024 Pharma (EEIG) 10-Q 2012 Q3 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended September 30, 2012

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

Commission File No. 333-120490

B GREEN INNOVATIONS, INC.

(Exact name of the Registrant as specified in Charter)

New Jersey	20-1862731
(State of Incorporation)	(I.R.S. Employer ID Number)
750 Highway 34, Matawan, New Jersey	07747
(Address of Principal Executive Offices)	(Zip Code)
Registrant’s Telephone No. including Area Code: 732-696-9333

Securities registered under 12(b) of the Exchange Act:  None

Securities registered under Section 12(g) of the Exchange Act: None

Indicateby checkmark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x Noo

Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Act).  Yes o No x

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§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 x No o

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

Large accelerated filer  o	Accelerated filer  o
Non-accelerated filer  o (Do not check if a smaller reporting company)	Smaller reporting company  x

Indicate the number of shares outstanding of the issuer's common stock, as of the latest practical date: 886,952,726 shares of Class A Common stock, no par value as of November 5, 2012.

B GREEN INNOVATIONS, INC

TABLE OF CONTENTS

		Page
Part I – Financial Information
Item 1.	Condensed Financial Statements (Unaudited):	1
	Condensed Balance Sheets – September 30, 2012 and December 31, 2011	1
	Condensed Statements of Operation - Three and Nine Months Ended September 30, 2012 and 2011	2
	Condensed Statements of Cash Flows – Nine Months Ended September 30, 2012 and 2011	3
	Notes to Condensed Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Result of Operations	19
Item 4.	Controls and Procedures	21
Part II – Other Information
Item 1.	Legal Proceedings	22
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	22
Item 3.	Defaults Upon Senior Securities	22
Item 6.	Exhibits	22
	Signatures	23
	Index of Exhibits	24

PART I - FINANCIAL INFORMATION

Item 1.  Condensed Financial Statements

B GREEN INNOVATIONS, INC.

CONDENSED BALANCE SHEETS

ASSETS	September 30,			December 31,
	2012			2011
	(Unaudited)
Current assets:
Cash and cash equivalents	$	160,045		$	207,339
Marketable securities, at fair value		-			910,845
Accounts receivable		39,481			54,910
Inventories		2,112			1,871
Prepaid expenses and other current assets		14,027			12,320
Total current assets		215,665			1,187,285
Property, plant and equipment, net		8,198			10,090
Intangible assets, net of accumulated amortization		51,033			52,657
Total assets	$	274,896		$	1,250,032
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable and accrued expenses	$	493,761		$	598,961
Due to related party		761,256			670,961
Deferred maintenance contracts		1,000			500
Notes payable to related party		603			3,003
Total current liabilities		1,256,620			1,273,425
Stockholders' equity (deficit):
Series A 3% Secured Preferred Stock		761,922			1,605,546
Common stock:
Class A Common Stock		1,192,956			1,097,806
Class B Common Stock		460			853
Class C Common Stock		-			-
Accumulated comprehensive income		-			1,016
Additional paid-in capital		9,932,687			9,901,681
Accumulated deficit		(12,869,749	)		(12,630,295	)
Total stockholders' equity (deficit)		(981,724	)		(23,393	)
Total liabilities and stockholders' equity (deficit)	$	274,896		$	1,250,032

See accompanying notes to condensed financial statements.

1

B GREEN INNOVATIONS, INC.

CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended						Nine Months Ended
	September 30, 2012			September 30, 2011			September 30, 2012			September 30, 2011
Net sales	$	77,169		$	64,173		$	264,815		$	171,527
Cost of sales		20,806			16,044			70,671			44,042
Gross profit		56,363			48,129			194,144			127,485
Operating expenses:
General and administrative expenses		132,503			147,519			430,538			458,485
Impairment of assets		-			-			-			19,582
Total operating expenses		132,503			147,519			430,538			478,067
Loss from operations		(76,140	)		(99,390	)		(236,394	)		(350,582	)
Other income (expense):
Interest		114			906			416			2,397
Dividend income		-			3,815			70,582			7,139
Interest expense		(7,140	)		(5,058	)		(32,313	)		(13,152	)
Other income		-			45,000			-			116,500
Settlement expense		(29,400	)		-			(29,400	)		-
Gain from reduction of liability		-			-			53,860			-
Loss on sales of marketable securities		-			-			(66,205	)		-
Total other income (expense)		(36,426	)		44,663			(3,060	)		112,884
Loss from operations before provision for income taxes		(112,566	)		(54,727	)		(239,454	)		(237,698	)
Provision for income taxes		-			-			-			-
Net loss	$	(112,566	)	$	(54,727	)	$	(239,454	)	$	(237,698	)
Basic and diluted loss per common share	$	(0.00	)	$	(0.00	)	$	0.00		$	0.00
Weighted average shares outstanding      Basic and diluted		841,748,243			606,774,858			711,351,309			605,241,917

See accompanying notes to condensed financial statements

2

B GREEN INNOVATIONS, INC.

CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

	Nine Months Ended
	September 30, 2012			September 30, 2011
Cash flows from operating activities:
Net loss	$	(239,454	)	$	(237,698)
Adjustments to reconcile net loss to net    cash used in operating activities:
Depreciation and amortization		3,516			10,647
Gain on extinguishment of liability		(53,860	)		-
Beneficial interest		12,600			-
Settlement expense		29,400			-
Issuance of common stock in lieu of compensation		22,500			-
Issuance of common stock for services		1,600			4,500
Loss of sale of marketable securities		66,205			-
Impairment of assets		-			19,582
Changes in assets and liabilities:
Decrease (increase) in accounts receivable		15,429			(13,733	)
Increase in inventories		(241	)		(4,793	)
(Increase) decrease in prepaid expenses		(1,707	)		8,359
Increase in notes receivable		-			(116,500	)
(Decrease) increase in accounts payable and accrued liabilities		(8,700)			48,554
Increase in amounts due to related parties		144,155			147,283
Increase in deferred maintenance contracts		500			6,340
Net cash used in operating activities		(8,057	)		(127,459	)
Cash flows from investing activities:
Proceeds from sale of marketable securities		843,624			-
Reinvestment of dividends		-			(7,139	)
Purchases of marketable securities		-			(900,000	)
Net cash provided by (used in) investing activities		843,624			(907,139	)
Cash flows from financing activities:
Conversion of Series A Preferred Stock		(843,624	)
Repurchase of Class B Common Stock		(39,237	)		(29,774	)
Net cash used in financing activities		(882,861	)		(29,774	)
Net increase (decrease) in cash and cash equivalents		(47,294	)		(1,064,372	)
Cash and cash equivalents at beginning of period		207,339			1,141,944
Cash and cash equivalents at end of period	$	160,045		$	77,572
During the period, cash was paid for the following:
Taxes paid	$	-		$	-
Interest paid	$	-		$	-

See accompanying notes to condensed financial statements.

3

B GREEN INNOVATIONS, INC.

