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 APRIL 30, 2009





OR





 ̈
            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 333-152608









Management
Energy, Inc.


(Exact
name of registrant as specified in its charter)




NEVADA
              
              26-1749145(State
      or other jurisdiction of
                incorporation
      or organization)
              
              (I.R.S.
      Employer
                Identification
      No.)30950
      Rancho Viejo Road, Suite 120San
      Juan Capistrano, California
              
              92675(Address
      of principal executive offices)
              
              (Zip
      Code)




Registrant’s
telephone number, including area code: (949) 373-7286




Securities
registered pursuant to Section 12(b) of the Act:


None




Securities
registered pursuant to Section 12(g) of the Act:




None









Indicate by check mark whether the
registrant is a well-known seasoned issuer, as define in Rule 405 of the
Securities Act).  Yes ̈Nox





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




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




Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the
best of the 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.    ̈




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





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





State
the aggregate market value of the voting and non-voting equity held by
non-affiliates of the Registrant 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 August 12, 2009:  $19,503,438





Indicate
by check mark whether the issuer filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution
of securities under a plan confirmed by a court.  Yes  x   No   ̈





As of August 12, 2009, 72,325,000
shares of the Registrant’s Common Stock were outstanding.





Management
Energy, Inc.





FORM
10-K


For
the Fiscal Year Ended April 30, 2009





INDEX




PART
      IItem
      1.
                
                Description
      of Business
                1Item
      1A.
                
                Risk
      Factors
                7Item
      2.
                
                Description
      of Properties
                15Item
      3.
                
                Legal
      Proceedings
                15Item
      4.
                
                Submission
      of Matters to a Vote of Security Holders
                16PART
      IIItem
      5.
                
                Market
      for Common Equity, Related Stockholder Matters and Issuer Purchases of
      Equity Securities
                16Item
      6.
                
                Selected
      Financial Information
                17Item
      7.
                
                Management’s
      Discussion and Analysis or Plan of Operations
                17Item
      8.
                
                Financial
      Statements
                21Item
      9.
                
                Changes
      In and Disagreements with Accountants on Accounting and Financial
      Disclosure
                21Item
      9A.
                
                Controls
      and Procedures
                21Item
      9B.
                
                Other
      Information
                22PART
      IIIItem
      10.
                
                Directors,
      Executive Officers and Corporate Governance
                23Item
      11.
                
                Executive
      Compensation
                25Item
      12.
                
                Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters
                26Item
      13.
                
                Certain
      Relationships and Related Transactions, and Director
      Independence
                28Item
      14.
                
                Principal
      Accountant Fees and Services
                29Item
      15.
                
                Exhibits,
      Financial Statement Schedules
                31Signatures
                
                
                32


i


PART
I




Item
1.Description of Business.




In
addition to the historical information contained herein, the discussion in this
Form 10-K contains certain forward-looking statements, within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934, that involve risks and uncertainties, such as
statements concerning: growth and anticipated operating results; developments in
our markets and strategic focus; new development project;  estimated
recoverable reserves; strategic relationships and future economic and business
conditions. The cautionary statements made in this Form 10-K should be read
as being applicable to all related forward-looking statements whenever they
appear in this Form 10-K. Our actual results could differ materially from
the results discussed in the forward-looking statements. Factors that could
cause or contribute to such differences include, but are not limited to, those
discussed under the section captioned “Risk Factors” in Item 1.A. of this
Form 10-K as well as those cautionary statements and other factors set
forth elsewhere herein.





Information
regarding market and industry statistics contained in this Form 10-K is included
based on information available to us that we believe is accurate.  It
is generally based on industry and other publications that are not produced for
purposes of securities offerings or economic analysis.  We have not
reviewed or included data from all sources, and cannot assure investors of the
accuracy or completeness of the data included in this Form 10-K.  We
do not assume any obligation to update any forward-looking
statement.  As a result, investors should not place undue reliance on
these forward-looking statements.





General





Our
business plan is to engage in the exploration, extraction and distribution of
coal.  We are currently considered to be an exploration stage
corporation because we are engaged in the search for coal deposits and are not
engaged in the exploitation of a coal deposit.  We have not engaged in
the preparation of an established commercially mineable coal deposit for
extraction or in the exploitation of a coal deposit. We will be in the
exploration stage until we discover commercially viable coal deposits on the
Property or any other property that we acquire, if ever. In an exploration stage
company, management devotes most of its activities to acquiring and exploring
mineral properties.





We
currently lease approximately 6,254 acres located in the vicinity of Bridger in
Carbon County, Montana (the “Bridger Property”), for the purpose of mining,
removing, marketing and selling coal.  Further exploration will be
required before a final evaluation as to the economic feasibility of coal
extraction on the Bridger Property can be determined.  We have done
preliminary estimates of the surface seams on the Bridger Property, and intend
to perform phase 1 drilling commencing in the fourth quarter of calendar year
2009 in order to determine whether it contains a commercially viable coal
deposit.





There is no assurance that a
commercially viable coal deposit exists on the Bridger
Property.  Furthermore, there is no assurance that we will be able to
successfully develop the Bridger Property or identify, acquire or develop other
coal properties that would allow us to profitably extract and distribute coal
and to emerge from the exploration stage.





Company
History





We were
initially incorporated in the State of Nevada on May 19, 2005, as Inkie
Entertainment Group, Inc., for the purpose of engaging in the production,
distribution and marketing of filmed entertainment products.  On
January 15, 2008, we changed our name to Quantum Information, Inc. In January
2009, we announced that we would transition out of the filmed entertainment
products business and into the coal business.





As part
of that transition, on January 14, 2009, we sold all of our assets to Joel
Klandrud, our former officer and director, in exchange for the surrender to us
by Mr. Klandrud of 4,000,000 shares of the our common stock, and the assumption
by Mr. Klandrud all of the our liabilities.  We also changed our name
to MGMT Energy, Inc. on February 5, 2009 and to Management Energy, Inc. on May
28, 2009 to better reflect our business focus.


1





On April
13, 2009, we entered into a Contribution and Assignment Agreement (the
“Contribution Agreement”) with Carbon County Holdings, LLC, a Delaware limited
liability company (“CCH”), John P. Baugues, Jr., our former Chief Executive
Officer and director, The John Paul Baugues, Sr. Family Trust, the beneficiaries
of which are John P. Baugues, Jr. and his children  (the “Baugues
Trust”), and Tydus Richards, the former Chairman of our board of
directors.  Pursuant to the Contribution Agreement, CCH agreed to
contribute and assign to us all of CCH’s rights and obligations under that
certain Mining Lease, dated on or around January 16, 2009 (the “Bridger Lease”),
between CCH, on the one hand, and Edith L. Bolzer and Richard L. Bolzer, as
lessors, on the other hand, for the purpose of mining and removing coal from the
Bridger Property.  In exchange for the contribution and assignment of
the Bridger Lease, we agreed to issue to each of Mr. Baugues, the Baugues Trust,
and Mr. Richards, the sole members of CCH, the number of shares of our Common
Stock set forth opposite such member’s name below.





Name of Member
                                
                                Number of SharesJohn
      P. Baugues, Jr.
                                
                                15,925,000The
      John Paul Baugues, Sr. Family Trust
                                
                                16,575,000Tydus
      Richards
                                
                                27,500,000Total
                                
                                60,000,000





Under the
terms of the Bridger Lease, we are required to pay to the lessors (1) a minimum
annual payment in an amount equal to $62,541 in each year during the initial ten
(10) year term of the Bridger Lease, subject to increases in future years (the
“Minimum Annual Payment”) and (2) a royalty equal to 12.5% of the gross proceeds
on all coal mined from the Bridger Property (the “Royalty”).  In
addition, unless coal is mined from minerals owned by the lessors, for each ton
of coal mined from, stored on or transported across the Bridger Property, we are
required to pay a damage fee of $0.15 per ton for such coal (the “Damage
Fee”).  In the event that the Royalty and/or the Damage Fee in any
year during the term exceeds twice the Minimum Annual Payment, we are not
required to make the Minimum Annual Payment for that year.





The
Bridger Lease is effective for a 10 year term.  We have the right to
renew the Bridger Lease for two additional 10 year terms upon at least 90 days
written notice to the lessors prior to the expiration of the then-current
term.  After 3 years from the effective date, we have the right to
terminate the Bridger Lease, on any annual anniversary, upon 90 days prior
written notice to the lessors and upon payment of all damage fees, rentals and
royalties accrued through the date of termination.





The
consideration that we agreed to pay to acquire the Bridger Lease was approved by
holders of a majority of our common stock.  The closing of the
transaction under the Contribution Agreement was subject to approval of our
stockholders.  On April 11, 2009, our stockholders approved the
transaction.  On April 13, 2009, we consummated the transactions
contemplated by the Contribution Agreement, including acquisition of the Bridger
Lease.





On May 28, 2009, we completed a
five-for-one stock split of our common stock and an increase in the number of
our authorized shares of common stock to 300,000,000.  The share and
per-share information disclosed within this Form 10-K reflect the completion of
this stock split.





Coal
Characteristics




Coal is a
combustible, sedimentary, organic mineral composition, which is composed mainly
of carbon, hydrogen and oxygen. Coal goes through the process of coalification
as it matures, affecting its chemical and physical properties. There are various
grades of coal, ranging from low rank coals (lignite and sub-bituminous) to hard
coals (bituminous and anthracite). Bituminous coal is used as either thermal
coal or coking coal, depending on its properties. The properties of the coal
determine its value in the market, and include but are not limited to calorific
value, sulfur, moisture and ash content.


2





In the
event the Bridger Property is found to contain commercially viable coal
deposits, they are expected to yield high-bituminous low-sulfur coal, which is
primarily used for power generation and industrial uses.





The
Coal Industry





Generally.Global
economic growth, the primary driver of energy demand, is conservatively
forecasted to increase by an average of 3.2% per annum between 2002 and 2030,
according to the World Coal Institute (“WCI”). The world’s population is
expected to increase from its current level of 6.4 billion to 8 billion by 2030,
according to the United Nations’ 2004 world population prospects report.
International Energy Agency (“IEA”) projections indicate that if governments
continue with current energy policies, global demand for energy will increase by
almost 60% by 2030, with more than two-thirds of this increase coming from
developing countries.





Fossil
fuels will continue to dominate energy consumption – accounting for around 85%
of the increase in world primary energy demand over the next 30 years, according
to the IEA. Although nuclear energy provides a significant proportion of energy
in some economies, it can face very long permitting and construction cycles and
private financing is difficult to find. Renewable energies are growing fast, but
from a small base and, by 2030, they are still only expected to meet 14% of
total energy demand, according to the IEA.




Coal
prices in the western United States increased during 2008 according to the
Energy Information Administration (“EIA”). This price escalation is primarily
attributable to increased international demand, escalation of oil prices, and
the weakening of the United States dollar. Although it is impossible to predict
whether prices for coal will continue to escalate, as a result of the recent
drop in oil prices and the worldwide economic downturn, we believe that a large
amount of the electricity in the United States will continue to be generated by
coal.




We
believe that rapid economic expansion in developing nations, particularly China
and India, has increased global demand for coal. We expect coal exports from the
United States to increase in response to growing global coal demand,
particularly as some of the traditional coal export nations experience mine,
port, rail and labor challenges. We estimate that higher domestic demand for
coal and higher U.S. coal exports will positively influence domestic coal
demand. Additionally, we expect decreased production, particularly in the
Central Appalachian region of the United States, to adversely impact domestic
coal supply in the coming years. We anticipate continuing demand growth and
weaker coal supplies to exert upward pressure on coal pricing in the
future.




