Minerals receiving 2,000 shares of common stock of Bluestone, representing 20% of the outstanding capital stock of Bluestone at the time; and (b) $2.2 million, with $1.1 million paid by cancellation of a demand loan made to Santa Teresa Minerals by Angelique de Maison, a director of the Company, in January 2012, which loan had been assigned by Ms. de Maison to Bluestone, and the balance of $1.1 million to be paid in monthly installments from time to time upon demand by Santa Teresa Minerals. A total of $1,670,988 has been paid as of March 31, 2012 with $529,012 remaining as a note receivable.

Note 4 – Bluestone SA Acquisition

On February 29, 2012, Power-Save Energy Company, a Utah corporation, entered into an agreement to acquire all of the capital stock of Bluestone S.A. On March 9, 2012, pursuant to a Share Exchange Agreement with Bluestone, S.A., a Chilean corporation, and the shareholders of Bluestone, S.A., the Company acquired 100% of the outstanding shares of common stock of Bluestone from Bluestone Shareholders. In exchange for the Bluestone Stock, the Company issued 60,000,000 shares of its common stock to the Bluestone Shareholders. As a result of closing the transaction, Bluestone Shareholders now hold approximately 96.7% of the Company’s issued and outstanding common stock. For accounting purposes, the Bluestone acquisition is treated as a reverse acquisition with Bluestone treated as the acquirer and the Company as the acquired party. As a result, the business and financial information included in the report is the business and financial information of Bluestone prior to March 9, 2012 and the combined entity after March 9, 2012. The Company will undergo a full valuation of the assets, liabilities, and contingencies acquired from Bluestone within the next twelve months, and will adjust any balances accordingly.

The Company’s current primary business is the operations of Bluestone. Bluestone is a pre-revenue exploration stage Chilean company with a 60% equity ownership of Sulfatos Chile. Sulfatos Chile owns the Anico Copper Mine and is building a copper sulfate production facility.

Note 5- Fixed Assets

The Company acquired fixed assets with a fair value of $4,432,817 in the Bluestone acquisition in May 2012. See Note 3- Bluestone SA Acquisition. The fixed assets are being amortized over their remaining useful lives.

Page - 9

Note 6- Goodwill

In connection with the Bluestone acquisition, and in accordance with ASC Topic 805-30 “Business Combinations – Goodwill or Gain from Bargain Purchase Including Consideration Transferred,” we recorded goodwill in the amount of $4,462,000, as a result of the Bluestone SA Acquisition, see Note 4- Bluestone SA Acquisition. In accordance with ASC Topic 350-20 "Intangibles - Goodwill and Other," goodwill will be assessed periodically.

Note 7- Debt

From November 2011 through February 2012, Angelique de Maison, a director of the Company, provided a total of $1.1m in working capital advances in the form of an unsecured demand loan with no interest and no set terms of repayment to Santa Teresa Minerals. In February 2012 these advances were assigned to Bluestone, of which Ms. de Maison is a major shareholder, and were applied to the purchase of Santa Teresa Minerals’ 60% equity interest in Sulfatos Chile by Bluestone in February 2012.

In February and March 2012 Zirk Engelbrect, Chief Executive Officer and director of the Company, provided a total of $570,988 in unsecured demand loans with no interest and no set terms of repayment which was applied to the purchase of Sulfatos Chile.

$529,012 remains due to Santa Teresa Minerals for the purchase of Sulfatos Chile as a note payable. See Note 3- Sulfatos Chile.

Note 8- Private Placements

On January 29, 2010, the Company issued a total of 54,285 shares of restricted common stock in a private placement. The Company received net proceeds from the offering of $190,000. The Company issued 7,146 shares of common stock for consulting services associated with this private placement valued at market value of $25,000.

On May 18, 2010, an additional 5,714 shares of restricted common stock was issued in connection with the January 29, 2010 Private Placement. These shares were valued at market value of $34,000.

On April 21, 2011, the Company issued 414,285 shares of its common stock to eight entities, in exchange for $145,000, pursuant to a Subscription Agreements dated January 20, 2011, March 28, 2011 and March 31,2011.