CONDENSED STATEMENTS OF CASH FLOWS (Continued)

(Unaudited)

Supplemental Schedule of Non-Cash Financing Activities:

For the Nine Months Ended September 30, 2012:

a)   The Company issued 25,000,000 shares of Class A Common stock to an individual in lieu of compensation with a fair market value of $22,500.

b)   The Company issued 99,500,000 shares of Class A Common stock issued to a director of the Company for payment of accounts payable for directors fees owed for over 6 years with a market value of $78,500. The market value of the shares was $57,250, which resulted in a $21,250 gain from settlement, which was recorded as additional paid-in capital.

c)   The Company issued 2,000,000 shares of Class A Common stock to an individual in payment of consulting fees with a fair market value of $1,600.

d)   The Company issued 30,000,000 of Class A Common stock to an individual to reduce a promissory note in the amount of $2,400. The difference between the fair market value of $15,000 and the promissory note reduction was charged to beneficial interest in the amount of $12,600.

e) The Company issued 75,000,000 shares Class A Common Stock to a Company upon the conversion of $18,000 of debt owed to a debtor of the Company pursuant to an Assignment of Debt Agreement. The market value of the shares was $47,400. The difference between the market value and the debt reduction of $29,400 was charged to settlement expense

For the Nine Months Ended September 30, 2011:

a)   The Company converted $66,104 of the principal amount and accrued interest of the iVoice Note Receivable, dated April 30, 2010 for redemption of 1,057.664 shares of B Green Innovations Series A 3% Preferred Stock in accordance with the terms of the Promissory Note.

b)   The Company issued 3,642,856 shares of Class A common stock with a fair value of $4,500 for services.

.

See accompanying notes to condensed financial statements.

4

B GREEN INNOVATIONS, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

September 30, 2012 and 2011

Note 1                      Background

B Green Innovations, Inc., a Matawan, New Jersey-based corporation, (OTC Bulletin Board: BGNN), formerly iVoice Technology, Inc., (“B Green Innovations” or the “Company”) was incorporated under the laws of New Jersey on November 10, 2004 as a wholly owned subsidiary of iVoice, Inc. (“iVoice”).  In May 2008, the Company formed B Green Innovations, Inc. (“B Green”), a wholly-owned subsidiary to commercialize its “green” technology platforms.

On November 17, 2009, pursuant to an Agreement and Plan of Merger (the “Merger Agreement”), B Green Innovations, Inc., a wholly owned subsidiary of iVoice Technology, Inc. (the “Company”), merged into iVoice Technology, Inc.

On July 28, 2009, the Board of Directors and shareholders through written consent representing a majority of the total voting Class A and Class B Common stock voted to change the name of the Company to B Green Innovations, Inc.  On November 20, 2009, the Company filed an Amendment to the Certificate of Incorporation with the State of New Jersey to officially change the name of the Company.

Note 2                      Business Operations

The B Green Innovations, Inc. ("B Green"), "Go Green" mission from its inception, is to create a "Green" company for the development of solutions to eliminate waste from the world's environment. B Green offers consumers a realistic and necessary solution to the problem of waste around the world. We believe that to truly have an impact on the planet, one must be committed to the environment and seek out environmentally-friendly products.

The first technology was to create new products from recycled tire rubber. EcoPod® and VibeAway® address important environmental concerns and problems facing the planet today. EcoPod® and VibeAway® are 100% recycled rubber-based products that can be utilized as support pads under any units that vibrate and make noise, including washing machines, dryers, compressors, commercial condensers, and many other units that advantageously benefit from sound and vibration control. In addition, we announced that we had filed a new patent application for a process described as “Recycled Tire Pod with Appliance Recess Guide.”

The Company also sells 100% degradable/biodegradable compactor bags. These bags include oxo-biodegradable additive using the latest technology that supports the 3 R’s of “Packaging Reduce”, “Reuse”, “Recycle” and provides a fourth R, “Remove”. Independent Scientific Testing show that plastics incorporated with an additive called Renatura™ will degrade and then fully biodegrade, without leaving behind harmful residues in the soil.

These oxo-biodegradable plastic products are scientifically proven to be non-toxic and are FDA compliant, meaning they are safe for food packaging applications and have been awarded approved food film contact ‘no migration’ status. Regular plastic bags can take up to 100 years to break down causing plastic pollution and harm to both domestic and wild life. Standard plastics are filling our landfills and greatly impacting our planet. Plastics incorporating this additive in the presence of oxygen disappear when exposed to UV light or thermal heat. Our product is designed to allow plastics to degrade like a leaf, slowly yielding CO2 (which through photosynthesis becomes oxygen), water, bio-waste, and mineral salts that condition the soil in the process.

The Company continues to evaluate additional products to its product line as well as expanding its distribution channels.

The Company will also continue to support the Interactive Voice Response ("IVR"), software that was developed by iVoice. The Company's Interactive Voice Response line is designed to read information from and write information to, databases, as well as to query databases and return information.

5

B GREEN INNOVATIONS, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

September 30, 2012 and 2011

Note 2                      Business Operations (continued)

IVR is an application generator that allows full connectivity to many databases, including Microsoft Access, Microsoft Excel, Microsoft Fox Pro, and Paradox, or to standard text files. The IVR software is sold as an application generator that gives the end user the ability to develop its own customized IVR applications or as a customized turnkey system. IVR performs over 40 different customizable commands. Examples of IVR range from simply selecting announcements from a list of options stored in the computer (also known as audio text) to more complex interactive exchanges such as querying a database for information.

Note 3                      Going Concern

The accompanying condensed financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplates continuation of the Company as a going concern.

As of September 30, 2012, the Company had a net operating loss, and negative working capital.  These matters raise substantial doubt about the Company’s ability to continue as a going concern. Therefore, recoverability of a major portion of the recorded asset amounts shown in the accompanying balance sheets is dependent upon continued operations of the Company, which in turn, is dependent upon the Company’s ability to raise capital and/or generate positive cash flow from operations.

Management plans to increase the development, manufacture, and distribution of “green” products to generate a positive cash flow. However, these plans are dependent upon obtaining additional capital. There can be no assurance that the Company will be able to obtain the necessary capital, and achieve its growth objectives. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event the Company cannot continue in existence.

Note 4                      Summary of Significant Accounting Policies

a)    Basis of Presentation

The accompanying condensed unaudited interim financial statements included herein have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). The condensed financial statements and notes are presented as permitted on Form 10-Q and do not contain information included in the Company's annual statements and notes. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. It is suggested that these condensed financial statements be read in conjunction with the December 31, 2011 audited financial statements and the accompanying notes thereto. While management believes the procedures followed in preparing these condensed financial statements are reasonable, the accuracy of the amounts are in some respects dependent upon the facts that will exist, and procedures that will be accomplished by the Company later in the year. These results are not necessarily indicative of the results to be expected for the full year.

These condensed unaudited financial statements reflect all adjustments, including normal recurring adjustments, which, in the opinion of management, are necessary to present fairly the operations and cash flows for the periods presented.

b)    Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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.

6

B GREEN INNOVATIONS, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

September 30, 2012 and 2011

Note 4                      Summary of Significant Accounting Policies (continued)

c)    Revenue Recognition

With respect to IVR customer support services, the Company offers customers an optional annual software maintenance and support agreement for subsequent periods. Sales of purchased maintenance and support agreements are recorded as deferred revenue and recognized over the respective terms of the agreements.

