GWS (FRPD) 10-Q 2010 Q1 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark  One)

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

For the quarterly period ended January 31, 2010

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

For the transition period from __________ to _____________

 GWS Technologies, Inc.

(Exact name of small business issuer as specified in its charter)

Delaware	20-2721447
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

15455 N. Greenway-Hayden Loop, Suite C4

Scottsdale, Arizona 85260

(address of principal executive offices)

(480) 619-4747

(issuer’s telephone number)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.      Yes x     No o

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

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

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

APPLICABLE ONLY TO CORPORATE ISSUERS

The number of shares of the issuer’s common equity outstanding as of March 19, 2010 was approximately 11,501,497 shares of common stock, par value $.001.

INDEX TO FORM 10-Q FILING

FOR THE PERIOD ENDED JANUARY 31, 2010

TABLE OF CONTENTS

PART I.

FINANCIAL INFORMATION

		Page
Item 1.	Financial Statements		1
	Balance Sheets as of January 31, 2010 and October 31, 2009		1
	Statements of Operations for the three month periods ended January 31, 2010 and January 31, 2009		2
	Statements of Stockholders' Equity (Deficit)		3
	Statements of Cash Flows for the three month periods ended January 31, 2010 and January 31, 2009		4
	Notes to the Financial Statements		5
Item  2.	Management's Discussion and Analysis of Financial Condition and Results of Operations		10
Item  3.	Quantitative and Qualitative Disclosures About Market Risk		20
Item  4.	Controls and Procedures		20

PART II

OTHER INFORMATION

Item  1A	Risk Factors	21
Item  2.	Unregistered Sales of Equity Securities and Use of Proceeds	26
Item  3.	Defaults Upon Senior Securities	26
Item  6.	Exhibits	27
SIGNATURES		28

PART I- FINANCIAL INFORMATION

Item  1.     Financial Statements

GWS TECHNOLOGIES, INC.
Balance Sheets
ASSETS
	January 31,				October 31,
	2010				2009
	(Unaudited)				(Restated)
CURRENT ASSETS
Cash		$	-			$	-
Prepaid expenses			231,903				309,819
Total Current Assets			231,903				309,819
PROPERTY AND EQUIPMENT, net			11,640				13,089
TOTAL ASSETS		$	243,543			$	322,908
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable and accrued expenses		$	502,719			$	496,557
Bank overdraft			56				1,978
Accrued interest payable			279,732				232,928
Note payable-related parties			363,032				358,135
Note payable			1,192,703				1,232,703
Total Current Liabilities			2,338,242				2,322,301
LONG-TERM DEBT			-				-
TOTAL LIABILITIES			2,338,242				2,322,301
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock: $0.001 par value; 10,000,000 shares authorized;
no shares issued and outstanding			-				-
Common stock: $0.001 par value; 100,000,000 shares authorized;
10,680,997 and 8,104,897 shares issued and outstanding, respectively			10,681				8,105
Additional paid-in capital			11,675,636				10,448,918
Stock subscription receivable			(22,522	)			-
Accumulated deficit			(13,758,494	)			(12,456,416	)
Total Stockholders' Equity (Deficit)			(2,094,699	)			(1,999,393	)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)		$	243,543			$	322,908

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

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GWS TECHNOLOGIES, INC.
Statements of Operations
(Unaudited)
	For the Three Months
	Ended
	January 31,
	2010			2009
REVENUES	$	-		$	-
COST OF GOODS SOLD		-			-
GROSS PROFIT (LOSS)		-			-
OPERATING EXPENSES
Depreciation and amortization		1,448			1,448
Consulting fees		1,215,415			1,726,024
Professional fees		21,950			3,762
General and administrative		16,461			12,327
Total Operating Expenses		1,255,274			1,743,561
LOSS FROM CONTINUING OPERATIONS		(1,255,274	)		(1,743,561	)
OTHER INCOME (EXPENSES)
Interest expense		(46,804	)		(35,596	)
Total Other Income (Expenses)		(46,804	)		(35,596	)
NET LOSS BEFORE INCOME TAXES		(1,302,078	)		(1,779,157	)
INCOME TAX EXPENSE		-			-
NET LOSS FROM CONTINUING OPERATIONS	$	(1,302,078	)	$	(1,779,157	)
DISCONTINUED OPERATIONS
Loss from discontinued operations		-			(31,923	)
Income tax benefit		-			-
GAIN (LOSS) ON DISCONTINUED OPERATIONS		-			(31,923	)
NET LOSS	$	(1,302,078	)	$	(1,811,080	)
BASIC AND DILUTED INCOME (LOSS) PER SHARE	$	(0.14	)	$	(0.86	)
BASIC AND DILUTED WEIGHTED AVERAGE
NUMBER OF SHARES OUTSTANDING		9,270,247			2,094,897

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

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GWS TECHNOLOGIES, INC.
Statements of Stockholders' Equity (Deficit)
					Additional		Stock
	Common Stock				Paid-in		Subscription			Accumulated
	Shares		Amount		Capital		Receivable			Deficit			Total
Balance, October 31, 2008		609,897	$	610	$	4,446,683	$	-		$	(5,855,470	)	$	(1,408,177	)
Common stock issued for services		4,895,000		4,895		4,478,098		-			-			4,482,993
Options exercised in exchange for services		2,250,000		2,250		360,250		-			-			362,500
Options exercised for cash at $0.46 per share		300,000		300		137,200		-			-			137,500
Common stock issued for
debt at $0.30 per share		50,000		50		14,950		-			-			15,000
Options granted as compensation		-		-		1,007,070		-			-			1,007,070
Beneficial conversion feature of
convertible debt		-		-		4,667		-			-			4,667
Net loss for the year ended
October 31, 2009		-		-		-		-			(6,600,946	)		(6,600,946	)
Balance, October 31, 2009		8,104,897		8,105		10,448,918		-			(12,456,416	)		(1,999,393	)
Common stock issued for services (unaudited)		2,087,500		2,087		1,157,643		-			-			1,159,730
Common stock issued for cash at
$0.36 per share (unaudited)		88,600		89		29,475		(22,522	)		-			7,042
Common stock issued for
debt at $0.10 per share (unaudited)		400,000		400		39,600		-			-			40,000
Net loss for the three months ended
January 31, 2010 (unaudited)		-		-		-		-			(1,302,078	)		(1,302,078	)
Balance, January 31, 2010 (unaudited)		10,680,997	$	10,681	$	11,675,636	$	(22,522	)	$	(13,758,494	)	$	(2,094,699	)

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

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GWS TECHNOLOGIES, INC.
Statements of Cash Flows
(Unaudited)
	For the Three Months
	Ended
	January 31,
	2010			2009
OPERATING ACTIVITIES
Net loss	$	(1,302,078	)	$	(1,811,080	)
Adjustments to reconcile net loss to
net cash used by operating activities:
Common stock issued for services		1,237,646			1,722,600
Depreciation expense		1,449			1,448
Changes in operating assets and liabilities:
Accounts payable and accrued expenses		57,863			(21,231	)
Net Cash Used in Continuing Operating Activities		(5,120	)		(108,263	)
Net Cash Provided by Discontinued Operating Activities		-			3,243
Net Cash Used in Operating Activities		(5,120	)		(105,020	)
INVESTING ACTIVITIES
Property and equipment purchased		-			-
Net Cash Used in Investing Activities		-			-
Net Cash Provided by Discontinued Investing Activities		-			-
Net Cash Used in Investing Activities		-			-
FINANCING ACTIVITIES
Proceeds from notes payable		-			98,700
Repayment of bank overdraft		(1,922	)		-
Common stock issued for cash		7,042			-
Net Cash Provided by Financing Activities		5,120			98,700
Net Cash Provided by Discontinued Operating Activities		-			-
Net Cash Used in Operating Activities		5,120			98,700
		-
NET INCREASE (DECREASE) IN CASH					(6,320	)
CASH AT BEGINNING OF PERIOD		-			7,100
CASH AT END OF PERIOD	$	-		$	780
SUPPLEMENTAL DISCLOSURES OF
CASH FLOW INFORMATION:
Cash Paid For:
Interest	$	-		$	-
Income taxes	$	-		$	-
Non Cash Financing Activities:
Common stock issued for debt	$	40,000		$	-

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

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GWS TECHNOLOGIES, INC.

