UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549


FORM
10-K




(Mark
One)


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




For the
fiscal year ended March 31, 2010




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




For the
transition period from ____________ to_________________




Commission
file number 000-51108





TOT
      Energy, Inc.(Exact
      name of registrant as specified in its
charter)




Delaware
                
                20-0715816(State
      or other jurisdiction of incorporation or
                  organization)
                
                (IRS
      Employer Identification
Number)




12100 NE
16th Avenue


Suite
210


North Miami, FL
33161


(Address
of principal executive offices)





(305)
891-2288


(Registrant’s
telephone number, including area code)




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




Securities
registered under Section 12(g) of the Exchange Act:




Common
      Stock, par value $0.001 per share(Title
      of class)





Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.


o
YES      x NO





Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act.


o
YES     x NO





Note – Checking the box above
will not relieve any registrant required to file reports pursuant to Section 13
or 15(d) of the Exchange Act from their obligations under those
Sections.




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


x   
YES     o NO




Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§ 229.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).





x YES (None Required)
o NO




Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not
be contained, to the best of registrant’s knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. x




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





Large
      accelerated filer o
            Accelerated
      filer oNon-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 Act).


o
YES            x NO





State the
aggregate market value of the voting and non-voting common equity held by
non-affiliates computed by reference to the price at which the common equity was
last sold, or the average bid and asked price of such common equity, as of the
last business day of the registrant’s most recently completed second fiscal
quarter.





Note. —If a determination as
to whether a particular person or entity is an affiliate cannot be made without
involving unreasonable effort and expense, the aggregate market value of the
common stock held by non-affiliates may be calculated on the basis of
assumptions reasonable under the circumstances, provided that the assumptions
are set forth in this Form.





The aggregate market value
of the voting common equity held by non-affiliates was $1,853,744 based upon the
last traded price of $0.09 per share on July 1, 2010.




Indicate
the number of shares outstanding of each of the registrant’s classes of common
stock, as of the latest practicable date.





At July 1, 2010, the number
of shares outstanding of the issuer’s common stock was 320,778,512
shares.




DOCUMENTS
INCORPORATED BY REFERENCE




NONE









TOT
ENERGY, INC.





Form
10-K


For the
Year Ended March 31, 2010


INDEX




PageNo.PART
      IItem
      1.
              Business
              
              3Item
      1B.
              Unresolved
      Staff Comments
              
              4Item
      2.
              Properties
              
              4Item
      3.
              Legal
      Proceedings
              
              5Item
      4.
              Submission
      of Matters to a Vote of Security Holders
              
              5PART
      IIItem
      5.
              Market
      for Common Equity, Related Stockholder Matters and Issuer Purchases of
      Equity Securities
              
              5Item
      6.
              Selected
      Financial Data
              
              7Item
      7.
              Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
              
              7Item
      7A.
              Quantitative
      and Qualitative Disclosures About Market Risk
              
              11Item
      8.
              Financial
      Statements and Supplementary Data
              
              11Item
      9.
              Changes
      In and Disagreements With Accountants on Accounting and Financial
      Disclosure
              
              26Item
      9A(T).
              Controls
      and Procedures
              
              26Item
      9B.
              Other
      Information
              
              28PART
      IIIItem
      10.
              Directors,
      Executive Officers and Corporate Governance
              
              28Item
      11.
              Executive
      Compensation
              
              30Item
      12.
              Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters.
              
              32Item
      13.
              Certain
      Relationships and Related Transactions, and Director
      Independence.
              
              33Item
      14.
              Principal
      Accounting Fees and Services.
              
              34PART
      IVItem
      15.
              Exhibits,
      Financial Statement Schedules
              
              35Signatures
              
              38


2




PART
I




Item
1. Business




Overview




TOT
Energy, Inc. (the “Company”), formerly Splinex Technology, Inc., was organized
on February 6, 2004 under the laws of the State of Delaware as a wholly-owned
subsidiary of Splinex, LLC, a Florida limited liability company, and was the
surviving entity pursuant to a merger with Ener1 Acquisition Corp., a Delaware
corporation and wholly-owned subsidiary of Ener1, Inc., a Florida corporation.
The Company initially intended to develop advanced technologies in the
three-dimensional or 3D computer graphics industry. Since October 28, 2003
(“Inception”), the date of formation of Splinex, LLC, through December 17, 2007,
we operated in a development phase typical of a software company and focused on
developing technologies and products and securing intellectual property rights
while we developed relationships with potential customers and resellers. Under
an agreement effective April 1, 2004 (the “Contribution Agreement”), Splinex,
LLC contributed substantially all of its assets, liabilities and operations to
the Company. Due to lack of significant sales, we substantially reduced our
workforce and overhead costs beginning in September 2005. From September 2005
through July 2007, Ener1 Group, Inc., a related party, loaned us money to fund
our operations. In July 2007, Ener1 Group, Inc. stopped funding our operations,
except that Mr. Wolfe did receive compensation by Ener 1 Group, Inc. for legal
services provided to the Company. For more information, see “Item 11. Executive
Compensation.”




On
December 17, 2007, (1) certain holders, who had received shares in the Company
as distributions from Splinex LLC, transferred their ownership of 35,162,334
shares of common stock of the Company to Splinex LLC for nominal consideration,
and (2) Bzinfin, S.A., a British Virgin Islands limited corporation that is
indirectly owned by an affiliate of Ener1 Group, Inc., a Florida company of
which Mike Zoi is a shareholder and director and which is the majority
shareholder of Ener1, Inc., and Ener1 Group assigned debt obligations of the
Company to Splinex LLC in the amount of $2,805,207 and $845,864, respectively.
Under a Purchase Agreement dated December 17, 2007, TGR Capital, LLC (which
changed its name to Enerfund, LLC in September 2008), a Florida limited
liability company (“Enerfund”), which is wholly-owned by Mike Zoi, acquired all
of the membership interests in Splinex LLC, thereby giving Enerfund control of
Splinex LLC.




Under an
Exchange Agreement dated December 18, 2007, the Company agreed to issue
113,500,000 newly issued shares of the Company to Splinex LLC of which 8,500,000
shares were issued to Bzinfin and 2,125,000 were issued to a former affiliate of
Splinex, LLC. Splinex LLC owned 98,157,334 shares of the Company as of December
17, 2007 and an aggregate of 201,032,334 shares after the completion of the
Exchange Agreement on December 18, 2007. The Company had 100,757,769 shares
outstanding at December 17, 2007 and 214,257,769 shares outstanding after the
completion of the Exchange Agreement. In June 2008, Splinex, LLC changed its
name to TGR Energy, LLC (“TGR”).




On July
16, 2008, we entered into a Joint Venture Agreement (the “JV Agreement”) with
Evgeny Bogorad (“Bogorad”), owner of Sibburnefteservis, Ltd. of Novosibirsk,
Russia, an oil services company (“SIBBNS”). Pursuant to the JV Agreement,
Bogorad has contributed certain of SIBBNS assets and personnel to a joint
venture company named TOT-SIBBNS, Ltd., a Russian corporation (“TOT-SIBBNS”). An
independent appraisal company has appraised the contributed assets at
US$6,221,881.We ended development stage activity on July 16, 2008 when we
acquired a 75% interest in the TOT-SIBBNS joint venture and began operations in
the oil and gas service industry, including the exploration, development,
production, and marketing of crude oil and natural gas in Russia and Kazakhstan,
as well as other markets around the world.  At the closing on July 16,
2008, we issued to Bogorad 3,000,000 shares of our common stock in exchange for
a 75% interest in TOT-SIBBNS.





TOT-SIBBNS
obtained its first contract and began drilling operations in Fall 2008. However,
financial constraints and the declining price of oil resulted in a suspension of
drilling operation in January 2009. Drilling operations did not recommence
during the Winter 2009 and most employees were furloughed in April
2009.





TOT-SIBBNS
had expectations of continuing exploratory drilling (both through its existing
customer and new customers) for the 2009/2010 drilling season as the price of
oil had risen significantly and TOT-SIBBNS was able to secure an additional
drilling contract in November 2009. However, in January 2010, it became
questionable whether activities with TOT-SIBBNS’ initial customer would
recommence in the short term, and there remained uneasiness in the market over
the continued improvement in crude oil prices, which had a negative impact on
the exploratory drilling market in Russia at that time.  Accordingly,
on January 27, 2010, after several weeks of exploring other business
opportunities, the Company altered its business focus and decided to exercise
its option to unwind the joint venture and pursue other development
opportunities in the alternative energy business.


3





The
Company and TOT-SIBBNS executed an unwind agreement whereby the Company
exchanged its 75% interest in TOT-SIBBNS for the 3,000,000 shares given to
Evgeny Borograd in 2008. The unwind of the joint venture was consummated as
of March 31, 2010. The unwind of the TOT-SIBBNS joint venture has been
accounted for using the guidance provided in ASC 845 (previously APB 29), as a
disposal “other than by sale” similar to a spin-off transaction, with the shares
received reflected as treasury stock and recorded on the Company’s balance sheet
at its carrying basis in the net assets of the joint venture as of March 31,
2010.  For more information relating to the unwind of the TOT-SIBBNS
joint venture, see Note 12 of the Notes to Consolidated Financial Statements,
which information is incorporated herein by reference.





Although
we are not currently engaged in operating activities, we intend to focus on
developing or acquiring an alternative energy solar business concentrating on
commercial solar installations and other energy saving/management
offerings.





KORLEA-TOT
is our 51% joint venture with Korlea Invest Holding AG of Switzerland (“Korlea”)
who is a provider and trader of energy assets in the Czech Republic. The joint
venture, Korlea-TOT, established as of July 17, 2008, was expected to assist in
the marketing of oil assets sourced by other TOT-Energy companies and contacts.
There has been no activity to date with this joint venture, but we continue to
look for opportunities to implement a profitable plan with our partner, Korlea,
which has expertise in energy trading.





Despite
the unwind of the TOT-SIBBNS joint venture, we are working to build a
diversified portfolio of energy assets. To this end, from time to time, we may
be engaged in various discussions to acquire businesses or formulate joint
venture or other arrangements with energy companies located around the world.
Our policy is not to disclose discussions or potential transactions until
definitive agreements have been executed. Where appropriate, acquisitions will
be financed with equity shares and this may result in substantial dilution to
existing stockholders.




Several
factors raise significant doubt as to our ability to continue operating as a
going concern.  These factors include our history of net losses and
that as of March 31, 2010, due to the unwind of the TOT-SIBBNS joint venture, we
have no operations and a working capital deficit. We are dependent upon TGR or
Mike Zoi (as a result of his controlling interest in TGR and our dependence on
the Subscription Agreement with TGR) to fund our operations. Our independent
auditors’ report on our financial statements for the year ended March 31, 2010
contains an explanatory paragraph about our ability to continue as a going
concern. Management believes that our current operating strategy, as described
in the preceding paragraphs, provides the opportunity for us to continue as a
going concern; however, there is no assurance this will occur.





Our
principal executive offices are located at 12100 N.E. 16 th Ave;
Suite 210; Miami, FL 33161. Our telephone number is (305) 891-2288.




Employees




At March
31, 2009, the Company employed four people, including the Company’s CEO, CFO, a
senior accountant (part-time) and a secretary (part-time).  None of
our employees were represented by a union or collective bargaining
agreement.




Item
1B. Unresolved Staff Comments




None.




Item
2. Description of Property




We
currently lease office space on a month to month basis.


4




Item
3. Legal Proceedings





From time
to time, we may be involved in litigation relating to claims arising in the
normal course of operations. We are not currently a party to any such
proceedings.




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




None.





PART
II





Item
5. Market for Common Equity and Related Stockholder Matters and Purchases of
Equity Securities





There
currently is no established public trading market for our common stock. The
number of shareholders of record of our common stock at March 31, 2010 was 205.
The number of shareholders of record does not include beneficial owners of
common stock whose shares are held in the names of various dealers, clearing
agencies, banks, brokers and other fiduciaries. The principal markets for our
stock were the Over The Counter Bulletin Board (OTCBB) and Pink Sheets LLC. On
July 1, 2010, the price of our common stock last traded at $0.09 per share on
the OTCBB.





The
following table sets forth the high and low prices for our common stock for the
quarterly periods indicated as reported by the OTCBB. The quotations reflect
inter-dealer prices, without retail mark-up, mark-down or commission and may not
represent actual transactions.





Fiscal
      Year
                                    
                                    Date
                                    
                                    High
                                    
                                    
                                    Low2009
                                    
                                    June
      30, 2008
                                    
                                    $
                                    0.12
                                    
                                    
                                    $
                                    0.12September
      30, 2008
                                    
                                    $
                                    0.13
                                    
                                    
                                    $
                                    0.13December
      31, 2008
                                    
                                    $
                                    0.07
                                    
                                    
                                    $
                                    0.07March
      31, 2009
                                    
                                    $
                                    0.30
                                    
                                    
                                    $
                                    0.072010
                                    
                                    June
      30, 2009
                                    
                                    $
                                    0.22
                                    
                                    
                                    $
                                    0.22September
      30, 2009
                                    
                                    $
                                    0.23
                                    
                                    
                                    $
                                    0.23December
      31, 2009
                                    
                                    $
                                    0.15
                                    
                                    
                                    $
                                    0.15March
      31, 2010
                                    
                                    $
                                    0.15
                                    
                                    
                                    $
                                    0.15





We have
not paid any cash dividends during the last two fiscal years and do not
anticipate paying any cash dividends on our common stock in the foreseeable
future.




Plan
Shares Outstanding




The
following table sets forth information as of March 31, 2010 with respect to the
Company’s 2004 Stock Option Plan, approved by our security holders. The 2004
Stock Option Plan authorizes the issuance of a maximum of 10,000,000 shares
underlying options. The Company previously granted options to purchase a total
of 4,825,000 shares of common stock, of which options to purchase 4,737,500
shares of common stock expired unexercised.




Plan Category
                  
                  Number of Securities to
                    be Issued Upon Exercise
                    of Outstanding Options,
                    Warrants and Rights
                  
                  
                  Weighted-average
                    exercise price of
                    outstanding options,
                    warrants and rights
                  
                  
                  Number of securities
                    remaining available for
                    future issuance under
                    equity compensation
                    plans (excluding
                    securities reflected in
                    the first column)Equity
      compensation plans approved by security holders.
                  
                  
                  1,200,000
                  
                  
                  $
                  0.25
                  
                  
                  
                  3,975,000


5




Recent
Sales of Unregistered Securities




On August
7, 2008, our Board of Directors approved a Subscription Agreement dated August
7, 2008 (the “Subscription Agreement”) with TGR, wherein TGR committed to invest
up to $2,000,000 (the “Investment Amount”) in exchange for up to 100,000,000
shares of the Company's common stock for $0.02 per share. In addition, we
granted TGR warrants to purchase up to 50,000,000 shares of common stock for
$0.05 per share. These warrants may be exercised within five years from the date
of grant. The shares and warrants are issuable under the Subscription Agreement
upon the funding from time to time by TGR. The valuation date to determine the
appropriate compensation charge is the last day of the quarter then ended. The
Subscription Agreement was amended on January 12, 2010 to increase the
Investment Amount by an additional $2,000,000 to $4,000,000 in exchange for up
to an additional 100,000,000 shares of common stock and 50,000,000 warrants to
purchase common stock for $0.05 per share for a period of 5 years from date of
issuance.




For the
fiscal year ended March 31, 2009, TGR was issued an aggregate of 82,725,335
shares of common stock of the Company and fully vested warrants to purchase
41,362,168 shares of common stock of the Company at an exercise price of $0.05
per share pursuant to the terms of the Subscription Agreement. These issuances
were in exchange for financings under the Subscription Agreement in the
aggregate amount of $1,654,507 of which $1,017,097 was cash and $637,410 related
to refinancing of previously outstanding notes payable.