Note 9 – Stock Split

On October 15, 2011 the Company effected a 35 for 1 reverse-split of its issued and outstanding common stock, whereby, every 35 shares of stock where exchanged for one share of common stock. No remainders would remain. All share amounts in these financial statements have been adjusted to reflect the 35 for 1 reverse split

Note 10 – Stockholders’ Equity

On January 21, 2011, the Company registered two million (57,142) shares of the Company’s Common Stock on Form S-8, to be issued pursuant to the 2011 Equity Incentive Plan (the “Plan”), to advance the interests of the Company by providing directors, selected employees and consultants of the Company with the opportunity to acquire shares of the Company’s Common Stock. The Company issued the 57,142 shares as of March 31, 2011

On April 20, 2011, the Company registered two million (114,284) shares of the Company’s Common Stock on Form S-8, to be issued pursuant to the 2011 Equity Incentive Plan (the “Plan”), to advance the interests of the Company by providing directors, selected employees and consultants of the Company with the opportunity to acquire shares of the Company’s Common Stock

On April 21, 2011, the Company issued 472,034 shares of its common stock to Michael Forster for unpaid services rendered to the Company from January 1, 2009 through December 31, 2010.

On June 20, 2011, the Company registered ten million (285,714) shares of the Company’s Common Stock on Form S-8, to be issued pursuant to the 2011 Equity Incentive Plan (the “Plan”), to advance the interests of the Company by providing directors, selected employees and consultants of the Company with the opportunity to acquire shares of the Company’s Common Stock. The Company issued the 228,571 shares as of June 30, 2011 for services.

On September 15, 2011, the Company issued 128,571 shares for services issued for services rendered from January 1 through June 30, 2011.

In October, 2011, the Company issued a total of 49,542 shares of common stock for professional service rendered to the company.

On March 9, 2012, the Company issued 60,000,000 shares of its common stock to the Bluestone Shareholders in exchange for 100% of the outstanding stock of Bluestone SA.

Page - 10

Note 11- Subsequent Events

In accordance with Accounting Standards Codification Topic No. 855 “Subsequent Events” (ASC 855), the Company has evaluated subsequent events through the time between the end of the reporting period and the time this Quarterly Report on Form 10-Q for the period ended March 31, 2012 was filed and has found the following events to report.

In May 2012 Zirk Engelbrecht, our Chief Executive Officer, and Gonzalo Troncoso, our President and Chief Operating Officer, elected to purchase 75,000 shares each of Preferred Stock at $5.00 per share granted to them in March 2012.

[End Notes to Financial Statements]

Page - 11

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

FORWARD-LOOKING STATEMENTS

This Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) contains forward-looking statements that involve known and unknown risks, significant uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed, or implied, by those forward-looking statements. You can identify forward-looking statements by the use of the words may, will, should, could, expects, plans, anticipates, believes, estimates, predicts, intends, potential, proposed, or continue or the negative of those terms. These statements are only predictions. In evaluating these statements, you should consider various factors which may cause our actual results to differ materially from any forward-looking statements. Although we believe that the exceptions reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. We undertake no obligation to revise or update publicly any forward-looking statements for any reason.

CORPORATE HISTORY

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

On February 29, 2012, Power-Save Energy Company, a Utah corporation, entered into an agreement to acquire all of the capital stock of Bluestone S.A. On March 9, 2012, pursuant to a Share Exchange Agreement (the “Share Exchange Agreement”) with Bluestone, S.A., a Chilean corporation (“BLUESTONE”), and the shareholders of BLUESTONE, S.A. (“BLUESTONE Shareholders’), the Company acquired 100% of the outstanding shares of common stock of Bluestone (the “Bluestone Stock”) from Bluestone Shareholders. In exchange for the Bluestone Stock, the Company issued 60,000,000 shares of its common stock to the Bluestone Shareholders. As a result of closing the transaction, Bluestone Shareholders now hold approximately 96.7% of the Company’s issued and outstanding common stock. On April 12, 2012 an Amendment to the Articles of Incorporation was filed to change its name from Power-Save Energy Company to Lustros, Inc. (the “Company”).

RESULTS OF OPERATIONS

Three Months Ended March 31, 2012

Revenue for the three months ended March 31, 2012 was $12,532. Gross profit for the three months ended March 31, 2012 was $12,532. Research and Development expense for the three months ended March 31, 2012 was $3,445 compared to $23,055 for the same period since inception.

General and administrative expenses for the three months ended March 31, 2012 were $398,056 compared to $338,909 for the three months ended March 31, 2011.

Due to the losses during the period the Company has not recorded a provision for income taxes. The Company will carry back any net operating loss to recover taxes paid in prior periods.

LIQUIDITY AND CAPITAL RESOURCES.

As of March 31, 2012 the current assets exceeded the current liabilities by $7,386,978. Cash for the period ended March 31, 2012 was $303,404 primarily from the collection of accounts receivable..