For the “green” products, revenues are recognized at the time of shipment to, or acceptance by customer, provided title and risk of loss is transferred to the customer. Provisions, when appropriate, are made where the right to return exists.

Shipping and handling costs charged to customers are classified as revenue, and the shipping and handling costs incurred are included in cost of goods sold.

d)    Product Warranties

The Company estimates its warranty costs based on historical warranty claims experience in estimating potential warranty claims. Due to the limited sales of the Company's products, management has determined that warranty costs are immaterial and has not included an accrual for potential warranty claims. Presently, costs related to warranty coverage are expensed as incurred. Warranty claims are reviewed quarterly to verify that warranty liabilities properly reflect any remaining obligation based on the anticipated expenditures over the balance of the obligation period.

e)    Research and Development Costs

Research and development costs are charged to expense when incurred. The Company has not incurred any research and development costs for the nine months ended September 30, 2012 and 2011.

f)    Advertising Costs

Advertising costs are expensed as incurred and are included in selling expenses. For the three and nine months ended September 30, 2012 the Company incurred $2,422 and $4,172, respectively, as compared to $1,276 and $3,258, respectively, for the three and nine months ended September 30, 2011.

g)    Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. There were no cash equivalents at September 30, 2012 and December 31, 2011. The Company maintains cash balances at financial institutions that are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to federally insured limits. At times balances may exceed FDIC insured limits. The Company has not experienced any losses in such accounts.

h)   Marketable Securities

The Company has evaluated its investment policies consistent with ASC 320-10-25, “Classification of Investment Securities”, and determined that all of its investment securities are to be classified as available for sale securities. Available for sale securities are carried at fair value, with the unrealized gains and losses reported in Stockholders' Equity (Deficit) under the caption Accumulated Other Comprehensive Income.

7

B GREEN INNOVATIONS, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

September 30, 2012 and 2011

Note 4                      Summary of Significant Accounting Policies (continued)

i)   Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of trade accounts receivable and cash.  As of September 30, 2012, the Company believes it has no significant risk related to its concentration within its accounts receivable.

j)    Accounts Receivable

Accounts receivable are non-interest bearing obligations due under normal trade terms. Senior management reviews accounts receivable on a monthly basis to determine if any receivables will be potentially uncollectible. Historical bad debts and current economic trends are used in evaluating the allowance for doubtful accounts. The Company includes any accounts receivable balances that are determined to be uncollectible, along with a general reserve, in its overall allowance for doubtful accounts. After all attempts to collect a receivable have failed, the receivable is written off against the allowance. Based on the information available, the Company believes its allowance for doubtful accounts as of September 30, 2012 and December 31, 2011 is adequate.

k)   Property and Equipment

Property and equipment is stated at cost. Depreciation is computed using the straight-line method based upon the estimated useful lives of the assets, generally five to seven years. Maintenance and repairs are charged to expense as incurred.

l)   Intangible Assets

Registration and maintenance costs associated with the filing and registration of patents are prepaid and amortized over the remaining life of the patent, not to exceed 20 years. Costs associated with such patents are not approved or abandoned.

m)   Income Taxes

The Company accounts for income taxes using the asset and liability method described in FASB ASC 740. Deferred tax assets arise from a variety of sources, the most significant being: a) tax losses that can be carried forward to be utilized against profits in future years; b) expenses recognized in the books but disallowed in the tax return until the associated cash flow occurs; and c) valuation changes of assets which need to be tax effected for book purposes but are deductible only when the valuation change is realized.

Deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using enacted tax rates and laws that are expected to be in effect when such differences are expected to reverse.  The measurement of deferred tax assets is reduced, if necessary, by a valuation allowance for any tax benefit, which is not more likely than not to be realized. In assessing the need for a valuation allowance, future taxable income is estimated, considering the realization of tax loss carryforwards. Valuation allowances related to deferred tax assets can also be affected by changes to tax laws, changes to statutory tax rates and future taxable income levels. In the event it was determined, that the Company would not be able to realize all or a portion of our deferred tax assets in the future, we would reduce such amounts through a charge to income in the period in which that determination is made. Conversely, if we were to determine that we would be able to realize our deferred tax assets in the future in excess of the net carrying amounts, we would decrease the recorded valuation allowance through an increase to income in the period in which that determination is made.  In its evaluation of a valuation allowance, the Company takes into account existing contracts and backlog, and the probability that options under these contract awards will be exercised as well as sales of existing products. The Company prepares profit projections based on the revenue and expenses forecast to determine that such revenues will produce sufficient taxable income to realize the deferred tax assets.

The Company adopted FASB ASC 740-10-50, Accounting for Uncertainty in Income Taxes. ASC 740-10-50 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC 740-10 requires that the Company determine whether the benefits of its tax positions are more-likely-than-not of being sustained upon audit based on the technical merits of the tax position. The Company recognizes the impact of an uncertain income tax position taken on its income tax return at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority.

8

B GREEN INNOVATIONS, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

September 30, 2012 and 2011

Note 4                      Summary of Significant Accounting Policies (continued

m)   Income Taxes (continued)

Despite the Company’s belief that its tax return positions are consistent with applicable tax laws, one or more positions may be challenged by taxing authorities. Settlement of any challenge can result in no change, a complete disallowance, or some partial adjustment reached through negotiations or litigation.

Interest and penalties related to income tax matters, if applicable, will be recognized as income tax expense. During the nine months ended September 30, 2012 and 2011, the Company did not incur any expense related to interest or penalties for income tax matters, and no such amounts were accrued as of September 30, 2012 and December 31, 2011.

n)     Fair Value of Financial Instruments

The carrying amounts reported in the balance sheets as of September 30, 2012 and December 31, 2011 for cash and cash equivalents, marketable securities, accounts receivable, inventories, prepaid expenses and other current assets, accounts payable and accrued expenses other current liabilities approximate the fair value because of the immediate or short-term maturity of these financial instruments.  The fair value of the debt approximates its carrying value at the stated discount rate of the debt to reflect recent market conditions.

o)     Long-Lived Assets

The Company assesses the recoverability of the carrying value of its long-lived assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future, undiscounted cash flows expected to be generated by an asset.  If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets.  Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.  No impairment losses were recognized for the three and nine months ended September 30, 2012. For the nine months ended September 30, 2011, the Company recorded an impairment loss of $19,582 related to fixed assets no longer utilized in the amount of $17,258 and for patents rejected in the amount of $2,324. Such amounts are reported in the accompanying statement of operations in operating expenses 

p)     Accumulated Other Comprehensive Income (Loss)

ASC 220, “Comprehensive Income”, establishes standards for the reporting and display of comprehensive income (loss) and its components in the financial statements. The items of other comprehensive income (loss) that are typically required to be displayed are foreign currency items, minimum pension liability adjustments, and unrealized gains and losses on certain investments in debt and equity securities. During the nine months ended September 30, 2012 and 2011, the Company had one item that represented comprehensive income, and thus, has included a statement of comprehensive income (loss).