Global Coal Supply and
Demand.   Because of its availability, stability and
affordability, coal is a major contributor to the global energy supply,
providing approximately 40% of the world’s electricity, according to the WCI.
Coal is also used in producing approximately 70% of the world’s steel supply,
according to the WCI. Coal reserves can be found in 70 countries around the
world.




Coal is
traded worldwide and can be transported to demand centers by ship and by rail.
Worldwide coal production approximated 5.9 billion tons in 2006 and 5.4 billion
tons in 2005, according to the WCI. China produces more coal than any other
country in the world. Historically, Australia has been the world’s largest coal
exporter, exporting more than 200 million tons in each of the last three years,
according to the WCI. China, Indonesia and South Africa have also historically
been significant exporters in the global coal markets.  However,
growing demand in China has resulted in declining coal exports and increasing
coal imports. These trends have caused China to become a less significant
seaborne coal supply source.




U.S. Coal
Consumption.  In the United States, coal is used primarily by
power plants to generate electricity, by steel companies to produce coke for use
in blast furnaces and by a variety of industrial users to heat and power
foundries, cement plants, paper mills, chemical plants and other manufacturing
and processing facilities. Coal consumption in the United States has increased
from 505.8 million tons in 1973 to approximately 1.2 billion tons in 2007, based
on information provided by the EIA.


3


Throughout
the United States, coal has long been favored as a fuel to produce electricity
because of its cost advantage and its availability. Since 1973, the use of coal
to generate electricity in the United States has nearly tripled in response to
growing electricity demand. According to the EIA, coal accounted for
approximately 49% of U.S. electricity generation in 2007 and is projected to
account for approximately 55% in 2030.  Much of the projected growth
in U.S. coal consumption occurs after 2015, when a substantial amount of new
coal-fired generating capacity is projected to come on line.




According
to the National Mining Association (“NMA”), coal is the lowest-cost fossil fuel
used in producing electricity. We estimate that the cost of generating
electricity from coal is less than one-third of the cost of generating
electricity from other fuels. According to the EIA, the average delivered cost
of coal to electric power generators during the first ten months of 2007 was
$1.77 per million British thermal units (“BTUs”).




The EIA
projects that power plants will increase their demand for coal as demand for
electricity increases. The EIA estimates that electricity demand may increase up
to 39% by 2030, despite continuing efforts throughout the United States to
become more energy efficient. Coal consumption has generally grown at the pace
of electricity growth because coal-fueled electricity generation is used in most
cases to meet baseload requirements.




Coal is
expected to remain the fuel of choice for domestic power generation through at
least 2030, according to the EIA. Through that time, we expect new technologies
intended to lower emissions of mercury, sulfur dioxide, nitrogen oxide and
particulate matter will be introduced into the power generation industry. We
believe these technological advancements will help coal retain its role as a key
fuel for electric power generation well into the future.




The other
major market for coal is the steel industry. Coal is essential for iron and
steel production. According to the WCI, approximately 64% of all steel is
produced from iron made in blast furnaces that use coal. The steel industry uses
metallurgical coal, which is distinguishable from other types of coal because of
its high carbon content, low expansion pressure, low sulfur content and various
other chemical attributes. As such, the price offered by steel makers for
metallurgical coal is generally higher than the price offered by power plants
and industrial users for steam coal. Rapid economic expansion in China, India
and other parts of Southeast Asia has significantly increased the demand for
steel in recent years.




Over the
past year, prices for oil and natural gas in the United States have reached
record levels because of increasing demand and tensions regarding international
supply, although recently prices have dropped markedly. Historically, high oil
and gas prices and global energy security concerns have increased government and
private sector interest in converting coal into liquid fuel, a process known as
liquefaction. Liquid fuel produced from coal can be refined further to produce
transportation fuels, such as low-sulfur diesel fuel, gasoline and other oil
products, such as plastics and solvents. We expect advances in technologies
designed to convert coal into electricity through coal gasification processes
and to capture and sequester carbon dioxide emissions from electricity
generation and other sources. These technologies have garnered greater attention
in recent years due to developing concerns about the impact of carbon dioxide on
the global climate. We believe the advancement of coal-conversion and other
technologies represent a positive development for the long-term demand for
coal.  We believe that this advancement will continue despite the
recent decline in oil and natural gas prices.




U.S. Coal
Production.   The United States produces approximately
one-fifth of the world’s coal and is the second largest coal producer in the
world, exceeded only by China. Coal in the United States represents
approximately 94% of the domestic fossil energy reserves with over 250 billion
tons of recoverable coal, according to the U.S. Geological Survey. The U.S.
Department of Energy estimates that current domestic recoverable coal reserves
could supply enough electricity to satisfy domestic demand for more than 200
years.


4


Our
Site




Property Location and
Access.  We have the rights to mine the Bridger Property
situated approximately two miles west of Bridger, which is located in Carbon
County, Montana.  The Burlington Northern’s railroad line provides the
principal means of transport to bring in goods and heavy equipment and export
coal.  The road network in Carbon County is Highway
308.   Access to the areas where we intend to mine is by county
road.




Claim
Status.   We have a leasehold interest in the Bridger
Property.




History.  Historically,
the Bridger, Bearcreek and Red Lodge coal fields in Montana were mined from the
late 1880’s until the early 1950’s.  Records indicated that there were
over 700 million tons of coals in these three indicated fields.  The
major customer base for the fields at the time was the
railroads.    There were 16 different underground mines in
operations at various times during the period.   Pacific Corp
mined in this location in 1975.




Property
Condition.  The Bridger Property currently is ranch land, and
has access to power lines sufficient to provide power for our currently
forecasted needs.




Geology. The Bridger Property
is sparsely populated, with no streams and no environmental impediments to
mining.  There are three mineable coal seams in the Bridger Property
we currently hold with seam thickness ranging from three to eight
feet.  Some of the lower seams may contain metallurgical coal
characteristics.  There are approximately four to eight mineable coal
seams in the Bridger, Bearcreek and Red Lodge coal fields, taken as a whole. The
seams contain upper cretaceous mesaverde meeteetsc formations and also paleocene
fort union formations.




Distribution




The
railroad loading for the Bridger Property would be located near Bridger, Montana
on Burlington Northern’s Thermopolis / Casper railroad line. We plan to build a
rail line of approximately 5 miles to connect our mines to the Burlington
Northern railroad line.  We currently have no distribution contracts
in place.




Strategic
Positioning




Our
strategy is to identify and acquire under-valued mining rights to undeveloped
coal reserves and add significant value by applying our project development
expertise in the following areas:




·
            verification
      of reserves;




·
            acquisition
      of government permitting;




·
            development
      of a project plan;




·
            implementation
      of mining operations;




·
            development
      of distribution relationships; and




·
            development
      of customer relationships.




We
believe this strategic focus will position us to compete effectively against our
larger competitors.  Possible purchasers of our products include
larger coal producers, electric utilities and financial institutions (private
equity and hedge funds) who invest in the basic materials and/or energy sectors,
for example: National Coal Corp., AES Corp. Cline Energy, Sempra, James River
Coal Company, Sumitomo, Chinese Coal Company, DTE Energy, Arch Coal, Inc. and
Peabody Energy Corp.




We also
believe we will benefit from the following market factors and
trends:




·
            Long-Term Demand
      Growth:  Coal-based electricity generation represents
      approximately 50% of total electricity produced in the United States and
      is projected to maintain its power generation share as total electricity
      demand continues to grow through 2030 according to the
  WCI.


5





·
            Favorable Regulatory
      Environment: The current White House administration recently
      outlined a stimulus package providing tax credits and business incentives
      to produce lower cost and cleaner coal, the type of coal we believe is
      represented by our potential
reserves.





·
            Potential Industry-Wide Coal
      Supply Constraints: We believe that incremental coal supply has
      recently been constrained by the limited availability of the capital
      markets, and potential concerns over regulatory changes, such as the
      prohibition of mountaintop removal mining. These supply constraints could
      limit production of various types of coal throughout the United States,
      creating a stronger pricing environment for our
  coal.




Competition




The coal
industry is intensely competitive.  Some of the most important
competitive factors are quality (including sulfur and heat content),
transportation costs from the mine to the customer, and the reliability of
supply. Currently, some of the largest coal producers and competitors include
Alpha Natural Resources, Inc., Arch Coal, Inc., CONSOL Energy, Inc., Foundation
Coal Holdings, Inc., International Coal Group, Inc., James River Coal Company,
Massey Energy Company, Murray Energy, Inc., Patriot Coal Corporation and Peabody
Energy Corp. These coal producers are larger and have greater financial
resources and larger reserve bases than we do.  We also compete
directly with a number of smaller producers in both Montana and
Indiana.  As the price of domestic coal increases, we may also begin
to compete with companies that produce coal from one or more foreign
countries.




Additionally,
coal competes with other fuels, such as petroleum, natural gas, hydropower and
nuclear energy for steam and electrical power generation. Over time, costs and
other factors, such as safety and environmental considerations, may affect the
overall demand for coal as a fuel.




Regulations
and Laws




The coal
mining industry is subject to regulation by federal, state and local authorities
on matters such as:




·
            employee
      health and safety;




·
            mine
      permits and other licensing
requirements;




·
            air
      quality standards;




·
            water
      quality standards;




·
            storage
      of petroleum products and substances which are regarded as hazardous under
      applicable laws or which, if spilled, could reach waterways or
      wetlands;




·
            plant
      and wildlife protection;




·
            reclamation
      and restoration of mining properties after mining is
      completed;




·
            storage
      and handling of explosives;




·
            wetlands
      protection;




·
            surface
      subsidence from underground mining;




·
            reduction
      of carbon dioxide emissions; and




·
            the
      effects, if any, that mining has on groundwater quality and
      availability.




In
addition, the utility industry is subject to extensive regulation regarding the
environmental impact of its power generation activities, which could affect
demand for our coal. It is possible that new legislation or regulations may be
adopted, or that existing laws or regulations may be differently interpreted or
more stringently enforced, any of which could have a significant impact on our
mining operations or our customers’ ability to use coal.


6


We are
committed to conducting mining operations in compliance with applicable federal,
state and local laws and regulations. However, because of the extensive and
detailed nature of these regulatory requirements, compliance with all of these
regulations could be a significant expense.  Although it is not
possible to quantify the costs of compliance with applicable federal and state
laws and the associated regulations, these potential costs are expected to be
significant.  Compliance with these laws and regulations has
substantially increased the cost of coal mining for domestic coal
producers.





Employees




We have
no employees as of August 10, 2009.  We believe that our future
success will depend, in part, on our ability to attract, hire and retain
qualified personnel with knowledge of the coal industry.





Item
1A.Risk Factors.




In
addition to the other information in this Form 10-K, the following factors
should be considered in evaluating Management Energy, Inc. and our
business.





Risks
Relating to Our Company and Business




Because
of the early stage of development and the nature of our business, our securities
are considered highly speculative.