For the
fiscal year ended March 31, 2010, TGR was issued an aggregate of 16,186,515
shares of common stock of the Company and fully vested warrants to purchase
8,093,757 shares of common stock of the Company at an exercise price of $0.05
per share pursuant to the terms of the Subscription Agreement. These issuances
were in exchange for financings under the Subscription Agreement in the
aggregate amount of $323,730.




Up until
May 15, 2009, Mr. New’s base salary was $140,000 with a $30,000 bonus payable
quarterly for meeting agreed upon objectives.  On May 15, 2009, Mr.
New’s base salary was reduced from $140,000 to $91,000 and his bonus was reduced
from $30,000 to $19,500 annually. To partially offset the reduction in salary,
the Company provided Mr. New with 25,000 shares of fully vested common stock in
lieu of his March 31, 2009 cash bonus and 200,000 shares of common stock which
vested monthly from April 1, 2009 to September 30, 2009.  On March 31,
2010, Mr. New was granted 250,000 fully vested shares of the Company’s common
stock and a compensation charge of $37,500 was recorded based on the fair value
of the stock issued on the date of grant.




Other
employees (other than officers and directors) receiving salary reductions were
granted a total of 50,000 shares of common stock which vested monthly between
April 1, 2009 and September 30, 2009.




Pursuant
to a Stock Purchase Agreement dated November 23, 2009, TGR agreed to sell to
Dune Capital Group ("Dune") an aggregate of 5,000,000 shares of common stock of
TOT Energy, Inc. held by TGR for a purchase price of $0.10 per share or an
aggregate of $500,000. The purchase price is required to be paid on or
before April 1, 2010. Dune paid $300,000 on November 23, 2009. In order to
ensure compliance with obligations under Section 16 of the Securities Exchange
Act of 1934, prior to the issuance of shares to Dune by TGR, TGR assigned this
Purchase Agreement to the Company. Accordingly, the Company received $300,000
pursuant to this agreement and issued an aggregate of 3,000,000 shares of common
stock of the Company to Dune on January 12, 2010.  On April 28, 2010,
the Company agreed to terminate the Stock Purchase Agreement with Dune and
rescind the prior issuance of common stock. The Company refunded $300,000 to
Dune in exchange for return of the 3,000,000 shares of common stock previously
issued.  For more information relating to the repurchase of Dune
shares, see Note 13 – Subsequent Events, of the Notes to Consolidated Financial
Statements, which information is incorporated herein by reference.





On
November 1, 2008, the Company entered into a Letter Agreement with Olympus
Securities LLC (the “Agreement”). Under the Agreement, Olympus was appointed TOT
Energy’s exclusive financial advisor and investment banker (collectively, the
“Services”) for a period of seven (7) months. After expiration of this initial
term, the Agreement is to automatically continue on a month-to-month basis, with
each party having the right to terminate on thirty (30) days notice. The
Agreement included a fee of one thousand dollars ($1,000) per month in return
for the Services, except for the first month, where, instead of the monthly fee,
the Company granted five (5) year warrants to Olympus to purchase one million
(1,000,000) shares of the Company's common stock at ten cents ($.10) per share.
The warrants were valued at $149,999 and were to be amortized over the
seven-month term of the Agreement. The Agreement contains other provisions
relating to payments of cash, stock and warrants in connection with any future
financing or investment transaction completed through Olympus. The Company has
not yet paid a cash fee or provided the abovementioned warrants to Olympus due
to the failure by Olympus to provide meaningful investment banking services
until world financial markets stabilized and, more recently, due to the unwind
of the TOT-SIBBNS joint venture.  The Company has amortized the
warrant charge of $149,999 during fiscal 2010 and accrued this amount in the
financial statements.


6




At March
31, 2010, the Company had options to purchase 1,200,000 shares of common stock
outstanding under its stock option plan, of which options to purchase 750,926
shares of common stock are vested, with an exercise price of $0.25 per share and
with a remaining weighted average contractual term of 4.95 years.





The
Company also had warrants to purchase 49,455,925 shares of common stock
outstanding at March 31, 2010 with a strike price of $0.05 per share and a
remaining contractual term of 3.55 years pursuant to the Subscription
Agreement.





The
Company entered into a Sponsorship Agreement with American Speed Factory dated
April 22, 2009, whereby the Company would receive certain marketing and
promotional services and sponsorship rights to display the Company’s logo in
connection with the 2009 Ferrari Challenge racing season in exchange for the
issuance of 500,000 shares of restricted stock of the Company.




We
believe that each of the foregoing securities transactions were exempt from the
registration requirements of Section 5 of the Securities Act of 1933, as
amended, by virtue of Section 4(2) of the Securities Act which exempts
transactions by an issuer not involving any public offering.




Purchases
of Equity Securities by the Issuer and Affiliated Purchasers





See
information relating to issuances to an affiliate pursuant to the Subscription
Agreement and the rescission of the purchase of common stock by Dune Capital as
described under “Item 5. Market for Common Equity and Related Stockholder
Matters and Purchases of Equity Securities – Recent Sales of Unregistered
Securities.”




Item
6. Selected Financial Data





Not
Applicable.





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





This
Annual Report on Form 10-K contains forward -looking statements. These
statements relate to our expectations, hopes, intentions or strategies regarding
future events or future financial performance. Any statements contained in this
report that are not statements of historical fact may be deemed forward-looking
statements. In some cases, forward-looking statements can be identified by
terminology such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,”
“intend,” “believe,” “estimate,” “predict,” “potential” or “continue,” or the
negative of such terms or other comparable terminology. Forward-looking
statements include but are not limited to statements regarding: our future
business plans; future sales of our product and services; introduction of new
products and services; expected hiring levels; marketing plans; increases of
selling, general and administrative costs; financing requirements and capital
raising plans; successful integration and development of acquired businesses;
regulatory and economic factors affecting the energy sector and other factors
that may impact our acquisition and development strategy, some of which are
beyond our control and difficult to predict. These statements are only
predictions and are subject to a number of assumptions, risks and uncertainties
that could cause actual results to differ materially from those expressed or
implied in the forward-looking statements. The following important factors, in
addition to those discussed in our other filings with the Securities and
Exchange Commission (the “Commission”) from time to time, and other unforeseen
events or circumstances, could affect our future results and could cause those
results or other outcomes to differ materially from those expressed or implied
in our forward-looking statements: general economic conditions; competition;
weather; our ability to raise capital; our ability to control costs; changes
within our industries; new and upgraded products and services by us or our
competitors; employee retention; sovereign risk; legal and regulatory issues;
changes in accounting policies or practices; currency translation and exchange
risks; and the ability to develop or acquire and sustain a viable alternative
energy business.




All
forward-looking statements are based on information available to us on the date
of this filing, and we assume no obligation to update such statements, although
we will continue to comply with our obligations under the securities
laws.


7




The
following discussion should be read in conjunction with our other filings with
the Commission and the consolidated financial statements and related notes
included in this Annual Report.





General





We are
working to build a diversified portfolio of energy assets. To this end, from
time to time, we may be engaged in various discussions to acquire businesses or
formulate joint venture or other arrangements with energy companies located
around the world. Our policy is not to disclose discussions or potential
transactions until definitive agreements have been executed. Where appropriate,
acquisitions will be financed with equity shares and this may result in
substantial dilution to existing stockholders.  Although we are not
currently engaged in operating activities, we intend to focus on developing or
acquiring an alternative energy solar business concentrating on commercial solar
installations and other energy saving/management offerings.





On July
16, 2008, we entered into a Joint Venture Agreement (the “JV Agreement”) with
Evgeny Bogorad (“Bogorad”), owner of Sibburnefteservis, Ltd. of Novosibirsk,
Russia, an oil services company (“SIBBNS”). Pursuant to the JV Agreement,
Bogorad has contributed certain of SIBBNS assets and personnel to a joint
venture company named TOT-SIBBNS, Ltd., a Russian corporation (“TOT-SIBBNS”). An
independent appraisal company appraised the contributed assets at US$6,221,881.
At the closing on July 16, 2008, we issued to Bogorad 3,000,000 shares of our
common stock in exchange for a 75% interest in TOT-SIBBNS.





TOT-SIBBNS
provides exploration services to oil exploration and production companies
located in and around Novosibirsk, Russia. TOT-SIBBNS owns and operates four oil
drilling rigs that generate the majority of the revenues of TOT-SIBBNS.
TOT-SIBBNS uses this equipment for drilling exploratory wells for fees. In
addition, TOT-SIBBNS provides engineering services and well remediation services
on a contract fee basis. TOT-SIBBNS obtained its first contract and began
drilling operations in the Fall 2008. However, financial constraints and the
declining price of oil resulted in a suspension of drilling operation in January
2009. Drilling operations did not recommence during the Winter 2009 and most
employees were furloughed in April 2009.





TOT-SIBBNS
had expectations of continuing exploratory drilling (both through its existing
customer and new customers) for the 2009/2010 drilling season as the price of
oil had risen significantly and TOT-SIBBNS was able to secure an additional
drilling contract in November 2009. However, in January 2010, it became
questionable whether activities with TOT-SIBBNS’ initial customer would
recommence in the short term, and there remained uneasiness in the market over
the continued improvement in crude oil prices, which had a negative impact on
the exploratory drilling market in Russia at that time.  Accordingly,
on January 27, 2010, after several weeks of exploring other business
opportunities, the Company altered its business focus and decided to exercise
its option to unwind the joint venture and pursue other development
opportunities in the alternative energy business.  The Company and
TOT-SIBBNS executed an unwind agreement whereby the Company exchanged its 75%
interest in TOT-SIBBNS for the 3,000,000 shares given to Evgeny Borograd in
2008. The unwind of the joint venture was consummated as of March 31,
2010. The unwind of the TOT-SIBBNS joint venture has been accounted for
using the guidance provided in ASC 845 (previously APB 29), as a disposal “other
than by sale” similar to a spin-off transaction, with the shares received
reflected as treasury stock and recorded on the Company’s balance sheet at its
carrying basis in the net assets of the joint venture as of March 31,
2010. Operations of TOT-SIBBNS are included in the Company’s consolidated
financial statements at March 31, 2010 as discontinued operations, but will not
be included in the consolidated financial statements subsequent to March 31,
2010.  For more information relating to the unwind of the TOT-SIBBNS joint
venture, see Note 12 of the Notes to Consolidated Financial Statements, which
information is incorporated herein by reference.





Although
we are not currently engaged in operating activities, we are in the process of
updating our business plan and intend to focus on developing or acquiring an
alternative energy solar business concentrating on commercial solar
installations and other energy saving/management offerings.





KORLEA-TOT is our 51%
joint venture with Korlea Invest Holding AG of Switzerland (“Korlea”), a
provider and trader of energy assets in the Czech Republic. The joint venture,
Korlea-TOT, established as of July 17, 2008, was expected to assist in the
marketing of oil assets sourced by other TOT-Energy companies and
contacts.  There has been no activity to date with this joint venture, but
we continue to look for opportunities to implement a profitable plan with our
partner, Korlea, which has expertise in energy trading.


8




Short
term financing is provided by TGR Energy, LLC (“TGR”) as we require additional
working capital, pursuant to a Subscription Agreement dated August 7, 2008 (the
“Subscription Agreement”). TGR has agreed to provide up to $2,000,000 (the
“Investment Amount”) in exchange for up to 100,000,000 shares of common stock
and warrants to purchase up to 50,000,000 shares of common stock at an exercise
price of $0.05 per share. Pursuant to the Subscription Agreement, TGR will fund
the Investment Amount as required in our operational budget.  TGR’s
obligation to fund the Investment Amount will be reduced by any future third
party funding or investment on terms no less favorable than those contained in
the Subscription Agreement.  On January 12, 2010, TGR agreed to
increase the Investment Amount from $2,000,000 to $4,000,000 in exchange for up
to an additional 100,000,000 shares of the Company’s common stock and warrants
to purchase up to 50,000,000 shares of the Company’s common stock at an exercise
price of $0.05 per share for a period of five years from date of
issuance.





Several
factors raise significant doubt as to our ability to continue operating as a
going concern.  These factors include our history of net losses and
that as of March 31, 2010, due to the unwind of the TOT-SIBBNS joint venture, we
have no operations, and a working capital deficit. We are dependent upon TGR or
Mike Zoi (as a result of his controlling interest in TGR and our dependence on
the Subscription Agreement with TGR) to fund our operations. Our independent
auditors’ report on our financial statements for the year ended March 31, 2010
contains an explanatory paragraph about our ability to continue as a going
concern. Management believes that our current operating strategy, as described
in the preceding paragraphs, provides the opportunity for us to continue as a
going concern; however, there is no assurance this will occur.





Results
of Operations for the Year Ended March 31, 2010 Compared to the Year Ended March
31, 2009





We had a
net loss of $6,596,834 or $0.02 per share, for the year ended March 31, 2010
(“fiscal 2010”) compared to a net loss of $12,177,140,
or $0.05 per share, for the year ended March 31, 2009 (“fiscal
2009”).  The net loss of $6,596,834 for fiscal 2010 includes a loss
from discontinued operations of $646,017 or $0.00 per share relating to the
TOT-SIBBNS joint venture (see note 12) as compared to a loss from discontinued
operations of $1,799,816, or $0.01 per share relating to the TOT-SIBBNS joint
venture for fiscal 2009.  Our total operating expenses from continuing
operations for fiscal 2010 were $5,789,352 as compared to operating expenses for
fiscal 2009 of $10,378,126.  Other expenses were $171,025 in fiscal 2010
compared with other income of $802 in fiscal 2009.





For
fiscal 2010, our operating expenses consisted of $5,789,352, of which $19,540
was attributable to Korlea-TOT.  Operating expenses for fiscal 2010
related primarily to compensation expense ($4,717,677) in connection with
issuances of stock and warrants pursuant to the Subscription
Agreement.  Payroll expenses were $602,420, professional fees for
legal, accounting, consulting and tax preparation were $115,933 and other
general and administrative expenses were $333,782, consisting primarily of
investor relations expenses ($83,535), travel expenses ($23,215), directors and
officers insurance ($15,304), telephone expense ($11,799) and rent
($10,000).





For
fiscal 2009, our operating expenses consisted of $10,378,126, of which $0
related to Korlea-TOT. Operating expenses in fiscal 2009 related primarily to
compensation expense ($8,812,774) in connection with issuances of stock and
warrants pursuant to the Subscription Agreement . Payroll expenses were
$656,702, professional fees for legal, accounting, consulting and tax
preparation were $316,857 and other general and administrative expenses were
$591,793 consisting primarily of travel expenses ($118,321), rent ($101,341),
investor relations expenses ($154,246), directors and officers insurance
($15,273) and telephone ($7,031).





The
non-controlling interest in loss of consolidated subsidiary was $9,560 in fiscal
2010 and $0 in fiscal 2009.  The non-controlling interest relates to
the 49% non-controlling interest in Korlea-TOT retained by our joint venture
partner.





Liquidity
and capital resources





At March
31, 2010, we had negative working capital of $638,279 and cash of
$277,830.


9




Short
term financing is provided primarily by TGR pursuant to the Subscription
Agreement. For the fiscal year ended March 31, 2010, TGR was issued 16,186,515
shares of common stock of the Company and fully vested warrants to purchase
8,093,757 shares of common stock of the Company for $0.05 per share in exchange
for funding of $323,730 provided during the twelve months ended March 31, 2010
under the terms of the Subscription Agreement. A compensation charge of
$4,717,677 was recorded for the twelve months ended March 31, 2010 as an officer
of the Company is also a principal of TGR and the securities issued were below
market value as of the issue date. This amount is calculated as the difference
between the market price of our common stock at the end of each quarter in which
shares were issued and the subscription price of the common shares ($0.02)
multiplied by the number of shares issued, plus the Black-Scholes valuation of
the warrants issued as calculated at the end of each quarter.