Note 5                      Earnings (Loss) Per Share

FASB ASC 260-10 requires the presentation of basic earnings per share ("basic EPS") and diluted earnings per share ("diluted EPS").

The Company’s basic income (loss) per common share is based on net income (loss) for the relevant period, divided by the weighted average number of common shares outstanding during the period.  Diluted income per common share is based on net income, divided by the weighted average number of common shares outstanding during the period, including common share equivalents, such as outstanding stock options and beneficial conversion of related party accounts. The computation of diluted loss per share for the three and nine months ended September 30, 2012 and 2011 does not assume conversion, exercise or contingent exercise of warrants, and securities as they would have an anti-dilutive effect on the earnings resulting from the Company’s net loss position in that period.

9

B GREEN INNOVATIONS, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

September 30, 2012 and 2011

Note 5                      Earnings (Loss) Per Share (continued)

The computation of diluted loss per share for the three and nine months ended September  30, 2012 does not include share equivalents in the amount of 4,465,356,563 as they would have an anti-dilutive effect on the earnings resulting from the Company’s net loss position in that period.  The computation of diluted loss per share for the three and nine months ended September 30, 2011 does not assume conversion, exercise or contingent exercise of warrants, and securities in the amount of 3,921,751,719 shares as they would have an anti-dilutive effect on the earnings resulting from the Company’s net loss position in that period.

	Three Months Ended			Three Months Ended
	September 30, 2012			September 30, 2011
Basic net loss per share:
Net loss attributable to common stockholders	$	(112,566	)	$	(54,727	)
Weighted-average common shares outstanding		841,748,243			606,774,858
Basic net loss per share	$	(0.00	)	$	(0.00	)
Diluted net loss per share:
Net loss attributable to common stockholders	$	(112,566	)	$	(54,727	)
Weighted-average common shares outstanding		841,748,243			606,774,858
Incremental shares attributable to the common stock equivalents		-			-
Total adjusted weighted-average shares		841,748,243			606,774,858
Diluted net loss per share	$	(0.00	)	$	(0.00	)

	Nine Months Ended			Nine Months Ended
	September 30, 2012			September 30, 2011
Basic net loss per share:
Net loss attributable to common stockholders	$	(239,454	)	$	(237,698	)
Weighted-average common shares outstanding		711,351,309			605,241,917
Basic net loss per share	$	(0.00	)	$	(0.00	)
Diluted net loss per share:
Net loss attributable to common stockholders	$	(239,454	)	$	(237,698	)
Weighted-average common shares outstanding		711,351,309			605,241,917
Incremental shares attributable to the common stock equivalents		-			-
Total adjusted weighted-average shares		711,351,309			605,241,917
Diluted net loss per share	$	(0.00	)	$	(0.00	)

Note 6                      Intangible Assets

Intangible assets consist of patents pending in the amount of $51,033 and $52,657 for the periods ended September 30, 2012 and December 31, 2011. The Company recorded amortization expense of $541 and $1,624, respectively, for the three and nine months ended September 30, 2012 as compared to $513 and $4,412, respectively, for the same periods in the prior fiscal year. There was no impairment expense for the nine months ended September 30, 2012. For the nine months ended September 30, 2011, the Company had an impairment expense of $2,324 for patents that were rejected.

Note 7                      Related Party Transactions

The Company has assumed an outstanding promissory demand note in the amount of $190,000 payable to Jerry Mahoney, Chief Executive Officer and Chairman of the Board of B Green Innovations, Inc.  This amount is related to funds loaned to iVoice and is unrelated to the operations of B Green Innovations, Inc.  The note will bear interest at the rate of prime plus 2.0% per annum (5.25% at September 30, 2012) on the unpaid balance until paid.  Interest payments are due and payable annually. Under the terms of the Promissory Note, at the option of the Note holder, principal and interest can be converted into either (i) one share of Class B Common Stock of B Green Innovations, Inc., par value $.01, for each dollar owed, (ii) the number of shares of Class A Common Stock of B Green Innovations, Inc. calculated by dividing (x) the sum of the principal and interest that the Note holder has requested to have prepaid by (y) eighty percent (80%) of the lowest issue price of Class A Common Stock since the first advance of funds under this Note, or (iii) payment of the principal of this Note, before any repayment of interest.

10

B GREEN INNOVATIONS, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

September 30, 2012 and 2011

Note 7                      Related Party Transactions (continued)

The Board of Directors of the Company maintains control over the issuance of shares and may decline the request for conversion of the repayment into shares of the Company. During the nine months ended September 30, 2012, the Company issued 30,000,000 of Class A Common stock to reduce the promissory note in the amount of $2,400. The difference between the fair market value of $15,000 and the promissory note reduction was charged to beneficial interest in the amount of $12,600. As of September 30, 2012 and December 31, 2011, the outstanding balances were $603 and $3,003, respectively, plus accrued interest of $151,889 and $132,174, respectively.

On May 8, 2007, the Company executed a Security Agreement providing Jerome Mahoney, President and Chief Executive Officer of the Company, with a security interest in all of the assets of the Company to secure the promissory note dated August 5, 2005 and all future advances including, but not limited to, additional cash advances: deferred compensation, deferred expense reimbursement, deferred commissions and income tax reimbursement for the recognition of income upon the sale of common stock for the purpose of the holder advancing additional funds to the Company.

The Company entered into a five-year employment agreement with Jerome Mahoney to serve as Non-Executive Chairman of the Board of Directors, effective August 1, 2004. On March 9, 2009, the term of the employment agreement between the Company and Mr. Mahoney, the Company’s CEO, was extended to July 31, 2016.  The Company will compensate Mr. Mahoney with a base salary of $85,000 for the first year with annual increases based on the Consumer Price Index. Mr. Mahoney had a consulting agreement with the Company’s former subsidiary B Green Innovations for annual compensation of $24,000 and upon every annual anniversary thereafter, at the rate based on the increase in the Consumer Price Index for All Urban Consumers (New York-Northern N.J.-Long Island). Effective January 1, 2010, this amount was added to Mr. Mahoney’s base salary. On June 15, 2010, Mr. Mahoney’s employment agreement was amended to increase the base salary to $195,000 effective July 1, 2010. As of September 30, 2012, Mr. Mahoney’s salary was $ 199,307. All other terms of the Employment Agreement shall remain in full force and effect. A portion of Mr. Mahoney’s compensation shall be deferred until such time that the Board of Directors determines that the Company has sufficient financial resources to pay his compensation in cash.

The Board has the option to pay Mr. Mahoney’s compensation in the form of Class B Common Stock. Mr. Mahoney will also be entitled to certain bonuses based on mergers and acquisitions completed by the Company. Pursuant to the terms of the Class B Common Stock, a holder of Class B Common Stock has the right to convert each share of Class B Common Stock into the number of shares of Class A Common Stock determined by dividing the number of Class B Common Stock being converted by a 20% discount of the lowest price for which the Company had ever issued its Class A Common Stock. As of September 30, 2012 and December 31, 2011, total deferred compensation due to Mr. Mahoney was $609,367 and $484,928 respectively.