Our
securities are highly speculative because of the nature of our business and the
early stage of its development. We have largely been engaged in the business of
producing motion pictures and only recently entered the coal business.
Accordingly, we have not generated any revenues from continuing operations nor
have we realized a profit from our operations to date and there is little
likelihood that we will generate significant revenues or realize any profits in
the short term. Any profitability in the future from our business will be
dependent upon attaining adequate levels of internally generated revenues
through locating and developing recoverable reserves of coal, which itself is
subject to numerous risk factors as set forth herein. Since we have not
generated any revenues from continuing operations, we will have to raise
additional monies through either securing industry reserve based debt financing,
or the sale of our equity securities or debt, or combinations of the above in
order to continue our business operations, and there is not assurance that we
will be able to obtain such financing or that such financing will be on terms
attractive to us.





We
have never generated any revenue from continuing operations and have a history
of losses.





From
inception through to April 30, 2009, we have incurred aggregate losses of
approximately $1,452,648. Our loss from continuing operations for the fiscal
year ended April 30, 2009 was $1,369,375 and our loss from discontinued
operations for the fiscal year ended April 30, 2009 was $59,986. We have never
generated any revenues from continuing operations.  There is no
assurance that we will operate profitably or will generate positive cash flow in
the future. In addition, our operating results in the future may be subject to
significant fluctuations due to many factors not within our control, such as our
ability to acquire mining properties and leases, the demand for our production
and/or services, and the level of competition and general economic conditions.
If we cannot generate positive cash flows in the future, or raise sufficient
financing to continue our operations, then we may be forced to scale down or
even close our operations. Until such time as we generate significant revenues,
we expect an increase in development costs and operating costs. Consequently, we
expect to continue to incur operating losses and negative cash flow until we
receive significant commercial production from our properties.


7





Our
former Chief Executive Officer recently resigned and we are involved in a
dispute with him regarding the development of our existing coal project
opportunities.





Effective
July 10, 2009, John P. Baugues, Jr. resigned as our Chief Executive Officer and
a member of our Board of Directors.  As stated in his resignation
letter, Mr. Baugues’ decision to resign was based on his belief that we had
breached a number of material agreements with him, including (but not limited
to) the following: an inability to agree on a suitable employment agreement, an
agreement that he would be paid a salary, an agreement that his expenses would
be reimbursed, and an agreement that we would secure adequate funding to
complete the development of our coal mining project in Carbon County,
Montana.   We disagree with Mr. Baugues’ assertion that we have
breached any material agreement with him.





Subsequent
to his resignation, Mr. Baugues also has taken the position that certain coal
development opportunities (other than the Bridger Property) that were pursued by
us while Mr. Baugues was an officer and director are not our corporate
opportunities and that he has the right to pursue them
independently.  We intend to defend vigorously our interests in these
coal development project opportunities.  However there is no assurance
that we can prevent Mr. Baugues from pursuing the opportunities
independently.  Even if we are successful in preventing Mr. Baugues
from pursuing the opportunities, there is no assurance that we will be
successful in acquiring and developing the projects without the involvement of
Mr. Baugues.





We
will need additional capital to execute our business plan and fund operations
and may not be able to obtain such capital on acceptable terms or at
all.





Our
business strategy will require additional substantial capital investment in
future periods.  We require capital for, among other purposes,
acquiring new supplies and equipment, acquiring additional reserves, and
maintaining compliance with environmental laws and regulations. Because cash
generated internally is not sufficient to fund capital requirements in 2009, we
will require additional debt and/or equity financing. However, this type of
financing may not be available or, if available, may not be available on
attractive terms.





Future
debt financing, if available, may result in increased interest and amortization
expense, increased leverage and decreased income available to fund
operations.  In addition, future debt financing may limit our ability
to withstand competitive pressures and render us more vulnerable to economic
downturns.





Our
ability to obtain additional capital on acceptable terms or at all is subject to
a variety of uncertainties, including:





·
            investors'
      perceptions of, and demand for, coal
products;




·
            conditions
      of the U.S. and other capital markets in which we may seek to raise
      funds;




·
            our
      future results of operations, financial condition and cash
      flows;




·
            governmental
      regulation of coal mining; and




·
            economic,
      political and other conditions in the United States and other
      countries.




Future
financings through equity investments are likely to be dilutive to the existing
stockholders. Also, the terms of securities we may issue in future capital
transactions may be more favorable for our new investors. Newly issued
securities may include preferences, superior voting rights, the issuance of
warrants or other derivative securities, and the issuances of incentive awards
under equity employee incentive plans, which may have additional dilutive
effects. Further, we may incur substantial costs in pursuing future capital
and/or financing, including investment banking fees, legal fees, accounting
fees, printing and distribution expenses and other costs. We may also be
required to recognize non-cash expenses in connection with certain securities we
may issue, such as convertible notes and warrants, which will adversely impact
our financial condition and results of operations.


8





If we
fail to generate sufficient cash flow from operations in future periods or to
obtain required capital in the future, we could be forced to reduce or delay
capital expenditures, sell assets or restructure or refinance our indebtedness,
or our business may fail.





There
can be no assurance that we will establish commercial discoveries and/or
profitable production programs on the Bridger Property or any other properties
we acquire.





Exploration
for recoverable reserves of coal is subject to a number of risk factors. Few
properties that are explored are ultimately developed into producing
coal.





We
currently lease approximately 6,254 acres located in the vicinity of Bridger in
Carbon County, Montana for the purpose of mining, removing, marketing and
selling coal.  Further exploration will be required before a final
evaluation as to the economic feasibility of coal extraction on the Bridger
Property can be determined.  We have done preliminary estimates of the
surface seams on the Bridger Property, and intend to perform phase 1 drilling
commencing in the fourth quarter of the calendar year 2009 in order to determine
whether it contains a commercially viable coal deposit.





There is no assurance that a
commercially viable coal deposit exists on the Bridger
Property.  Furthermore, there is no assurance that we will be able to
successfully develop the Bridger Property or identify, acquire or develop other
coal properties that would allow us to profitably extract and distribute coal
and to emerge from the exploration stage.





Our
future success depends upon our ability to acquire and develop coal reserves
that are economically recoverable.





Our
recoverable reserves, if any, will decline as we produce coal. Our future
success depends upon our conducting successful exploration and development
activities and acquiring properties containing economically recoverable coal
deposits. Our current strategy includes building our coal deposits base through
acquisitions of mineral rights, leases, or producing properties.





Our
planned development and exploration projects and acquisition activities may not
result in the acquisition of significant coal deposits and we may not have
success developing mines.  In order to develop coal deposits, we must
obtain various governmental leases and permits.  We cannot predict
whether we will obtain the leases and permits necessary for us to operate
profitably in the future.





There
are uncertainties in estimating our economically recoverable coal reserves, and
inaccuracies in our estimates could result in lower than expected revenues,
higher than expected costs and decreased profitability.





There are
uncertainties inherent in estimating quantities and values of economically
recoverable coal reserves, including many factors beyond our control. As a
result, estimates of economically recoverable coal reserves are by their nature
uncertain. Information about our reserves consists of estimates based on
engineering, economic and geological data assembled and analyzed by our staff.
Some of the factors and assumptions which impact economically recoverable
reserve estimates include:





·
            geological
      conditions;




·
            historical
      production from the area compared with production from other producing
      areas;




·
            the
      assumed effects of regulations and taxes by governmental
      agencies;




·
            assumptions
      governing future prices; and




·
            future
      operating costs, including cost of
materials.




Each of
these factors may, in fact, vary considerably from the assumptions used in
estimating reserves.   For these reasons, estimates of the
economically recoverable quantities of coal attributable to a particular group
of properties, and classifications of these reserves based on risk of recovery
and estimates of future net cash flows, may vary
substantially.  Actual production, revenues and expenditures with
respect to our reserves will likely vary from estimates, and these variances may
be material.   As a result, our estimates may not accurately
reflect our actual reserves.


9





Our
officers and directors have no prior experience in the coal business and that
lack of experience could harm our business.





Our
current chief executive officer and other members of management were not
involved in the coal industry prior to the time they joined us.  This
lack of experience places us at a significant operational and competitive
disadvantage and makes it difficult for us to obtain the funding we need to
execute our business plan.





If
we are unable to attract and retain additional qualified personnel, our ability
to execute our business plan will be adversely impacted.





We
believe our execution of our business plan will depend upon our ability to
attract and retain skilled personnel with experience in the coal
industry.  There can be no assurance that we will be able to attract
and retain sufficient numbers of highly skilled and experienced employees.
Further, we cannot guarantee that any employee will remain employed by us for
any definite period of time.  Qualified employees periodically are in
great demand and may be unavailable in the time frame required to satisfy our
requirements. We expect competition for such personnel to increase as the demand
for coal and other energy sources expand. Our inability to hire or retain
sufficient personnel at competitive rates or the loss of personnel could impair
the growth of our business.





Public
company compliance may make it more difficult to attract and retain officers and
directors.





The
Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) and new rules subsequently
implemented by the SEC have required changes in the corporate governance
practices of public companies. As a public company, we expect these new rules
and regulations to increase our compliance costs in 2009 and beyond and to make
certain activities more time consuming and costly. As a public company, we also
expect that these new rules and regulations may make it more difficult and
expensive for us to obtain director and officer liability insurance and we may
be required to accept reduced policy limits and coverage or incur substantially
higher costs to obtain the same or similar coverage. As a result, it may be more
difficult for us to attract and retain qualified persons to serve on our board
of directors or as executive officers.




Risks
Relating to Our Industry




Competition
within the coal industry may adversely affect our ability to sell our coal and
overcapacity in the coal industry could adversely affect pricing, either of
which could impair our profitability.





The
market for coal is intensely competitive.  Currently, some of the
largest coal producers and competitors include Alpha Natural Resources, Inc.,
Arch Coal, Inc., CONSOL Energy, Inc., Foundation Coal Holdings, Inc.,
International Coal Group, Inc., James River Coal Company, Massey Energy Company,
Murray Energy, Inc., Patriot Coal Corporation and Peabody Energy Corp. These
coal producers are larger and have greater financial resources and larger
reserve bases than we do. We also compete directly with a number of smaller
producers in both Montana and Indiana.  As the price of domestic coal
increases, we may also begin to compete with companies that produce coal from
one or more foreign countries.





Additionally,
coal competes with other fuels such as petroleum, natural gas, hydropower and
nuclear energy for steam and electrical power generation. Over time, costs and
other factors, such as safety and environmental considerations, may affect the
overall demand for coal as a fuel.





If we are
not as successful as our competitors, our sales could decline, which could
materially harm our business, prospects, financial condition, results of
operations and cash flows.


10





The
characteristics of coal may make it difficult for coal users to comply with
various environmental standards, which are continually under review by
international, federal and state agencies, related to coal
combustion.   As a result, they may switch to other fuels, which
would adversely affect our sales.





Coal
contains impurities, including sulfur, mercury, chlorine and other elements or
compounds, many of which are released into the air when coal is
burned.  Stricter environmental regulations of emissions from
coal-fired electric generating plants could increase the costs of using coal
thereby reducing demand for coal as a fuel source, the volume of our coal sales
and price.   Stricter regulations could make coal a less
attractive fuel alternative in the planning and building of utility power plants
in the future.