Condensed Notes to the Financial Statements

January 31, 2010 and October 31, 2009

NOTE 1 - FINANCIAL STATEMENTS

The accompanying financial statements have been prepared by the Company without audit.  In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows at January 31, 2010, and for all periods presented herein, have been made.

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.  It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s October 31, 2009 financial statements.  The results of operations for the periods ended January 31, 2010 and 2009 are not necessarily indicative of the operating results for the full years.

NOTE 2 - RESTATEMENT OF FINANCIAL STATEMENTS

The Company has restated its financial statements as of and for the year ended October 31, 2009 to reflect material differences discovered subsequent to the report 10K being filed.  The Company erroneously recorded $88,200 worth of stock to be issued for services as having been issued.  This resulted in an overstatement of the Additional Paid-in Capital account of $88,200, an overstatement of Stock Subscription Receivable account of $65,969 and an understatement of accounts payable of $22,231.  In accordance with FASB ASC 505-50, the Company has reclassified the remaining $309,819 of stock issued in advance for services that were improperly classified as “Stock Subscription Receivables” in the stockholder’s equity section of the balance sheet to “Prepaid Expenses” in the current asset section of the balance sheet.  The Company also updated section 9A to clarify its assessment of internal controls as of October 31, 2009.   The below tables are summarized financial statements comparing the restated financial statements to those originally filed.

Balance Sheets
ASSETS
	October 31,				October 31,
	2009				2009
					(Restated)
CURRENT ASSETS
Cash		$	-			$	-
Prepaid expenses			-				309,819
Total Current Assets			-				309,819
TOTAL ASSETS		$	13,089			$	322,908
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Total Current Liabilities			2,300,070				2,322,301
LONG-TERM DEBT			-				-
TOTAL LIABILITIES			2,300,070				2,322,301
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock			-				-
Common stock			8,105				8,105
Additional paid-in capital			10,537,118				10,448,918
Stock subscription receivable			(375,788	)			-
Accumulated deficit			(12,456,416	)			(12,456,416	)
Total Stockholders' Equity (Deficit)			(2,286,981	)			(1,999,393	)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)		$	13,089			$	322,908

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NOTE 3 -  GOING CONCERN

The Company’s financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.

In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking equity and/or debt financing. However management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

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NOTE 4 – SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

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

Recent Accounting Pronouncements

In January 2010, the FASB issued Accounting Standards Update 2010-02, Consolidation (Topic 810): Accounting and Reporting for Decreases in Ownership of a Subsidiary. This amendment to Topic 810 clarifies, but does not change, the scope of current US GAAP. It clarifies the decrease in ownership provisions of Subtopic 810-10 and removes the potential conflict between guidance in that Subtopic and asset derecognition and gain or loss recognition guidance that may exist in other US GAAP. An entity will be required to follow the amended guidance beginning in the period that it first adopts FAS 160 (now included in Subtopic 810-10). For those entities that have already adopted FAS 160, the amendments are effective at the beginning of the first interim or annual reporting period ending on or after December 15, 2009. The amendments should be applied retrospectively to the first period that an entity adopted FAS 160. The Company does not expect the provisions of ASU 2010-02 to have a material effect on the financial position, results of operations or cash flows of the Company.

In January 2010, the FASB issued Accounting Standards Update 2010-01, Equity (Topic 505): Accounting for Distributions to Shareholders with Components of Stock and Cash (A Consensus of the FASB Emerging Issues Task Force). This amendment to Topic 505 clarifies the stock portion of a distribution to shareholders that allows them to elect to receive cash or stock with a limit on the amount of cash that will be distributed is not a stock dividend for purposes of applying Topics 505 and 260. Effective for interim and annual periods ending on or after December 15, 2009, and would be applied on a retrospective basis. The Company does not expect the provisions of ASU 2010-01 to have a material effect on the financial position, results of operations or cash flows of the Company.

In December 2009, the FASB issued Accounting Standards Update 2009-17, Consolidations (Topic 810): Improvements to Financial Reporting by Enterprises Involved with Variable Interest Entities. This Accounting Standards Update amends the FASB Accounting Standards Codification for Statement 167. The Company does not expect the provisions of ASU 2009-17 to have a material effect on the financial position, results of operations or cash flows of the Company.

In December 2009, the FASB issued Accounting Standards Update 2009-16, Transfers and Servicing (Topic 860): Accounting for Transfers of Financial Assets. This Accounting Standards Update amends the FASB Accounting Standards Codification for Statement 166. The Company does not expect the provisions of ASU 2009-16 to have a material effect on the financial position, results of operations or cash flows of the Company.

In October 2009, the FASB issued Accounting Standards Update 2009-15, Accounting for Own-Share Lending Arrangements in Contemplation of Convertible Debt Issuance or Other Financing. This Accounting Standards Update amends the FASB Accounting Standard Codification for EITF 09-1. The Company does not expect the provisions of ASU 2009-15 to have a material effect on the financial position, results of operations or cash flows of the Company.

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NOTE 4 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Recent Accounting Pronouncements

In October 2009, the FASB issued Accounting Standards Update 2009-14, Software (Topic 985): Certain Revenue Arrangements That Include Software Elements. This update changed the accounting model for revenue arrangements that include both tangible products and software elements. Effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010. Early adoption is permitted. The Company does not expect the provisions of ASU 2009-14 to have a material effect on the financial position, results of operations or cash flows of the Company.

In October 2009, the FASB issued Accounting Standards Update 2009-13, Revenue Recognition (Topic 605): Multiple-Deliverable Revenue Arrangements. This update addressed the accounting for multiple-deliverable arrangements to enable vendors to account for products or services (deliverables) separately rather than a combined unit and will be separated in more circumstances that under existing US GAAP. This amendment has eliminated that residual method of allocation. Effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010. Early adoption is permitted. The Company does not expect the provisions of ASU 2009-13 to have a material effect on the financial position, results of operations or cash flows of the Company.

In September 2009, the FASB issued Accounting Standards Update 2009-12, Fair Value Measurements and Disclosures (Topic 820): Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent). This update provides amendments to Topic 820 for the fair value measurement of investments in certain entities that calculate net asset value per share (or its equivalent). It is effective for interim and annual periods ending after December 15, 2009. Early application is permitted in financial statements for earlier interim and annual periods that have not been issued. The Company does not expect the provisions of ASU 2009-12 to have a material effect on the financial position, results of operations or cash flows of the Company.

In July 2009, the FASB ratified the consensus reached by EITF (Emerging Issues Task Force) issued EITF No. 09-1, (ASC Topic 470) "Accounting for Own-Share Lending Arrangements in Contemplation of Convertible Debt Issuance" ("EITF 09-1"). The provisions of EITF 09-1, clarifies the accounting treatment and disclosure of share-lending arrangements that are classified as equity in the financial statements of the share lender. An example of a share-lending arrangement is an agreement between the Company (share lender) and an investment bank (share borrower) which allows the investment bank to use the loaned shares to enter into equity derivative contracts with investors. EITF 09-1 is effective for fiscal years that beginning on or after December 15, 2009 and requires retrospective application for all arrangements outstanding as of the begi nning of fiscal years beginning on or after December 15, 2009. Share-lending arrangements that have been terminated as a result of counterparty default prior to December 15, 2009, but for which the entity has not reached a final settlement as of December 15, 2009 are within the scope. Effective for share-lending arrangements entered into on or after the beginning of the first reporting period that begins on or after June 15, 2009. The Company does not expect the provisions of EITF 09-1 to have a material effect on the financial position, results of operations or cash flows of the Company.

