Good Vibrations Shoes 10QSB 2008 Q1 Quarterly report (small business)

Part I		Page
Financial Information

Item 1.	Financial Statements	3
	Balance Sheet June 30, 2007 (Unaudited)	3
	Statements of Operations for the Three Months Ended June 30, 2007 (Unaudited) and 2006 (Unaudited)	4
	Statements of Cash Flows for the Three Months Ended June 30, 2007 (Unaudited) and 2006 (Unaudited)	5
	Notes to the Unaudited Financial Statements	6

Item 2.	Management’s Discussion and Analysis or Plan of Operations	8

Item 3.	Controls and Procedures .	10


PART II
OTHER INFORMATION

Item 1.	Legal Proceedings	11

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	11

Item 3.	Defaults Upon Senior Securities	11

Item 4.	Submission of Matters to a Vote of Security Holders	11

Item 5.	Other Information	11

Item 6.	Exhibits	11

SIGNATURES		12

CERTIFICATIONS

Part I

Financial Information

Item 1. Financial Statements

SOLPOWER CORPORATION

BALANCE SHEET

June 30, 2007

(Unaudited)


	ASSETS
CURRENT ASSETS:
	Cash and cash equivalents	$	406
	Accounts receivable		30,000
	Prepaid expenses		5,902
	Inventory		22,010
	Total Current Assets		58,318

TOTAL ASSETS		$	58,318

	LIABILITIES AND STOCKHOLDERS' (DEFICIT)
CURRENT LIABILITIES:
	Customer advances	$	284,879
	Accounts payable - trade		189,568
	- related parties		198,801
	Accrued expenses		152,225
	Total Current Liabilities		825,473

	Commitments and Contingencies

STOCKHOLDERS' (DEFICIT):
	Preferred stock, $0.001 par value - 5,000,000 shares
	authorized; issued and outstanding, none		-
	Common stock, $.001 par value - 100,000,000 shares
	authorized; 72,259,727 shares issued and outstanding		722,597
	Additional paid in capital		12,523,625
	Accumulated (deficit)		(14,013,377)
	Total Stockholder's (Deficit)		(767,155)

TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT)		$	58,318

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

SOLPOWER CORPORATION

STATEMENTS OF OPERATIONS

(Unaudited)


	For the Three Months Ended
	June 30,
	2007			2006

NET REVENUES	$	135,222		$	162,597

COST OF REVENUES		51,973			74,979

GROSS PROFIT		83,249			87,618

OPERATING EXPENSES:
Administration compensation and consulting		18,000			16,100
Accounting and legal		28,201			16,071
Sales and marketing		28,588			24,869
Other general and administrative		12,811			22,202
		87,600			79,242

PROFIT (LOSS) FROM OPERATIONS		(4,351	)		8,376

OTHER INCOME (EXPENSE):
Exchange rate differential		-			395
Royalty income		-			2,555
Interest expense		(129	)		(359	)
		(129	)		2,591

PROFIT (LOSS) BEFORE PROVISION FOR INCOME TAXES		(4,480	)		10,967

PROVISION FOR INCOME TAXES		-			-

NET PROFIT (LOSS)	$	(4,480	)	$	10,967

Basic and Diluted Profit (Loss) Per Common Share
Continuing operations	$	-		$	-

Weighted Average Number of Common Shares Outstanding
Basic and Diluted		72,259,727			70,559,727

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

SOLPOWER CORPORATION

STATEMENTS OF CASH FLOWS

(Unaudited)


	For the Three Months Ended June 30,
	2007			2006
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings (loss)	$	(4,480	)	$	10,967

Adjustments to reconcile net earnings (loss) to
net cash provide by operating activities:
Depreciation and amortization		-			1,500
Net change in current assets and liabilities:
Accounts receivable		(30,000	)		29,999
Royalties receivable		-			(2,949	)
Prepaid expense		5,901			6,035
Inventory		30,264			32,465
Deposits		-			350
Accounts payable - trade		8,243			7,698
- related parties		(10,162	)		(865	)
Accrued expenses		15,972			17,483
Net Cash Provided by Operating Activities		15,738			102,683

CASH FLOWS FROM FINANCING ACTIVITIES:
Bank overdraft		-			(587	)
Net customer advances		(35,223	)		(100,211	)
Net cash (Used in) Financing Activities		(35,223	)		(100,798	)