For
example, in order to meet the federal Clean Air Act limits for sulfur dioxide
emissions from electric power plants, coal users will need to install scrubbers,
use sulfur dioxide emission allowances (some of which they may purchase), or
switch to other fuels.   Each option has
limitations.   Lower sulfur coal may be more costly to purchase
on an energy basis than higher sulfur coal depending on mining and
transportation costs.   The cost of installing scrubbers is
significant and emission allowances may become more expensive as their
availability declines.   Switching to other fuels may require
expensive modification of existing plants. The extent to which power generators
switch to alternative fuel could materially affect us if we cannot offset the
cost of sulfur removal by lowering the delivered costs of our higher sulfur
coals on an energy equivalent basis.





Proposed
reductions in emissions of mercury, sulfur dioxides, nitrogen oxides,
particulate matter or greenhouse gases may require the installation of
additional costly control technology or the implementation of other measures,
including trading of emission allowances and switching to other
fuels.   For example, in 2005 the Environmental Protection Agency
proposed separate regulations to establish mercury emission limits nationwide
and to reduce the interstate transport of fine particulate matter and ozone
through reductions in sulfur dioxides and nitrogen oxides throughout the eastern
United States.   The Environmental Protection Agency continues to
require reduction of nitrogen oxide emissions in a number of eastern states and
the District of Columbia and will require reduction of particulate matter
emissions over the next several years for areas that do not meet air quality
standards for fine particulates.   In addition, Congress and
several states may consider legislation to further control air emissions of
multiple pollutants from electric generating facilities and other large
emitters.   Any new or proposed reductions will make it more
costly to operate coal-fired plants and could make coal a less attractive fuel
alternative to the planning and building of utility power plants in the
future.





To
the extent that any new or proposed requirements affect our customers, this
could adversely affect our operations and results.





Proposals
to regulate greenhouse gas emissions could impact the market for our fossil
fuels, increase our costs, and reduce the value of our coal assets. Numerous
proposals have been made at the international, national, regional, and state
levels of government that are intended to limit emissions of greenhouse gas
(“GHGs”), such as carbon dioxide and methane.   Combustion of
fossil fuels, such as the coal we seek to produce, results in the creation of
carbon dioxide that is currently emitted into the atmosphere by coal end
users.   Several states have already adopted measures requiring
reduction of GHGs within state boundaries.   If comprehensive
regulations focusing on GHGs emission reductions were to be enacted by the
United States or additional individual states, it may adversely affect the use
of and demand for fossil fuels, particularly coal.  Further regulation
of GHGs could occur in the United States pursuant to treaty obligations,
regulation under the Clean Air Act, or regulation under state law.  In
2007, the U.S. Supreme Court held in Massachusetts v.  Environmental
Protection Agency, that the Environmental Protection Agency had authority to
regulate GHG's under the Clean Air Act, reversing the Environmental Protection
Agency's interpretation of the Clean Air Act.   This decision
could lead to federal regulation of GHGs under the existing Clean Air Act of
coal-fired electric generation stations, which could adversely affect demand for
our coal.


11





Our
mines will be subject to stringent federal and state safety regulations that may
increase our cost of doing business, and may place restrictions on our methods
of operation.   In addition, government inspectors under certain
circumstances, have the ability to order our operation to be shut down based on
safety considerations.





Stringent
health and safety standards were imposed by federal legislation when the Federal
Coal Mine Health and Safety Act of 1969 was adopted.   The
Federal Coal Mine Safety and Health Act of 1977 expanded the enforcement of
safety and health standards of the Coal Mine Health and Safety Act of 1969 and
imposed safety and health standards on all (non-coal as well as coal) mining
operations.  Regulations are comprehensive and affect numerous aspects
of mining operations, including training of mine personnel, mining procedures,
the equipment used in mine emergency procedures, mine plans and other
matters.   The various requirements mandated by law or regulation
can have a significant effect on operating costs and place restrictions on our
methods of operations.   In addition, government inspectors under
certain circumstances, have the ability to order our operation to be shut down
based on safety considerations.





Coal
mining is a dangerous industry, and lapses in our safety practices or natural
disasters beyond our control could close our coal mine for an extended period of
time, which would likely cause the failure of our operations.





Coal
mining, especially underground coal mining, is dangerous.  Great care
must be taken to assure safe, continued operations.  Past experiences
of others in the industry indicate that lapses in safety practices can result in
catastrophic collapse of a coal mining operation.  Even when best
mining practices are strictly observed, natural disasters such as an earthquake
could possibly destroy a coal mine's operations.  Any catastrophic
event at our coal mine which would close our mine for an extended period of time
likely would cause the failure of our operations.





The
marketability of natural resources will be affected by numerous factors beyond
our control, which may result in us not receiving an adequate return on invested
capital to be profitable or viable.





The
marketability of natural resources, which may be acquired or discovered by us,
will be affected by numerous factors beyond our control. These factors include
market fluctuations in coal pricing and demand, the proximity and capacity of
natural resource markets and processing equipment, governmental regulations,
land tenure, land use, regulation concerning the importing and exporting of coal
and environmental protection regulations. The exact effect of these factors
cannot be accurately predicted, but the combination of these factors may result
in us not receiving an adequate return on invested capital to be profitable or
viable.





Exploratory
and development drilling involves many risks and we may become liable for
pollution or other liabilities, which may have an adverse effect on our
financial position.





Mining
operations generally involve a high degree of risk. Hazards such as unusual or
unexpected geological formations, power outages, labor disruptions, blow-outs,
fire, inability to obtain suitable or adequate machinery, equipment or labor,
and other risks are involved. We may become subject to liability for pollution
or hazards against which we cannot adequately insure or which we may elect not
to insure. Incurring any such liability may have a material adverse effect on
our financial position and operations.





Any
change to government regulation/administrative practices may have a negative
impact on our ability to operate and our profitability.





The laws,
regulations, policies or current administrative practices of any government
body, organization or regulatory agency in the United States, or any other
jurisdiction, may be changed, applied or interpreted in a manner which will
fundamentally alter the ability of our company to carry on our business. The
actions, policies or regulations, or changes thereto, of any government body or
regulatory agency, or other special interest groups, may have a detrimental
effect on us. Any or all of these situations may have a negative impact on our
ability to operate and/or our profitably.


12





Disruption
of rail, barge, overland conveyor and other systems that may deliver our coal or
an increase in transportation costs could make our coal less
competitive.





Coal
producers depend upon rail, barge, trucking, overland conveyor and other systems
to provide access to markets.   Disruption of transportation
services because of weather-related problems, strikes, lock-outs, break-downs of
locks and dams or other events could temporarily impair our ability to supply
coal to customers and adversely affect our
profitability.   Transportation costs represent a significant
portion of the delivered cost of coal and, as a result, the cost of delivery is
a critical factor in a customer's purchasing decision.  Increases in
transportation costs could make our coal less competitive.





Terrorist
attacks and threat, escalation of military activity in response to such attacks
or acts of war may negatively affect our business, financial condition and
results of operations.





Terrorist
attacks and threats, escalation of military activity in response to such attacks
or acts of war may negatively affect our business, financial condition and
results of operations.  Our business is affected by general economic
conditions, fluctuations in consumer confidence and spending, and market
liquidity, which can decline as a result of numerous factors outside of our
control, such as terrorist attacks and acts of war.  Future terrorist
attacks against United States targets, rumors or threats of war, actual
conflicts involving the United States or its allies, or military or trade
disruptions affecting our customers may materially adversely affect our
operations.  As a result, there could be delays or losses in
transportation and deliveries of coal to our customers, decreased sales of our
coal and extension of time for payment of accounts receivable from our
customers.  Strategic targets such as energy-related assets may be at
greater risk of future terrorist attacks than other targets in the United
States.  In addition, disruption or significant increases in energy
prices could result in government-imposed price controls.  It is
possible that any, or a combination, of these occurrences could have a
materially adverse effect on our business, financial condition and results of
operations.





Risks
Relating to Our Common Stock





Some
of our former officers and directors beneficially own a substantial percentage
of our outstanding common stock, which gives them control over certain major
decisions on which our stockholders may vote, which may discourage an
acquisition of us.





Our
former Chief Executive Officer and former Chairman of of our Board of Directors,
beneficially own, approximately 34.6% and 31.0% of our outstanding common
stock.  The interests of our former officers and directors may differ
from the interests of other stockholders, and they may, by virtue of their
ownership stake, be able to exert substantial influence or otherwise control
many corporate actions requiring stockholder approval, including the following
actions:





·
            electing
      or defeating the election of
directors;





·
            amending
      or preventing amendment of our articles of incorporation or
      bylaws;





·
            effecting
      or preventing a merger, sale of assets or other corporate transaction;
      and





·
            controlling
      the outcome of any other matter submitted to the stockholders for
      vote.





The stock
ownership of our former officers and directors may discourage a potential
acquirer from seeking to acquire shares of our common stock or otherwise
attempting to obtain control of us, which in turn could reduce our stock price
or prevent our stockholders from realizing a premium over our stock
price.





Provisions
of our Articles of Incorporation, our Bylaws and Nevada law could delay or
prevent a change in control of us, which could adversely affect the price of our
common stock.





Our
articles of incorporation, our bylaws and Nevada law could delay, defer or
prevent a change in control of us, despite the possible benefit to our
stockholders, or otherwise adversely affect the price of our common stock and
the rights of our stockholders. For example, our Articles of Incorporation
permit our board of directors to issue one or more series of preferred stock
with rights and preferences designated by our board of directors. We are also
subject provisions of the Nevada control share laws that may limit voting rights
in shares representing a controlling interest in us.  These provisions
could also discourage proxy contests and make it more difficult for you and
other stockholders to elect directors other than the candidates nominated by our
board.


13





Trading
in our common shares on the OTC Bulletin Board is limited and sporadic making it
difficult for our stockholders to sell their shares or liquidate their
investments.





Our
common shares are currently listed for public trading on the OTC Bulletin
Board.  The trading price of our common shares has been subject to
wide fluctuations. Trading prices of our common shares may fluctuate in response
to a number of factors, many of which will be beyond our control. The stock
market has generally experienced extreme price and volume fluctuations that have
often been unrelated or disproportionate to the operating performance of
companies with no current business operation. There can be no assurance that
trading prices previously experienced by our common shares will be matched or
maintained. These broad market and industry factors may adversely affect the
market price of our common shares, regardless of our operating
performance.





In the
past, following periods of volatility in the market price of a company's
securities, securities class-action litigation has often been instituted. Such
litigation, if instituted, could result in substantial costs for us and a
diversion of management's attention and resources.





A
decline in the price of our common stock could affect our ability to raise
further working capital and adversely impact our operations.





A
prolonged decline in the price of our common stock could result in a reduction
in the liquidity of our common stock and a reduction in our ability to raise
capital.  Because our operations currently are, expected to be
primarily financed through the sale of equity securities, a decline in the price
of our common stock could be especially detrimental to our liquidity and our
continued operations. Any reduction in our ability to raise equity capital in
the future would force us to reallocate funds, if any are available, from other
planned uses and would have a significant negative effect on our business plans
and operations, including our ability to continue our current operations. If our
stock price declines, we may not be able to raise additional capital or generate
funds from operations sufficient to meet our obligations.





Our
common stock may be deemed a “penny stock”, which would make it more difficult
for our investors to sell their shares.