8

NOTE 5 – COMMON STOCK

 a)    During the first quarter, the Company issued 2,077,500 shares of common stock for services for an average price of $0.51 per share.

 b)    During the first quarter, the Company issued 88,600 shares of common stock for cash for an average price of $0.36 per share.  A portion of these proceeds have not been collected and have been recorded as a stock subscription receivable of $22,522 as of January 31, 2010.

 c) During the first quarter, the Company issued 400,000 shares of common stock for debt for $0.10 per share.

NOTE 6 – DISCONTINUED OPERATIONS

In accordance with ASC 205-20, the Company has classified all results from operations of its former business of providing supplies and materials to providers of emergency response services into discontinued operations line items within the Company’s statements of operations and statements of cash flow.

Net loss from discontinued operations for the three months ended January 31, 2009 and 2008 consisted of the following:

	2009		2008
Revenue	$	-	$	31,476
Cost of Goods Sold		-		3,129
Operating Expenses		-		60,270
Net Loss from Discontinued Operations	$	-	$	(31,923	)

NOTE 7 – SUBSEQUENT EVENTS

The Company issued the following shares of its common stock for services and cash:

o   February 2, 2010 - 2,500 shares to consultant for sales and marketing services.

o   February 2, 2010 - 30,000 shares to consultant for services.

o   February 2, 2010 - 38,000 shares issued for cash totaling $6,552.

o   February 24, 2010 - 50,000 shares issued to a consultant for marketing services.

o   February 24, 2010 - 50,000 shares issued to a consultant for marketing services.

o   March 3, 2010 - 50,000 shares issued for cash totaling $9,100.

o   March 3, 2010 - 50,000 shares issued to a consultant for marketing services.

o   March 10, 2010 - 50,000 shares issued to a consultant for marketing services.

o   March 11, 2010 - 500,000 shares issued a consultant for investor relations services.

The Company has evaluated subsequent events through March 19, 2010, the date the financial statements were issued, and has concluded that there are no recognized or non-recognized subsequent events other than those noted above that have occurred since the quarter ended January 31, 2010.

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Item  2.   Management’s Discussion and Analysis of Financial Condition and Results of Operations

For a description of our significant accounting policies and an understanding of the significant factors that influenced our performance during the period ended January 31, 2010, this “Management’s Discussion and Analysis” should be read in conjunction with the Financial Statements, including the related notes, appearing in Item 1 of this Quarterly Report.  The preparation of this Quarterly Report on Form 10-Q requires us to make estimates and assumptions that affect the reported amount of assets and liabilities, disclosure of contingent assets and liabilities at the date of our financial statements, and the reported amounts of revenue and expenses during the reporting period. There can be no assurance that actual results reported in the future will not differ from those estimates or that revisions of these estimates may not become necessary in the future.

Forward Looking Statements

This portion of this Quarterly Report on Form 10-Q includes statements that constitute "forward-looking statements." These forward-looking statements are often characterized by the terms "may," "believes," "projects," "expects," or "anticipates," and do not reflect historical facts. Specific forward-looking statements contained in this portion of the Quarterly Report include, but are not limited to the Company's expectation that it will begin generating significant revenues from the sale of its products rather than from equity or debt financings. Forward-looking statements involve risks, uncertainties and other factors, which may cause our actual results, performance or achievements to be materially different from those expressed or implied by such forward-looking statements. Factors and risks that could affect our results and achievem ents and cause them to materially differ from those contained in the forward-looking statements include, but are not limited to the risks and uncertainties set forth below in the section titled "Risk Factors," as well as other factors that we are currently unable to identify or quantify, but may exist in the future.

The foregoing factors may affect generally our business, results of operations and financial position. Forward-looking statements speak only as of the date the statement was made. We do not undertake and specifically decline any obligation to update any forward-looking statements.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

We provide wind turbines and other wind and solar products, primarily to retail and commercial customers. During the past several quarters we have focused on the following two main areas to expand our business: (1) joint venturing with landowners to build solar farms; and (2) retrofitting commercial buildings with alternative energy equipment, concentrating on solar power installations in Arizona.

Solar Farms

We anticipate significant growth from construction of solar farms which generate electricity that can be sold to end-users and utility companies and which will allow us to participate in long-term power purchase agreement revenues (typically 20-25 year contracts).  Our business model is to assist the landowner in the design, planning/zoning, and construction/installation of solar arrays on suitable properties throughout the Southwest, with the initial emphasis on projects in Arizona and Texas; we are also going to supply the materials (such as photovoltaic panels, inverters, racks, and tracking motors, as necessary) for these projects and thereby leverage our existing alternative energy product distribution relationships.

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In March 2009, Arizona Public Service (APS) issued a Request for Proposal (RFP) for renewable energy from small generation resources. GWS Technologies, Inc., in conjunction with Dominion Real Estate Investments LLC responded to the RFP in June of 2009. After a vetting process, GWS was notified that it was on the short list of bidders, and subsequently Dominion and GWS entered into a Power Purchase Agreement, or PPA, from APS in February 2010.

The proposed project will consist of a 7.4MW (DC) solar farm in Buckeye, Arizona. The project will utilize mono-crystalline solar panel technology on just over 35 acres of land and is estimated to produce 13,000MWh of electricity per year. The project is estimated to take 7 months to complete.  GWS and Dominion are currently negotiating for financing on the project; however, there is presently no assurance that financing on commercially reasonable terms will be available in a timely manner, and without timely financing there is no guarantee that this project will be completed on schedule, or at all.

With new government incentives and enhanced tax credits for homes and businesses through the American Recovery and Reinvestment Act, Arizona is now poised to expand its solar power production dramatically. 28 states, including Arizona, have a Renewable Energy Standard which requires regulated utilities to buy a growing percentage of their electricity from renewable energy projects like solar farms and commercial retrofits.

As referenced above, we have partnered with Dominion Real Estate Partners, Inc. (DREP) to provide solutions and technology integration on alternative energy projects in Texas and Arizona. DREP is a real estate and development holding company; the principals of the company also are the Managing Partners and founders of Dominion Real Estate Partners LLS, a full service residential and commercial real estate company with over 160 associates in 15 offices in Arizona, Texas, and California.

DREP is currently planning a 118 acre solar farm in Lubbock, Texas which could provide power to a planned housing development and federal facilities continuous to Lubbock Airport. The initial project was designed in conjunction with Texas Tech University. The estimated cost of the entire project is approximately $250 million.

We are also submitting proposals to utilities in Arizona which are actively seeking renewable energy from small generation resources. Many of these proposals are subject to non-disclosure agreements.

Commercial Retrofitting for Solar Power

We have also partnered with building owners and managers to retrofit their commercial buildings with solar power. There are significant incentives from state and federal government and from utility companies for building owners to “go green”. There is also the threat of a “cap and trade” system to limit carbon production by businesses, which will force business owners to produce at least some of their own electricity through solar panel or wind turbine installations. We are currently working with the building owners and managers to obtain financing for these retrofits.