On December 30, 2011, as part of a transaction involving the sale of iVoice, Inc., the holder of the Company’s Series A 3% Preferred Stock, Mr. Mahoney exchanged amounts due him from iVoice, Inc. for the aforementioned Series A 3% Preferred Stock. In June 2012, Mr. Mahoney converted 843.6 of  Series A Preferred Stock into $843,624 based on the Initial Stated Value of $1,000 per share. In June 2012, the Company repurchased 39,237 shares of its Class B Common Stock at $1.00 per share which is the same price that it was purchased from Mr. Mahoney, a related party. 

Note 8                     Income taxes

The tax effect of temporary differences, primarily net operating loss carryforwards, asset reserves and accrued liabilities give rise to a deferred tax asset. Deferred income taxes are recognized for the tax consequence of such temporary differences at the enacted tax rate expected to be in effect when the differences reverse. Because of the current uncertainty of realizing the benefit of the tax carry forward, a valuation allowance equal to the tax benefit for deferred taxes has been established. The full realization of the tax benefit associated with the carry forward depends predominantly upon the Company's ability to generate taxable income during the carry forward period.

11

B GREEN INNOVATIONS, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

September 30, 2012 and 2011

Note 9                     Capital Stock

Pursuant to the Company’s certificate of incorporation, as amended, the Company is authorized to issue 1,000,000 shares of Preferred Stock, par value of $1.00 per share, 10,000,000,000 shares of Class A Common Stock, no par value per share, 50,000,000 shares of Class B Common Stock, par value $0.01 per share, and 20,000,000 shares of Class C Common Stock, par value $0.01 per share. Below is a description of the Company’s outstanding securities, including Preferred Stock, Class A Common Stock, Class B Common Stock and Class C Common Stock.

a)        Preferred Stock

The Company is authorized to issue 1,000,000 shares of Preferred Stock, par value $1.00 per share.

Of the 1,000,000 shares of Preferred Stock, 10,000 shares are designated Series A 10% Preferred Stock, par value $1.00 per share, with a stated value of $1,000 (the “Series A Preferred Stock”). The stated value is used for calculation of dividends and liquidation preferences. On March 12, 2008, the Company sold 1,444.44 shares of Series A 10% Preferred Stock to iVoice, Inc. for $1,444,444.  With consent of the holders of the Series A Preferred Stock, on March 6, 2009, the Company amended its Certificate of Incorporation and amended the rights of the Series A Preferred by: (i) eliminating all voting rights for the Series A Preferred Stock and (ii) eliminating the conversion feature of the Series A Preferred Stock.

In February 2010, the Company filed with the State of New Jersey an Amendment to the Certificate that revised the rights of the holders of the Company’s Series A 10% Secured Convertible Preferred Stock. The revisions included:

a.   The preferred stock will be referred to in the Company’s Certificate of Incorporation as: “Series A 3% Preferred Stock”.

b.   The holders of the preferred stock will have a new dividend rate of 3%.

c.   The holders of the Series A 3% Preferred Stock shall have no voting rights.

d.   Series A 3% Preferred Stock is convertible, at the option of the holder with the consent of the Corporation, at any time after the date of issuance of such share into such number of fully paid and non-assessable shares of Common Stock as is determined by dividing the Series A Initial Value, as may be adjusted from time to time, by the Conversion Price applicable to such share. The "Conversion Price” per share shall be calculated as the closing bid price of the Class A Common stock on the last trading day immediately prior to the date that the Notice of Conversion is tendered to the Corporation, subject to certain adjustments.

e.   The holders of shares of Series A Preferred Stock shall be prohibited from converting shares of Series A Preferred Stock, and the Corporation shall not honor any attempted conversion of Series A Preferred Stock, if, and to the extent, the shares of Common Stock held by such converting holder of Series A Preferred Stock following any attempted conversion would exceed 9.99% of the outstanding shares of Common Stock of the Corporation after giving effect to such conversion.

On January 5, 2011, the Company converted $66,104 of the principal amount and accrued interest of the iVoice Note Receivable, dated April 30, 2010 for redemption of 1,057.664 shares of B Green Innovations Series A 3% Preferred Stock in accordance with the terms of the Promissory Note. 

In February 2011, the Board of Directors authorized the Company to sell up 350 shares of the Series A 3% Preferred Stock.

On January 9, 2012, Jerome Mahoney exchanged a note issued by iVoice, Inc. for the sum of $972,203 for a new note issued by American Security Resources Corporation (“ASRC”), an unrelated party to the Company (the “ASRC Note”).  Thereafter, pursuant to a Preferred Stock Exchange Agreement by and among, Jerome Mahoney, ASRC and the Company, Mr. Mahoney returned the ASRC Note to ASRC in exchange for the Company cancelling an equal value of the Company’s Series A 3% Preferred Stock (“Preferred Stock”), or 972.2 shares, held by iVoice, Inc. and the issuance of an equal number of Preferred Stock shares to Mr. Mahoney. In June 2012, the Company converted 843.6 of Series A Preferred Stock into $843,624 based on the Initial Stated Value of $1,000 per share. As of September 30, 2012 and December 31, 2011, respectively, 762 and 1,606 shares of Series A 3% Preferred Stock are issued and outstanding, respectively.

As of September 30, 2012 and December 31, 2011 dividends in arrears amounted to $426,723 and $397,233, respectively.

12

B GREEN INNOVATIONS, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

September 30, 2012 and 2011

Note 9                     Capital Stock (continued)

b)        Class A Common Stock

As of September 30, 2012, there are 10,000,000,000 shares of Class A Common Stock authorized, no par value, and 842,952,726 shares were issued, and 841,758,243 shares were outstanding. 

Each holder of Class A Common Stock is entitled to receive ratably dividends, if any, as may be declared by the Board of Directors out of funds legally available for payment of dividends.  The Company has never paid any dividends on its common stock and does not contemplate doing so in the foreseeable future. The Company anticipates that any earnings generated from operations will be used to finance its growth objectives. During the nine months ended September 30, 2012, the Company issued the following shares of Class A Common stock:

1.	25,000,000 shares of Class A Common stock to an employee in lieu of compensation with a fair market value of $22,500.
2.	99,500,000 shares of Class A Common stock issued to a director of the Company for payment of accounts payable in the amount of $78,500 for directors fees owed for over 6 years.
3.	2,000,000 shares of Class A Common stock to an individual in payment of consulting fees with a fair market value of $1,600.
4.	30,000,000 of Class A Common stock to Jerry Mahoney to reduce a promissory note in the amount of $2,400. The difference between the fair market value of $15,000 and the promissory note reduction was charged to beneficial interest in the amount of $12,600.
5.	75,000,000 shares Class A Common Stock to a Company upon the conversion of $18,000 of debt owed to debtor of the Company pursuant to an Assignment of Debt Agreement.