(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS		(19,485	)		1,885

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		19,891			-

CASH AND CASH EQUIVALENTS, END OF PERIOD	$	406		$	1,885

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

SOLPOWER CORPORATION

Notes to the Unaudited Financial Statements

NOTE 1 - ORGANIZATION AND OPERATIONS

Organization

Solpower Corporation (the “Company”), formerly known as Virtual Technologies, Inc. and Dynafuel Corporation, was incorporated under the laws of the State of Utah on June 7, 1982. The Company was originally incorporated with an authorized capital of 30,000,000 shares of common stock with a par value of one cent ($0.01) per share. On December 12, 1995, the Company amended its articles of incorporation, changing its name to Virtual Technologies, Inc. and authorizing preferred stock of 5,000,000 shares at $0.25 par value. On July 22, 1996, the Company changed its legal domicile to the State of Nevada. On November 22, 1997, the Company restated the articles of incorporation, changing its name to Solpower Corporation and changing its preferred stock par value to one-tenth of one cent ($.001) per share. On December 11, 2000, at the Annual Shareholders’ Meeting, shareholders approved an amendment to the Company’s articles of incorporation to increase the authorized shares of common stock to 100,000,000.

Nature of Operations

The principal business purpose of the Company is the sales and distribution of Soltron^®, a fuel-enhancing product. The Company has the exclusive worldwide sales, distribution, marketing and manufacturing rights to the product, Soltron^®, a fuel enhancing product.

NOTE 2 - BASIS OF PRESENTATION

The accompanying unaudited interim financial statements of Solpower Corporation have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission, and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s Annual Report for the fiscal year ended March 31, 2007, on Form 10-KSB filed with the SEC. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year.

Notes to the financial statements, which would, substantially duplicate the disclosure contained in the audited financial statements for fiscal 2007 as reported in the Form 10−KSB have been omitted.

NOTE 3 - GOING CONCERN

The accompanying unaudited financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. The Company historically has experienced significant losses and negative cash flows from operations. As of June 30, 2007, the Company has a deficiency in working capital of $(767,155), accumulated (deficit) of $(14,013,377) and a net (loss) for the three months ended June 30, 2007, of $(4,480). In addition, the Company does not have a revolving credit facility with any financial institution. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on raising additional capital, negotiating adequate financing arrangements and on achieving sufficiently profitable operations. The financial statements do not include any adjustments relating to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

NOTE 4 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Comprehensive Income (Loss)

Statement of Financial Accounting Standards (“SFAS”) No. 130, Reporting Comprehensive Income, establishes requirements for disclosure of comprehensive income and its components, which include, among other items, unrealized gains or losses from marketable securities and foreign currency translation adjustments that previously were only reported as a component of stockholders’ equity. The Company had no components of comprehensive (loss) during the periods presented.

Loss per Common Share

Basic loss per common share is computed based on weighted average shares outstanding and excludes any potential dilution from stock options, warrants and other common stock equivalents. Basic loss per share is computed by dividing loss available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted net loss per common share reflects potential dilution from the exercise or conversion of securities into common stock or from other contracts to issue common stock. Diluted net loss per common share is not included, as the effect of including these shares is anti-dilutive.

Foreign Currency Translation

Account balances and transactions denominated in foreign currencies and the accounts of the Corporation’s foreign operations have been translated into United States funds, as follows: (i) assets and liabilities, if any, at the rates of exchange prevailing at the balance sheet date; (ii) revenue and expenses at average exchange rates for the period in which the transactions occurred; (iii) exchange gains and losses arising from foreign currency transactions are included in the determination of net earnings for the period; and (iv) exchange gains and losses arising from the translation of the Corporation’s foreign operations are deferred and were included as a separate component of stockholders’ equity.

NOTE 5 - INTANGIBLE ROYALTY AGREEMENT

In accordance with SFAS No. 144, the Company was required to assess the recoverability of the Intangible Royalty Agreement relating to the disposal of Virtual Technologies. In performing this assessment, the primary factor considered by Management is the fact that no royalties under this royalty agreement have been collected since its inception. As such, management determined that this royalty agreement was impaired and reduced the value to zero at March 31, 2007, due to the uncertainty of collecting the royalty payments.

Amortization expense charged to operations for the three months ended June 30, 2007 and 2006 was $- 0 - and $1,500, respectively.

NOTE 6 - STOCKHOLDER’S (DEFICIT)

Warrants

At June 30, 2007, the Company had no outstanding warrants.

Options

At June 30, 2007, the Company had no outstanding options. During the three months ended in June 30, 2007, options to purchase 1,000,000 shares of restricted stock at $0.15 expired.

NOTE 7 – CHANGE IN MANAGEMENT

On May 1, 2006, the Board of Directors of the Company accepted the resignation of Mr. Robert Kohn and appointed Mr. James Hirst as President, Chief Executive and Principal Accounting Officer.

ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

THIS FORM 10-QSB MAY CONTAIN CERTAIN “FORWARD-LOOKING” STATEMENTS AS SUCH TERM IS DEFINED IN THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND BY THE SECURITIES AND EXCHANGE COMMISSION IN ITS RULES, REGULATIONS AND RELEASES, WHICH REPRESENT THE REGISTRANT’S EXPECTATIONS OR BELIEFS, INCLUDING BUT NOT LIMITED TO, STATEMENTS CONCERNING THE REGISTRANT’S OPERATIONS, ECONOMIC PERFORMANCE, FINANCIAL CONDITION, GROWTH AND ACQUISITION STRATEGIES, INVESTMENTS, AND FUTURE OPERATIONAL PLANS. FOR THIS PURPOSE, ANY STATEMENTS CONTAINED HEREIN THAT ARE NOT STATEMENTS OF HISTORICAL FACT MAY BE DEEMED TO BE FORWARD-LOOKING STATEMENTS. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, WORDS SUCH AS “MAY”, “WILL”, “EXPECT”, “BELIEVE”, “ANTICIPATE”, “INTENT”, “COULD”, “ESTIMATE”, “MIGHT”, “PLAN”, “PREDICT” OR “CONTINUE” OR THE NEGATIVE OR OTHER VARIATIONS THEREOF OR COMPARABLE TERMINOLOGY ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS. THESE STATEMENTS BY THEIR NATURE INVOLVE SUBSTANTIAL RISKS AND UNCERTAINTIES, CERTAIN OF WHICH ARE BEYOND THE REGISTRANT’S CONTROL, AND ACTUAL RESULTS MAY DIFFER MATERIALLY DEPENDING ON A VARIETY OF IMPORTANT FACTORS, INCLUDING UNCERTAINTY RELATED TO ACQUISITIONS, GOVERNMENTAL REGULATION, MANAGING AND MAINTAINING GROWTH, THE OPERATIONS OF THE COMPANY AND ITS SUBSIDIARIES, VOLATILITY OF STOCK PRICE AND ANY OTHER FACTORS DISCUSSED IN THIS AND OTHER REGISTRANT FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION. THE COMPANY DOES NOT INTEND TO UNDERTAKE TO UPDATE THE INFORMATION IN THIS FORM 10-QSB IF ANY FORWARD-LOOKING STATEMENT LATER TURNS OUT TO BE INACCURATE. THE FOLLOWING SHOULD BE READ IN CONJUNCTION WITH THE INFORMATION PRESENTED IN THE COMPANY’S ANNUAL REPORT ON FORM 10-KSB FOR THE YEAR ENDED MARCH 31, 2007.

Going Concern

The accompanying unaudited financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. We have historically experienced significant losses and negative cash flows from operations. For the three-month period ended June 30, 2007, we had net (loss) of $(4,480). Operations have resulted in a deficiency in working capital of $(767,155), and an accumulated (deficit) of $(14,013,377) as of June 30, 2007.

There can be no assurance that the Company will be able to continue as a going concern in view of its financial condition. Our continued existence will depend upon its ability to obtain sufficient additional capital in a timely manner to fund its operations and to further develop its long-term business plan. Any inability to obtain additional financing will have a material adverse effect on us, including possibly requiring the Company to significantly reduce or cease its operations.

These factors raise substantial doubt about the ability of the Company to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern.

Off-Balance Sheet Arrangements

During the quarter ended June 30, 2007, we did not engage in any off balance sheet arrangements as defined in Item 303(c) of the SEC’s Regulation S-B.

Critical Accounting Policies

Our financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, which require us to make estimates and judgments that significantly affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities at the date of the financial statements. Note 2, “Significant Accounting Policies” in the Notes to the Financial Statements in our Annual Form 10-KSB at March 31, 2007, describes our significant accounting policies which are reviewed by management on a regular basis.

An accounting policy is deemed by us as critical if it requires an accounting estimate to be made based on assumptions about matters that are uncertain at the time the estimate is made, and if different estimates that reasonably could have been used, or changes in the accounting estimates that are reasonable likely to occur periodically, could materially impact the financial statements. The policies and estimates that we believe are most critical to the preparation of our consolidated financial statements and that require a higher degree of judgment are:

Stock-based compensation; and

Valuation of warrants and options under the Black-Scholes option pricing model.

Operating Results for the Three Months Ended June 30, 2007 and 2006

Revenues - Revenues for the three months ended June 30, 2007, were $135,222 as compared to $162,597 for the comparable three months ended June 30, 2006. The decrease in revenues of $27,375 was attributable to decrease bulk Soltron^® sales mainly to a major distributor aggregating $57,375, offset by an increase in bulk enzyme sales of $30,000. Sales to our major Soltron^®distributor do not recur on a consistent quarterly basis, and have decreased due to slower commercial sales in California and overseas markets.