In addition to supplying the solar panels and equipment to retrofit these buildings, we will assist the end-user to apply for certification under Arizona’s Commercial/Industrial Solar Energy Tax Credit Program. The primary goal of this program is to stimulate the production and use of solar energy in commercial and industrial applications by subsidizing the initial cost of solar energy devices. Tax credits can be used to offset Arizona income tax liability; any unused credit amounts can be carried forward for a five-year period.

Despite a new emphasis on solar farms and commercial retrofits, we are continuing to operate our alternative/renewable energy product distribution business. These product lines include both industrial and consumer products based on alternative energy technologies, including wind turbines and solar chargers ranging from handheld devices that can power an iPod to large vertical wind turbines that can power a building.

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In the past we attempted entry into the carbon offset sector of the “green” industry by offering the public the ability to calculate their respective “carbon footprints” on our website, with the intent to ultimately offer and sell carbon offsets to both consumers and businesses; however, our entry into this market sector has been delayed, initially due to our lack of ability to finance the purchase of such carbon credits for inventory and sale, and now because (i) our existing staff is concentrating on the business areas specified above, and (ii) the market for these offsets has experienced significant volatility.

Liquidity and capital resources

Our material cash expenditures have been very limited during the last quarter, primarily expenses relating to general and administrative expenses, including payroll expenses and office rent; and accounting and legal fees relating to our reporting obligations.

During the last quarter, our operating expenses have mostly been paid by loans from large shareholders and a director of the Company. We have allocated a significant portion of our personnel resources to attempting to develop solar farms in Arizona as opposed to further development of our distribution business, which has been dramatically affected by our inability to obtain financing for our customers. Moreover, we have been required to engage consultants with expertise in electrical engineering and contracting to provide the services necessary to move forward with our planning, design and bidding activities. This has resulted in significant losses during the last quarter.

As referenced above, the domestic, and indeed global, financial crisis has negatively affected our ability to obtain purchase order, accounts receivable, and inventory financing, which has slowed our distribution activities.

We need to raise significant capital to continue as a going concern. We also have significant outstanding invoices from suppliers, some of which are overdue (and have gone to collection or resulted in judgments) and which are negatively affecting our credit lines with our suppliers.  There can be no assurance that we will raise sufficient funds to continue our business operations.

We had no cash at January 31, 2010, nor did we have any accounts receivable or inventory. The significant decrease in our accounts receivable was caused by our inability to finance our sales contracts in a timely manner.  We currently do not have any significant cash resources, and our need for capital is our most significant business concern and the single most significant factor limiting our growth.

Our accounts payable and accrued expenses at January 31, 2010 were $502,719, as compared to $496,557 at October 31, 2009. Our total current liabilities at January 31, 2010 were $2,338,242, as compared to $2,322,301 at October 31, 2009.

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We held property and equipment at January 31, 2010 which was valued, net of depreciation, at $11,640, and prepaid expenses valued at $231,903, for total assets of $243,543.

Results of Operations

We had no revenues for the three months ended January 31, 2010. We have classified all results from operations of our  former business of providing supplies and materials to providers of emergency response services into discontinued operations line items within the Company’s statements of operations and statements of cash flow, and we have shifted our business focus from distributing products manufactured by other parties to joint venturing on proposed solar and wind farms.

We have incurred losses since our inception. Our net loss was $1,302,078 for the three-month period ended January 31, 2010, as compared to $1,881,080 for the same period for the prior year.  A significant portion of the operating expenses in both periods were due to consulting fees, with shares of common stock issued for services.

Market Analysis Summary

In the first days of his administration, President Obama announced that he would seek to raise the amount of electricity generated from renewable energy to 10% of total U.S. capacity by 2012 (currently this figure is about 3%).  As this goal requires significant capital, the administration has included $100 billion in the current stimulus package that is directly related to financing clean energy projects. This Clean Energy Financing Initiative provides loan guarantees and other measures to encourage the private sector to invest billions of dollars in green energy. 

Arizona is an Emerging Solar Producer. Until recently, the solar industry in Arizona has been stagnant.  Arizona is approximately sixth among all 50 states in terms of solar installations per capita but has the highest solar exposure in the continental United States (in contrast, because of state tax incentives and rebates for commercial and residential solar installation, New Jersey ranks second after California in terms of solar capacity, but its solar exposure levels are among the bottom tier of US states). Until recently, Arizona has lacked any significant solar cell manufacturing and research and development. In the sunniest state in the country nearly 40% of the state’s energy is derived from coal. The solar industry in Arizona primarily consist s of solar installers for homes and businesses, which are distributors of predominantly foreign photovoltaic (PV) or solar panels. With new government incentives and enhanced tax credits for homes and businesses adding solar components mandated by the U.S. Economic Recovery Act, Arizona is now poised to expand its solar power production dramatically.

Generous state and federal subsidies, plus billions in economic-stimulus money earmarked for solar power, create an additional incentive to tie up land. According to the National Renewable Energy Laboratory, Arizona has some of the richest solar land in the country, and the state has become a focal point for new solar farm development. Much of the prime land for solar use is along the Interstate 10 corridor between Buckeye and the California state line. Other hot spots can be found around Kingman and west of Wickenburg.

More than 40 solar projects have currently been proposed for Arizona. If built, they would tie up more than 725,000 acres and generate enough electricity to power 25 million homes, far more than Arizona needs. California has 60 applications that total 575,000 acres and Nevada 39 active applications for about 300,000 acres.

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Effects of Regulation on Global Solar Industry. Germany’s Renewable Energy Sources Act required German power companies to buy all the alternative energy produced by photovoltaic systems, at a fixed above-market price, for 20 years. This mechanism, known as a feed-in tariff, has given German entrepreneurs a powerful incentive to install solar panels. With a locked-in customer base for their electricity, they can earn a reliable return on their investment. It has incentivized German homeowners and small businesses to install solar panels on their roofs and farmers to build small solar farms in their unused fields. Spain, France, Italy and Greece have copied Germany’s solar incentives, and states like New Jersey and California in the United States have used modi fied forms of these incentives to jump-start solar power installations.

However, the German government has decided to cut incentives for solar power by 16 percent beginning July 1, 2010. The cuts in the feed-in tariff will apply for rooftop photovoltaic systems as well as those built on conversion sites such as dumps and former army bases. Converted farmland fields will no longer be eligible for any incentives at all from July 1. This measure has created a surge in short-term demand for solar panels, and a resulting price spike. We do not believe that this will create a long-term shortage of solar panels or that it will significantly effect our business operations.

Domestic Wind Turbine Market Trends.A recent report published by veteran research market firm BCC Research and titled Wind Turbines: The US Market forecasts that the domestic United States’ market size for wind turbine components and systems will reach $60.9 billion US in 2013. The cost per kWh of energy produced by wind turbines is expected to be one of the cheapest sources of renewable energy. As costs increase for fossil fuel energy sources, wind energy will not need government subsidies to be competitive.

The top five states in terms of capacity installed are now: 

·   Texas, with 7,116 MW

·   Iowa, with 2,790 MW

·   California, with 2,517 MW

·   Minnesota, with 1,752 MW

·   Washington, with 1,375 MW

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Domestic Solar Installation Trends.  A report issued by the California Public Utilities Commission stated that residential and commercial rooftop installations more than doubled in 2008 from the previous year to 158 megawatts of producing power. Reinforcing the perception that state and federal incentives have a major impact on new installations, the report noted that there was a surge in applications to participate in California’s $3 billion solar rebate program in the fourth quarter of 2008 after Congress lifted the $2,000 cap on the federal tax credit on solar arrays in October 2008 (allowing homeowners and businesses to take a 30% tax credit on systems installed after Dec. 31st) , which, coupled with an additional California state rebate, cut the real cost of a solar system in California in half. The report concluded that, in addition to environmental benefits such as cutting greenhouse gas emissions and other pollutants, it appears that solar energy is benefiting California by serving as an economic bright spot in the economy.