c)        Class B Common Stock

As of September 30, 2012, there are 50,000,000 shares of Class B Common Stock authorized, par value of $.01 per share and 46,014 shares issued and outstanding.  Each holder of Class B Common Stock has voting rights equal to 100 shares of Class A Common Stock. A holder of Class B Common Stock has the right to convert each share of Class B Common Stock into the number of shares of Class A Common Stock determined by dividing the number of Class B Common Stock being converted by a 20% discount of the lowest price that B Green Innovations, Inc. had ever issued its Class A Common Stock. Upon our liquidation, dissolution, or winding-up, holders of Class B Common Stock will be entitled to receive distributions. On July 27, 2009, the Company amended its Certificate of Incorporation as follows: a holder of Class B Common Stock has the right to convert each share of Class B Common Stock into the number of shares of Class A Common Stock determined by dividing the number of Class B Common Stock being converted by a 20% discount of the lowest price that B Green Innovations, Inc. had ever issued its Class A Common Stock. Each holder of Class B common stock has voting rights equal to the number of Class A shares that would be issued upon the conversion of the Class B shares, had all of the outstanding Class B shares been converted on the record date used for purposes of determining which shareholders would vote. Previously, each holder of Class B Common Stock has voting rights equal to 100 shares of Class A Common Stock. In February 2011, the Board of Directors authorized the Company to buyback up to 115,025 shares of Class B common stock at $1.00 per share. During the nine months ended September 30, 2012, the Company repurchased 39,237 shares of its Class B Common Stock at $1.00 per share which is the same price that it was purchased from Jerry Mahoney, a related party.

d)        Class C Common Stock

As of September 30, 2012, there are 20,000,000 shares of Class C Common Stock authorized, par value $.01 per share.  Each holder of Class C Common Stock is entitled to 1,000 votes for each share held of record. Shares of Class C Common Stock are not convertible into Class A Common Stock. Upon liquidation, dissolution or wind-up, the holders of Class C Common Stock are not entitled to receive our net assets pro rata. As of September 30, 2012, no shares were issued or outstanding.

13

B GREEN INNOVATIONS, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

September 30, 2012 and 2011

Note 10                    Stock Options

During 2005, the Company adopted the 2005 Stock Incentive Plan and the 2005 Directors’ and Officers’ Stock Incentive Plan (“Plan”) in order to attract and retain qualified personnel.  Under the Plan, the Board of Directors, in its discretion may grant stock options (either incentive or non-qualified stock options) to officers, directors and employees.  The Company has not issued any stock options as of September 30, 2012.

Note 11                    Fair Value Measurements

FASB Codification Topic 820-10, Fair Value Measurements and Disclosures defines fair value, establishes a framework for measuring fair value under generally accepted accounting principles and expands disclosures about fair value measurements; however, it does not require any new fair value measurements, rather, its application is made pursuant to other accounting pronouncements that require or permit fair value measurements.

As defined in FASB ASC 820-10, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique.

Fair value measurements are generally based upon observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our view of market assumptions in the absence of observable market information. The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. FASB Codification Topic 820-10, Fair Value Measurements and Disclosures includes a fair value hierarchy that is intended to increase consistency and comparability in fair value measurements and related disclosures. The fair value hierarchy consists of the following three levels:

Level 1 – Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, marketable securities and listed equities.

Level 2 – Pricing inputs are other than quoted prices in active markets included in level 1, which are either directly or indirectly observable as of the reported date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Instruments in this category generally include non-exchange-traded derivatives such as commodity swaps, interest rate swaps, options and collars.

Level 3 – Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value.

14

B GREEN INNOVATIONS, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

September 30, 2012 and 2011

Note 11                    Fair Value Measurements (continued)

The Company adopted the Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) No. 2010-06, Improving Disclosures about Fair Value Measurements (“ASU 2010-06”) which requires additional disclosures about the various classes of assets and liabilities measured at fair value, the valuation techniques and inputs used, the activity in Level 3 fair value measurements and the transfers between Levels 1, 2, & 3.

The following table sets forth by level within the fair value hierarchy the Company’s financial assets and liabilities that were accounted for at fair value as of September 30, 2012 and December 31, 2011. As required by FASB ASC 820-10, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels.

September 30, 2012	Level I		Level II		Level III		Total
Total Assets	$	-	$	-	$	-	$	-
Total Liabilities	$	-	$	-	$	-	$	-

December 31, 2011	Level I		Level II		Level III		Total
Marketable Securities	$	910,845	$	-	$	-	$	910,845
Total Assets	$	910,845	$	-	$	-	$	910,845
Total Liabilities	$	-	$	-	$	-	$	-

Note 12                    New Accounting Pronouncements

In May 2011, the Financial Accounting Standards Board (FASB) issued ASU 2011-04, guidance to improve consistency in application of existing fair value measurement and disclosure requirements.  The standard is intended to clarify the application of the requirements, not to establish valuation standards or affect valuation practices outside of financial reporting.  The guidance is effective for interim and annual periods beginning on or after December 15, 2011.  The adoption of ASU 2011-04 did not have an impact on our financial statements.

In June 2011, the FASB issued ASU 2011-05, guidance to improve the comparability, consistency, and transparency of financial reporting and to increase the prominence of items reported in other comprehensive income.  The standard eliminates the current option to present components of other comprehensive income as part of the statement of changes in stockholders’ equity.  The amendment requires that all non-owner changes in stockholders’ equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements.  The amendment does not affect how earnings per share is calculated or presented.  The guidance is effective for interim and annual periods beginning after December 15, 2011. The adoption of ASU 2011-05 did not have an impact on our financial statements.

15

B GREEN INNOVATIONS, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

September 30, 2012 and 2011

Note 12                    New Accounting Pronouncements (continued)

In September 2011, the FASB issued ASU 2011-08, “Intangibles — Goodwill and Other (Topic 350).” The objective of this Update is to simplify how entities test goodwill for impairment. This Update permits an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. The Update is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. Early adoption is permitted, including for annual and interim goodwill impairment tests performed as of a date before September 15, 2011. The adoption of ASU 2011-08 did not have an impact on our financial statements.

In December 2011, the FASB issued ASU No. 2011-11, Balance Sheet (ASC Topic 210) — Disclosures about Offsetting Assets and Liabilities. The ASU requires enhanced disclosures on offsetting, including disclosing gross and net information about instruments and transactions eligible for offset and instruments and transactions subject to an agreement similar to a master netting arrangement.  The ASU is effective for the Company’s first quarter of fiscal year 2013 and requires the enhanced disclosures for all comparative periods presented.  Other than requiring additional disclosures, the adoption of this new guidance will not have a material impact on the Company’s consolidated financial statements.

Management does not believe that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying financial statements.

Note 13                    Gain on Reduction of Liability

The Company recorded a gain from the reduction in liabilities of $53,860 in 2012. The obligation principally relates to services rendered when the Company was operating under different operations. Very little, if any, collection activity occurred. In the opinion of Company’s counsel as a result of the passage of time these liabilities cannot be legally enforced against the Company.

Note 14                    Segment Data

FASB ASC 280, “Disclosures about Segments of an Enterprise and related information”, establishes standards for reporting information regarding operating segments in annual financial statements and requires selected information of those segments to be presented in interim financial statements. Operating segments are identified as components of an enterprise for which separate discrete financial information is available for evaluation by the chief operating decision maker (the Company’s President and Chief Executive Officer) in making decisions on how to allocate resources and assess performance. In accordance with FASB ASC 280 the Company has determined it has two reportable segments –“green” technology products, and support of Interactive Voice Response (“IVR”) software. There are no inter-segment revenues.