Our
common stock may be subject to the “penny stock” rules adopted under Section
15(g) of the Exchange Act. The penny stock rules apply to non-Nasdaq listed
companies whose common stock trades at less than $5.00 per share or that have
tangible net worth of less than $5,000,000 ($2,000,000 if the company has been
operating for three or more years). These rules require, among other things,
that brokers who trade penny stock to persons other than “established customers”
complete certain documentation, make suitability inquiries of investors and
provide investors with certain information concerning trading in the security,
including a risk disclosure document and quote information under certain
circumstances. Many brokers have decided not to trade penny stocks because of
the requirements of the penny stock rules and, as a result, the number of
broker-dealers willing to act as market makers in such securities is limited. If
we remain subject to the penny stock rules for any significant period, it could
have an adverse effect on the market, if any, for our securities. If our
securities are subject to the penny stock rules, investors will find it more
difficult to dispose of our securities.





The
Financial Industry Regulatory Authority, or FINRA, has adopted sales practice
requirements which may also limit a stockholder's ability to buy and sell our
stock.





In
addition to the “penny stock” rules described above, FINRA has adopted rules
that require that in recommending an investment to a customer, a broker-dealer
must have reasonable grounds for believing that the investment is suitable for
that customer. Prior to recommending speculative low priced securities to their
non-institutional customers, broker-dealers must make reasonable efforts to
obtain information about the customer's financial status, tax status, investment
objectives and other information. Under interpretations of these rules, FINRA
believes that there is a high probability that speculative low priced securities
will not be suitable for at least some customers. FINRA requirements make it
more difficult for broker-dealers to recommend that their customers buy our
common stock, which may limit your ability to buy and sell our stock and have an
adverse effect on the market for our shares.


14





Investors
should not anticipate receiving cash dividends on our common stock.





We have
never declared or paid any cash dividends or distributions on our common stock
and intend to retain our future earnings, if any, to support operations and to
finance expansion. Therefore, we do not anticipate paying any cash dividends on
our common stock in the foreseeable future.





Sales
of a substantial number of shares of our common stock may adversely affect the
market price of our common stock or our ability to raise additional
capital.





Sales of
a substantial number of shares of our common stock in the public market, or the
perception that large sales could occur, could cause the market price of our
common stock to decline or limit our future ability to raise capital through an
offering of equity securities. The sale of substantial amounts of our common
stock in the public market could create a circumstance commonly referred to as
an “overhang” and in anticipation of which the market price of our common stock
could fall. The existence of an overhang, whether or not sales have occurred or
are occurring, also could make more difficult our ability to raise additional
financing through the sale of equity or equity-related securities in the future
at a time and price that we deem reasonable or appropriate. Our articles of
incorporation permits the issuance of up to 300,000,000 shares of common stock
and 10,000,000 shares of preferred stock. As of August 10, 2009, we had an
aggregate of 72,325,000 shares of our common stock and 10,000,000 shares of our
preferred stock authorized but unissued.  Thus, we have the ability to
issue substantial amounts of stock in the future. No prediction can be made as
to the effect, if any, that market sales of our common stock will have on the
market price for our common stock. Sales of a substantial number could adversely
affect the market price of our shares.




Item
2.Description of Properties.




As of
July 2009, our corporate offices are located at 30950 Rancho Viejo Rd #120, San
Juan Capistrano, California 92675 in a shared office space with Strands
Management Company, LLC (“Strands”).  David Walters, our director, is
a managing member, and 50% owner, of Strands.   We currently are
not assessed any rental charges for the use of this space.





The
premises used during the year ended April 30, 2009 were provided to us without
charge.  We have reviewed the estimated fair market value of the rent
for the space used and concluded it to be immaterial to the financial statements
individually and taken as a whole, as such, no expense for rent has been
recorded for the period shown.





Other
than the Bridger Property, we do not currently own or lease any real
property.





Item
3.Legal Proceedings.





Effective
July 10, 2009, John P. Baugues, Jr. resigned as our Chief Executive Officer and
a member of our Board of Directors.  As stated in his resignation
letter, Mr. Baugues’ decision to resign was based on his belief that we had
breached a number of material agreements with him, including (but not limited
to) the following: an inability to agree on a suitable employment agreement, an
agreement that he would be paid a salary, an agreement that his expenses would
be reimbursed, and an agreement that we would secure adequate funding to
complete the development of our coal mining project in Carbon County,
Montana.   We disagree with Mr. Baugues’ assertion that we have
breached any material agreement with him.





Subsequent
to his resignation, Mr. Baugues also has taken the position that certain coal
development opportunities (other than the Bridger Property) that were pursued by
us while Mr. Baugues was an officer and director are not our corporate
opportunities and that he has the right to pursue them
independently.  We intend to defend vigorously our interests in these
coal development project opportunities.


15





No other
legal proceedings are currently pending or, to our knowledge, threatened against
us that, in the opinion of our management, could reasonably be expected to have
a material adverse effect on our business or financial condition or results of
operations.





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




On
January 20, 2009, stockholders holding a majority of our outstanding shares of
common stock gave their signed written consent to action without a meeting to
approve an amendment to our Articles of Incorporation to change our name from
Quantum Information, Inc. to “MGMT ENERGY, INC.”  This action is described
in our Current Report on Form 8-K filed with the Securities and Exchange
Commission on February 6, 2009 as well as definitive Information Statement on
Schedule 14C filed with the Securities and Exchange Commission on January 30,
2009.




On April
11, 2009, stockholders holding a majority of our outstanding shares of common
stock gave their signed written consent to action without a meeting to approve
the Contribution Agreement through which we acquired the rights and obligations
under the Bridger Lease.





On May
28, 2009, stockholders holding a majority of our outstanding shares of common
stock gave their signed written consent to action without a meeting to approve
an amendment to our Articles of Incorporation (i) to approve a five-for-one
hundred reverse stock split of our common stock,  (ii) to authorize
(after giving effect to the stock split) 300,000,000 authorized shares of our
common stock having a par value of $0.001 per share, and (iii) to change our
name from “MGMT ENERGY, INC” to “Management Energy, Inc.”  These
matters are described in our Current Report on Form 8-K filed with the
Securities and Exchange Commission on May 29, 2009.




PART
II




Item
5.Market for Common Equity and Related Stockholder Matters.




Our
Common Stock is quoted on the OTC Electronic Bulletin Board under the symbol
“MMEX”. The following table indicates the quarterly high and low trading prices
for the Common Stock on the OTC Electronic Bulletin Board for the fiscal years
ending April 30, 2009 and April 30, 2008. Such inter-dealer quotations do not
necessarily represent actual transactions and do not reflect retail mark-ups,
mark-downs or commissions.




Prior
to May 28, 2009 and the effectiveness of our 5-for-1 stock split, our stock
symbol on the OTC Electronic Bulletin Board was “MGEG”.


16




Sales PricesHigh
                  
                  
                  LowFiscal
      20081st
      Quarter
                  
                  
                  n/a
                  
                  
                  
                  n/a2nd
      Quarter
                  
                  
                  n/a
                  
                  
                  
                  n/a3rd
      Quarter
                  
                  
                  n/a
                  
                  
                  
                  n/a4th
      Quarter
                  
                  
                  n/a
                  
                  
                  
                  n/aFiscal
      20091st
      Quarter
                  
                  
                  n/a
                  
                  
                  
                  n/a2nd
      Quarter
                  
                  
                  n/a
                  
                  
                  
                  n/a3rd
      Quarter
                  
                  
                  n/a
                  
                  
                  
                  n/a4th
      Quarter
                  
                  $
                  0.81
                  
                  
                  $
                  0.40





There
were 26 holders of record of our common stock as of August 10, 2009.  The last sale
price for our common stock as reported on August 11, 2009 was
$1.36.





We did
not pay dividends on our common stock for the fiscal year ended April 30, 2009
and have no plans to do so in the foreseeable future.





We do not
have an equity compensation plan.




Item
6.Selected Financial Data.





Not
applicable.





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




“Safe
Harbor” Statement under the Private Litigation Reform Act of 1995




This
Annual Report, other than historical information, may include forward-looking
statements, including statements with respect to financial results, product
introductions, market demand, sales channels, industry trends, sufficiency of
cash resources and certain other matters. These statements are made under the
“safe harbor” provisions of the Private Securities Litigation Reform Act of 1995
and involve risks and uncertainties which could cause actual results to differ
materially from those in the forward-looking statements, including those
discussed in the section entitled “Risk Factors” in Item 1.A. and elsewhere
in this Annual Report on Form 10-K and other filings with the Securities
and Exchange Commission.




Overview





Our
business plan is to engage in the exploration, extraction and distribution of
coal.  We are currently considered to be an exploration stage
corporation because we are engaged in the search for coal deposits and are not
engaged in the exploitation of a coal deposit.  We have not engaged in
the preparation of an established commercially mineable coal deposit for
extraction or in the exploitation of a coal deposit. We will be in the
exploration stage until we discover commercially viable coal deposits on the
Bridger Property or any other property that we acquire, if ever. In an
exploration stage company, management devotes most of its activities to
acquiring and exploring mineral properties.





We
currently lease the Bridger Property, which consists of approximately 6,254
acres located in the vicinity of Bridger in Carbon County, Montana, for the
purpose of mining, removing, marketing and selling coal.  Further
exploration will be required before a final evaluation as to the economic
feasibility of coal extraction on the Bridger Property can be
determined.  We have done preliminary estimates of the surface seams
on the Bridger Property, and intend to perform phase 1 drilling commencing in
the fourth quarter of calendar year 2009 in order to determine whether it
contains a commercially viable coal deposit.


17


There is no assurance that a
commercially viable coal deposit exists on the Bridger
Property.  Furthermore, there is no assurance that we will be able to
successfully develop the Bridger Property or identify, acquire or develop other
coal properties that would allow us to profitably extract and distribute coal
and to emerge from the exploration stage.





As we execute our business plan in the
fiscal year ending April 30, 2010, we expect to incur a substantial amount of
operating expenses that have not been incurred or reflected in our historical
results of operations, including: mining lease expenses and expenses for
personnel, operations, and professional fees. We also expect that we will
continue to incur stock based compensation charges in future periods as we will
likely issue equity awards as a form of compensation to management and other
professional service providers.





Results
of Operations




Fiscal
Year Ended April 30, 2009, Compared to Fiscal Year Ended April 30,
2008





Revenues





We have
only recently entered the coal business. Accordingly, we have not generated any
revenues from continuing operations.  We do not expect to generate any
revenues until at least the second quarter of calendar year 2010.





Operating
Expenses





Operating
expenses from continuing operations totaled $1,369,375 for the fiscal year ended
April 30, 2009 compared to $0 for the comparable period in the prior
year.  The current year operating expenses primarily consist of a
non-cash stock based compensation charge recorded of $1,163,500 for the
1,625,000 shares of our common stock issued as a retainer under our Support
Services Agreement, with Strands Management Company.  Operating
expenses for the fiscal year ended April 2009 also include $62,541 of
acquisitions costs related to the Bridger Lease acquisition, $66,668 of
consulting fees, and $51,800 of other professional fees.





We
recently changed our principal business to the coal business, and expect to
continue to incur operating expenses to pursue our business plan.





Loss from Discontinued
Operations





On
January 14, 2009, we sold all of our assets to Joel Klandrud, our former officer
and director, pursuant to an Asset Sale Agreement.  In exchange, Mr.
Klandrud (1) surrendered to us for cancellation 4,000,000 shares of our Common
Stock, par value $0.001 per share, and (2) assumed all of our
liabilities.  We incurred losses from discontinued operations of
$59,986 for the fiscal year ended April 30, 2009.