For the
fiscal year ended March 31, 2009, TGR was issued an aggregate of 82,725,335
shares of common stock of the Company and fully vested warrants to purchase
41,362,168 shares of common stock of the Company at an exercise price of $0.05
per share pursuant to the terms of the Subscription Agreement.  These
issuances were in exchange for financings under the Subscription Agreement in
the aggregate amount of $1,654,507 of which $1,017,097 was cash and $637,410
related to refinancing of previously outstanding notes payable.  A
compensation charge of $8,827,218 was recorded for the fiscal year ended March
31, 2009.  This amount is calculated as the difference between the
market price of our common stock at the end of each quarter in which shares were
issued and the subscription price of the common shares ($0.02) multiplied by the
number of shares issued, plus the Black-Scholes valuation of the warrants issued
as calculated at the end of each quarter.




Pursuant
to a Stock Purchase Agreement dated November 23, 2009, TGR agreed to sell to
Dune Capital Group ("Dune") an aggregate of 5,000,000 shares of common stock of
TOT Energy, Inc. held by TGR for a purchase price of $0.10 per share or an
aggregate of $500,000. The purchase price is required to be paid on or
before April 1, 2010. Dune paid $300,000 on November 23, 2009. In order to
ensure compliance with obligations under Section 16 of the Securities Exchange
Act of 1934, prior to the issuance of shares to Dune by TGR, TGR assigned this
Purchase Agreement to the Company. Accordingly, the Company received $300,000
pursuant to this agreement and issued an aggregate of 3,000,000 shares of common
stock of the Company to Dune on January 12, 2010.  On April 28, 2010
the Company agreed to terminate the Stock Purchase Agreement with Dune and
rescind the prior issuance of common stock. The Company refunded $300,000 to
Dune in exchange for return of the 3,000,000 shares of common stock previously
issued.  For more information relating to the repurchase of Dune
shares, see Note 13 – Subsequent Events, of the Notes to Consolidated Financial
Statements, which information is incorporated herein by reference.





Critical
Accounting Policies and Estimates





Our
significant accounting policies are described more fully in Note 1 to our
consolidated financial statements.  Management is required to make certain
estimates and assumptions during the preparation of our financial statements in
accordance with generally accepted accounting principles.  These estimates
and assumptions impact the reported amount of assets and liabilities as well as
disclosures regarding any contingencies.  Actual results could differ from
estimates and this could impact reported net income or the value of our assets
and liabilities.





In
applying estimates, management uses its judgment to determine the appropriate
assumptions to be used in the determination of certain estimates. Those
estimates are based on our historical experience, terms of existing contracts,
our observance of trends in the industry, information provided by outside
sources, trade journals and other sources, as appropriate.





Deferred
Taxes.  Estimates of deferred income taxes and items giving rise to
deferred tax assets and liabilities reflect management’s assessment of actual
future taxes to be paid on items reflected in the financial statements, giving
consideration to both timing and the probability of the realization. 
Actual income taxes could vary from these estimates for a variety of reasons
including changes in tax law, operating results that vary from budget or the
review of our tax returns by the IRS.





Valuation
of stock based compensation.  Stock based compensation has been provided by
the Company in order to preserve the cash flow necessary to grow our
business.  In addition, we entered into the Subscription Agreement
described above to strengthen our available sources of capital.  We believe
the estimate of stock based compensation is a “critical accounting estimate”
that significantly affects our results of operations.  Management of the
Company has discussed the development and selection of this critical accounting
estimate with our board of directors and the board of directors has reviewed the
Company’s disclosure relating to it in this Report.


10




Off-balance
sheet arrangements





At March
31, 2010, we did not have any off-balance sheet arrangements, as defined in Item
303(a)(4) of Regulation S-K promulgated under the Securities Exchange Act
of 1934, as amended.




Recently
Issued Accounting Pronouncements




In June
2009,  the FASB issued an amendment to ASC 810-10. This amendment
requires an enterprise to qualitatively assess the determination of the primary
beneficiary of a Variable Interest Entity “VIE” based on whether the enterprise:
(1) has the power to direct the activities of a VIE that most significantly
effect the entity’s economic performance; and (2) has the obligation to
absorb losses of the entity or the right to receive benefits from the entity
that could potentially be significant to the VIE. ASC 810-10, as amended,
requires an ongoing reconsideration of the primary beneficiary, and amends the
events that trigger a reassessment of whether an entity is a VIE. This statement
is effective as of the beginning of a reporting entity’s first annual reporting
period that begins after November 15, 2009. Earlier application is
prohibited. Retrospective application is optional. Adoption of this standard has
not had, and is not expected in the future to have, a significant impact on our
financial condition and results of operations.




In
September 2009, the FASB issued ASU 2009-13, “Multiple-Deliverable Revenue
Arrangements.” ASU 2009-13 addresses the unit of accounting for multiple-element
arrangements. In addition, ASU 2009-13 revises the method by which consideration
is allocated among the units of accounting.   Specifically, the
overall consideration is allocated to each deliverable by establishing a selling
price for individual deliverables based on a hierarchy of evidence, involving
vendor-specific objective evidence, other third party evidence of the selling
price, or the reporting entity’s best estimate of the selling price of
individual deliverables in the arrangement. ASU 2009-13 will be effective
prospectively for revenue arrangements entered into or materially modified in
fiscal years beginning on or after June 15, 2010. Adoption of this standard
is not expected to have a significant impact on our financial condition and
results of operations.




Item
7A.   Quantitative and Qualitative Disclosures About Market
Risk





We do not
have material exposure to market risks associated with changes in interest rates
related to cash equivalent securities held at March 31, 2010.




Item
8.  Financial Statements and Supplementary Data




REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM




To the
Board of Directors and Stockholders


TOT
Energy, Inc.


Miami,
Florida




We have
audited the accompanying consolidated balance sheets of TOT Energy, Inc. (the
“Company”) as of March 31, 2010 and 2009, and the related consolidated
statements of operations, changes in stockholders’ deficiency in assets and cash
flows for the years then ended. These financial statements are the
responsibility of the Company’s management. Our responsibility is to express an
opinion on these financial statements based on our audits.




We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.


11




In our
opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the financial position of TOT Energy, Inc. as of March
31, 2010 and 2009, and the related consolidated statements of operations,
changes in stockholders’ deficiency in assets and cash flows for the years then
ended in conformity with accounting principles generally accepted in the United
States of America.




The
accompanying consolidated financial statements have been prepared assuming that
the Company will continue as a going concern. As discussed in Note 2 to the
consolidated financial statements, the Company has experienced recurring losses
and has a working capital deficit at March 31, 2010. This raises substantial
doubt about the Company’s ability to continue as a going concern. Management’s
plans in regard to these matters are also described in Note 2. The consolidated
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.





/s/Daszkal
Bolton LLP




Jupiter,
Florida


July 13,
2010


12


TOT
ENERGY, INC.


CONSOLIDATED
BALANCE SHEETS





March
      31, 2010
                      
                      
                      March
      31, 2009ASSETSCurrent
      assetsCash
                      
                      $
                      277,830
                      
                      
                      $
                      99,971Deposits
                      
                      
                      8,000
                      
                      
                      
                      6,000Prepaid
      expenses and other assets
                      
                      
                      20,152
                      
                      
                      
                      1,798Total
      current assets
                      
                      
                      305,982
                      
                      
                      
                      107,769Fixed
      assetsComputers and
      equipment
                      
                      
                      12,319
                      
                      
                      
                      11,162Less:
      accumulated depreciation
                      
                      
                      (5,530
                      )
                      
                      
                      (4,510
                      )Total
      fixed assets (net)
                      
                      
                      6,789
                      
                      
                      
                      6,652Assets
      of discontinued operations
                      
                      
                      -
                      
                      
                      
                      2,931,074Total
      assets
                      
                      $
                      312,771
                      
                      
                      $
                      3,045,495LIABILITIES
      AND STOCKHOLDERS' EQUITYCurrent
      liabilitiesAccounts
      payable
                      
                      $
                      23,702
                      
                      
                      $
                      592Accrued
      expenses
                      
                      
                      920,559
                      
                      
                      
                      463,377Total
      current liabilities
                      
                      
                      944,261
                      
                      
                      
                      463,969Liabilities
      of discontinued operations
                      
                      
                      -
                      
                      
                      
                      265,129COMMITMENTS
      AND CONTINGENCIESSTOCKHOLDERS'
      EQUITYPreferred
      stock ($.001 par value, 100,000,000 shares authorized and no shares issued
      and outstanding)
                      
                      
                      -
                      
                      
                      
                      -Common
      stock ($.001 par value, 800,000,000 shares authorized and 320,778,512 and
      300,583,108 shares  issued and outstanding)
                      
                      
                      320,778
                      
                      
                      
                      300,583Treasury
      stock, at cost; 3,250,000 shares
                      
                      
                      (2,341,640
                      )
                      
                      
                      (62,500
                      )Paid
      in capital
                      
                      
                      24,671,186
                      
                      
                      
                      19,940,319Accumulated
      other comprehensive loss
                      
                      
                      9,972
                      
                      
                      
                      (1,176,613
                      )Accumulated
      deficit
                      
                      
                      (23,319,787
                      )
                      
                      
                      (16,722,953
                      )Noncontrolling
      interest
                      
                      
                      28,001
                      
                      
                      
                      37,561Total
      equity
                      
                      
                      (631,490
                      )
                      
                      
                      2,316,397Total
      liabilities and stockholders' equity
                      
                      $
                      312,771
                      
                      
                      $
                      3,045,495





See
accompanying notes


13


TOT
ENERGY, INC.


CONSOLIDATED STATEMENTS
OF OPERATIONS





Twelve
      Months Ended
                      March
      31, 2010
                    
                    
                    Twelve
      Months Ended
                      March
      31, 2009Sales
                    
                    $
                    -
                    
                    
                    $
                    -Cost
      of sales
                    
                    
                    -
                    
                    
                    
                    -Gross
      Profit
                    
                    
                    -
                    
                    
                    
                    -Operating
      ExpensesGeneral
      and administrative
                    
                    
                    5,789,352
                    
                    
                    
                    10,378,126Loss
      from operations
                    
                    
                    (5,789,352
                    )
                    
                    
                    (10,378,126
                    )Non-operating
      expenseOther
      income (expense)
                    
                    
                    (171,025
                    )
                    
                    
                    802Loss
      before income tax provision
                    
                    
                    (5,960,377
                    )
                    
                    
                    (10,377,324
                    )Income
      tax provision
                    
                    
                    -
                    
                    
                    
                    -Net
      loss from continuing operations
                    
                    
                    (5,960,377
                    )
                    
                    
                    (10,377,324
                    )Net
      loss attributable to the noncontrolling interest
                    
                    
                    9,560
                    
                    
                    
                    -Net
      loss from discontinued operations
                    
                    
                    (646,017
                    )
                    
                    
                    (1,799,816
                    )Net
      loss
                    
                    
                    (6,596,834
                    )
                    
                    
                    (12,177,140
                    )Other
      comprehensive incomeForeign
      currency translation loss
                    
                    
                    (26,903
                    )
                    
                    
                    (16,931
                    )Comprehensive
      loss
                    
                    $
                    (6,623,737
                    )
                    
                    $
                    (12,194,071
                    )Net
      loss per share from continuing operations - basic and
    diluted
                    
                    $
                    (0.02
                    )
                    
                    $
                    (0.04
                    )Net
      loss per share from discontinued operations - basic and
      diluted
                    
                    $
                    (0.00
                    )
                    
                    $
                    (0.01
                    )Net
      loss per share - basic and diluted
                    
                    $
                    (0.02
                    )
                    
                    $
                    (0.05
                    )Weighted
      average number of common shares outstanding - basic and
      diluted
                    
                    
                    309,714,392
                    
                    
                    
                    236,191,569





See
accompanying notes.


14


TOT
ENERGY, INC.


CONSOLIDATED
STATEMENTS OF CHANGES IN


STOCKHOLDERS’
DEFICIENCY IN ASSETS





Preferred
      Stock
                                                    
                                                    
                                                    Common
      Stock
                                                    
                                                    
                                                    Treasury
                                                    
                                                    
                                                    Additional
                                                      Paid
      in
                                                    
                                                    
                                                    Accumulated
                                                      Other
                                                      Comprehensive
                                                    
                                                    
                                                    Non-controlling
                                                    
                                                    
                                                    Accumulated
                                                    
                                                    
                                                    Total
                                                      Stockholders’
                                                      Equity (Deficiency)Shares
                                                    
                                                    
                                                    Amount
                                                    
                                                    
                                                    Shares
                                                    
                                                    
                                                    Amount
                                                    
                                                    
                                                    Stock
                                                    
                                                    
                                                    Capital
                                                    
                                                    
                                                    Income
                                                    
                                                    
                                                    Interest
                                                    
                                                    
                                                    Deficit
                                                    
                                                    
                                                    in
      AssetsBalance
      at March 31, 2008
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    214,507,773
                                                    
                                                    
                                                    
                                                    214,508
                                                    
                                                    
                                                    
                                                    (62,500
                                                    )
                                                    
                                                    
                                                    5,115,356
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    (5,705,496
                                                    )
                                                    
                                                    
                                                    (438,132
                                                    )Stock
      options granted
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -Stock
      options vested
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    31,296
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    31,296Shares
      issued pursuant to TOT-SIBBNS joint venture
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    3,000,000
                                                    
                                                    
                                                    
                                                    3,000
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    4,372,480
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    4,375,480Shares
      issued for services pursuant to formation of Korlea-TOT
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    350,000
                                                    
                                                    
                                                    
                                                    350
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    45,150
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    45,500
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    91,000Shares
      and warrants to be issued pursuant to subscription
    agreement
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    82,725,335
                                                    
                                                    
                                                    
                                                    82,725
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    10,376,037
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    10,458,762Foreign
      currency exchange
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    (1,176,614
                                                    )
                                                    
                                                    
                                                    (7,939
                                                    )
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    (1,184,553
                                                    )Net
      loss
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    (11,017,457
                                                    )
                                                    
                                                    
                                                    (11,017,457
                                                    )Balance
      March 31, 2009
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    300,583,108
                                                    
                                                    
                                                    
                                                    300,583
                                                    
                                                    
                                                    
                                                    (62,500
                                                    )
                                                    
                                                    
                                                    19,940,319
                                                    
                                                    
                                                    
                                                    (1,176,614
                                                    )
                                                    
                                                    
                                                    37,561
                                                    
                                                    
                                                    
                                                    (16,722,953
                                                    )
                                                    
                                                    
                                                    2,316,397Stock
      options vested
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    33,791
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    33,791Shares
      and warrants to be issued pursuant to subscription
    agreement
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    16,186,515
                                                    
                                                    
                                                    
                                                    16,187
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    5,025,221
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    5,041,407Shares
      issued as executive compensation
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    508,889
                                                    
                                                    
                                                    508
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    62,880
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    63,388Shares
      issued for advertising and promotion
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    500,000
                                                    
                                                    
                                                    
                                                    500
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    49,503
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    50,003Shares
      issued pursuant to purchase agreeement
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    3,000,000
                                                    
                                                    
                                                    
                                                    3,000
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    297,000
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    300,000Net
      loss from discontinued operations
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    (646,017
                                                    )
                                                    
                                                    
                                                    (646,017
                                                    )Shares
      received, on disposal of TOT-SIBBNS Joint Venture
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    (2,279,140
                                                    )
                                                    
                                                    
                                                    (737,526
                                                    )
                                                    
                                                    
                                                    1,213,489
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    (1,803,177
                                                    )Foreign
      currency exchange
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    (26,903
                                                    )
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    (26,903
                                                    )Net
      loss
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    (9,560
                                                    )
                                                    
                                                    
                                                    (5,950,817
                                                    )
                                                    
                                                    
                                                    (5,960,377
                                                    )Balance
      March 31, 2010
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    $
                                                    -
                                                    
                                                    
                                                    $
                                                    320,778,512
                                                    
                                                    
                                                    $
                                                    320,778
                                                    
                                                    
                                                    $
                                                    (2,341,640
                                                    )
                                                    
                                                    $
                                                    24,671,187
                                                    
                                                    
                                                    $
                                                    9,972
                                                    
                                                    
                                                    $
                                                    28,001
                                                    
                                                    
                                                    $
                                                    (23,319,787
                                                    )
                                                    
                                                    $
                                                    (631,488
                                                    )




See
accompanying notes.