The Company is organized primarily on the basis of its “green” technology products. The “green” technology segment is dedicated to the development, manufacture, and distribution of “green” products, focusing on acquiring and identifying promising technologies that address environmental issues. The Company also continues to support its IVR business. The Company currently has no plans to engage in future research and development, to launch any additional versions of the IVR software or other products, or to continue to market this product. Management evaluates the performance of its segments by allocating resources to them based on gross margin. The Company’s general and administrative costs are not segment specific. As a result, all operating expenses are not managed on a segment basis. Most costs are related to the “green” technology segment. Costs associated with its IVR business are specifically allocated at the gross profit level. Segment assets include accounts receivable and inventory.  

16

B GREEN INNOVATIONS, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

September 30, 2012 and 2011

Note 14                    Segment Data (continued)

The tables below present information about reportable segments for the three and nine months ended September 30, 2012 and 2011. 

Three Months Ended September 30, 2012

	“Green” Products		IVR		Corporate/ Reconciling Items			Total
Net sales	$	76,669	$	500	$	-		$	77,169
Cost of sales		20,806		-		-			20,806
Gross profit		55,863		500		-			56,363
General and administrative		-		-		132,503			132,503
Interest and dividends, net		-		-		7,026			7,026
Settlement expense		-		-		29,400			29,400
Loss on sale of marketable securities		-		-		-			-
		-		-		168,929			168,929
Income (loss) before taxes	$	55,863	$	500	$	(168,929	)	$	(112,566	)

Three Months Ended September 30, 2011

	“Green” Products		IVR		Corporate/ Reconciling Items			Total
Net sales	$	52,823	$	11,350	$	-		$	64,173
Cost of sales		16,044		-		-			16,044
Gross profit		36,779		11,350		-			48,129
General and administrative		-		-		147,519			147,519
Interest, net		-		-		337			337
Impairment of assets		-		-		-			-
Other income		-		-		(45,000	)		(45,000	)
		-		-		102,856			102,856
Income (loss) before taxes	$	36,779	$	11,350	$	(102,856	)	$	(54,727	)

17

B GREEN INNOVATIONS, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

September 30, 2012 and 2011

Note 14                    Segment Data (continued)

Nine Months Ended September 30, 2012

	“Green” Products		IVR		Corporate/ Reconciling Items			Total
Net sales	$	257,640	$	7,175	$	-		$	264,815
Cost of sales		70,671		-		-			70,671
Gross profit		186,969		7,175		-			194,144
General and administrative		-		-		430,538			430,538
Interest and dividends, net		-		-		(38,685	)		(38,685	)
Settlement expense		-		-		29,400			29,400
Loss on sales of marketable     securities		-		-		66,205			66,205
Gain on extinguishment of debt		-		-		(53,860	)		(53,860	)
		-		-		433,598			433,598
Income (loss) before taxes	$	186,969	$	7,175	$	(433,598	)	$	(239,454	)

Nine Months September 30, 2011

	“Green” Products		IVR		Corporate/ Reconciling Items			Total
Net sales	$	153,167	$	18,360	$	-		$	171,527
Cost of sales		44,042		-		-			44,042
Gross profit		109,125		18,360		-			127,485
General and administrative		-		-		458,485			458,485
Interest, net		-		-		3,616			3,616
Impairment of assets		-		-		19,582			19,582
Other income		-		-		(116,500	)		(116,500	)
		-		-		365,183			365,183
Income (loss) before taxes	$	109,125	$	18,360	$	(365,183	)	$	(237,698	)

18

Item 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULT OF  OPERATIONS

Forward Looking Statements

A number of the statements made by the Company in this report may be regarded as “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.

Forward-looking statements include, among others, statements concerning the Company’s outlook, pricing trends and forces within the industry, the completion dates of capital projects, expected sales growth, cost reduction strategies and their results, long-term goals of the Company and other statements of expectations, beliefs, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts.

All predictions as to future results contain a measure of uncertainty and accordingly, actual results could differ materially.  Among the factors that could cause a difference are:  changes in the general economy; changes in demand for the Company’s products or in the cost and availability of its raw materials; the actions of its competitors; the success of our customers; technological change; changes in employee relations; government regulations; litigation, including its inherent uncertainty; difficulties in plant operations and materials; transportation, environmental matters; and other unforeseen circumstances. For a discussion of material risks and uncertainties that the Company faces, see the discussion in the Form 10−K for the fiscal year ended December 31, 2011 entitled “Risk Factors”.

Results of Operations

Total sales increased $13,006 (20.3%) and $93,288 (54.4%) for the three and nine months ended September 30, 2012 to $77,169 and $264,815, respectively, as compared to $64,163 and $171,527 for the same periods in the prior year. This increase is due to the increase in sales of our “green” products as a result of an increase in volume from new customers. The Company continues to evaluate additional products to its product line as well as expanding its distribution channels. The Company continues its efforts to market and sell its products through a distribution network. B Green has entered into distribution agreements with reputable distributors that have proven themselves within their territories and industry segments.

Gross profit increased $8,234 (17.1%) and $66,659 (52.3%) for the three and nine months ended September 30, 2012 to $56,363 and $194,144, respectively, as compared to $49,395 and $79,356 for the same periods in the prior year primarily as a result the increased volume of the “green” products and the cost savings by changing our out-sourced manufacturer. Gross profit for the nine months ended September 30, 2012 was 73.3% compared to 74.3% for the nine months ended September 30, 2011. Gross profit for the three months ended September 30, 2012 was 73.0% compared to 75.0% for the three months ended September 30, 2011. 

Total selling, general and administrative expenses decreased $15,016 (10.2%) and $27,947 (6.1%) for the three and nine months ended September 30, 2012 to $132,503 and $430,538, respectively, as compared to $147,517 and $458,485 for the same periods in the prior year. For the three months ended September 30, 2012, the decrease is primarily a result of lower professional fees. For the nine months ended September 30, 2012, the decrease is attributed to lower professional fees and selling expenses offset partially by an increase in stock compensation expense. The Company had no expenses related to the impairment of assets for the nine months ended September 30, 2012 as compared to $19,582 for the nine months ended September 30, 2011.

For the three and nine months ended September 30, 2012, the Company had losses from operations of $76,140 and $236,394, respectively, as compared to losses from operations of $99,390 and $350,582 for the three and nine months ended September 30, 2011 as a result of the factors discussed above.

Total other expense was $36,426 for the three months ended September 30, 2012 as compared to other income of $44,663 for the three months ended September 30, 2011 as a result of a decrease in income from administrative services and settlement expense related to the extinguishment of debt. Total other expense was $3,060 for the nine months ended September 30, 2012 as compared to other income of $112,884 for the nine months ended September 30, 2011 as a result of the loss on the sale of marketable securities, settlement expense related to the extinguishment of debt,  and a decrease in income from administrative services, partially offset by an increase in dividend income.