Liquidity
and Capital Resources





The
accompanying financial statements have been prepared assuming that we will
continue as a going concern. As shown in the accompanying financial statements,
we incurred losses of $1,429,361 and $23,287 for the years ended April 30, 2009
and 2008, respectively and have an accumulated deficit of $1,452,648 at April
30, 2009.  At April 30, 2009, we had cash and cash equivalents of $900
and no other assets.





We have
not yet established a source of revenues to cover our operating costs and to
allow us to continue as a going concern.  We do not expect to generate
any revenues until at least the second quarter of calendar year
2010.  In order to continue as a going concern, develop a reliable
source of revenues, and achieve a profitable level of operations, we will need,
among other things, significant additional capital
resources.  Accordingly, management’s plans to continue as a going
concern include raising additional capital through sales of common stock and
other securities.




18




The
business of exploring, extracting and distributing coal is capital
intensive.  Execution of our business strategywill require substantial
capital investment in the short-term and in future periods.  We
require capital for, among other purposes, identifying and acquiring additional
reserves and developing acquired reserves.





Because
cash generated internally is not sufficient to fund capital requirements in
2009, we will require additional debt and/or equity financing. However, this
type of financing may not be available or, if available, may not be available on
attractive terms.





On July
24, 2009, we completed the sale of 400,000 shares of our common stock at a
purchase price of $1.00 per share. The investor was an entity controlled by the
former Chairman of our Board of Directors. In connection with the sale, we
agreed that we will not expend the proceeds of the offering without the consent
of the investor.





Our
current funding is not sufficient to continue our operations for the remainder
of the fiscal year ending April 30, 2010.  We cannot provide any
assurances that additional financing will be available to us or, if available,
may not be available on acceptable terms.





If we are
unable to obtain adequate capital, we could be forced to cease or delay
development of our operations, sell assets or our business may
fail.   In each such case, the holders of our common stock would
lose all or most of their investment.  Please see “Risk Factors” for
information regarding the risks related to our financial
condition.





Critical
Accounting Policies and Estimates


Our
financial statements and accompanying notes are prepared in accordance with
generally accepted accounting principles used in the United
States.  Preparing financial statements requires management to make
estimates and assumptions that affect the reported amounts of assets,
liabilities, revenue and expenses.  These estimates and assumptions
are affected by management’s application of accounting policies.  We
believe that understanding the basis and nature of the estimates is critical to
an understanding of our financials.




Use of
Estimates





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





Issuance of Shares for
Non-Cash Consideration





We
account for the issuance of equity instruments to acquire goods and/or services
based on the fair value of the goods and services or the fair value of the
equity instrument at the time of issuance, whichever is more reliably
determinable.





Our
accounting policy for equity instruments issued to consultants and vendors in
exchange for goods and services follows the provisions of EITF Issue No. 96-18,
Accounting for Equity
Instruments That are Issued to Other Than Employees for Acquiring, or in
Conjunction with Selling, Goods or Services and EITF Issue No. 00-18,
Accounting Recognition for
Certain Transactions Involving Equity Instruments Granted to Other Than
Employees.  The measurement date for the fair value of the
equity instruments issued is determined at the earlier of (i) the date at which
a commitment for performance by the consultant or vendor is reached or (ii) the
date at which the consultant or vendor's performance is complete.  In
the case of equity instruments issued to consultants, the fair value of the
equity instrument is recognized over the term of the consulting
agreement.




19




Recently
Issued Accounting Pronouncements





In
September 2006, the FASB adopted SFAS No. 157, Fair Value
Measurements.  SFAS No. 157 establishes a framework for
measuring fair value and expands disclosure about fair value measurements.
Specifically, this standard establishes that fair value is a market-based
measurement, not an entity specific measurement.  As such, the value
measurement should be determined based on assumptions the market participants
would use in pricing an asset or liability, including, but not limited to
assumptions about risk, restrictions on the sale or use of an asset and the risk
of nonperformance for a liability.  The expanded disclosures include
disclosure of the inputs used to measure fair value and the effect of certain of
the measurements on earnings for the period.  SFAS No. 157 is
effective for fiscal years beginning after November 15, 2007.  In
February 2008, the FASB issued FSP 157-2, Effective Date of FASB Statement No.
157, which delays the effective date of SFAS No. 157 for non-financial
assets and liabilities to fiscal years beginning after November 15, 2008. 
The adoption of SFAS No. 157 related to financial assets and liabilities
did not have a material impact on the Company's financial statements.  We
are currently evaluating the impact, if any, that SFAS No. 157 may have on our
future financial statements related to non-financial assets and
liabilities.





In
October 2008, the FASB issued FSP No. 157-3, Determining the Fair Value of a
Financial Asset When the Market for That Asset is Not
Active.  FSP No. 157-3 clarifies the application of SFAS No.
157 in a market that is not active, and provides an illustrative example
intended to address certain key application issues.  FSP No. 157-3 is
effective immediately, and applies to the Company’s January 31, 2009 financial
statements.  We have concluded that the application of FSP No. 157-3
did not have a material impact on our financial position and results of
operations as of and for the year ended April 30, 2009.





On
February 15, 2007, the FASB, issued SFAS No. 159, The Fair Value Option for Financial
Assets and Liabilities—Including an Amendment of SFAS 115. This standard
permits an entity to choose to measure many financial instruments and certain
other items at fair value. This option is available to all entities. Most of the
provisions in SFAS 159 are elective; however, an amendment to SFAS 115 “Accounting for Certain Investments
in Debt and Equity Securities” applies to all entities with available for
sale or trading securities.  SFAS 159 is effective as of the beginning
of an entity’s first fiscal year that begins after November 15,
2007.  The adoption of SFAS No. 159 did not have a material impact on
our financial position or results of operations.




In
December 2007, the FASB issued SFAS No. 141(R), Business
Combinations.  SFAS No. 141(R) establishes principles and
requirements for how an acquirer recognizes and measures in its financial
statements the identifiable assets acquired, the liabilities assumed, and any
non-controlling interest in the acquiree and recognizes and measures the
goodwill acquired in the business combination or a gain from a bargain
purchase.  SFAS No. 141(R) also sets forth the disclosures required to
be made in the financial statements to evaluate the nature and financial effects
of the business combination. SFAS No. 141(R) applies prospectively to business
combinations for which the acquisition date is on or after the beginning of the
first annual reporting period beginning on or after December 15, 2008.
Accordingly, the Company will adopt this standard in fiscal 2010.  We
are currently evaluating the potential impact of the adoption of SFAS No.
141(R) on our financial statements.





In
December 2007, the FASB issued SFAS No. 160, Non-controlling Interests in
Consolidated Financial Statements, an amendment of ARB No. 51. SFAS
No. 160 will change the accounting and reporting for minority interests,
which will be recharacterized as non-controlling interests (NCI) and classified
as a component of equity. This new consolidation method will significantly
change the accounting for transactions with minority interest
holders.  SFAS No. 160 requires retroactive adoption of the
presentation and disclosure requirements for existing minority interests. All
other requirements of SFAS No. 160 shall be applied
prospectively.  SFAS No. 160 is effective for fiscal years
beginning after December 15, 2008 and, as such, the Company will adopt this
standard in fiscal 2010.  We are currently evaluating the potential
impact of the adoption of SFAS No. 160 on our financial
statements.




20




Off-Balance
Sheet Arrangements




As of
April 30, 2009, we did not have any significant off-balance sheet arrangements,
as defined in Item 303 of Regulation S-K.




Quantitative
and Qualitative Disclosures About Market Risk




We
do not have any material exposure to market risk associated with our cash and
cash equivalents. Our note payables are at a fixed rate and, thus, are not
exposed to interest rate risk.





Item
8.Financial Statements.




The
information required by this item is included on pages F-1 through
F-7.




Item
9.Changes In and Disagreements with Accountants on Accounting and Financial
Disclosure.




Not
applicable.





Item
9A. Controls and Procedures




We
maintain disclosure controls and procedures that are designed to ensure that
information required to be disclosed in our reports made pursuant to the
Securities Exchange Act of 1934, as amended (the “Exchange Act”).  is
recorded, processed, summarized and reported within the timelines specified in
the Securities and Exchange Commission’s rules and forms, and that such
information is accumulated and communicated to our management, including our
Chief Executive Officer and Principal Financial Officer, as appropriate, to
allow 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 only provide reasonable assurance of achieving the desired control
objectives, and in reaching a reasonable level of assurance, management
necessarily was required to apply its judgment in evaluating the cost-benefit
relationship of possible controls and procedures.




As
required by Rule 13a-15(b) under the Exchange Act, we carried out an
evaluation, under the supervision and with the participation of our management,
including our Chief Executive Officer and Principal Financial Officer, of the
effectiveness of the design and operation of our disclosure controls and
procedures as of the end of the fiscal year covered by this report. Based on the
foregoing, our Chief Executive Officer and Principal Financial Officer concluded
that our disclosure controls and procedures were effective as of the end of
period covered by this report in timely alerting them to material information
relating to Management Energy, Inc. required to be disclosed in our periodic
reports with the Securities and Exchange Commission.





Management’s Report on Internal
Control Over Financial Reporting




Our
Chief Executive Officer and Principal Financial Officer are responsible for
establishing and maintaining adequate internal control over financial reporting,
as such term is defined in Rule 13a-15(f) of the Exchange Act.




Internal
control over financial reporting is promulgated under the Exchange Act as a
process designed by, or under the supervision of, our Chief Executive Officer
and Principal Financial Officer and effected by our board of directors,
management and other personnel, 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 and includes those policies and procedures that:




21




•        Pertain
to the maintenance of records that in reasonable detail accurately and fairly
reflect the transactions and dispositions of our assets;




•        Provide
reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with accounting principles
generally accepted in the United States and that our receipts and expenditures
are being made only in accordance with authorizations of our management and
directors; and




•        Provide
reasonable assurance regarding prevention or timely detection of unauthorized
acquisition or disposition of our assets that could have a material effect on
the financial statements.




Readers
are cautioned that internal control over financial reporting, no matter how well
designed, has inherent limitations and may not prevent or detect misstatements.
Therefore, even effective internal control over financial reporting can only
provide reasonable assurance with respect to the financial statement preparation
and presentation.




Our
management, under the supervision and with the participation of our Chief
Executive Officer and Principal Financial Officer, has evaluated the
effectiveness of our internal controls over financial reporting as of the end of
the period covered by this report based upon the framework in Internal
Control—Integrated Framework issued by the Committee of Sponsoring Organizations
of the Treadway Commission (COSO). Based on our evaluation, management concluded
that our internal control over financial reporting was effective as of April 30,
2009.




We continue the process to complete a
thorough review of our internal controls as part of our preparation for
compliance with the requirements of Section 404 of the Sarbanes-Oxley Act of
2002. Section 404 requires our management to report on, and our external
auditors to attest to, the effectiveness of our internal control structure and
procedures for financial reporting. As a non-accelerated filer under Rule 12b-2
of the Exchange Act, our first report under Section 404 as a smaller reporting
company will be contained in our Form 10-K for the year ended April 30,
2010.




This
annual report does not include an attestation report of the company’s
independent 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.