15





TOT
ENERGY, INC.


CONSOLIDATED
STATEMENTS OF CASH FLOWS




Twelve Months
                                                          
                                                          
                                                          Twelve MonthsEnded
                                                          
                                                          
                                                          EndedMarch 31, 2010
                                                          
                                                          
                                                          March 31, 2009Cash
      flows from operating activities:Net
      loss
                                                          
                                                          $
                                                          (6,596,834
                                                          )
                                                          
                                                          $
                                                          (12,177,140
                                                          )Adjustments
      to reconcile net loss to net cash used in operating
      activities:Net
      loss from discontinued operations
                                                          
                                                          
                                                          646,017
                                                          
                                                          
                                                          
                                                          1,799,816Net
      loss attributable to noncontrolling interest
                                                          
                                                          
                                                          (9,560
                                                          )Depreciation
                                                          
                                                          
                                                          1,020
                                                          
                                                          
                                                          
                                                          510Amortization
      of accounting software license
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          1,197Share
      Based Compensation
                                                          
                                                          
                                                          4,751,474
                                                          
                                                          
                                                          
                                                          8,881,051Changes
      in assets and liabilities, net of acquistions
                                                            and
      the effect of consolidation of equity affiliates:Prepaid
      expenses
                                                          
                                                          
                                                          (18,354
                                                          )
                                                          
                                                          
                                                          18,702Deposits
                                                          
                                                          
                                                          (2,000
                                                          )
                                                          
                                                          
                                                          (6,000
                                                          )Accounts
      payable
                                                          
                                                          
                                                          23,110
                                                          
                                                          
                                                          
                                                          22,489Accrued
      expenses
                                                          
                                                          
                                                          457,182
                                                          
                                                          
                                                          
                                                          430,735Total
      adjustments
                                                          
                                                          
                                                          5,848,889
                                                          
                                                          
                                                          
                                                          11,148,500Net
      cash used in operating activities of continuing
      operations
                                                          
                                                          
                                                          (747,945
                                                          )
                                                          
                                                          
                                                          (1,028,640
                                                          )Cash
      flows from investing activities:Purchase
      of equipment
                                                          
                                                          
                                                          (1,157
                                                          )
                                                          
                                                          
                                                          (7,162
                                                          )Net
      cash used in investing activities of continuing operations
                                                          
                                                          
                                                          (1,157
                                                          )
                                                          
                                                          
                                                          (7,162
                                                          )Cash
      flows from financing activities:Contributed
      capital from equity investors
                                                          
                                                          
                                                          737,114
                                                          
                                                          
                                                          
                                                          1,017,097Contributed
      capital for Korlea-TOT joint venture
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          37,561Increase
      in related party payables
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          47,128Net
      cash provided by financing activities of continuing
    operations
                                                          
                                                          
                                                          737,114
                                                          
                                                          
                                                          
                                                          1,101,787Cash
      flows from discontinued operationsNet
      cash used in discontinued operations
                                                          
                                                          
                                                          216,751
                                                          
                                                          
                                                          
                                                          (70,491
                                                          )Effect
      of exchange rate changes on cash
                                                          
                                                          
                                                          (26,903
                                                          )
                                                          
                                                          
                                                          16,471Net
      increase in cash
                                                          
                                                          
                                                          177,860
                                                          
                                                          
                                                          
                                                          11,964Cash
      at beginning of period
                                                          
                                                          
                                                          99,971
                                                          
                                                          
                                                          
                                                          88,007Cash
      at end of period
                                                          
                                                          $
                                                          277,831
                                                          
                                                          
                                                          $
                                                          99,971Supplemental
      Disclosure of Cash Flow InformationCash
      paid during the year for:Interest
                                                          
                                                          $
                                                          -
                                                          
                                                          
                                                          $
                                                          -Income
      taxes
                                                          
                                                          $
                                                          -
                                                          
                                                          
                                                          $
                                                          -Non-cash
      investing and financing activities:Related
      party debt and accrued interest exchanged for equity
                                                          
                                                          $
                                                          -
                                                          
                                                          
                                                          $
                                                          637,410Common
      stock issued to form joint venture TOT-SIBBNS
                                                          
                                                          $
                                                          -
                                                          
                                                          
                                                          $
                                                          4,375,480Common
      stock received on disposal of TOT-SIBBNS joint venture
                                                          
                                                          $
                                                          2,279,140
                                                          
                                                          
                                                          $
                                                          -Common
      stock issued for services provided in formation of joint venture
      Korlea-TOT
                                                          
                                                          $
                                                          -
                                                          
                                                          
                                                          $
                                                          45,500





See
accompanying notes.




16




TOT
ENERGY, INC.





NOTES TO
FINANCIAL STATEMENTS





NOTE 1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





Organization
and Basis of Presentation





TOT
Energy, Inc. (the “Company”), formerly Splinex Technology, Inc., was organized
on February 6, 2004 under the laws of the State of Delaware as a wholly-owned
subsidiary of Splinex, LLC, a Florida limited liability company, and was the
surviving entity pursuant to a merger with Ener1 Acquisition Corp., a Delaware
corporation and wholly-owned subsidiary of Ener1, Inc., a Florida corporation.
The Company initially intended to develop advanced technologies in the
three-dimensional or 3D computer graphics industry. Under an agreement effective
April 1, 2004 (the “Contribution Agreement”), Splinex, LLC contributed
substantially all of its assets, liabilities and operations to the Company. The
Company began its development stage activity on October 28, 2003 (“Inception”),
the date of formation of Splinex, LLC, and ended development stage activity on
July 16, 2008 when the Company acquired a 75% interest in the TOT-SIBBNS joint
venture and began operations in the oil and gas service industry.





Basis of
Consolidation





The
audited financial statements include the accounts of TOT Energy, Inc., the
accounts of the Company’s 75% discontinued operations joint venture, TOT-
SIBBNS, a limited liability company formed under the laws of Russia (also known
as the Russian Federation) and the accounts of our 51% joint venture,
Korlea-TOT, a limited liability company formed under the laws of the Czech
Republic. All material intercompany accounts and transactions have been
eliminated in this consolidation.





Effective
March 31, 2010, the Company has deconsolidated the TOT-SIBBNS joint venture (see
Note 12). Accordingly, the fiscal year to date activity for TOT-SIBBNS is
reflected in the financial statements as discontinued operations. The assets and
liabilities of TOT-SIBBNS have been separately classified in the March 31, 2009
balance sheet as assets and liabilities of discontinued operations.





Business
Activity





The
Company is working to build a diversified portfolio of energy assets. To this
end, from time to time, the Company may be engaged in various discussions to
acquire businesses or formulate joint venture or other arrangements with energy
companies located around the world. Where appropriate, acquisitions will be
financed with equity shares and this may result in substantial dilution to
existing stockholders. Prior to 2008, the Company developed computer software
products.





Until
March 31, 2010, TOT-SIBBNS provided exploration services to oil exploration and
production companies located in and around Novosibirsk, Russia. TOT-SIBBNS owned
and operated four oil-drilling rigs that generated the majority of the revenues
of TOT-SIBBNS. TOT-SIBBNS used this equipment for drilling exploratory wells for
fees. In addition, TOT-SIBBNS provided engineering services and well remediation
services on a contract fee basis.





KORLEA-TOT
is the Company’s 51%-owned joint venture with Korlea Invest Holding AG of
Switzerland (“Korlea”) who is a provider and trader of electricity in the Czech
Republic. Korlea-TOT was expected to assist in the marketing of oil assets
sourced by other TOT-Energy companies and contacts. There has been no activity
to date with this joint venture but we continue to look for opportunities to
develop and implement a profitable plan with our partner, Korlea, which has
expertise in energy trading.





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 disclosures of contingent assets and liabilities as of the
balance sheet date and the reported amounts of expenses for the period
presented. Actual results could differ from those
estimates.


17


Cash and
Cash Equivalents





Cash and
cash equivalents include highly liquid money market investments purchased with
an original maturity of three months or less. At March 31, 2010 and March 31,
2009, the Company had no cash equivalents. The Company maintains its U.S.
Dollar-denominated cash in a bank deposit account, the balance of which, at
times, may exceed federally insured limits. Bank accounts in the United States
are guaranteed by the Federal Deposit Insurance Corporation (FDIC) up to
$250,000. At March 31, 2010, and March 31, 2009, the United States bank balances
did not exceed the FDIC limit. The Company also maintains bank balances in the
Czech Republic and at March 31, 2010, the overseas bank balance was $84,009. At
March 31, 2009, the overseas bank balance was $76,656. The non-United States
bank balances are not insured and there is risk of loss in the event such banks
should fail.





Inventories





Inventories
are purchased primarily for the needs of production and used during the normal
operating cycle. Items in inventory include fuel, cables, lubricants,
construction materials and other miscellaneous items recorded at cost. Costs for
freight or other acquisition expenses are charged to operations in the period
they are incurred. Inventory is reduced using the average cost by
item.




Fixed
Assets





The
Company depreciates its building over a term of 20 years. Machinery and
Equipment are depreciated over lives ranging from 3 years to 10 years depending
on the equipment. The Company uses lives of three years for office equipment,
five years for most pieces of drilling equipment and ten years for our four
drills. All of the Company assets are depreciated on a straight-line basis for
financial statement purposes.





Foreign
Currency Transactions





The
Company’s primary operations are conducted outside the United States and we use
foreign currencies to operate our consolidated foreign subsidiaries. Quarterly
income and expense items are translated into U.S. dollars using the average
interbank rate for the period. Assets and liabilities are translated into U.S.
dollars using the interbank rate as of the balance sheet date. Equity items are
translated at their historical rate. The Company does not engage in any currency
hedging activities.




Revenue
Recognition





The
Company recognizes revenues from its contract on the completed contract method
due to uncertainty in counterparty performance and collections under its terms.
Under the completed contract method, revenues and costs are included in
operations when the contract is completed. Any losses expected to be incurred
are charged to operations in the period that such losses are
probable.





Net Loss
Per Share





Basic net
loss per common share is computed by dividing net loss applicable to common
stockholders by the weighted-average number of common shares outstanding during
the period. Diluted net loss per common share is determined using the
weighted-average number of common shares outstanding during the period, adjusted
for the dilutive effect of common stock equivalents, consisting of shares
issuable upon exercise of common stock options or warrants. In periods when
losses are reported, the weighted-average number of common shares outstanding
excludes common stock equivalents because their inclusion would be
anti-dilutive.





At March
31, 2010 and 2009, the Company had outstanding vested stock options to purchase
750,926 and 412,963 shares of common stock, respectively, and warrants to
purchase 49,455,925 and 41,363,168 shares of common stock, respectively. These
common stock equivalents have been excluded from the earnings per share
calculation because their inclusion would be anti-dilutive.


18


At March
31, 2010, the Company had 750,926 exercisable options to purchase common stock.
The Company recorded a $33,791 compensation expense related to the vesting of
options for the twelve months ended March 31, 2010. There were no new options
issued during the twelve months ended March 31, 2010. At March 31, 2009, the
Company had 412,963 exercisable options to purchase common stock. The Company
recorded a $31,296 compensation expense for these options in fiscal 2009.





During
fiscal 2010, the Company issued 16,186,515 shares of common stock and warrants
to purchase 8,093,757 shares of common stock in exchange for $323,730 pursuant
to the terms of its Subscription Agreement with TGR Energy, LLC (see Notes 8, 9
and 11).




Fair
Value of Financial Instruments





The
Company’s financial instruments consist mainly of cash deposits, short-term
payables and borrowings under related party payables. The Company believes that
the carrying amounts of third-party financial instruments approximate fair
value, due to their short-term maturities.





Impairment
of Long-Lived Assets





The
Company reviews its long-lived assets for impairment whenever events or changes
indicate that the carrying amount of an asset or group of assets may not be
recoverable. No impairment losses were recorded during fiscal 2010 and fiscal
2009.





Recent
Accounting Pronouncements





In June
2009 the FASB issued an amendment to ASC 810-10. This amendment requires an
enterprise to qualitatively assess the determination of the primary beneficiary
of a VIE based on whether the enterprise: (1) has the power to direct the
activities of a VIE that most significantly effect the entity’s economic
performance; and (2) has the obligation to absorb losses of the entity or the
right to receive benefits from the entity that could potentially be significant
to the VIE. ASC 810-10, as amended, requires an ongoing reconsideration of the
primary beneficiary, and amends the events that trigger a reassessment of
whether an entity is a VIE. This statement is effective as of the beginning of a
reporting entity’s first annual reporting period that begins after November 15,
2009. Earlier application is prohibited. Retrospective application is optional.
Adoption of this standard is not expected to have a significant impact on our
financial condition and results of operations.




In
September 2009 the FASB issued ASU 2009-13, “Multiple-Deliverable Revenue
Arrangements.” ASU 2009-13 addresses the unit of accounting for multiple-element
arrangements. In addition, ASU 2009-13 revises the method by which consideration
is allocated among the units of accounting. Specifically, the overall
consideration is allocated to each deliverable by establishing a selling price
for individual deliverables based on a hierarchy of evidence, involving
vendor-specific objective evidence, other third party evidence of the selling
price, or the reporting entity’s best estimate of the selling price of
individual deliverables in the arrangement. ASU 2009-13 will be effective
prospectively for revenue arrangements entered into or materially modified in
fiscal years beginning on or after June 15, 2010. Adoption of this standard is
not expected to have a significant impact on our financial condition and results
of operations.





NOTE 2.
GOING CONCERN CONSIDERATIONS




The
Company’s financial statements have been prepared on a going concern basis,
which contemplates the realization of assets and the settlement of liabilities
and commitments in the normal course of business. The Company had negative cash
flows from continuing operating activities of $747,945 for the year ended March
31, 2010, and had negative working capital of $638,279 at March 31, 2010. The
Company remains dependent upon TGR Energy, LLC or Mike Zoi (as a result of his
controlling interest in TGR and the Company’s dependence on the Subscription
Agreement with TGR) to fund its operations.


19





Management
is continuing its plan to build a diversified portfolio of energy assets,
including the development or acquisition of an alternative energy solar business
concentrating on commercial solar installations and other energy
saving/management offerings. Management believes that its current operating
strategy will provides the opportunity for the Company to continue as a going
concern; however, there is no assurance this will occur. The accompanying
consolidated financial statements do not include any adjustments that might be
necessary if the Company is unable to continue as a going concern.




NOTE 3.
SEGMENT INFORMATION





Until
March 31, 2010, the Company’s sole reportable business segment was the energy
services sector. The Company’s accounting policies for segments are the same as
those described in the summary of significant accounting policies.




NOTE 4.
CONTRACT ACCOUNTING





The
Company accounts for its long-term contracts using the completed contract method
of revenue recognition due to increasing uncertainties relating to its sole
customer’s ability to continue to finance the existing contract to completion.
The completed contract method recognizes income only when the contract is
substantially complete. Project costs and related revenues are accumulated and
are reflected in operations only when an estimated loss is probable. The
contract will be deemed complete when our customer agrees that each milestone
contained in the contract has been met.