California regulators caution that many homeowners and business owners may leave the program and cancel their applications if the economy continues to deteriorate rapidly this year. The current dropout rate is 15%, according to the report. Municipal programs also are expected to have an effect on new alternative energy installations. Berkeley, California has launched a program that pays for residential and business solar arrays and lets owners pay the cost back over twenty years through an annual assessment on their property taxes.

Effect of existing or probable governmental regulations on our business.  Our business is affected by a wide range of municipal, county, state and federal regulations and may be influenced by the announcement of proposed regulations by the new administration and Congress. A major focus of the new administration is energy independence and the expedited development of wind, solar, and other clean energy sources.

The Environmentally Preferable Purchasing Program. The Environmental Protection Agency's Environmentally Preferable Purchasing Program, or EPP, started in 1993 after the signing of Executive Order 12873, and continues today under Executive Order 13423. The program was originally created with the purpose of using the federal government's enormous buying power to stimulate market demand for green products and services. Environmentally preferable means "products or services that have a lesser or reduced effect on human health and the environment when compared with competing products or services that serve the same purpose.” This comparison applies to raw materials, manufacturing, packaging, distribution, use, reuse, operation, maintenance, and disposal.

The United States federal government is one of the world's largest consumers. Indeed, it is the single largest consumer of goods and services within the United States, with total spending estimated at $350 billion for goods and services each year. Therefore, the federal government’s purchasing power exerts a tremendous influence on which products and services are available in the national marketplace. The Environmentally Preferable Purchasing Program works to ensure that federal government's buying power is working to the greatest extent possible to increase availability of environmentally preferable products, which in turn minimizes environmental impacts.

Federal agencies are directed by federal laws, regulations and executive orders to make purchasing decisions with the environment in mind. Most recently, these requirements have included Executive Order 13423, titled “Strengthening Federal Environmental, Energy and Transportation Management”, which orders federal agencies to use sustainable practices when buying products and services. For the Federal government as a whole, the President's Office of Management and Budget has issued a series of scorecards to help track progress of Federal agencies in implementing this program. Green purchasing progress is measured in the Environmental Stewardship Scorecard. These scorecards are for internal government use.

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Executive Order 13514. On October 5, 2009 President Obama signed Executive Order (E.O.) 13514, titled Federal Leadership in Environmental, Energy, and Economic Performance. It expanded upon the energy reduction and environmental performance requirements for federal agencies.

E.O. 13514 sets numerous Federal energy requirements in several areas, including:

· Accountability and Transparency

· Strategic Sustainability Performance Planning

· Greenhouse Gas Management

· Sustainable Buildings and Communities

· Electronic Products and Services

· Pollution Prevention and Waste Reduction

Accountability and Transparency

E.O. 13514 accountability, transparency, and reporting requirements include:

· Within 30 days, Federal agency heads must designate a senior management official to serve as Senior Sustainability Officer accountable for agency conformance. The Senior Sustainability Officer designation must be reported to the Chair of the Council on Environmental Quality (CEQ) and the Director of the Office of Management and Budget (OMB). The Senior Sustainability Officer shall:

·        Prepare targets for agency-wide reductions in 2020 for greenhouse gas (GHG) emissions.

·      Within 240 days, prepare and submit a multi-year Strategic Sustainability Performance Plan to the Chair of the Council on Environmental Quality (CEQ) and the Director of the Office of Management and Budget (OMB) for review and approval.

· Agency efforts and outcomes in implementing E.O. 13514 must be transparent and disclosed on publicly available Federal Web sites.

· OMB must prepare scorecards providing periodic evaluation of Federal agency performance. Scorecard results must be published on a publicly available Web site.

· The CEQ Chair must ensure that Federal agencies are held accountable for conforming to the requirements of E.O. 13514.

· Agency heads shall decide that this order applies in whole or in part with respect to the activities, personnel, resources, and facilities of the agency not located within the U.S. if determined that such application is in the interest of the U.S.

· Agency heads may submit to the President, through the CEQ Chair, an exemption request covering an agency activity and related personnel, resources, and facilities.

· The Director of National Intelligence may exempt an intelligence activity and related personnel, resources, and facilities when in the interest of national security.

· To the maximum extent practical and without compromising national security, each agency shall strive to comply with the purposes, goals, and implementation steps of E.O. 13514.

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Strategic Sustainability Performance Planning

Federal agencies are required to develop, implement, and annually update a Strategic Sustainability Performance Plan that prioritizes agency actions based on life-cycle return on investment. Between fiscal years 2011 and 2021, each plan shall:

· Include a policy statement committing the agency to comply with environmental and energy statutes, regulations, and executive orders.

· Achieve established sustainability goals and targets, including greenhouse gas reduction targets.

· Be integrated within each agency's strategic planning and budgeting process.

· Identify agency activities, policies, plans, procedures, and practices relevant to the implementation of E.O. 13514 and, where necessary, provide for development and implementation of new or revised policies, plans, procedures, and practices.

· Identify specific agency goals, schedules, milestones, and approaches for achieving results and quantifiable metrics required by E.O. 13514.

· Outline planned actions to provide information about agency progress, performance, and results on a publicly available Federal Web site.

· Incorporate actions for achieving progress metrics identified by the CEQ Chair and OMB Director.

· Evaluate agency climate change risks and vulnerabilities to manage the effects of climate change on the agency's operations and mission in both the short and long term.

· Consider environmental measures as well as economic benefits, social benefits, and costs in evaluating projects and activities based on life-cycle return on investment.

· Annually identify opportunities for improvement and evaluate past performance to extend or expand projects that have net benefits as well as reassess or discontinue under-performing projects.

The CEQ Chair and OMB Director are responsible for reviewing and approving each agency's multi-year strategic sustainability performance plan.

Greenhouse Gas Management

Greenhouse gas management is imperative within E.O. 13514. Each Federal agency must:

· Within 90 days, establish and report to the CEQ Chair and OMB Director a fiscal year 2020 percentage reduction target of agency-wide scope 1 and scope 2 GHG emissions in absolute terms relative to a fiscal year 2008 baseline.

·        In establishing the target, agencies shall consider reductions associated with:

·          Reducing agency building energy intensity.

·      Increasing agency renewable energy use and on-site projects.

·            Reducing agency use of fossil fuels by:

·         Using low GHG emitting and alternative fuel vehicles.

·         Optimizing vehicle numbers across agency fleets.

·         Reducing petroleum consumption in agency fleets of 20 or more 2% annually through fiscal year 2020 relative to a fiscal year 2005 baseline.

·        Where appropriate, this target shall exclude direct emissions from excluded vehicles and equipment as well as electric power produced and sold commercially to other parties in the course of regular business.

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· Within 240 days, establish and report to the CEQ Chair and OMB Director a fiscal year 2020 percentage reduction target for agency-wide scope 3 GHG emissions in absolute terms relative to a fiscal year 2008 baseline.

·        In establishing the target, agencies shall consider reductions associated with:

·            Pursuing opportunities with vendors and contractors to address and incentivize GHG emission reductions.

·            Implementing strategies and accommodations for transit, travel, training, and conferences that actively reduce carbon emissions associated with commuting and travel by agency staff.

·            Meeting greenhouse gas emissions reductions associated with other Federal Government sustainability goals.

·            Implementing innovative policies and practices that address agency-specific scope 3 GHG emissions.

· Within 15 months, establish and report to the CEQ Chair and OMB Director a comprehensive inventory of absolute GHG emissions across all three scopes for fiscal year 2010. Comprehensive inventories shall be submitted annually thereafter at the end of each January.