Gross Profit - Gross profit increased from 53.9% for the three months ended June 30, 2006, to 61.6% for the three months ended June 30, 2007. The increase in gross profit margin of 7.7% resulted primarily from higher margins on sales of bulk enzyme product as compared to sales of bulk Soltron^® product. Our sales mix in the current year period are comprised of enzyme product of 44.4% and Soltron^® product of 55.6%, as compared to the prior year period sales mix of enzyme product of 18.5% and Soltron^® products of 81.5%. The change in sales mix and reduced total revenue resulted in a decrease in gross profit of $4,369 for the current three month period ended June 30, 2007, to $83,249 as compared to the prior year period gross profit of $87,618.

Operating Expenses - Operating expenses for the three months ended June 30, 2007, were $87,600 as compared to $79,242 for the comparable period ended June 30, 2006, which constitutes an increase of $8,358. The increase is primarily comprised of increases in accounting and legal fees incurred in getting our SEC reporting current of $12,130 and sales and marketing of $3,719. These increases were offset by decreased other general and administrative aggregating $9,391 and was mainly comprised of decreased insurance expense of $3,999 and decreased office expenses of $3,822.

Net (Loss) Profit - The Company’s net (loss) for the three months ended June 30, 2007, was $(4,480) as compared to net profit of $10,967 for the comparable period ending June 30, 2006. The decrease in net profit for the current period is mainly attributable to increased operating expenses and decreased gross profit as detailed above.

Plan of Operation

We continue to historically report significant losses. Nevertheless, we believe that we may be able to continue to reduce our operating losses based on the current trend of increasing Soltron^® product sales, together with licensing fees from Virtual Technologies Pty Ltd. Because of discussions with distributors we anticipate increased sales of the Soltron^® during our fiscal year 2008, mainly in the area of sales Soltron^®concentrate for private labeling.

During our fiscal years ended March 31, 2007 and 2006, and continuing into fiscal year 2008, the Company has been in the middle stages as a development company seeking to find the complementary mix of products and projects for future development, marketing and distribution. The Company continues to explore the total distribution and marketing for its products through established distributors, both wholesale and retail. The Company anticipates that this methodology will continue to enable it to cut costs, increase the revenue stream and increase profits over the long range. Although gross profits may decrease initially with certain revenues going to the benefit of the distributors, we believe that the Company’s revenues, profits and cash flow will increase in the long term as a result of this methodology as more distributors penetrate and sell through to the end users of these products. Distribution of the enzyme technology utilizing a private labeling arrangement has proven effective by increasing revenue in that sector, gross profit and eliminating distribution costs in our prior fiscal year.

Part of our business plan is to arrange adequate financing to assist the Company to implement our business strategies. The Company anticipates continuing to explore the expansion of additional product lines or business segments with environmentally friendly products with established marketplaces and to accomplish these through mergers and acquisitions. A plan to move the Company into other potentially profitable businesses in environmentally friendly segments and to enhance the performance of the current product mix is currently being pursued.

We continue to progress getting our financial reporting current in order that we may have our securities quoted on the OTC Bulletin Board, which may provide a better ability to attract investors. We are in process of completing our Securities Act filings to facilitate this process. We intend to raise capital to provide working capital and to expand our present operations and pursue the other segments of our business plan.

Liquidity and Capital Reserves

Product sales provided sufficient working capital to fund our operations during the three months ended June 30, 2007. Our operating activities provided $15,738 of cash during the period. We utilized such excess liquidity to decrease customer advances by $35,223. During the comparative period for the previous year, we provided $102,683 from operations, which was offset by decreasing customer advances by $100,211.

Item 3 – Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain “disclosure controls and procedures” (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as amended), that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms. Under the supervision of, and the participation of, our management, including our Chief Executive Officer and Chief Financial Officer, we have conducted an evaluation of our disclosure controls and procedures as of June 30, 2007. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures are effective in alerting them on a timely basis to material information required to be disclosed in our periodic reports and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

Changes in Internal Controls

During the quarter ended June 30, 2007, there were no changes in the our internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

Part II

Other Information

Item 1.

Legal Proceedings

None.

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

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4.Submission of Matters to a Vote of Security Holders

None.

Item 5.

Other Information

None.

Item 6.

Exhibits

(a)	The following exhibits are filed as part of this report:

31.1	Certification of Chief Executive Officer and Principal Accounting Officer of Periodic Report pursuant to Rule 13a-14a and Rule 15d-14(a).

32.1	Certification of Chief Executive Officer and Principal Accounting Officer pursuant to 18 U.S.C. – Section 1350.

SIGNATURES

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

	SOLPOWER CORPORATION

Date: October 3, 2007	By:	/s/ James H. Hirst
		James H. Hirst
		Chief Executive Officer, President, Director
		and Principal Accounting Officer

Good Vibrations Shoes (GVSI) 10QSB2008 Q1 Quarterly report (small business)