NOTE 5.
JOINT VENTURES





On July
18, 2008, the Company executed an agreement to acquire a 75% controlling
interest in TOT-SIBBNS, a limited liability company organized under the laws of
the Russian Federation. Pursuant to the Joint Venture Agreement, the owner (the
“JV Partner”) of Sibburnefteservis, Ltd. of Novosibirsk, Russia (“SIBBNS”)
contributed certain assets of SIBBNS to TOT SIBBNS in exchange for 3,000,000
shares of the Company’s common stock. The assets were appraised at more than $6
million at the time of contribution and the Company was obligated to issue an
additional 2,000,000 shares to the JV Partner if TOT SIBBNS achieved $10,000,000
in cumulative revenues. If on the third anniversary of the joint venture
agreement, the Company’s stock price is not at least $1.00 per share, the
Company will have the option of making an additional payment to the JV Partner
or returning the Company’s interest in the joint venture to the JV
Partner.





On or
about January 27, 2010, the Company determined to unwind the TOT-SIBBNS joint
venture. The Company and TOT-SIBBNS executed an unwind agreement whereby the
Company exchanged its 75% interest in TOT-SIBBNS for the 3,000,000 shares given
to Evgeny Borograd in 2008. The unwind of the joint venture was consummated as
of March 31, 2010. The unwind of the TOT-SIBBNS joint venture has been accounted
for using the guidance provided in ASC 845 (previously APB 29), as a disposal
“other than by sale” similar to a spin-off transaction, with the shares received
reflected as treasury stock and recorded on the Company’s balance sheet at its
carrying basis in the net assets of the joint venture as of March 31, 2010.





The
Company formed a joint venture, Korlea-TOT Energy s.r.o., in July 2008 with its
Czech Republic partner Korlea Invest. The Company invested $56,000 to provide
the 51% of share capital that the Company owns for this limited liability
company in the Czech Republic. The Company financed this investment through a
related party note with Kazo, LLC. The Company issued Alexander Kaplan 350,000
newly issued shares of Company stock for his assistance in completing this
transaction.





NOTE 6.
BUILDING, MACHINERY AND EQUIPMENT




Building,
machinery and equipment consisted of the following at March 31, 2010 and
2009:





2010
                  
                  
                  2009-Computers and
      Equipment
                  
                  $
                  12,319
                  
                  
                  $
                  11,162Less
      accumulated depreciation
                  
                  
                  (5,530
                  )
                  
                  
                  (4,510
                  )$
                  6,789
                  
                  
                  $
                  6,652




20


Depreciation
expense for continuing operations was $1,020 and $510 for fiscal 2010 and fiscal
2009, respectively.  Total depreciation expense for continuing and
discontinued operations was $554,327 and $304,452 for fiscal 2010 and fiscal
2009, respectively (See Note 12).





NOTE 7.
ACCRUED EXPENSES





Accrued
expenses represent expenses that are owed at the end of the period and either
have not been billed by the provider or are expenses that are estimated for
services provided. At March 31, 2010 and March 31, 2009, accrued expenses
consisted of the following:





March 31, 2010
                    
                    
                    March 31, 2009Professional
      Fees
                    
                    $
                    31,468
                    
                    
                    $
                    39,968Accrued
      wages
                    
                    
                    723,428
                    
                    
                    
                    423,409Other
      accrued expenses
                    
                    
                    165,663
                    
                    
                    
                    -$
                    920,559
                    
                    
                    $
                    463,377





NOTE 8.
STOCKHOLDERS’ EQUITY





The
Company is authorized to issue 800,000,000 shares of common stock, par value of
$0.001 per share. Each holder of common stock is entitled to one vote for each
share held. The Company is authorized to issue 100,000,000 shares of preferred
stock, par value $0.001 per share, which may be divided into series with the
designations, powers, preferences, and relative rights and any qualifications,
limitations or restrictions as determined by the Company’s board of
directors.





Under an
Exchange Agreement dated December 18, 2007, the Company agreed to issue
113,500,000 newly issued shares of common stock of the Company to TGR Energy,
LLC, of which 8,500,000 shares were issued to Bzinfin, S.A., a British Virgin
Islands limited corporation that is indirectly owned by an affiliate of the
Ener1 Group, and 2,125,000 shares were issued to Alexander Malovik, a principal
of Splinex, LLC, in exchange for the Bzinfin and Ener1 Group notes totaling
$3,688,132. TGR Energy, LLC owned 98,157,334 shares of common stock of the
Company as of December 17, 2007, and after the completion of the Exchange
Agreement transactions owned an aggregate of 201,032,334 shares of common stock
of the Company as of December 18, 2007. The Company had a total of 100,757,773
shares of common stock outstanding at December 17, 2007 and 214,507,773 shares
of common stock outstanding at December 18, 2007.





On August
7, 2008, the Board of Directors approved a Subscription Agreement dated August
7, 2008 (the “ Subscription Agreement”) with TGR Energy, LLC (“TGR”), wherein
TGR committed to invest up to $2,000,000 (the “Investment Amount”) in exchange
for up to 100,000,000 shares of the Company's common stock for $0.02 per share.
In addition, the Company granted TGR warrants to purchase up to 50,000,000
shares of common stock for $0.05 per share. These warrants may be exercised
within five years from the date of grant. The shares and warrants are issuable
under the Subscription Agreement upon the funding from time to time by TGR. The
valuation date to determine the appropriate compensation charge is the last day
of the quarter then ended. On January 12, 2010, TGR agreed to increase the
Investment Amount from $2,000,000 to $4,000,000 in exchange for up to an
additional 100,000,000 shares of the Company’s common stock and warrants to
purchase up to 50,000,000 shares of the Company’s common stock at an exercise
price of $0.05 per share for a period of five years from date of
issuance.





On August
13, 2008, the Board of Directors approved (i) the issuance of fully vested
options to purchase 100,000 shares of common stock to Curtis Wolfe for his
services as a board member of the Company and (ii) the issuance of options to
purchase 1,000,000 shares of common stock to Jonathan New for his services as
Chief Financial Officer. Mr. Wolfe abstained from discussion of his option
grants. Mr. New’s stock options vest ratably over three years. Both sets of
options have a life of 7 years from the date of grant and a strike price of
$0.25 per share. Utilizing a Black-Scholes valuation model, at September 30,
2008, the Company recorded compensation expense of $0.10 per share or $10,000
for options granted to Mr. Wolfe and $4,444 for vested options of Mr. New.
For the year ended March 31, 2009, the Company recorded compensation
expense of $0.10 per share or $21,296 for vested options of Mr.
New.




On August
25, 2008, in consideration for activities that resulted in the successful joint
venture with Korlea-TOT, the Company issued 350,000 shares of restricted
TOT-Energy, Inc. common stock to Kaplan Capital, LLC. The stock provided for
services was valued based on the market price per share on date of issuance
($0.13 per share) and the Company recorded compensation expense of
$45,500.




21





On
November 1, 2008, the Company entered into a Letter Agreement with Olympus
Securities LLC (the “Agreement”). Under the Agreement, Olympus was appointed TOT
Energy’s exclusive financial advisor and investment banker (collectively, the
“Services”) for a period of seven (7) months. After expiration of this
initial term, the Agreement is to automatically continue on a month-to-month
basis, with each party having the right to terminate on thirty (30) days notice.
The Agreement included a fee of one thousand dollars ($1,000) per month in
return for the Services, except for the first month, where, instead of the
monthly fee, the Company granted five (5) year warrants to Olympus to purchase
one million (1,000,000) shares of the Company's common stock at
ten cents ($.10) per share. The warrants were valued at $149,998 and were to be
amortized over the seven-month term of the Agreement. The Agreement
contains other provisions relating to payments of cash, stock and warrants in
connection with any future financing or investment transaction completed through
Olympus. The Company has not yet paid a cash fee or provided the abovementioned
warrants to Olympus due to the failure by Olympus to provide meaningful
investment banking services until world financial markets stabilized and, more
recently, due to the unwind of the TOT-SIBBNS joint venture. The Company has
amortized the warrant charge of $149,999 during fiscal 2010 and accrued this
amount in the financial statements.





Pursuant
to a Stock Purchase Agreement dated November 23, 2009, TGR agreed to sell to
Dune Capital Group ("Dune") an aggregate of 5,000,000 shares of common stock of
TOT Energy, Inc. held by TGR for a purchase price of $0.10 per share or an
aggregate of $500,000. The purchase price is required to be paid on or
before April 1, 2010. Dune paid $300,000 on November 23, 2009. In order to
ensure compliance with obligations under Section 16 of the Securities Exchange
Act of 1934, prior to the issuance of shares to Dune by TGR, TGR assigned this
Purchase Agreement to the Company. Accordingly, the Company received $300,000
pursuant to this agreement and issued an aggregate of 3,000,000 shares of common
stock of the Company to Dune on January 12, 2010.  See Note 13 for
additional information relating to the subsequent unwind of this
transaction.





For the
fiscal year ended March 31, 2009, TGR was issued an aggregate of 82,725,335
shares of common stock of the Company and fully vested warrants to purchase
41,362,168 shares of common stock of the Company at an exercise price of $0.05
per share pursuant to the terms of the Subscription Agreement.  These
issuances were in exchange for financings under the Subscription Agreement in
the aggregate amount of $1,654,507 of which $1,017,097 was cash and $637,410
related to refinancing of previously outstanding notes payable.  A
compensation charge of $8,827,218 was recorded for the fiscal year ended March
31, 2009. This amount is calculated as the difference between the market price
of our common stock at the end of each quarter in which shares were issued and
the subscription price of the common shares ($0.02) multiplied by the number of
shares issued, plus the Black-Scholes valuation of the warrants issued as
calculated at the end of each quarter.





For the
fiscal year ended March 31, 2010, TGR was issued an aggregate of 16,186,515
shares of common stock of the Company and fully vested warrants to purchase
8,093,757 shares of common stock of the Company at an exercise price of $0.05
per share pursuant to the terms of the Subscription Agreement.  These
issuances were in exchange for financings under the Subscription Agreement in
the aggregate amount of $323,730.  A compensation charge of $4,717,677
was recorded for the fiscal year ended March 31, 2010. This amount is calculated
as the difference between the market price of our common stock at the end of
each quarter in which shares were issued and the subscription price of the
common shares ($0.02) multiplied by the number of shares issued, plus the
Black-Scholes valuation of the warrants issued as calculated at the end of each
quarter.





At March
31, 2010, the Company had options to purchase 1,200,000 shares of common stock
outstanding under its stock option plan, of which options to purchase 750,926
shares of common stock are vested, with an exercise price of $0.25 per share and
with a remaining weighted average contractual term of 5.69 years. The Company
also had warrants to purchase 49,455,925 shares of common stock outstanding at
March 31, 2009 with a strike price of $0.05 per share and a remaining
contractual term of 3.55 years pursuant to the Subscription
Agreement.




NOTE 9.
STOCK OPTIONS AND STOCK GRANTS





For
fiscal 2010, there were no new options issued.  A compensation charge
of 33,791 was recorded based on the vesting of previously issued
options.


22




During
fiscal 2010, the Company issued 508,889 shares of restricted stock to employees
in lieu of cash compensation.  The Company recorded a charge of
$63,388, based on the fair value of the shares issued.





Additionally,
the Company issued 500,000 shares of the Company’s restricted common stock to
American Speed Factory in exchange for an agreement to promote and advertise
TOT-Energy in the Ferrari Challenge Racing Series.  The Company
recorded a $50,000 promotion expense in Fiscal 2010 to reflect the services
provided in exchange for common shares.





For
fiscal 2009, options to purchase 1,100,000 shares of common stock were granted
under the Company’s stock option plan.  Options to purchase 100,000 shares
were granted to a director as compensation as a member of the board of directors
and options to purchase 1,000,000 shares were granted to the Chief Financial
Officer as part of his incentive compensation.  The options to purchase
1,000,000 shares vest monthly over three years and compensation charges for
these shares are amortized over the three year period.  The following table
details the charges to income and assumptions used to derive these
charges:





ITEM
                      
                      2010
                      
                      
                      2009Charge
      to income (compensation expense)
                      
                      $
                      33,791
                      
                      
                      $
                      31,296Volatility
                      
                      
                      na
                      %
                      
                      
                      323
                      %Stock
      price
                      
                      $
                      na
                      
                      
                      $
                      0.12Strike
      Price
                      
                      $
                      na
                      
                      
                      $
                      0.25Option
      life
                      
                      na
                      
                      
                      7
      yearsRisk
      free rate
                      
                      
                      na
                      %
                      
                      
                      3.5
                      %Vesting
                      
                      na
                      
                      
                      Options to purchase
                        100,000 shares are
                        vested 100% at grant
                        date. Options to
                        purchase 1,000,000
                        shares vest monthly
                        over 3 years





NOTE 10.
INCOME TAXES





Deferred
income taxes reflect the net tax effects of temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes and
the amounts of assets and liabilities used for income tax purposes.  At
March 31, 2010 and 2009, the Company had cumulative federal net operating loss
carry forwards (NOL) of approximately $5.5 million and $5.5 million,
respectively.  Of these amounts, $0 and approximately $640,000 relates to
our Russian subsidiary, TOT-SIBBNS for fiscal 2010 and 2009 respectively. 
The Company estimates that 24% is the proper tax rate for the Russian foreign
loss and we estimate this loss will expire in 10 years (2019).  The Company
has determined that the net operating loss may not be realized and a valuation
allowance has been recorded for the full amount of the tax loss
carryforward.





Pursuant
to Sections 382 and 383 of the Internal Revenue Code, annual use of any of the
Company's net operating loss and credit carry forwards will be limited. The tax
loss carryforward amounts begin to expire in December 2025.





The net
provision (benefit) for income taxes consisted of the following at March 31,
2010 and 2009:





2010
                      
                      
                      2009Current
      Federal income taxes
                      
                      $
                      -
                      
                      
                      $
                      -Deferred
      income tax benefitDomestic
                      
                      
                      (2,136,513
                      )
                      
                      
                      (494,976
                      )Foreign
                      
                      
                      (155,044
                      )
                      
                      
                      (153,632
                      )Valuation
      allowance
                      
                      
                      2,291,557
                      
                      
                      
                      648,608Total
      income tax provision
                      
                      $
                      -
                      
                      
                      $
                      -




Significant
components of the Company's deferred tax assets at March 31, 2010 and 2009 are
as follows:


23




2010
                        
                        
                        2009Net
      operating loss carry forwards
                        
                        $
                        5,050,165
                        
                        
                        $
                        2,758,608Accrued
      compensation and other
                        
                        
                        664,134
                        
                        
                        
                        509,0905,714,299
                        
                        
                        
                        3,267,698Valuation
      allowance for deferred tax assets
                        
                        
                        (5,714,299
                        )
                        
                        
                        (3,267,698
                        )Net
      deferred tax asset
                        
                        $
                        -
                        
                        
                        $
                        -





Reconciliation
between actual income taxes and amounts at March 31, 2010 and 2009 computed by
applying the federal statutory rate of 34% to pre-tax loss is summarized as
follows:





2010
                      
                      
                      2009U.
      S. Federal statutory rate on loss before income taxes
                      
                      
                      34.0
                      %
                      
                      
                      34.0
                      %Benefit
      of lower foreign tax rates
                      
                      
                      0.0
                      %
                      
                      
                      -3.0
                      %State
      income tax, net of federal tax benefit
                      
                      
                      3.6
                      %
                      
                      
                      3.6
                      %Increase
      in valuation allowance
                      
                      
                      -37.6
                      %
                      
                      
                      -34.6
                      %Total
      income tax provision
                      
                      
                      0.0
                      %
                      
                      
                      0.0
                      %





The
Company has been delinquent in the filing its federal tax returns for several
years. However, since the Company did not record profits, it owes no tax, but
may be subject to certain fines and penalties.