Sustainable Buildings and Communities

Federal agencies must enhance efforts towards sustainable buildings and communities. Specific requirements include:

· Implement high performance sustainable Federal building design, construction, operation and management, maintenance, and deconstruction by:

·        Ensuring all new Federal buildings, entering the design phase in 2020 or later, are designed to achieve zero net energy by 2030.

·        Ensuring all new construction, major renovations, or repair or alteration of Federal buildings comply with the Guiding Principles of Federal Leadership in High Performance and Sustainable Buildings

·        Ensuring at least 15% of existing agency buildings and leases (above 5,000 gross square feet) meet the Guiding Principles by fiscal year 2015 and that the agency makes annual progress towards 100% compliance across its building inventory.

·        Pursuing cost-effective, innovative strategies (e.g., highly-reflective and vegetated roofs) to minimize consumption of energy, water, and materials.

·        Managing existing building systems to reduce the consumption of energy, water, and materials, and identifying alternatives to renovation that reduce existing asset deferred maintenance costs.

·        When adding assets to agency building inventories, identifying opportunities to:

·          Consolidate and eliminate existing assets.

·            Optimize the performance of portfolio property.

·            Reduce associated environmental impacts.

·        Ensuring rehabilitation of Federally-owned historic buildings utilizes best practices and technologies in retrofitting to promote long-term viability of the building.

· Advance regional and local integrated planning by:

·        Participating in regional transportation planning and recognizing existing community transportation infrastructure.

·        Aligning Federal policies to increase the effectiveness of local planning for energy choices such as locally-generated renewable energy.

·        Ensuring that planning for new Federal facilities and leases consider sites that are pedestrian friendly, near existing employment centers, and accessible to public transport; and emphasize existing central cities and, in rural communities, existing or planned town centers.

·        Identify and analyze impacts from energy usage and alternative energy sources in all environmental impact statements and environmental assessments for proposals covering new or expanded Federal facilities under the amended National Environmental Policy Act (NEPA) of 1969.

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Electronic Products and Services

E.O. 13514 includes product efficiency and stewardship. Federal agencies must:

· Ensure 95% of new contract actions, task orders, and delivery orders for products and services (excluding weapon systems) are energy efficient (ENERGY STAR® or FEMP-designated), water efficient, bio-based, environmentally preferable (Electronic Product Environmental Assessment Tool (EPEAT) certified), non-ozone depleting, contain recycled content, or are non-toxic or less-toxic alternatives where such products and services meet agency performance requirements.

· Implement best management practices for the energy-efficient management of servers and Federal data centers.

Pollution Prevention and Waste Reduction

E.O. 13514 includes the following pollution prevention and waste reduction requirements for Federal agencies:

· Minimize the generation of waste and pollutants through source reduction.

· Decrease agency use of chemicals where such decrease will assist the agency in achieving greenhouse gas reduction targets.

· Divert at least 50% of non-hazardous solid waste by the end of fiscal year 2013.

· Reduce printing paper use and acquiring uncoated printing and writing paper containing at least 30% post-consumer fiber.

· Increase the diversion of compostable and organic material from the waste stream.

This “green” movement has been spreading throughout all levels of government. For example, California law requires state government to practice EPP, and even the U.S. Army has its own 'green buying' initiative.  We believe the adoption of EPP by states, counties and municipalities will result in increased opportunities for our “green” product lines.

Going Concern

Our financial statements have been prepared in accordance with accounting principles generally accepted in the United States applicable to a going concern that contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business.  Since the inception of the company, we have relied on loans from shareholders and officers, the sale of our equity securities, debt financing, and limited revenues to fund our operations.  We have incurred losses since our inception and we continue to incur legal, accounting, and other business and administrative expenses.  Our auditor has therefore recognized that there is substantial doubt about our ability to continue as a going concern.

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Item  3.   Quantitative and Qualitative Disclosures about Market Risk

Not Applicable.

Item  4.   Controls and Procedures

(a)           Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are designed with an objective of ensuring that information required to be disclosed in our periodic reports filed with the Securities and Exchange Commission, such as this Quarterly Report on Form 10-Q, is recorded, processed, summarized and reported within the time periods specified by the Securities and Exchange Commission. Disclosure controls are also designed with an objective of ensuring that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, in order to allow timely consideration regarding required disclosures.

The evaluation of our disclosure controls by our principal executive officer, Richard Reincke, who also serves as our principal financial officer, included a review of the controls’ objectives and design, the operation of the controls, and the effect of the controls on the information presented in this Quarterly Report. Because most of the senior management functions relating to the operation of our business are performed by Mr. Reincke, he does not expect that disclosure controls can or will prevent or detect all errors and all fraud, if any. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Also, projections of any evaluation of the disclosure controls and procedures to future periods are subject to the risk th at the disclosure controls and procedures may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Based on that evaluation, our chief executive officer/chief financial officer concluded that, as of January 31, 2010, our disclosure controls and procedures were not effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules, regulations and forms, and that such information is accumulated and communicated to our management, including our chief executive officer/chief financial officer, as appropriate, to allow timely decisions regarding required disclosure. Our principle difficulty is that we are understaffed and undercapitalized and do not presently employ a full-time chief financial officer; we also do not employ a full-t ime bookkeeper to maintain our records.

We do not have sufficient segregation of duties within accounting functions, which is a basic internal control.  Due to our size and nature, segregation of all conflicting duties may not always be possible and may not be economically feasible.  However, to the extent possible, the initiation of transactions, the custody of assets and the recording of transactions should be performed by separate individuals.  Management evaluated the impact of our failure to have segregation of duties on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented a material weakness in our disclosure controls and procedures.

 (b)           Changes in internal control over financial reporting

Our management, with the participation of Mr. Reincke, our chief executive officer/chief financial officer, has concluded that there were no significant changes in our internal controls over financial reporting that occurred during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II – OTHER INFORMATION

Item  1A.   Risk Factors

An investment in our common stock involves a substantial degree of risk.  Before making an investment decision, you should give careful consideration to the following risk factors in addition to the other information contained in this report. The following risk factors, however, may not reflect all of the risks associated with our business or an investment in our common stock.

The following risk factors must be considered in light of the current worldwide financial crisis.

Despite passage of The American Recovery and Reinvestment Act of 2009, the U.S. Commerce Department announced that the U.S. economy shrank by 3.8 percent in the fourth quarter of 2009, the most since 1982, while consumer spending recorded the worst slide in the postwar era. The current financial crisis has been called the worst financial crisis since the Great Depression of the 1930s, and has contributed to the failure of key businesses, declines in consumer wealth estimated in the trillions of U.S. dollars, substantial financial commitments incurred by both domestic and foreign governments, and a significant decline in economic activity. It has severely negatively impacted our business. In light of the broad consensus that financial markets are in the worst turmoil of a generation, there can be no assurance that the current finan cial crisis will not continue, or get worse.

The global financial crisis has negatively impacted general economic conditions, including the alternative energy industry.

The current global financial crisis has had significant negative effects on a broad range of businesses, including our business. The credit crisis and broad economic downturn has caused pronounced slowing of wind and power projects worldwide, except in some isolated markets. Our customers, who are typically wind and solar installers and developers, have experienced financing problems because the number of banks and financial institutions willing to fund installation of wind turbines and solar arrays has dropped significantly. We have also experienced difficulties in getting our customers and purchase orders financed, and we are delinquent in paying many of our suppliers, some of whom have filed lawsuits for collection. All of these factors have had a significant negative impact on our operations, and should the current financial c risis continue, there can be no assurance we, or our customers, will be able to continue operations.