There
were no changes in our internal controls over financial reporting (as such term
is defined in Rule 13a-15(f) under the Exchange Act) that occurred during
our fiscal year ended April 30, 2009, that have materially affected, or are
reasonably likely to materially affect, our internal controls over financial
reporting. In the estimation of our senior management, none of the following
changes in the composition of management have materially affected, or are
reasonably likely to materially affect, our internal controls over financial
reporting:





Item
9B.Other Information




Not
applicable.




22




PART
III




Item
10.Directors and Executive Officers of Management Energy, Inc.




The
following table presents information with respect to our directors and executive
officers.





Name
                Age
                PositionDavid
      Walters
                46
                Chief
      Executive Officer and DirectorMatt
      Szot
                35
                Chief
      Financial Officer, Secretary and
Treasurer




Directors





DAVID
WALTERS


Mr.
Walters has served as a Director since April 2009 and as Chief Executive Officer
since August 2009.  Mr. Walters is a founder and principal of Strands
Management Company, LLC (“Strands”) and Monarch Bay Associates, LLC (“Monarch
Bay”), and has extensive experience in investment management, corporate growth
development strategies and capital markets. From 1992 through 2000, he was an
executive vice president and managing director in charge of capital markets for
Roth Capital (formerly Cruttenden Roth), were he managed the capital markets
group and led over 100 financings (public and private), raising over $2 billion
in growth capital. Additionally, Mr. Walters oversaw a research department that
covered over 100 public companies, and was responsible for the syndication,
distribution and after-market trading of the public offerings. From 1992 through
2000, he managed the public offerings for Cruttenden Roth, which was the most
prolific public underwriter in the U.S. for deals whose post-offering market cap
was less than $100 million. Mr. Walters sat on Roth's Board of Directors from
1994 through 2000. Previously, he was a vice president for both Drexel Burnham
Lambert and Donaldson Lufkin and Jenrette in Los Angeles, and he ran a private
equity investment fund. Mr. Walters earned a B.S. in Bioengineering from the
University of California, San Diego.  Mr. Walters also serves as
Chairman of the Board of Directors and Chief Executive of Pinnacle Energy Corp.,
Monarch Staffing, Inc. and STI Group, Inc., as Chairman of the Board of
Directors of Remote Dynamics, Inc., and a member of the Board of Directors of
Precision Aerospace Components, Inc.





Executive
Officers





All
officers serve until their successors are duly elected and qualified or their
earlier death, disability or removal from office.




23




DAVID WALTERS – SEE
ABOVE




MATT SZOT





Mr.
Szothas served as
our Chief Financial Officer, Secretary and Treasurer since January
2009.  Mr. Szot has significant experience in financial implementation
processes, mergers and acquisitions, financial valuation and public company SEC
reporting and compliance.  Since February 2007, Mr. Szot has served as
the Chief Financial Officer for Strands Management Company, LLC, a strategic
consulting company which provides executive financial services to various
publicly traded and privately held companies. He is currently the Chief
Financial Officer of Monarch Bay Associates, LLC.  Prior thereto, from
2003 to 2006, Mr. Szot served as Chief Financial Officer and Secretary of Rip
Curl, Inc., a market leader in wetsuit and action sports apparel
products.  From 1996 to 2003, Mr. Szot was a Certified Public
Accountant with KPMG in the San Diego and Chicago offices and served as an Audit
Manager for various publicly traded companies.  Mr. Szot is on the
Board of Directors of Secured Federal Funding Acquisition Corp. and also serves
as Chief Financial Officer of Pinnacle Energy Corp. and Treasurer of Lathian
Health.  Mr. Szot graduated with High Honors from the University of
Illinois, Champaign-Urbana, with a Bachelor of Science degree in Accounting and
Agricultural Economics. Mr. Szot is a Certified Public Accountant in the State
of California.





To the
best of our knowledge, our officers and directors have neither been convicted in
any criminal proceedings during the past five years nor are parties to any
judicial or administrative proceeding during the last five years that resulted
in a judgment, decree or final order enjoining then from future violations
of, or prohibiting activities subject to, federal or state securities laws or a
finding of any violation of federal or state securities laws or commodities
laws.  No bankruptcy petitions have been filed by or against any
business or property of any of our directors or officers, nor has a bankruptcy
petition been filed against a partnership or business association in which these
persons were general partners or executive officers.




There are
no family relationships among the directors and executive officers of Management
Energy, Inc.





Organization
of the Board of Directors





Our board
of directors currently consists of one board member David Walters. All directors
serve until the next annual meeting of the stockholders or until their
respective successors are duly elected and qualified, or until their earlier
death or removal from office.   There have been no material
changes to the procedures by which our stockholders may recommend nominees to
our Board of Directors.





The board
of directors has determined that Mr. Walters is not “independent” as such term
is defined by the listing standards of Nasdaq and the rules of the SEC since he
is a principal of Strands, a provider of consulting services to us and a
principal of Monarch Bay, our placement agrent.





Board
Committees.There currently no committees of our board
of directors.  Our board of directors is expected to appoint an audit
committee, nominating committee and compensation committee, and to adopt
charters relative to each such committee.  We intend to appoint such
persons to the board of directors and committees of the board of directors as
are expected to be required to meet the corporate governance requirements
imposed by a national securities exchange, although we are not required to
comply with such requirements until we elect to seek listing on a securities
exchange.




Code of Ethics for Chief Executive
Officer and Senior Financial Officers. We intend to adopt a code of
ethics that applies to our officers, directors and employees, including our
Chief Executive Officer and Chief Financial Officer, but have not done so to
date due to our relatively small size.




Directors’ and Officers’ Liability
Insurance.We currently anticipate that we will obtain
directors’ and officers’ liability insurance insuring our directors and officers
against liability for acts or omissions in their capacities as directors or
officers, subject to certain exclusions.  Such insurance is expected
to insure us against losses which we may incur in indemnifying our officers and
directors.  In addition, we expect to enter into indemnification
agreements with our executive officers and directors and such persons shall also
have indemnification rights under applicable laws, and our articles of
incorporation and bylaws.




24




Section 16(a)
Beneficial Ownership Reporting Compliance





Due to
our status as a Section 15(d) reporting company, our executive officers,
directors, and persons who beneficially own more than 10% of a registered class
of our equity securities are not required to file with the SEC reports of
ownership and changes in ownership of our equity securities pursuant to Section
16(a) of the Securities Exchange Act of 1934.





Compensation
of Directors





We do not
currently pay any cash fees to our directors, but we pay directors’ expenses in
attending board meetings. During the fiscal year ended April 30, 2009, $31,249
of director expenses were accrued but have not been reimbursed as of August 10,
2009.





Item
11.Executive Compensation.





The
following table describes compensation awarded, paid to or earned, for the last
fiscal year, by us to our former Chief Executive Officer and Chief
Financial Officer during our fiscal year ended April 30, 2009.





Name and PrincipalPosition
                              
                              Year
                              
                              Salary
                              
                              
                              Bonus
                              
                              
                              StockAwards
                              
                              
                              OptionAwards
                              
                              
                              Non-EquityIncentivePlan Comp-ensation
                              
                              
                              Non-QualifiedDeferred Comp-ensationEarnings
                              
                              
                              All OtherComp-ensation
                              
                              
                              Total(a)
                              
                              (b)
                              
                              (c)
                              
                              
                              (d)
                              
                              
                              (e)
                              
                              
                              (f)
                              
                              
                              (g)
                              
                              
                              (h)
                              
                              
                              (i)
                              
                              
                              (j)John
      P. Baugues (2)
                              
                              2009
                              
                              $
                              -
                              
                              
                              $
                              -
                              
                              
                              $
                              -
                              
                              
                              $
                              -
                              
                              
                              $
                              -
                              
                              
                              $
                              -
                              
                              
                              $
                              -
                              
                              
                              $
                              -Former
      Chief Executive Officer and Chairman
                              
                              2008
                              
                              $
                              -
                              
                              
                              $
                              -
                              
                              
                              $
                              -
                              
                              
                              $
                              -
                              
                              
                              $
                              -
                              
                              
                              $
                              -
                              
                              
                              $
                              -
                              
                              
                              $
                              -Matt
      Szot (3)
                              
                              2009
                              
                              $
                              -
                              
                              
                              $
                              -
                              
                              
                              $
                              112,125
                              
                              
                              $
                              -
                              
                              
                              $
                              -
                              
                              
                              $
                              -
                              
                              
                              $
                              -
                              
                              
                              $
                              -Chief
      Financial Officer, Treasurer, and Secretary
                              
                              2008
                              
                              $
                              -
                              
                              
                              $
                              -
                              
                              
                              $
                              -
                              
                              
                              $
                              -
                              
                              
                              $
                              -
                              
                              
                              $
                              -
                              
                              
                              $
                              -
                              
                              
                              $
                              -




(1)
            As
      part of our transition to the coal business, on January 14, 2009, we sold
      all of our assets to Joel Klandrud, our former officer and
      director.  As a result of this transaction, we became a “shell
      company” as defined in Section 12-b(2) of the Securities Exchange Act of
      1934, as amended.  Moreover, as part of this transaction, all of
      our officers and directors that were involved in our prior business
      resigned.  Accordingly, the table below omits information
      related to the compensation of the officers engaged in our prior business,
      as we believe this information would be misleading and not otherwise add
      to an understanding of our current business and compensation
      practices.





(2)
            Mr.
      Baugues became our Chief Executive Officer effective January 14, 2009 and
      resigned from the position on July 10,
2009.





(3)
            Mr.
      Szot became our Chief Financial Officer effective January 14,
      2009.




25




The
following table describes compensation awarded, paid to or earned, for the last
fiscal year, by us to our current Chief Executive Officer and Director
during our fiscal year ended April 30, 2009.





Name and PrincipalPosition
                          
                          Year
                          
                          Salary
                          
                          
                          Bonus
                          
                          
                          StockAwards
                          
                          
                          OptionAwards
                          
                          
                          Non-EquityIncentivePlan Comp-ensation
                          
                          
                          Non-QualifiedDeferred Comp-ensationEarnings
                          
                          
                          All OtherComp-
                            ensation
                          
                          
                          Total(a)
                          
                          (b)
                          
                          (c)
                          
                          
                          (d)
                          
                          
                          (e)
                          
                          
                          (f)
                          
                          
                          (g)
                          
                          
                          (h)
                          
                          
                          (i)
                          
                          
                          (j)David
      Walters (1)
                          
                          2009
                          
                          $
                          -
                          
                          
                          $
                          -
                          
                          
                          $
                          504,563
                          
                          
                          $
                          -
                          
                          
                          $
                          -
                          
                          
                          $
                          -
                          
                          
                          $
                          66,668
                          
                          
                          $
                          -Current
      Chief Executive Officer and Director
                          
                          2008
                          
                          $
                          -
                          
                          
                          $
                          -
                          
                          
                          $
                          -
                          
                          
                          $
                          -
                          
                          
                          $
                          -
                          
                          
                          $
                          -
                          
                          
                          $
                          -
                          
                          
                          $
                          -




(1)
            Mr.
      Walters has served as a Director since April 2009 and as Chief Executive
      Officer since August 2009. Mr. Walters owns a 50% interest and is a
      managing member of Strands Management Company,
      LLC.   We incurred $66,668 of expense under
      the terms of a support services agreement in the fiscal year ended
      April 30, 2009.




Outstanding
Equity Awards at Fiscal Year-End




As of
August 10, 2009, there were no outstanding equity awards held by any named
executive officer.




Employment
Agreements





As of
August 10, 2009, we were not a party to any employment agreement with any named
executive officer.