NOTE 11.
RELATED PARTY TRANSACTIONS





On August
7, 2008, the Company and TGR, which held 94% of the Company’s outstanding common
stock, entered into the Subscription Agreement described above pursuant to which
TGR has agreed to provide funding of up to $2,000,000 (the “Investment Amount”)
in exchange for up to 100,000,000 shares of the Company’s common stock and
warrants to purchase up to 50,000,000 shares of the Company’s common stock at an
exercise price of $0.05 per share. Pursuant to the Subscription Agreement, TGR
will fund the Investment Amount as required in the Company’s operational budget.
TGR’s obligation to fund the Investment Amount will be reduced by any future
third party funding or investments in the Company on terms no less favorable
than those contained in the Subscription Agreement. On January 12, 2010, TGR
agreed to increase the Investment Amount from $2,000,000 to $4,000,000 in
exchange for up to an additional 100,000,000 shares of the Company’s common
stock and warrants to purchase up to 50,000,000 shares of the Company’s common
stock at an exercise price of $0.05 per share for a period of five years from
date of issuance.





For the
fiscal year ended March 31, 2009, TGR was issued an aggregate of 82,725,335
shares of common stock of the Company and fully vested warrants to purchase
41,362,168 shares of common stock of the Company at an exercise price of $0.05
per share pursuant to the terms of the Subscription Agreement.  These
issuances were in exchange for financings under the Subscription Agreement in
the aggregate amount of $1,654,507 of which $1,017,097 was cash and $637,410
related to refinancing of previously outstanding notes payable.  A
compensation charge of $8,827,218 was recorded for the fiscal year ended March
31, 2009. This amount is calculated as the difference between the market price
of our common stock at the end of each quarter in which shares were issued and
the subscription price of the common shares ($0.02) multiplied by the number of
shares issued, plus the Black-Scholes valuation of the warrants issued as
calculated at the end of each quarter.





For the
fiscal year ended March 31, 2010, TGR was issued an aggregate of 16,186,515
shares of common stock of the Company and fully vested warrants to purchase
8,093,757 shares of common stock of the Company at an exercise price of $0.05
per share pursuant to the terms of the Subscription Agreement.  These
issuances were in exchange for financings under the Subscription Agreement in
the aggregate amount of $323,730.  A compensation charge of $4,717,677 was
recorded for the fiscal year ended March 31, 2009. This amount is calculated as
the difference between the market price of our common stock at the end of each
quarter in which shares were issued and the subscription price of the common
shares ($0.02) multiplied by the number of shares issued, plus the Black-Scholes
valuation of the warrants issued as calculated at the end of each
quarter.


24




NOTE
12.  DISCONTINUED OPERATIONS





Effective
March 31, 2010, the Company entered into a Joint Venture Dissolution Agreement,
which dissolved the TOT-SIBBNS joint venture.  The Company received
the 3,000,000 shares of common stock issued in 2008 in connection with the
establishment of the joint venture and the assets of the joint venture were
returned to the noncontrolling interest holder (JV Partner).  The
following summarizes results from discontinued operations:





Year ended
                        
                        
                        Year endedMarch 31, 2010
                        
                        
                        March 31, 2009Revenues
                        
                        $
                        -
                        
                        
                        $
                        -Cost
      of Sales
                        
                        
                        -
                        
                        
                        
                        -Operating
      Expenses
                        
                        
                        942,044
                        
                        
                        
                        852,927Other
      (Income) Expenses
                        
                        
                        (80,688
                        )
                        
                        
                        584Impairment
      on assets held for disposal
                        
                        
                        -
                        
                        
                        
                        -Net
      loss from discontinued operations
                        
                        
                        (646,017
                        )
                        
                        
                        (1,799,816
                        )





Assets
and liabilities of discontinued operations at March 31, 2009 consisted of the
following:





ASSETSCurrent
      AssetsInventory
      of raw materials
                        
                        
                        31,174Prepaid
      expenses and other assets
                        
                        
                        422Total
      current assets
                        
                        
                        31,596Fixed
      assetsBuilding
                        
                        
                        160,649Machinery
      & Equipment
                        
                        
                        3,042,771Less: accumulated depreciation
                        
                        
                        (303,942
                        )Total
      fixed assets
                        
                        
                        2,899,478Total
      Assets
                        
                        $
                        2,931,074LIABILITIESCurrent
      LiabilitiesAccounts
      Payable
                        
                        
                        37,088Accrued
      other expenses
                        
                        
                        228,041Total
      liabilities
                        
                        $
                        265,129





NOTE 13.
SUBSEQUENT EVENTS





Rescission
of Dune Stock Purchase Agreement


25




On April
28, 2010,  the Company agreed to terminate the Stock Purchase
Agreement with Dune and rescind the prior issuance of common stock. The Company
repurchased the 3,000,000 shares of common stock previously issued to Dune for
$300,000.  The redeemed shares will be accounted for as treasury
stock.










Item
9.   Changes and Disagreements With Accountants on Accounting and
Financial Disclosure





None.




Item
9A(T).    Controls and Procedures





Our
disclosure controls and procedures are designed to provide reasonable assurance
that information required to be disclosed in our reports filed or submitted
under the Securities Exchange Act of 1934 is recorded, processed, summarized and
reported within the time periods specified in the SEC’s rules and forms, and
that such information is accumulated and communicated to our management,
including our chief executive officer and chief financial officer, as
appropriate, to allow for timely decisions regarding required disclosure . In
designing and evaluating the disclosure controls and procedures, management
recognized that any controls and procedures, no matter how well designed and
operated, can provide only reasonable assurance of achieving the desired control
objectives, and management is required to apply its judgment in evaluating the
cost-benefit relationship of possible controls and procedures.





As of
March 31, 2010, as a result of the unwind of our TOT-SIBBNS joint venture, we
have ceased operations in the oil and gas exploratory drilling business and
continue to focus on the development and/or acquisition of a business in the
alternative energy field.  Our disclosure controls and procedures are
currently not effective because there are a limited number of personnel employed
and we cannot have an adequate segregation of duties, and due to material
weaknesses in internal control over financial reporting as discussed below.
Accordingly, management cannot provide reasonable assurance of achieving the
desired control objectives. Management works to mitigate these risks by being
personally involved in all substantive transactions and attempts to obtain
verification of transactions and accounting policies and treatments involving
our overseas operations. We are in the process of reviewing and, where
necessary, modifying controls and procedures throughout the Company. We expect
this process to continue through 2011.




Management’s
Report on Internal Control Over Financial Reporting





Management
is responsible for establishing and maintaining adequate internal control over
financial reporting as defined in Rules 13a-15(f) under the Securities Exchange
Act of 1934, as amended. Internal control over financial reporting is designed
to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles in the United States of America
(“GAAP”). We recognize that because of its inherent limitations, internal
control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to
the risk that controls may become inadequate because of changes in conditions,
or that the degree of compliance with the policies and procedures may
deteriorate.





Management
conducted an evaluation of the effectiveness of our internal control over
financial reporting as of March 31, 2010.  Our management’s evaluation
of our internal control was based on the framework in Internal Control –
Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission (the “COSO Framework”).  Based on this evaluation
under the COSO Framework, our management concluded that our internal control
over financial reporting was not effective as of March 31, 2010.





Management
is aware of the following material weaknesses (a material weakness is a
deficiency, or a combination of deficiencies, in internal control over financial
reporting, such that there is a reasonable possibility that a material
misstatement of the Company's annual or interim financial statements will not be
prevented or detected on a timely basis) in our internal control over financial
reporting:




26




Control
Environment





·
            Inadequate Written Policies and
      Procedures: Based on our management’s review of key accounting policies
      and procedures, our management determined that such policies and
      procedures were inadequate as of March 31, 2010. Management identified
      certain policies and procedures as inadequate and others as lacking in
      appropriate documentation. Management is in the process of enhancing
      existing policies and procedures and preparing formal written
      documentation as
appropriate.





·
            Segregation of Duties: We did not
      maintain adequate segregation of duties related to job responsibilities
      for initiating, authorizing, and recording of certain transactions as of
      March 31, 2010. Although we believe that we have established appropriate
      transaction approval criteria, we do not have sufficient personnel to
      provide an independent review of journal entries, account analyses,
      monitoring or adequate risk assessment functions. Due to this material
      weakness, there is a reasonable possibility that a material misstatement
      in the financial statements would not be prevented or detected on a timely
      basis. The Company has attempted to mitigate certain of these risks by
      enhancing management’s oversight of various procedures for initiating,
      authorizing, and recording of various transactions and establishing more
      formal and rigorous written guidelines, policies and procedures. However,
      additional measures and personnel are
  required.





·
            Board of Directors and Audit
      Committee:  We did not have a functioning audit committee as of
      March 31, 2010 due to the lack of a sufficient number of independent
      members on our board of directors and that no member qualifies as a
      “financial expert” as defined by regulations of the SEC. Our entire board
      of directors acted in place of an audit committee. However, since we do
      not have a financial expert on our board, the oversight and monitoring of
      internal controls and procedures are not
  effective.




Control
Activities





·
            Testing of Internal Controls: We
      have identified deficiencies in our testing of internal controls within
      our key business processes, particularly with respect to our overseas
      operations, which were terminated effective March 31, 2010. This was
      primarily due to insufficient financial and personnel resources during
      fiscal 2010.  Management believes there are control procedures
      that are effective in design and implementation within our key business
      processes. However, certain of these processes were not formally tested or
      adequately documented.





Information
and Communication





·
            Timeliness and Adequacy of
      Financial Reporting Disclosures: Our Chief Executive Officer and our Chief
      Financial Officer concluded that the Company's controls were not effective
      as of March 31, 2010 due to inherent weaknesses present in the preparation
      of financial statements and related disclosures as a result of the limited
      financial personnel, information technology infrastructure and other
      resources. However, management believes that given the size and scope of
      the Company’s business that all material information was communicated
      to management within a time-frame that was adequate for management to make
      informed business and reporting
  decisions.





Monitoring





·
            Internal Control Monitoring: As a
      result of the lack of financial and personnel resources, management’s
      ability to monitor the design and operating effectiveness
      of  internal controls is limited. Accordingly, management’s
      ability to timely detect, prevent and remediate deficiencies and potential
      fraud risks is inadequate.




Management
intends to focus its remediation efforts in the near term on developing
additional formal policies and procedures surrounding transaction processing,
period-end account analyses and providing for additional review and monitoring
procedures and periodically assess the need for additional accounting resources
as the business develops and resources permit. Management also intends to
formally evaluate and test the effectiveness of our disclosure controls and
procedures and our internal control over financial reporting on an ongoing basis
and is committed to taking further action and implementing enhancements or
improvements as resources permit. Additionally, the Company intends to appoint a
financial expert and additional independent members to the board of directors as
soon as such persons can be identified and incentivized to join the
Company.


27




Notwithstanding
the material weaknesses discussed above, our management has concluded that the
financial statements included in this Annual Report on Form 10-K fairly present
in all material respects our financial condition, results of operations and cash
flows for the periods presented in conformity with generally accepted accounting
principles.





Attestation
Report of the Independent Registered Public Accounting Firm





This
annual report does not include an attestation report of the Company's registered
public accounting firm regarding internal control over financial reporting.
Management's report was not subject to attestation by the Company's registered
public accounting firm pursuant to temporary rules of the Securities and
Exchange Commission that permit the Company to provide only management's report
in this annual report.





Other
than as described above, there were no changes in internal controls over
financial reporting that have materially affected, or are reasonably likely to
materially affect, our internal control over financial reporting.




Item
9B.    Other Information





None.





PART
III





Item
10.    Directors, Executive Officers and Corporate
Governance





The
names, ages and offices held of all of the Company’s directors and executive
officers are set forth in the table below:





Name
                        
                        Age
                        
                        Position
                        
                        Year
                          AppointedMike
      Zoi
                        
                        43
                        
                        CEO,
      Director
                        
                        2007Curtis
      Wolfe
                        
                        46
                        
                        Secretary,
      Director
                        
                        2007Stuart
      Murdoch
                        
                        43
                        
                        Director
                        
                        2008Jonathan
      New
                        
                        50
                        
                        Chief
      Financial Officer
                        
                        2008




Each of
our directors will hold office until our next annual meeting of stockholders at
which directors are elected or until his successor is duly elected and
qualified.





Mr. Zoi
has been the CEO and a Director of the Company since 2007. Mr. Zoi has also been
a director and president of Ener1 Group since 2001, a privately held investment
firm he co-founded in 2001. Mr. Zoi indirectly holds a minority interest in
Ener1 Group. Ener1 Group owns approximately 52% of Ener1, Inc., a public company
engaged primarily in the business of designing, developing and manufacturing
high-performance, rechargeable, lithium-ion batteries and battery systems for
energy storage. Mr. Zoi served as a Director of Ener1, Inc. (NASDAQ: HEV) from
February 2002 to August 2008 and a vice president from February 2007 to August
2008. Since 2007, Mr. Zoi has been the managing member of TGR Energy LLC, a
Florida investment company, which owns approximately 94% of the Company. Mr. Zoi
is responsible for strategy and directly manages all senior executives of the
Company. Mr. Zoi also directs all merger and acquisition activities of the
Company. His expertise includes strategic development, branding, corporate
alliances, corporate websites and investor relations. Earlier in his career, Mr.
Zoi worked in various capacities relating to international finance and business
development.


28


Mr. Wolfe
has been a director of TOT Energy, Inc. since 2004 except for the period
beginning August 31, 2007 and ending December 18, 2007. Mr. Wolfe served as
Chief Operating Officer, Executive Vice President and General Counsel of Ener1
Group, Inc., the largest shareholder of alternative energy company Ener1, Inc.,
from 2004 to 2007.  Prior to his involvement with Ener1 Group, he was
a partner in an international law firm based in Miami where he focused on
mergers and acquisitions, start-up company financing, franchising and
intellectual property. His experience also includes equity and debt offerings
and compliance with reporting requirements for publicly traded companies. Since
2007, Mr. Wolfe has been the president of a private business consulting company,
Lobos Advisors, assisting start-up businesses in defining their business
objectives, strategic goals, and expanding business
opportunities.  Mr. Wolfe is the founder of WCIS Media, LLC, a company
that launched www.whocanisue.com, an online legal portal where he served as an
executive officer from 2007 until 2009.  Mr. Wolfe continues to serve
as a director of WCIS Media. Mr. Wolfe served 11 years in the United States Air
Force from 1981 to 1992. Mr. Wolfe has a BIS in English, Mathematics and Latin
American Studies from Weber State University and a JD from the University of
Iowa College of Law, where he graduated with distinction. He is also a
screenwriter and author.





On February
8, 2008, the Board of Directors named Stuart Spence Murdoch to the Board of
Directors effective February 15, 2008. Mr. Murdoch is a British citizen and
resident who is presently a Partner and CEO of Ceema Capital LLP,
a London-based FSA regulated Investment Advisory Firm. Prior
to his involvement with Ceema Capital LLP, Mr. Murdoch was director of
local market foreign exchange and interest rate trading at ABM Amro from 2004 to
2007. Prior to his employment with ABM Amro, Mr. Murdoch worked for AIG
International (UK) Limited as director of foreign exchange and forward contracts
for emerging market currencies from 2002 to 2003. Prior thereto, Mr. Murdoch
held various senior investment management and financial analyst positions
at Bank of America International (London), Goldman Sachs,
Barclays Capital and Chase Manhattan Bank. Mr. Murdoch is a graduate
of Exeter University in England.