Cash Requirements

Our cash on hand as of March 31, 2012 is $303,404. We do not have sufficient cash on hand to pay the costs of our operations as projected to twelve (12) months or less or to fund our operations for that same period of time. We will require additional financing in order to proceed with some or all of our goals as projected over the next twelve (12) months. We presently do not have any arrangements for additional financing, and no potential lines of credit or sources of financing are currently available for the purpose of proceeding with any of our goals projected over the next twelve (12) months and beyond.

Page - 12

Going Concern

We have not attained profitable operations and are dependent upon obtaining financing to pursue any extensive acquisitions and activities. For these reasons, our auditors stated in their report on our audited financial statements that they have substantial doubt that we will be able to continue as a going concern without further financing.

Off-Balance Sheet Arrangements

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.

Future Financings

We will continue to rely on equity sales of our common shares in order to continue to fund our business operations. Issuances of additional shares will result in dilution to existing stockholders. There is no assurance that we will achieve any additional sales of the equity securities or arrange for debt or other financing to fund our operations and other activities.

Critical Accounting Policies

Our financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the 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.

We regularly evaluate the accounting policies and estimates that we use to prepare our financial statements. A complete summary of these policies is included in the notes to our financial statements. In general, management's estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management.

See the incorporated notes to financial statements for additional discussion.

Recently Issued Accounting Pronouncements

In December 2010, the Financial Accounting Standards Board (“FASB”) issued Accounting Issued Update (“ASU”) No. 2010-28—Intangibles—Goodwill and Other (Topic 350): When to Perform Step 2 of the Goodwill Impairment Test for Reporting Units with Zero or Negative Carrying Amounts. The amendments in this Update modify Step 1 of the goodwill impairment test for reporting units with zero or negative carrying amounts. For those reporting units, an entity is required to perform Step 2 of the goodwill impairment test if it is more likely than not that a goodwill impairment exists. In determining whether it is more likely than not that a goodwill impairment exists, an entity should consider whether there are any adverse qualitative factors indicating that an impairment may exist. The qualitative factors are consistent with the existing guidance, which requires that goodwill of a reporting unit be tested for impairment between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. For public entities, the amendments in this Update are effective for fiscal years, and interim periods within those years, beginning after December 15, 2010. Early adoption is not permitted. The adoption of this ASU is not expected to have a material impact on the Company’s consolidated financial statements.

Page - 13

In January 2011, the FASB issued ASU No. No. 2011-01, Deferral of the Effective Date of Disclosures about Troubled Debt Restructurings in Update No. 2010-20. This ASU temporarily delays the effective date of the disclosures about troubled debt restructurings in Update 2010-20 for public entities. The delay is intended to allow the Board time to complete its deliberations on what constitutes a troubled debt restructuring. The effective date of the new disclosures about troubled debt restructurings for public entities and the guidance for determining what constitutes a troubled debt restructuring will then be coordinated. Currently, that guidance is anticipated to be effective for interim and annual periods ending after June 15, 2011. Accordingly, the Company has not included the disclosures deferred by this ASU.

In December 2011, the FASB issued Accounting Standards Update No. 2011-11, Disclosures about Offsetting Assets and Liabilities (“ASU No. 2011-11”). ASU No. 2011-11 requires disclosures to provide information to help reconcile differences in offsetting requirements under U.S. GAAP and International Financial Reporting Standards (“IFRS”). The new disclosure requirements mandate that entities disclose both gross and net information about instruments and transactions eligible for offset as well as collateral received and posted in connection with master netting agreements or similar arrangements. The guidance is effective for annual reporting periods beginning January 1, 2013 and interim periods within those annual periods. It is not expected to have a material impact on the Company’s financial position or results of operations.

In December 2011, the FASB issued Accounting Standards Update No. 2011-12, Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05 (“ASU No. 2011-12”). ASU No. 2011-12 defers the specific requirement to present items that are reclassified from accumulated other comprehensive income to net income separately with their respective components of net income and other comprehensive income. While the FASB is considering the operational concerns about the presentation requirements for classification adjustments, entities will continue to report reclassifications out of accumulated comprehensive income consistent with the presentation requirements in effect before ASU No. 2011-05. The amendments in ASU No. 2011-12 are effective for public entities for fiscal years, and interim periods within those years, beginning after December 15, 2011. It is not expected to have a material impact on the Company’s financial position or results of operations, or even disclosures, since it is deferring a previously required disclosure item until further deliberations are complete.