The net loss for the quarter ended September, 30, 2012 was $112,566 as compared to a net loss of $54,727 for the quarter ended September 30, 2011.  The net loss for the nine months ended September 30, 2012 was $239,454 as compared to a net loss of $237,698 for the nine months ended September 30, 2011. The changes were the result of the factors discussed above.

19

Liquidity and Capital Resources

To date, the Company has incurred substantial operating losses, and will require financing for working capital to meet its operating obligations.  We anticipate that we will require financing on an ongoing basis for the foreseeable future.

If the Company cannot find sources of additional financing to fund its working capital needs, the Company will be unable to obtain sufficient capital resources to operate our business. We cannot assure you that we will be able to access any financing in sufficient amounts or at all when needed. Our inability to obtain sufficient working capital funding will have an immediate material adverse effect upon our financial condition and our business. The Company currently has no other significant sources of working capital or cash commitments. However, no assurance can be given that the Company will raise sufficient funds from such financing arrangements, or that Company will ever produce sufficient revenues to sustain its operations, or that a market will develop for its common stock for which a significant amount of the Company’s financing is dependent upon.

During the nine months ended September 30, 2012, the Company had a net decrease in cash of $47,294.  The Company’s principal sources and uses of funds were as follows:

Cash used in operating activities. The Company used $8,057 in cash for operating activities for the nine months ended September 30, 2012 as compared to using $127,459 in the prior year. The decrease in cash used in operating activities is primarily the result of the lower operating loss, the reduction in accounts receivable and the fact that last year had an increase in notes receivable that did not occur in the current fiscal year.

Cash provided by (used in) investing activities.  The Company provided $843,624 in cash from investing activities for the nine months ended September 30, 2012 as compared using $907,139 in investing activities for the nine months ended September 30, 2011 as a result of selling its marketable securities in 2012 and as compared to its purchase in 2011. The proceeds of the sale of marketable securities were  used to convert shares of the Company’s Series A Preferred Stock ( see Notes 7 and 9).

Cash used in financing activities. The Company used $882,861 in financing activities for the nine months ended September 30, 2012 as compared to $29,774 for nine months ended September 30, 2011 as a result of partial payment of Series A Preferred Stock.

There was no significant impact on the Company’s operations as a result of inflation for the nine months ended September 30, 2012.

Critical Accounting Policies

The discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate these estimates, including those related to bad debts, inventory obsolescence, intangible assets, payroll tax obligations, and litigation. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of certain assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions.

We have identified below the accounting policy on revenue recognition, related to what we believe is the most critical to our business operations and is discussed throughout Management’s Discussion and Analysis of Financial Condition or Plan of Operation where such policy affects our reported and expected financial results.

Revenue Recognition

For “green” products, revenues are recognized at the time of shipment to, or acceptance by customer, provided title and risk of loss is transferred to the customer. Provisions, when appropriate, are made where the right to return exists.

With respect to customer support services for IVR, upon the completion of one year from the date of sale, the Company offers customers an optional annual software maintenance and support agreement for subsequent one-year periods. Sales of purchased maintenance and support agreements are recorded as deferred revenues and recognized over the respective terms of the agreements.

Due to the nature of the business and one-time contracts, it is unlikely that one customer will impact revenues in future periods. All revenues for 2012 and 2011 related to the Company’s IVR operations were derived from annual maintenance and support agreements.

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Off Balance Sheet Arrangements

During the nine months ended September 30, 2012, we did not engage in any material off-balance sheet activities nor have any relationships or arrangements with unconsolidated entities established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. Further, we have not guaranteed any obligations of unconsolidated entities nor do we have any commitment or intent to provide additional funding to any such entities.

Item 4.  Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Management of the Company has evaluated, with the participation of the Chief Executive Officer and Chief Financial Officer of the Company, the effectiveness of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) promulgated by the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer of the Company had concluded that the Company's disclosure controls and procedures as of the period covered by this Quarterly Report on Form 10-Q were not effective for the following reasons:

a)           The Company has limited segregation of duties amongst its employees with respect to the Company's control activities. This deficiency is the result of the Company's limited number of employees. This deficiency may affect management's ability to determine if errors or inappropriate actions have taken place. Management is required to apply its judgment in evaluating the cost-benefit relationship of possible changes in our disclosure controls and procedures.

b)           The Company's has a limited number of external board members. This deficiency may give the impression to the investors that the board is not independent from management. Management and the Board of Directors are required to apply their judgment in evaluating the cost-benefit relationship of possible changes in the organization of the Board of Directors.

Changes in internal control over financial reporting.

Management of the Company has also evaluated, with the participation of the Chief Executive Officer of the Company, any change in the Company’s internal control over financial reporting that occurred during the period covered by this Quarterly Report on Form 10-Q and determined that there was no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations.  There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company, threatened against or affecting our company, our common stock.

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

1.	On February 3, 2012, 25,000,000 shares of Class A Common stock were issued to an employee in lieu of compensation with a fair market value of $22,500.
2.	On April 20, 2012  and June 14, 2012 a toatal 99,500,000 shares of Class A Common stock were issued to a director of the Company for payment of accounts payable in the amount of $78,500 for directors fees owed for over 6 years.
3.	On May 22, 2012, 2,000,000 shares of Class A Common stock were issued to an individual in payment of consulting fees with a fair market value of $1,600.
4.	On May 31, 2012, 30,000,000 of Class A Common stock were issued to Jerry Mahoney to reduce a promissory note in the amount of $2,400. The difference between the fair market value of $15,000 and the promissory note reduction was charged to beneficial interest in the amount of $12,600.
5.	On July 30, 2012 and August 29, 2012,  a total of 75,000,000 shares Class A Common Stock were issued to a Company upon the conversion of $18,000 of debt owed to debtor of the Company pursuant to an Assignment of Debt Agreement.

The issuances of the aforementioned shares will be made in reliance upon the exemption from registration provided by Section 4(2) under the Securities Act of 1933, as amended.

Item 3.  Defaults Upon Senior Securities.

Not applicable.

Item 6.  Exhibits

31.1	Certification required under Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification required under Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema
101.CAL	XBRL Taxonomy Extension Calculation Linkbase
101.DEF	XBRL Taxonomy Extension Definition Linkbase
101.LAB	XBRL Taxonomy Extension Label Linkbase
101.PRE	XBRL Taxonomy Extension Presentation Linkbase

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SIGNATURES

In accordance with the requirements of the Exchange Act, the Registrant caused this report on Form 10-Q to be signed on its behalf by the undersigned, thereunto duly authorized.

	B GREEN INNOVATIONS, INC.
Date:           November 14, 2012	By:	/s/ Jerome Mahoney
		Jerome Mahoney
		President, Chief Executive Officer and
		Chief Financial Officer

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INDEX OF EXHIBITS

31.1	Certification required under Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification required under Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema
101.CAL	XBRL Taxonomy Extension Calculation Linkbase
101.DEF	XBRL Taxonomy Extension Definition Linkbase
101.LAB	XBRL Taxonomy Extension Label Linkbase
101.PRE	XBRL Taxonomy Extension Presentation Linkbase

24