On March
10, 2008, Jonathan New joined TOT Energy as Chief Financial
Officer.  Mr. New served as Chief Operating Officer of Ener1, Inc.
from 2001 to 2003. From 2004 to 2006, Mr New owned and operated Wholesale Salon
Furniture Corp.com.  The Florida company imported and distributed
salon equipment.  The business was sold in
2006.  Thereafter, until joining the Company, Mr. New provided counsel
to public companies on a variety of corporate accounting, reporting and audit
related issues. Prior to joining Ener1 in 2001, Mr. New held controller and
chief financial officer positions with companies including Haagen-Dazs, RAI
Credit Corporation and Prudential of Florida. Mr. New obtained his BS in
Accounting from Florida State University and began his career with Accenture. He
is a member of the Florida Institute of Certified Public Accountants and the
American Institute of Certified Public Accountants.





Board
composition





Effective
February 2008, our board of directors consisted of three members. The number of
directors may change from time to time, as determined by resolution adopted by a
majority of the board of directors. Our by-laws require a minimum of one
director and allow a maximum of nine directors.





Currently,
there is no one serving on the board who is a “financial expert” or
“independent” under the Commission’s standards (Rule 10A-3 of the Exchange Act)
as the Company’s limited financial resources are not adequate to attract and
retain qualified candidates.





Committees
of the board of directors





In
December 2004, our board of directors established a Nominating and Compensation
Committee and an Audit Committee.  Currently, there are no members of
these committees, which did not meet during fiscal 2010.





Audit
Committee





Our audit
committee’s main function is to oversee our accounting and financial reporting
processes, internal systems of control, independent auditor relationships and
the audits of our financial statements. This committee’s responsibilities
include:




·
            Selecting and hiring our
      independent auditors.


·
            Evaluating the qualifications,
      independence and performance of our independent
      auditors.


·
            Approving the audit and non-audit
      services to be performed by our independent
    auditors.


·
            Reviewing the design,
      implementation, adequacy and effectiveness of our internal controls and
      our critical accounting
policies.


·
            Overseeing and monitoring the
      integrity of our financial statements and our compliance with legal and
      regulatory requirements as they relate to financial statements or
      accounting matters.




29




·
            Reviewing with management and our
      auditors any earnings announcements and other public announcements
      regarding our results of
operations.


·
              Preparing the audit committee
      report we are required to include in filings with the
      Commission.





Currently,
the entire board of directors is serving as the audit committee.





Section
16(a) Beneficial Ownership Reporting Compliance





Section
16(a) of the Securities Exchange Act of 1934, as amended, requires our
directors, executive officers and holders of more than 10% of our outstanding
common stock to file with the Securities and Exchange Commission reports
regarding their ownership and changes in ownership of the common stock. Based
solely upon a review of copies of forms furnished to our Company, the following
officers and directors and holders of more than 10% of our common stock did not
timely filed the statement of changes in beneficial ownership on Form 4 or the
statement of beneficial ownership on Form 3 pursuant to Section 16(a) during
fiscal 2010 as follows:





NONE.




Code
of Ethics





We have a
Code of Ethics that applies to our officers and directors. The code provides
written standards that are reasonably designed to deter wrongdoing and promote:
(1) honest and ethical conduct, including the ethical handling of actual or
apparent conflicts of interests between personal and professional relationships;
(2) full, fair, accurate, timely and understandable disclosure in reports and
documents that we file with or submit to the SEC or in other public
communications we make; (3) compliance with applicable laws, rules and
regulations; (4) prompt reporting of internal violations of the code; and (5)
accountability for the adherence to the code. Our Code of Ethics can be found on
our Company website at  http://totenergy.com/company.php?n=codeofethics
..  We will provide a copy of our Code of Ethics to any person without
charge, upon written request to the Company.





Item
11. Executive Compensation





The
following table sets forth all compensation awarded, earned or paid by us for
services rendered in all capacities to us for fiscal 2010 to our Chief Executive
Officer and President and our other executive officers who earn more than
$100,000 annually in salary and bonus. We refer to these individuals as the
“named executive officers.”





Summary
Compensation Table




Name and Principal Position
                                      
                                      Year
                                      
                                      Salary ($)
                                      
                                      
                                      Bonus ($)
                                      
                                      
                                      Stock Awards
                                        ($)
                                      
                                      
                                      Option
                                        Awards ($)
                                      
                                      
                                      All Other
                                        Compen-
                                        sation ($)
                                      
                                      
                                      Total ($)Mike
      Zoi,
                                      
                                      2010
                                      
                                      $
                                      -
                                      
                                      
                                      $
                                      -
                                      
                                      
                                      $
                                      -
                                      
                                      
                                      $
                                      -
                                      
                                      
                                      $
                                      -
                                      
                                      
                                      $
                                      -Chief
      Executive Officer
                                      
                                      2009
                                      
                                      $
                                      59,391
                                      
                                      
                                      $
                                      -
                                      
                                      
                                      $
                                      -
                                      
                                      
                                      $
                                      -
                                      
                                      
                                      $
                                      -
                                      
                                      
                                      $
                                      59,391Jonathan
      New,
                                      
                                      2010
                                      
                                      $
                                      91,000
                                      
                                      
                                      $
                                      19,500
                                      
                                      
                                      $
                                      $60,000
                                      
                                      
                                      $
                                      -
                                      
                                      
                                      $
                                      -
                                      
                                      
                                      $
                                      170,500Chief Financial
      Officer
                                      
                                      2009
                                      
                                      $
                                      140,000
                                      
                                      
                                      $
                                      20,426
                                      
                                      
                                      $
                                      -
                                      
                                      
                                      $
                                      21,296
                                      
                                      
                                      $
                                      -
                                      
                                      
                                      $
                                      181,722Curtis Wolfe, Executive
      Vice President,
                                      
                                      2010
                                      
                                      $
                                      -
                                      
                                      
                                      $
                                      -
                                      
                                      
                                      $
                                      -
                                      
                                      
                                      $
                                      -
                                      
                                      
                                      $
                                      2,500
                                      
                                      
                                      $
                                      2,500General
      Counsel (Resigned 09/30/08)
                                      
                                      2009
                                      
                                      $
                                      -
                                      
                                      
                                      $
                                      -
                                      
                                      
                                      $
                                      -
                                      
                                      
                                      $
                                      10,000
                                      
                                      
                                      $
                                      60,500
                                      
                                      
                                      $
                                      70,500


30




Mike Zoi
became Chief Executive Officer on December 17, 2008 effective with his purchase
of member interests in Splinex, LLC.  For fiscal 2010 and 2009, Mr.
Zoi was entitled to receive a salary of $350,000, the majority of which has been
deferred at Mr. Zoi’s election. Mr. Zoi’s salary deferral is payable on demand
and does not accrue interest.





Jonathan
New joined us on March 10, 2008.  Up until May 15, 2009, Mr. New’s
base salary was $140,000 with a $30,000 bonus payable quarterly for meeting
agreed upon objectives.  On May 15, 2009, Mr. New’s base salary was reduced
from $140,000 to 91,000 and his bonus was reduced from $30,000 to $19,500
annually. To partially offset the reduction in salary, the Company provided Mr.
New with 25,000 shares of fully vested common stock in lieu of his March 31,
2009 cash bonus and 200,000 shares of common stock which vest monthly from April
1, 2009 to September 30, 2009.  Additionally, Mr. New was granted 250,000
shares of fully vested common stock at March 31, 2010.  A compensation
charge of $60,000 was recorded during fiscal 2010 for the 475,000 shares granted
during the fiscal year reflecting the then current market value per share on the
first trading day after the dates of grant as detailed below:





Date
                
                Number of
                  Shares
                
                
                Compensation
                  Expense
                
                
                Market Value
                  Per Share06/03/09
                
                
                25,000
                
                
                $
                2,500
                
                
                $
                0.1009/30/09
                
                
                200,000
                
                
                $
                20,000
                
                
                $
                0.1003/31/10
                
                
                250,000
                
                
                $
                37,500
                
                
                $
                0.15





Mr.
New also participates in the Company’s equity incentive compensation
plan.





Curtis
Wolfe serves as Secretary and a Director of the Company.  Mr.
Wolfe served as Executive Vice President and General Counsel of the
Company from December 17, 2007 to September 30, 2008. For fiscal 2009, Mr.
Wolfe received an aggregate of $60,500 for legal services provided to the
Company and this amount was expensed to legal fees in the combined statement of
operations. For fiscal 2010, Mr. Wolfe received $2,500 for legal services
provided to the Company and this amount was expensed to legal fees in the
consolidated statement of operations.  Mr. Wolfe also participates in
the Company’s equity incentive compensation plan.





OUTSTANDING
EQUITY AWARDS AT FISCAL YEAR-END 2010




Name
                                
                                Number of
                                  Securities
                                  Underlying
                                  Unexercised
                                  Options (#)
                                  Exercisable
                                
                                
                                Number of
                                  Securities
                                  Underlying
                                  Unexercised
                                  Options (#)
                                  Unexercisable
                                
                                
                                Equity Incentive
                                  Plan Awards:
                                  Number of
                                  Securities
                                  Underlying
                                  Unexercised
                                  Unearned
                                  Options (#)
                                
                                
                                Option
                                  Exercise
                                  Price ($)
                                
                                Option Expiration
                                  DateStuart
      Murdoch
                                
                                
                                100,000
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                $
                                0.25
                                
                                February
      7, 2013Curtis
      Wolfe
                                
                                
                                100,000
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                $
                                0.25
                                
                                July
      8, 2015Jonathan
      New
                                
                                
                                550,926
                                
                                
                                
                                449,074
                                
                                
                                
                                449,074
                                
                                
                                $
                                0.25
                                
                                July
      8, 2015




On August
13, 2008, the Board of Directors approved (i) the issuance of fully vested
options to purchase 100,000 shares of common stock to Curtis Wolfe for his
services as a board member and (ii) the issuance of options to purchase
1,000,000 shares of common stock to Jonathan New for his services as Chief
Financial Officer. Mr. New’s stock options will vest ratably over three years.
Both sets of options will have a term of 7 years from date of grant and a strike
price of $0.25 per share.




2010
DIRECTOR COMPENSATION




No
compensation was granted to board members during fiscal 2010.




Employment
Agreements




None. 
See Executive Compensation above.


31




Item
12. Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters.





The table
below contains information as of March 31, 2010 about stockholders whom we
believe are the beneficial owners of more than five percent (5%) of our
outstanding common stock, as well as information regarding stock ownership by
our directors and our Chief Executive Officer, our named executive officers, and
our directors and named executive officers as a group. Except as described
below, we know of no person that beneficially owns more than 5% of our
outstanding common stock. As of March 31, 2010 there were 320,778,512 shares of
common stock outstanding.  We believe, based on information supplied by the
following persons that, except as noted, the persons named in this table have
sole voting and investment power with respect to all shares of common stock
which they beneficially own. The amount and percentage of common stock
beneficially owned are reported on the basis of regulations of the SEC governing
the determination of beneficial ownership of securities. Under the rules of the
SEC, a person is deemed to be a “beneficial owner” of a security if that person
has or shares “voting power,” which includes the power to vote or to direct the
voting of such security, or “investment power,” which includes the power to
dispose of or to direct the disposition of such security. A person is also
deemed to be a beneficial owner of any securities of which that person has a
right to acquire beneficial ownership within 60 days. The address of each
person or entity named in the following table is c/o TOT Energy, Inc., 12100 NE
16th  Avenue,
Suite 210, North Miami, FL  33161.





Name and Address of Beneficial Owner
                      
                      Amount and
                        Nature of
                        Beneficial
                        owner
                        (number of
                        common
                        shares)
                      
                      
                      Percent of
                        ClassMike
      Zoi (1)
                      
                      
                      349,637,278
                      
                      
                      
                      94.2
                      %Stuart
      Murdoch (2)
                      
                      
                      100,000
                      
                      
                      
                      *Curtis
      Wolfe (3)
                      
                      
                      100,000
                      
                      
                      
                      *Jonathan
      New (4)
                      
                      
                      775,926
                      
                      
                      
                      *Directors
      and named executive officers as a group
                      
                      
                      350,613,204
                      
                      
                      
                      94.5
                      %





* Less
than one percent (1%)




(1)
            Includes 300,175,599 shares of
      common stock and warrants to purchase 49,455,925 shares of common stock
      that are held by TGR over which Mr. Zoi has dispositive and voting
      power


(2)
            Reflects shares underlying the
      grant of stock options expiring on February 5, 2013 and a strike price of
      $0.25 per share.


(3)
            Reflects shares underlying the
      grant of stock options expiring on August 12, 2013 and a strike price of
      $0.25 per share.


(4)
            Reflects shares underlying stock
      options that are currently exercisable.  Stock options to purchase
      1,000,000 shares of common stock were granted on August 13, 2008 and vest
      ratably over 36 months from the date of grant.  These options expire
      on August 13, 2013 and have a strike price of $0.25.  Also
      includes restricted stock grants totaling 475,000 shares made during
      fiscal 2010.




Equity Compensation Plan InformationNumber of
                        securities to be
                        issued upon
                        exercise of
                        outstanding
                        options, warrants
                        and rights
                      
                      
                      Weighted-
                        aver age exercise
                        price of
                        outstanding
                        options, warrants
                        and rights
                      
                      
                      Number of
                        securities
                        remaining available
                        for future issuance
                        under equity
                        compensation
                        plans (excluding
                        securities reflected
                        in column (a))Plan category
                      
                      (a)
                      
                      
                      (b)
                      
                      
                      (c)Equity
      compensation plans approved by security holders
                      
                      
                      1,200,000
                      
                      
                      $
                      0.25
                      
                      
                      
                      3,975,000




32




Item
13. Certain Relationships and Related Transactions, and Director
Independence





Certain
Relationships and Related Transactions





On
December 17, 2007, (1) certain holders, who had received shares in the Company
as distributions from Splinex LLC, transferred their ownership of 35,162,334
shares of common stock of the Company to Splinex LLC for nominal consideration,
and (2) Bzinfin, S.A., a British Virgin Islands limited corporation that is
indirectly owned by an affiliate of Ener1 Group, Inc., a Florida company of
which Mike Zoi is a shareholder and director and which is the majority
shareholder of Ener1, Inc., and Ener1 Group assigned debt obligations of the
Company to Splinex LLC in the amount of $2,805,207 and $845,864, respectively.
Under a Purchase Agreement dated December 17, 2007, TGR Capital, LLC (which
changed its name to Enerfund, LLC in September 2008), a Florida limited
liability company (“Enerfund”), which is wholly-owned by Mike Zoi, acquired all
of the membership interests in Splinex LLC, thereby giving Enerfund control of
Splinex LLC.





Under an
Exchange Agreement dated December 18, 2007, the Company agreed to issue
113,500,000 newly issued shares of the Company to Splinex LLC of which 8,500,000
shares were issued to Bzinfin and 2,125,000 were issued to a former affiliate of
Splinex, LLC. Splinex LLC owned 98,157,334 shares of the Company as of December
17, 2007 and an aggregate of 201,032,334 shares after the completion of the
Exchange Agreement on December 18, 2007. The Company had 100,757,769 shares
outstanding at December 17, 2007 and 214,257,769 shares outstanding after the
completion of the Exchange Agreement. In June 2008, Splinex, LLC changed its
name to TGR Energy, LLC (“TGR”).





On August
7, 2008, the Company and TGR, which held 94% of the Company’s outstanding common
stock, entered into the Subscription Agreement described above pursuant to which
TGR has agreed to provide funding of up to $2,000,000 (the “Investment Amount”)
in exchange for up to 100,000,000 shares of the Company’s common stock and
warrants to purchase up to 50,000,000 shares of the Company’s common stock at an
exercise price of $0.05 per share. Pursuant to the Subscription Agreement, TGR
will fund the Investment Amount as required in the Company’s operational budget.
TGR’s obligation to fund the Investment Amount will be reduced by any future
third party funding or investments in the Company on terms no less favorable
than those contained in the Subscription Agreement. On January 12, 2010, TGR
agreed to increase the Investment Amount from $2,000,000 to $4,000,000 in
exchange for up to an additional 100,000,000 shares of the Company’s common
stock and warrants to purchase up to 50,000,000 shares of the Company’s common
stock at an exercise price of $0.05 per share for a period of five years from
date of issuance.