Page - 14

The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

Quarterly Developments

On February 29, 2012, Power-Save Energy Company, a Utah corporation, entered into an agreement to acquire all of the capital stock of Bluestone S.A. On March 9, 2012, pursuant to a Share Exchange Agreement (the “Share Exchange Agreement”) with Bluestone, S.A., a Chilean corporation (“BLUESTONE”), and the shareholders of BLUESTONE, S.A. (“BLUESTONE Shareholders’), the Company acquired 100% of the outstanding shares of common stock of Bluestone (the “Bluestone Stock”) from Bluestone Shareholders. In exchange for the Bluestone Stock, the Company issued 60,000,000 shares of its common stock to the Bluestone Shareholders. As a result of closing the transaction, Bluestone Shareholders now hold approximately 96.7% of the Company’s issued and outstanding common stock.

Subsequent Developments

As also reported in Subsequent Events and displayed on the cover page of this Filing and incorporated herein, on April 09, 2012 The Company announced its name change from Power-Save Company to Lustros, Inc. to better reflect the focus of the business in the mining sector.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by our company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Our management carried out an evaluation under the supervision and with the participation of our Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 ("Exchange Act").

Based on this evaluation, our principal executive and principal financial and accounting officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) were effective as of March 31, 2012.

Changes in Internal Control over Financial Reporting

On March 9, 2012 Trisha Malone was appointed as the Chief Financial Officer of the Company.

Louis Fox resigned as Chief Financial Officer. The resignations were not the result of any disagreement with us on any matter relating to our operations, policies or practices.

The Company is not required by current SEC rules to include, and does not include, an auditor's attestation report. The Company's registered public accounting firm has not attested to Management's reports on the Company's internal control over financial reporting.

Page - 15

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

On March 18, 2011, 142 Cross Street, LLC filed a Complaint against the Company in San Luis Obispo Superior Court, seeking damages for breach of contract. The suit arises from a dispute surrounding a commercial real estate lease. This case was settled.

On September 21, 2011, Chris Frye filed a lawsuit against the Company in California Superior Court alleging, among other things, breach of contract surrounding the Company’s CBS Television solar project. Chris Frye also filed a cross-complaint in a New Mexico action filed by Uni-Rac involving similar subject matter. The Company vigorously denies all the allegations and insists the lawsuit is an attempt on Chris Frye’s part to evade paying an outstanding invoice owed to the Company. The California Suit has since been dismissed in its entirety and the cross-complaint in New Mexico has been dismissed as well. Chris Frye and Power-Save have joined forces to combat Uni-Rac in the New Mexico portion of the case, which is reduced to a dispute of less than $200,000 regarding the racking supplied in relation to the CBS project.

Other than the foregoing, we know of no material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which our director, officer or any affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.

ITEM 1A. RISK FACTORS

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

A.	During the Quarter

On February 29, 2012, the Company and its controlling shareholders entered into the Share Exchange Agreement with Bluestone and Bluestone Shareholders. Upon the closing of the share exchange, each of the Bluestone shareholders exchanged their respective shares of Bluestone for shares of the Company's common stock. As a result, 60,000,000 shares of the Company’s common stock were issued to the Bluestone shareholders.

The shares of common stock of the Company issued pursuant to the Share Exchange Agreement were issued in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act of 1933, as amended. A copy of the Share Exchange Agreement is attached hereto and is hereby incorporated by this reference. All references to the Share Exchange Agreement and other exhibits to this Current Report are qualified, in their entirety, by the text of such exhibits.

B.	Subsequent Issuances

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. [REMOVED AND RESERVED]

N/A.

ITEM 5. OTHER INFORMATION

Quarterly Events

On March 01, 2012 the Company announced that it entered into an agreement to acquire Bluestone SA a Chilean corporation in the business of copper mining and the manufacturing of food grade copper sulfate in an all-stock transaction.

On March 9, 2012 Gonzalo Troncoso was appointed as President and Secretary of the Company.

Page - 16

On March 9, 2012 Zirk Engelbrecht was appointed as Chief Executive Officer of the Company.

On March 9, 2012 Trisha Malone was appointed as the Chief Financial Officer of the Company.

On March 9, 2012, Angelique de Maison was appointed as a member of the Board of the Directors nominee of the Company.

On March 9, 2012, Juan Carlos Camus Villegas was appointed as a member of the Board of the Directors nominee of the Company.

On March 9, 2012, Larry A. Zielke was appointed as a member of the Board of the Directors nominee of the Company.

In addition to the new appointees, Michael Forster resigned as our Chief Executive Officer, David Forster resigned as President and Louis Fox resigned as Chief Financial Officer. The resignations were not the result of any disagreement with us on any matter relating to our operations, policies or practices. Furthermore, the Director’s Michael Forster, David Forster, and Gary Stanwyck resignations as to their Director positions were effective 10 days after the March 9, 2012 event, relieving them from their director responsibilities on March 19, 2012. The anticipation of this event was previously reported on the Company’s SC 14F1 Filing as filed with the Commission on March 13, 2012. The resignations were not the result of any disagreement with us on any matter relating to our operations, policies or practices.