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We will need significant infusions of additional capital.

During the last quarter we relied on loans and our limited revenues to obtain the funding necessary to operate the business. We are delinquent in paying many of our suppliers, resulting in several collection lawsuits. We do not have any cash reserves and we will need to obtain additional outside funding in the future in order to further satisfy our cash requirements. Our need for additional capital to finance our business strategy, operations, and growth will be greater should, among other things, revenue or expense estimates prove to be incorrect. We cannot predict the timing or amount of our capital requirements at this time. If we fail to arrange for sufficient capital on a timely basis in the future, we may be required to reduce the scope of our business activities further until we can obtain adequate financing. Debt financing must be repaid regardless of whether or not we generate profits or cash flows from our business activities. Equity financing may result in dilution to existing stockholders and may involve securities that have rights, preferences, or privileges that are senior to our common stock. Therefore, we may not be able to obtain financing in sufficient amounts or on acceptable terms when needed, which could adversely affect our operating results and prospects and our ability to continue in business.

Many of our current and potential competitors have longer operating histories, larger customer or user bases, greater brand recognition, greater access to brand name suppliers, and significantly greater financial, marketing and other resources than we do.

Many of these current and potential competitors can devote substantially more resources to the development of their business operations than we can at present. In addition, larger, well-established and well-financed entities may acquire, invest in or form joint ventures with other established competitors or with specific product manufacturers, which will allow them pricing advantages due to economies of scale or pursuant to distribution agreements with suppliers. Some large product distributors may also have exclusive distribution agreements or protected territories in which they can sell specific brand name products at a significant discount, or territories in which they may seek to exclude us from selling a specific brand of product. These types of arrangements between our competitors and manufacturers and suppliers may limit our abi lity to distribute certain brand name products and could adversely affect our revenues.

We depend upon our executive officers and key personnel.

The rapid execution necessary for us to fully exploit the market for our products and services requires an effective planning and management process. We experienced rapid growth during 2007 and then rapid contraction in 2008 carrying into fiscal 2009, as we did not receive financing which we had been promised and on which we depended to fund our growth. There is currently a significant strain on our managerial, operational and financial resources and one person, Richard Reincke, currently serves as both our President/CEO and Chief Financial Officer. Mr. Reincke has not taken a salary for several fiscal quarters and there can be no guarantee that he will continue to work without compensation. We recognize that our ability to manage our business effectively will require us to attract, identify, train, integrate and retain additional qual ified management and other key personnel, and that we currently do not have the financial resources to hire such personnel at this time. Additionally, due to financial constraints, we have cut back on our workforce, replacing full time employees with part-time consultants and with interns. The loss of services of Mr. Reincke or any of our remaining key personnel would have a material adverse effect on our business, revenues, results of operations and financial condition.

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There can be no assurance that any new products we introduce will achieve significant market acceptance or will generate significant revenue.

The market for products in the renewable energy industry is characterized by rapid technological advances, evolving standards in technology and frequent new product and service introductions and enhancements. Possible short life cycles for products we sell may necessitate high levels of expenditures for continually selecting new products and discontinuing the sale of obsolete product lines. To obtain a competitive position, we must continue to introduce new products and new versions of existing products that will satisfy increasingly sophisticated customer requirements and achieve market acceptance. Our inability or failure to position and/or price our new or existing products competitively, in response to changes in evolving standards in technology, could have a material adverse effect on our business, results of operations or financi al position.

Although we have implemented safeguards to prevent unauthorized access to our ecommerce sites, there always exists certain security risks, which may cause interruptions, delays or cessation in service.

Despite the implementation of security measures, our network infrastructure may be vulnerable to computer viruses or problems caused by third parties, which could lead to interruptions, delays or cessation in service to our clients. Inappropriate use of the Internet by third parties could also potentially jeopardize the security or deter certain persons from using our services. Such inappropriate use of the Internet would include attempting to gain unauthorized access to information or systems - commonly known as "cracking" or "hacking." Although we intend to continue to implement security measures, such measures have been circumvented in the past, and there can be no assurance that measures implemented will not be circumvented in the future. Alleviating problems caused by computer viruses or other inappropriate uses or security breach es may require interruptions, delays or cessation in service to our operations. There can be no assurance that customers or others will not assert claims of liability against us as a result of failures. Further, until more comprehensive security technologies are developed, the security and privacy concerns of existing and potential customers may inhibit the growth of the Internet service industry in general and our customer base and revenues in particular.

There is a risk of credit card fraud.

Although we have encryption certificates, systems and software for the electronic surveillance and monitoring of fraudulent credit card use, should our business be subject to repeated fraudulent use of credit cards on our ecommerce sites, it could effect the reputation of our ecommerce sites and the willingness of customers to continue to use our sites.

Shares of our common stock are "penny stocks”.

At all times when the current market price per share of our common stock is less than $5.00, our shares of common stock will be considered "penny stocks" as defined in the Securities Exchange Act of 1934, as amended. As a result, an investor may find it more difficult to dispose of or obtain accurate quotations as to the price of the shares of our common stock being issued under this prospectus. In addition, the penny stock rules adopted by the Securities and Exchange Commission under the Exchange Act would subject the sale of shares of our common stock to regulations which impose sales practice requirements on broker-dealers. For example, broker-dealers selling penny stocks must, prior to effecting the transaction, provide their customers with a document which discloses the risks of investing in penny stocks.

Furthermore, if the person purchasing penny stocks is someone other than an accredited investor, as defined in the Securities Act, or an established customer of the broker-dealer, the broker-dealer must also approve the potential customer's account by obtaining information concerning the customer's financial situation, investment experience and investment objectives. The broker-dealer must also make a determination whether the transaction is suitable for the customer and whether the customer has sufficient knowledge and experience in financial matters to be reasonably expected to be capable of evaluating the risk of transactions in penny stocks. Accordingly, the SEC's rules may limit the number of potential purchasers of shares of our common stock. Moreover, various state securities laws impose restrictions on transferring penny stocks , and, as a result, investors in our common stock may have their ability to sell their shares impaired.

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The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from those rules, deliver a standardized risk disclosure document prepared by the Commission, which (i) contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading; (ii) contains a description of the broker's or dealer's duties to the customer and of the rights and remedies available to the customer with respect to violation to such duties or other requirements of Securities' laws; (iii) contains a brief, clear, narrative description of a dealer market, including "bid" and "ask" prices for penny stocks and significance of the spread between the "bid" and "ask" price; (iv) contains a toll-free telephone number for inquiries on disciplinary actions; (v) define s significant terms in the disclosure document or in the conduct of trading in penny stocks; and (vi) contains such other information and is in such form (including language, type, size and format), as the Commission shall require by rule or regulation. The broker-dealer also must provide, prior to effecting any transaction in penny stock, the customer (i) with bid and offer quotations for the penny stock; (ii) the compensation of the broker-dealer and its salesperson in the transaction; (iii) the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and (iv) monthly account statements showing the market value of each penny stock held in the customer's account.

In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written acknowledgment of the receipt of a risk disclosure statement, a written agreement to transactions involving penny stocks, and a signed and dated copy of a written suitably statement. These disclosure requirements may have the effect of reducing the trading activity in the secondary market for a stock that becomes subject to the penny stock rules. If any of the Company's securities become subject to the penny stock rules, holders of those securities may have difficulty selling those securities. Stockholders should be aware that, according to Securities an d Exchange Commission Release No. 34-29093, dated April 17, 1991, the market for penny stocks has suffered from patterns of fraud and abuse. Such patterns include:

(i) control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer

(ii) manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases

(iii) boiler room practices involving high-pressure sales tactics and unrealistic price projections by inexperienced sales persons

(iv) excessive and undisclosed bid-ask differential and markups by selling broker-dealers

(v) the wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, along with the resulting inevitable collapse of those prices and with consequent investor losses.