For the
fiscal year ended March 31, 2009, TGR was issued an aggregate of 82,725,335
shares of common stock of the Company and fully vested warrants to purchase
41,362,168 shares of common stock of the Company at an exercise price of $0.05
per share pursuant to the terms of the Subscription Agreement.  These
issuances were in exchange for financings under the Subscription Agreement in
the aggregate amount of $1,654,507 of which $1,017,097 was cash and $637,410
related to refinancing of previously outstanding notes payable to a related
party.  A compensation charge of $8,827,218 was recorded for the fiscal
year ended March 31, 2009. This amount is calculated as the difference between
the market price of our common stock at the end of each quarter in which shares
were issued and the subscription price of the common shares ($0.02) multiplied
by the number of shares issued, plus the Black-Scholes valuation of the warrants
issued as calculated at the end of each quarter.




33




For the
fiscal year ended March 31, 2010, TGR was issued an aggregate of 16,186,515
shares of common stock of the Company and fully vested warrants to purchase
8,093,757 shares of common stock of the Company at an exercise price of $0.05
per share pursuant to the terms of the Subscription Agreement.  These
issuances were in exchange for financings under the Subscription Agreement in
the aggregate amount of $323,730.  A compensation charge of $4,717,677 was
recorded for the fiscal year ended March 31, 2009. This amount is calculated as
the difference between the market price of our common stock at the end of each
quarter in which shares were issued and the subscription price of the common
shares ($0.02) multiplied by the number of shares issued, plus the Black-Scholes
valuation of the warrants issued as calculated at the end of each
quarter.





Director
Independence





Currently,
there is no one serving on the board or any committee thereof who is a
“financial expert” or “independent” under the Commission’s standards (Rule 10A-3
of the Exchange Act) as the Company’s limited financial resources are not
adequate to attract and retain qualified candidates. For more information
regarding the Board and committees thereof, see “Item 10. Directors, Executive
Officers and Corporate Governance” of this Report.




Board
meetings and committees; annual meeting attendance





During
fiscal 2010, the board held seven meetings by telephonic conference or unanimous
written consent in lieu of a meeting. During fiscal 2010, Stuart Murdoch
attended less then 75% of the telephonic board
meetings.





The
Company does not have a formal policy regarding attendance by directors at
annual meetings of security holders. However, if any board members do attend the
annual meeting of security holders, their expenses will be
reimbursed.





Shareholder
communications





The
Company does not have a formal process for shareholders to send communications
directly to the board, which given the Company’s financial situation and limited
resources, the board deems appropriate at this time.





Item
14.  Principal Accounting Fees and Services





Audit
Fees.    The aggregate fees, including expenses, billed by our current
principal accountants in connection with the audit of our annual financial
statements and review of regulatory filings including the financial statements
included in our Annual and Quarterly Reports on Forms 10-K and 10-Q during
fiscal 2010 and fiscal 2009 were $51,500 and $113,063,
respectively.





Audit
Related Fees.  The aggregate fees, including expenses, billed by our
current principal accountants for services reasonably related to the performance
of the audit or review of financial statements not reported under “Audit Fees”
above for the years ended March 31, 2010 and fiscal 2009 were $13,750 and
$0.





Tax
Fees.  The aggregate fees, including expenses, billed by our former and
current principal accountants for services rendered for tax compliance, tax
advice, and tax planning during the fiscal years ended March 31, 2010 and fiscal
2009 were $0.





All Other
Fees.  The aggregate fees, including expenses, billed for all other
services rendered to us by our current principal accountants during the fiscal
years ended March 31, 2010 and 2009 were $0.





Audit
Committee Pre-Approval Policy





Our Audit
Committee’s responsibilities (which in our case is the full Board of Directors)
include selecting and hiring our independent auditors and approving the audit
and non-audit services to be performed by our independent auditors. The Audit
Committee’s policy is that all audit and non-audit services provided by our
independent auditor shall be approved before the independent auditor is engaged
for the particular services. These services may include audit services and
permissible audit-related services, tax services and other services. The Audit
Committee may in the future establish pre-approval procedures pursuant to which
our independent auditor may provide certain audit and non-audit services to us
without first obtaining the Audit Committee's approval. All fees paid to the
independent auditors in fiscal 2010 and 2009 were pre-approved by the Audit
Committee   (which in our case is the full Board of Directors), and
therefore no services were approved after the services were rendered
..




34




PART
IV





Item
15. Exhibits, Financial Statement Schedules





Exhibit
                Number
              
              Description2.1
              
              Agreement
      and Plan of Merger among Ener1 Acquisition Corp., Registrant and Ener1,
      Inc., dated as of June 9, 2004, incorporated herein by reference to
      Exhibit 2.1 to Splinex’s Registration Statement on Form S-1 filed with the
      Commission on June 24, 2004 (Registration No.
  333-116817)2.2
              
              First
      Amendment to Agreement and Plan of Merger among Ener1 Acquisition Corp.,
      Registrant and Ener1, Inc., dated as of October 13, 2004,
      incorporated herein by reference to Exhibit 2.2 to Amendment No, 1 to
      Splinex’s Registration Statement on Form S-1 filed with the Commission on
      October 15, 2004 (Registration No. 333-116817)2.3
              
              Second
      Amendment to Agreement and Plan of Merger among Ener1 Acquisition Corp.,
      Splinex and Ener1, Inc., dated as of December 23, 2004, incorporated
      herein by reference to Exhibit 2.3 to Amendment No. 3 to Splinex’s
      Registration Statement on Form S-1 filed with the Commission on December
      27, 2004 (Registration No. 333-116817)3.1
              
              Certificate
      of Incorporation of Splinex, incorporated herein by reference to Exhibit
      3.1 to Splinex’s Registration Statement on Form S-1 filed with the
      Commission on June 24, 2004 (Registration No.
  333-116817)3.2
              
              Certificate
      of Merger of Splinex, incorporated herein by reference to Exhibit 3.2 to
      Amendment No. 3 to Splinex’s Registration Statement on Form S-1 filed with
      the Commission on December 27, 2004 (Registration No.
      333-116817)3.3
              
              Bylaws
      of Splinex, incorporated herein by reference to Exhibit 3.3 to Splinex’s
      Registration Statement on Form S-1 filed with the Commission on June 24,
      2004 (Registration No. 333-116817)3.4
              
              Certificate
      of Amendment of Articles of Incorporation, incorporated herein by
      reference to Appendix A to Schedule 14C filed with the Commission on
      February 11, 2009.10.1
              
              Bridge
      Loan Agreement between Registrant and Ener1 Group, Inc. dated November 2,
      2004 incorporated herein by reference to Exhibit 10.13 to Amendment No. 2
      to Splinex’s Registration Statement on Form S-1 filed with the Commission
      on December 3, 2004 (Registration No. 333-116817)3.4
              
              Certificate
      of Amendment of Articles of Incorporation herin filed by reference to
      Appendix A to Schedule 14C filed with the Commission on February 11,
      2009.10.1
              
              Bridge
      Loan Agreement between Registrant and Ener1 Group, Inc. dated November 2,
      2004 incorporated herein by reference to Exhibit 10.13 to Amendment No. 2
      to Splinex’s Registration Statement on Form S-1 filed with the Commission
      on December 3, 2004 (Registration No. 333-116817)10.2
              
              Amendment
      to Bridge Loan Agreement between Registrant and Ener1 Group, Inc. dated
      November 17, 2004 incorporated herein by reference to Exhibit 10.14 to
      Amendment No. 2 to Splinex’s Registration Statement on Form S-1 filed with
      the Commission on December 3, 2004 (Registration No.
      333-116817)




35




10.3
              
              Employment
      Agreement between Christian Schormann and Splinex dated January 12, 2005,
      incorporated herein by reference to Exhibit 10.15 of the Current Report on
      Form 8-K filed with the Commission on January 25, 2005.10.4
              
              Revolving
      Debt Funding Commitment Agreement between Bzinfin, S.A. and Registrant,
      dated as of June 9, 2004, incorporated herein by reference to Exhibit
      10.1 to Splinex’s Registration Statement on Form S-1 filed with the
      Commission on June 24, 2004 (Registration No.
  333-116817)10.5
              
              2004
      Stock Option Plan of Registrant, incorporated herein by reference to
      Exhibit 10.2 to Splinex’s Registration Statement on Form S-1 filed with
      the Commission on June 24, 2004 (Registration No.
    333-116817)10.6
              
              Form of
      Stock Option Agreement of Registrant, incorporated herein by reference to
      Exhibit 10.3 to Splinex’s Registration Statement on Form S-1 filed with
      the Commission on June 24, 2004 (Registration No.
    333-116817)10.7
              
              Sublease
      Agreement between Ener1 Group, Inc. and Splinex, LLC, dated as of
      November 1, 2003, assigned to Registrant as of April 1, 2004,
      incorporated herein by reference to Exhibit 10.4 to Splinex’s Registration
      Statement on Form S-1 filed with the Commission on June 24, 2004
      (Registration No. 333-116817)10.8
              
              Contribution
      Agreement between Splinex, LLC and Registrant, dated as of April 1,
      2004, incorporated herein by reference to Exhibit 10.5 to Splinex’s
      Registration Statement on Form S-1 filed with the Commission on June 24,
      2004 (Registration No. 333-116817)10.9
              
              Assignment
      and Assumption of Employment Agreements between Splinex, LLC and
      Registrant, dated as of April 1, 2004, incorporated herein by
      reference to Exhibit 10.6 to Splinex’s Registration Statement on Form S-1
      filed with the Commission on June 24, 2004 (Registration No.
      333-116817)10.10
              
              Global
      Bill of Sale and Assignment and Assumption Agreement between Splinex, LLC
      and Registrant, dated as of April 1, 2004, incorporated herein by
      reference to Exhibit 10.7 to Splinex’s Registration Statement on Form S-1
      filed with the Commission on June 24, 2004 (Registration No.
      333-116817)10.11
              
              Employment
      letter between Gerard Herlihy and Registrant, dated May 20, 2004,
      incorporated herein by reference to Exhibit 10.8 to Splinex’s Registration
      Statement on Form S-1 filed with the Commission on June 24, 2004
      (Registration No. 333-116817)10.12
              
              Consulting
      Agreement between Dr. Peter Novak and Registrant, dated
      January 1, 2004, incorporated herein by reference to Exhibit 10.9 to
      Splinex’s Registration Statement on Form S-1 filed with the Commission on
      June 24, 2004 (Registration No. 333-116817)10.13
              
              Form
      of Employee Innovations and Proprietary Rights Assignment Agreement,
      incorporated herein by reference to Exhibit 10.10 to Splinex’s
      Registration Statement on Form S-1 filed with the Commission on June 24,
      2004 (Registration No. 333-116817)10.14
              
              Form
      of Indemnification Agreement, incorporated herein by reference to Exhibit
      10.11 to Amendment No. 3 to Splinex’s Registration Statement on Form S-1
      filed with the Commission on December 27, 2004 (Registration No.
      333-116817)10.15
              
              Employment
      Agreement between Michael Stojda and Registrant, dated September 1,
      2004, incorporated herein by reference to Exhibit 10.12 to Amendment No. 1
      to Splinex’s Registration Statement on Form S-1 filed with the Commission
      on October 15, 2004 (Registration No.
  333-116817)




36




10.16
              
              Reseller
      Agreement between Waterloo Maple Inc. and TOT Energy, Inc. dated May 27,
      2005., incorporated herein by reference to Exhibit 10.1 to Splinex’s
      Current Report on Form 8-K, filed with the Commission on June 3,
      200510.17
              
              Severance
      Agreement dated November 21, 2005 by and between Splinex and Michael
      Stojda, incorporated by reference to Exhibit 10.1 to Splinex’s Current
      Report on Form 8-K, filed with the Commission on November 21,
      200510.18
              
              Termination
      Agreement dated October 17, 2005 by and between Splinex and Christian
      Schormann, incorporated by reference to Exhibit 10.2 to Splinex’s Current
      Report on Form 8-K, filed with the Commission on November 21,
      200510.19
              
              First
      Amendment to Splinex Technology, Inc. 2004 Stock Option Plan, incorporated
      by reference to Exhibit 10.19 to the Annual Report on Form 10-K for the
      year ended March 31, 2009, filed with the Commission on June 30,
      200910.20
              
              Joint
      Venture Agreement dated July 16, 2008 by and between the Company and
      Evgeni Bogarad, incorporated by reference to Exhibit 10.1 to the Current
      Report on Form 8-K, filed with the Commission on July 23,
    200810.21
              
              Notarial
      Deed dated July 17, 2008 by and between the Company and Korlea Invest
      Holding AG, incorporated by reference to Exhibit 10.20 to the Quarterly
      Report on Form 10-Q, filed with the Commission on November 18,
      200810.22
              
              Subscription
      Agreement dated August 7, 2008 by and between the Company and TGR Energy,
      LLC, incorporated by reference to Exhibit 10.20 to the Quarterly Report on
      Form 10-Q, filed with the Commission on November 18,
  200810.23
              
              Amendment
      to the Subscription Agreement between TGR Energy, LLC and TOT Energy, Inc.
      dated January 12, 2010, incorporated by reference to Exhibit 10.20 to the
      Quarterly Report on Form 10-Q filed with the Commission on February 16,
      201010.24
              
              Assignment
      between TGR Energy, LLC and TOT Energy, Inc. dated January 12, 2010,
      incorporated by reference to Exhibit 10.21 to the Quarterly Report on Form
      10-Q filed with the Commission on February 16, 201010.25*
              
              Joint
      Venture Dissolution Agreement dated March 31, 2010 between TOT Energy, Inc
      and Sibburnefteservis, LTD., TOT-SIBBNS, LTD and Evgeni
      Bogorad.10.26*
              
              Stock
      Repurchase Agreement dated April 28, 2010 between TOT Energy, Inc., TGR
      Energy, LLC and Dune Capital Group LLC.14
              
              Code
      of Ethics, incorporated by reference to Exhibit 10.2 to Splinex’s Annual
      Report on Form 10-K for the year ended March 31, 2005, filed with the
      Commission on June 30, 200531.1*
              
              Certification
      of Principal Executive Officer pursuant to Section 302 of the
      Sarbanes-Oxley Act of 200231.2*
              
              Certification
      of Principal Financial Officer pursuant to Section 302 of the
      Sarbanes-Oxley Act of 200232.1*
              
              Certification
      of Principal Executive Officer and Principal Financial Officer pursuant to
      Section 906 of the Sarbanes-Oxley Act of
  2002




37


* Filed
herewith.





SIGNATURES





Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.





TOT
      Energy, Inc.July
      13, 2010
                      by:
      /S/ Mike ZoiMike
      ZoiPresident
      and Chief Executive OfficerPursuant
      to the requirements of the Securities Exchange Act of 1934, this report
      has been signed below by the following persons on behalf of the registrant
      and in the capacities and on the dates indicatedJuly
      13, 2010
                      /S/
      Mike ZoiMike
      ZoiPresident,
      Chief Executive Officer and Director(Principal
      Executive Officer)July
      13, 2010
                      /S/
      Jonathan NewJonathan
      NewChief
      Financial Officer(Principal
      Financial Officer and Principal Accounting Officer)July
      13, 2010Stuart
      MurdochDirectorJuly
      13, 2010
                      /S/
      Curtis WolfeCurtis
      WolfeDirector


38