Subsequent Events

On April 09, 2012 The Company announced its name change from Power-Save Company to Lustros, Inc. to better reflect the focus of the business in the mining sector.

On April 18, 2012, Gonzalo Troncoso resigned as Secretary of the Company. Mr. Troncosco retains his position as President. His resignation from the Secretary position is not the result of a disagreement with the Company.

On April 18, 2012, Trish Malone was appointed as Secretary of the Company. She holds this position in addition to being the current Chief Financial Officer of the Company.

On April 18, 2012 the Board of Directors approved the appointment of Gonzalo Troncoso as Chief Operating Officer.

On April 18, 2012 the Board of Directors approved the appointment of Larry A. Zielke as Senior Vice President and General Counsel.

On April 18, 2012 Gonzalo Troncoso was appointed as a member of the Board of Directors.

On April 18, 2012 Zirk Engelbrecht was appointed as a member of the Board of Directors.

On April 18, 2012 William H. Lavin was appointed as a member of the Board of Directors.

On April 18, 2012 Benjamin R. Dickey was appointed as a member of the Board of Directors.

On April 18, 2012 Trisha Malone was appointed as a member of the Board of Directors.

Page - 17

ITEM 6. EXHIBITS

Exhibit Number	Description of Exhibit	Filing
3.01	Amended Certificate of Incorporation	Filed herewith
3.02	Bylaws	Filed herewith
10.01	Share Exchange Agreement between Power-Save Energy and Bluestone SA and their Shareholders	Incorporated by reference as filed on Form 8-K on March 12, 2012.
31.01	Certification of Principal Executive Officer Pursuant to Rule 13a-14	Filed herewith.
31.02	Certification of Principal Financial Officer Pursuant to Rule 13a-14	Filed herewith.
32.01	CEO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act	Filed herewith.
32.02	CFO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act	Filed herewith.

Page - 18

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	LUSTROS, INC.

Dated: May 21, 2012	/s/ Zirs Engelbrecht
	By: Zirk Engelbrecht Its: Chief Executive Officer

Dated: May 21, 2012	/s/ Trisha Malone
	By: Trisha Malone Its: Chief Financial Officer

In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the Company and in the capacities and on the dates indicated.

Dated: May 21, 2012	/s/ Zirs Engelbrecht
	By: Zirk Engelbrecht Its: Chief Executive Officer

Dated: May 21, 2012	/s/ Trisha Malone
	By: Trisha Malone Its: Chief Financial Officer

Dated: May 21, 2012	/s/ Angelique de Maison
	By: Angelique de Maison Its: Director

Dated: May 21, 2012	/s/ Juan Carlos Camus Villegas
	By: Juan Carlos Camus Villegas Its: Director

Dated: May 21, 2012	/s/ William H. Lavin
	By: William H. Lavin Its: Director

Dated: May 21, 2012	/s/ Benjamin R. Dickey
	By: Benjamin R. Dickey Its: Director

Dated: May 21, 2012	/s/ Gonzalo Troncoso
	By: Gonzalo Troncoso Its: Director

Dated: May 21, 2012	/s/ Larry A. Zielke
	By: Larry A. Zielke Its: Director

Page - 19

Exhibit 31.01

CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER PURSUANT TO RULE 13a-14

I, Zirk Engelbrecht, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Lustros Inc.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

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

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

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

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

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 21, 2012

/s/ Zirk Engelbrecht

By: Zirk Engelbrecht

Its: Chief Executive Officer

Page - 20

Exhibit 31.02

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO RULE 13a-14

I, Trisha Malone, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Lustros Inc.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 21, 2012

/s/ Trisha Malone

By: Trisha Malone

Its: Chief Financial Officer

Page - 21

Exhibit 32.01

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Lustros Inc (the “Company”) on Form 10-Q for the period ending March 31, 2012 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Zirk Engelbrecht, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ Zirk Engelbrecht

By: Zirk Engelbecht

Chief Executive Officer

Dated: May 21, 2012

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

Page - 22

Exhibit 32.01

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Lustros Inc. (the “Company”) on Form 10-Q for the period ending March 31, 2012 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Trisha Malone, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ Trisha Malone

By: Trisha Malone

Chief Financial Officer

Dated: May 21, 2012

Page - 23

Lustros Inc. - FORM 10-Q - May 21, 2012

Attached files

Lustros Inc. Reports