This risk factor is especially significant because we believe some of the conduct mentioned above has occurred, which has prompted us to file complaints with FINRA (the Financial Industry Regulatory Authority) and a federal complaint in U.S. District Court, Central District of California, against the promoters, broker-dealers, and others who we believe have engaged in such conduct with our stock.

We have not paid and do not currently plan to pay dividends on our common stock.  

Some investors favor companies that pay dividends on their common stock, particularly in general downturns in the stock market. We have not declared or paid any cash dividends on our common stock. We currently intend to retain any future earnings for funding growth, and we do not currently anticipate paying cash dividends on our common stock in the foreseeable future.

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Provisions in our corporate charter and under Delaware law are favorable to our directors.

Pursuant to our certificate of incorporation, members of our management and Board of Directors will have no liability for violations of their fiduciary duty of care as officers and directors, except in limited circumstances. This means that you may be unable to prevail in a legal action against our officers or directors even if you believe they have breached their fiduciary duty of care. In addition, our certificate of incorporation allows us to indemnify our officers and directors from and against any and all expenses or liabilities arising from or in connection with their serving in such capacities with us. This means that if you were able to enforce an action against our directors or officers, in all likelihood we would be required to pay any expenses they incurred in defending the lawsuit and any judgment or settlement they otherwi se would be required to pay.

Failure to achieve and maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act could have a material adverse effect on our business and stock price.

Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 (“Act”), we furnished, at October 31, 2009, a report by our management on our internal control over financial reporting. The internal control report must contain (i) a statement of management's responsibility for establishing and maintaining adequate internal control over financial reporting, (ii) a statement identifying the framework used by management to conduct the required evaluation of the effectiveness of our internal control over financial reporting, and (iii) management's assessment of the effectiveness of our internal control over financial reporting as of the end of our most recent fiscal year, including a statement as to whether or not internal control over financial reporting is effective. A requirement for a statement that the Company’s independent auditors have issued an attestation report on management’s assessment of internal control over financial reporting has been delayed but will become a future requirement.

In order to achieve compliance with Section 404 of the Act within the prescribed period, we will need to engage in a process to document and evaluate our internal control over financial reporting, which will be both costly and challenging. In this regard, management will need to dedicate internal resources, engage outside consultants and adopt a detailed work plan to (i) assess and document the adequacy of internal control over financial reporting, (ii) take steps to improve control processes where appropriate, (iii) validate through testing that controls are functioning as documented and (iv) implement a continuous reporting and improvement process for internal control over financial reporting.  We can provide no assurance as to our, or our independent auditors’, conclusions at the prescribed periods with respect to th e effectiveness of our internal control over financial reporting under Section 404 of the Act. There is a risk that neither we nor our independent auditors will be able to conclude at the prescribed period that our internal controls over financial reporting are effective as required by Section 404 of the Act. Moreover, as our senior management and board of directors is extremely limited, we may not be able to adequately comply with these requirements unless we are able to augment both our senior management and our board of directors, and there can be no assurance that we will be able to do so in a timely manner, or at all.

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During the course of our testing we may identify deficiencies which we may not be able to remediate in time to meet the deadline imposed by the Sarbanes-Oxley Act for compliance with the requirements of Section 404. In addition, if we fail to achieve and maintain the adequacy of our internal controls, as such standards are modified, supplemented or amended from time to time, we may not be able to ensure that we can conclude on an ongoing basis that we have effective internal controls over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act. Moreover, effective internal controls, particularly those related to revenue recognition, are necessary for us to produce reliable financial reports and are important to helping prevent financial fraud. If we cannot provide reliable financial reports or prevent fraud, our bu siness and operating results could be harmed, investors could lose confidence in our reported financial information, and the trading price of our stock could drop significantly.

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

On December 3, 2009 we sold 20,000 shares of our common stock for the purchase price of $7,410 in an offshore transaction outside the United States to a non-US person in an offshore transaction (as defined in Regulation S) pursuant to an exemption from registration provided by Regulation S under the Securities Act.

Item 3. Defaults Upon Senior Securities

One of our noteholders has agreed to forebear on the collection of a promissory entered into on September 1, 2007 with the company. As consideration for a six (6) month extension of the loan term, the parties agreed  to the following: (i) The interest rate listed was changed from a fixed rate of 12% per annum to 15% per annum, with payments due on the 15th of each month; (ii) the conversion rights of the principal and unpaid interest remained, but the conversion rate was repriced at thirty cents ($0.30) per share; and (iii) the company also agreed, in consideration of its appreciation of her assistance and cooperation in extending this loan, to grant the noteholder stock equivalent to the amount of shares which would be purchased by a 10% inte rest “payment” on her loan.  This amount, $10,000.00 (or 10% of the loan) yielded 50,000 shares of stock at a price of $0.20 per share.  This was a one time nonrefundable and additional “interest” on her loan. The $100,000 loan, with accrued unpaid interest of approximately $9,000, was due March 1, 2009 and has not yet been repaid.

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Item  6.     Exhibits

The following exhibits are either attached hereto or incorporated herein by reference as indicated:

Exhibit  Number		Exhibit	Description
	3.1	Certificate of Incorporation dated February 15, 2005 *
	3.2	Certificate of Amendment of Certificate of Incorporation dated April 21, 2005 *
	3.3	Amended and Restated Certificate of Incorporation dated October 26, 2005*
	3.4	Certificate of Amendment of Certificate of Incorporation of GWS Technologies dated June 30, 2008**
	3.5	Certificate of Amendment of Certificate of Incorporation of GWS Technologies dated October 13, 2008***
	3.6	Bylaws*
	10.1	Amendment No. 1 to Lease with Camidor Properties**
	14	Code of Ethics**
	31	Certification pursuant to SEC Release No. 33-8238, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed herewith
	32	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to  Section 906 of the Sarbanes-Oxley Act of 2002	Filed herewith

*     Previously filed as exhibits to our registration statement on Form SB-2, file number 3333-139751, filed December 29, 2006.

**       Previously filed as exhibits to our Annual Report on Form 10-KSB filed February 12, 2008.

***     Previously filed as exhibits to our Annual report on Form 10-K filed February 16, 2010.

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SIGNATURES

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

	GWS Technologies, Inc.
Date:March 19, 2010	By:	/s/ Richard Reincke
		Chief Executive Officer/Chief Financial Officer
		(Principal Financial Officer and Authorized Officer)

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EXHIBIT INDEX

Exhibit  Number		Exhibit	Description
	3.1	Certificate of Incorporation dated February 15, 2005 *
	3.2	Certificate of Amendment of Certificate of Incorporation dated April 21, 2005 *
	3.3	Amended and Restated Certificate of Incorporation dated October 26, 2005*
	3.4	Certificate of Amendment of Certificate of Incorporation of GWS Technologies dated June 30, 2008**
	3.5	Certificate of Amendment of Certificate of Incorporation of GWS Technologies dated October 13, 2008***
	3.6	Bylaws*
	10.1	Amendment No. 1 to Lease with Camidor Properties**
	14	Code of Ethics**
	31	Certification pursuant to SEC Release No. 33-8238, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed herewith
	32	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to  Section 906 of the Sarbanes-Oxley Act of 2002	Filed herewith

*     Previously filed as exhibits to our registration statement on Form SB-2, file number 3333-139751, filed December 29, 2006.

**       Previously filed as exhibits to our Annual Report on Form 10-KSB filed February 12, 2008.

***     Previously filed as exhibits to our Annual report on Form 10-K filed February 16, 2010.

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