Compensation
Committee Interlocks and Insider Participation





Due to
the limited number of directors constituting our Board of Directors, the full
Board of Directors considers and participates in the compensation of our
executive officers.




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




The
following table sets forth certain information regarding beneficial ownership of
our common stock as of August 10, 2009:





·
            by
      each person who is known by us to beneficially own more than 5% of our
      common stock;


·
            by
      each of our executive officers and directors;
  and


·
            by
      all of our executive officers and directors as a
  group.




26




Name
      and address of
                                              
                                              Beneficial Ownership of Shares (2)Beneficial Owner (1)
                                              
                                              Number
                                              
                                              
                                              Percentage (3)JOHN
      P. BAUGUES, JR. (4)
                                              
                                              
                                              25,000,000
                                              
                                              
                                              
                                              34.6
                                              %3203
      3rd Avenue North, Suite 300Billings,
      MT 59101BNM
      CAPITAL VENTURES
                                              
                                              
                                              5,000,000
                                              
                                              
                                              
                                              6.9
                                              %Nieuwezijds
      Voorburgwal 86Postbus
      931012SEAmersterdam,
      NetherlandsPRIMA
      ESTATES
                                              
                                              
                                              5,000,000
                                              
                                              
                                              
                                              6.9
                                              %C/O
      DFM MANAGEMENT SAMLe
      Montaigne7
      Ave De Grande BretagneMonte
      Carlo 98000, MonacoTYDUS
      RICHARDS  (5)
                                              
                                              
                                              22,400,000
                                              
                                              
                                              
                                              31.0
                                              %29377
      Rancho California Road #204Temecula,
      CA 92591MATT
      SZOT
                                              
                                              
                                              162,500
                                              
                                              
                                              
                                              *DAVID
      WALTERS
                                              
                                              
                                              731,250
                                              
                                              
                                              
                                              1.0
                                              %All
      officers and directors as a group
                                              
                                              
                                              893,750
                                              
                                              
                                              
                                              1.2
                                              %(2
      persons)





*
Represents less than 1%





(1)
            Unless
      otherwise indicated, the address of each of the named parties in this
      table is: 30950 Rancho Viejo Road, Suite 120, San Juan Capistrano, CA
      92675.


(2)
            This
      table is based upon information supplied by our officers, directors,
      principal stockholders and our transfer agent.   Unless
      otherwise indicated, this table includes shares owned by a spouse, minor
      children, and relatives sharing the same home, as well as entities owned
      or controlled by the named beneficial owner.  Unless otherwise noted,
      we believe the shares reflected in this table are owned of record and
      beneficially by the named beneficial
owner.


(3)
            Based
      on 72,325,000 shares outstanding as of August 10,
  2009.


(4)
            Includes:
      (1) 8,425,000 shares of common stock owned by John P. Baugues, Jr., and
      (2) 16,575,000 shares of common stock held by The John Paul Baugues,
      Senior Family Trust, the beneficiaries of which are John P. Baugues, Jr.
      and his children.  Mr. Baugues disclaims beneficial ownership of
      the 16,575,000 share of common stock held by The John Paul Baugues, Senior
      Family Trust.


(5)
            Includes:
      (1) 22,000,000 shares of common stock owned by TRX Capital and 400,000
      shares of common stock owned by Lotus Asset
  Management.





27




Item
13.Certain Relationships and Related Transactions.




On
January 14, 2009, we sold all of our assets to Joel Klandrud, our former officer
and director, pursuant to that certain Asset Sale Agreement, dated January 14,
2009, in exchange for the surrender to us by Mr. Klandrud of 4,000,000 shares of
the our common stock, and the assumption by Mr. Klandrud all of the our
liabilities.





On
January 14, 2009, we entered into a Support Services Agreement with Strands
Management Company, LLC (the “Strands Agreement”).  Matt Szot, our
Chief Financial Officer, Treasurer, and Secretary, is the Chief Financial
Officer of Strands.  David Walters, a director, owns a 50% interest
and is a managing member of Strands.   Pursuant to the Strands
Agreement, in consideration for providing certain services to us, Strands is
entitled to a monthly fee in the amount of $16,667.  The initial term
of the Strands Agreement expires January 8, 2010.  On April 2, 2009, we
entered into Amendment #1 to the Strands Agreement.  Pursuant to the
amendment, we agreed to issue to Messrs. Walters and Szot and another principal
of Strands an aggregate of 1,625,000 shares of our common stock as a retainer,
in exchange for Strands’ agreement to continue to provide services under the
Support Services Agreement.  We incurred $66,668 and $0 under the
terms of the agreement for the years ended April 30, 2009 and 2008,
respectively, which is included in consulting expenses in the accompanying
statements of operations.  As of April 30, 2009, $66,668 is
outstanding under the agreement.




On
January 14, 2009, we entered into a Placement Agency and Advisory Services
Agreement with Monarch Bay Associates, LLC.  Matt Szot, our Chief
Financial Officer, Treasurer, and Secretary, is the Chief Financial Officer of
Monarch Bay.  David Walters, our Chief Executive Officer
and  director, owns a 50% interest and is a managing member of Monarch
Bay.  Pursuant the engagement letter, we are required to (1) pay to
Monarch Bay 3% of the gross proceeds of any financing from non-Monarch Bay
sources and issue to Monarch Bay warrants to purchase that number of shares of
our common stock equal to 3% of the number of shares of common stock (including
convertible securities) issued in such financing, and (2) pay to Monarch Bay 5%
of the gross proceeds of any financing from Monarch Bay sources and issue to
Monarch Bay warrants to purchase that number of shares of our  common
stock equal to 5% of the number of shares of common stock (including convertible
securities) issued in such financing.  We did not incur any expenses
under the terms of the agreement during the year ended April 30,
2009.





On
January 9, 2009, we entered into an Acquisition Agreement (the “Acquisition
Agreement”) to acquire 100% of the ownership interests in Patoka River Coal
Company, LLC, a Delaware limited liability company (“PRCC”), Patoka River
Holdings, LLC, a Delaware limited liability company (“PRH”), and Carbon County
Holdings, LLC (PRCC, PRH and CCH are collectively referred to herein as the
“LLCs”) in exchange for our agreement to issue a total of 40,000,000 shares of
our common stock to the owners of the LLCs, John P. Baugues, Jr. (our former
Chief Executive Officer and director), the Baugues Trust, and TRX Capital, LLC,
a California limited liability controlled by Tydus Richards, the former Chairman
of our board of directors,.  At that time, PRCC held an exclusive
option to acquire two parcels of land in fee simple, which option expired on
January 26, 2009, and CCH held certain leasehold mining rights.   On
March 31, 2009, we entered into a Letter Agreement Regarding Termination of
Acquisition Agreement (the “Termination Letter”), pursuant to which the parties
agreed to terminate the Acquisition Agreement.





On April
13, 2009, we entered into the Contribution Agreement with Carbon County
Holdings, LLC, John P. Baugues, Jr., our former Chief Executive Officer and
director, the Baugues Trust, and Tydus Richards, the former Chairman of our
board of directors.  Pursuant to the Contribution Agreement, CCH
agreed to contribute and assign to us all of CCH’s rights and obligations under
the Bridger Lease in exchange for the issuance to the members of CCH of, the
number of shares of our Common Stock set forth opposite such member’s name
below.




Name of Member
              
              Number of SharesJohn
      P. Baugues, Jr.
              
              15,925,000The
      John Paul Baugues, Sr. Family Trust
              
              16,575,000Tydus
      Richards
              
              27,500,000Total
              
              60,000,000




28




On April
13, 2009, we entered into a Strategic Consulting Services Agreement with Charles
S. Leykum (our former Board Advisor).  Pursuant to the agreement, we
agreed to issue to Mr. Leykum (or Mr. Leykum’s designees) an aggregate of
2,010,500 shares of our common stock as a payment, in exchange for Mr. Leykum’s
services.  The agreement had a term of 24 months.  On July
13, 2009, we agreed to the termination of the agreement with Charles S.
Leykum.  In connection with the termination of the agreement, Mr.
Leykum and certain affiliated entities surrendered 7,010,500 shares of the
Company’s common stock for cancellation and the parties agreed to a mutual
release of all claims.





On July
16, 2009, we entered into a Consulting Services Agreement with Lotus Asset
Management, an entity controlled by Tydus Richards, the former Chairman of our
board of directors.  Under the Agreement, we will pay Lotus Asset
Management a monthly fee of $20,000 in exchange for business development
services, serve as a member of the board of advisors, corporate strategy, and
identify other potential employees including a Chief Executive Officer with
extensive coal industry experience.  The initial term of the agreement
expires October 16, 2009.





On July 23, 2009, we entered into a
stock purchase agreement with an accredited investor controlled by Tydus
Richards, the former Chairman of our board of directors, for the sale of 400,000
shares of our common stock at a purchase price of $1.00 per share.  In
connection with the stock purchase agreement, we agreed that we will not expend
the proceeds of the offering without the consent of the investor.  The
sale closed on July 24, 2009.





Item
14.Exhibits.




(a)1.   Financial
Statements.




The
following financial statements of Management Energy, Inc. are submitted as a
separate section of this report (See F-pages), and are incorporated by
reference in Item 7:




Report
      Of Independent Registered Public Accounting Firm
                                          
                                          F-1Report
      Of Independent Registered Public Accounting Firm
                                          
                                          F-2Balance
      Sheets –  April 30, 2009 and 2008
                                          
                                          F-3Statements
      of Operations – For the Years Ended April 30, 2009 and 2008 and for the
      period of inception, from May 19, 2005 through April 30,
    2009
                                          
                                          F-4Statements
      of Cash Flows - For the Years Ended April 30, 2009 and 2008 and for the
      period of inception, from May 19, 2005 through April 30,
    2009
                                          
                                          F-5Statements
      of Stockholders Equity  – For the Year Ended April 30,
      2009
                                          
                                          F-6Notes
      to Financial Statements
                                          
                                          F-7




(b)
              Exhibits




The
following Exhibits are filed herewith pursuant to Item 601 of
Regulation S-K or incorporated herein by reference to previous filings as
noted:




29




Exhibit No.
                
                Identification of Exhibit2.1
                
                Agreement
      for Sale of Assets, dated January 14, 2009, entered into between the
      registrant and Joel Klanrud. (1)2.2
                
                Contribution
      and Assignment Agreement, dated as of March 31, 2009, by and among the
      registrant, Carbon County Holdings, LLC, a Delaware limited liability
      company, John P. Baugues, Jr., The John Paul Baugues, Sr. Family Trust,
      and Tydus Richards. (2)3.1.1
                
                Articles
      of Incorporation  (3)3.1.2
                
                Certificate
      Of Amendment to the Articles of Incorporation dated February 5, 2009
      (1)3.1.3
                
                Certificate
      Of Amendment to the Articles of Incorporation dated June 22, 2009
      (4)3.2
                
                By-Laws  (3)10.1.1
                
                Support
      Services Agreement, dated January 8, 2009, between Strands Management
      Company, LLC and the registrant (5)10.1.2
                
                Amendment
      No.1 to Support Services Agreement, dated April 3, 2009, between Strands
      Management Company, LLC and the registrant (2)10.2
                
                Engagement
      Letter, dated January 8, 2009, between the registrant and Monarch Bay
      Associates, LLC (5)10.3
                
                Mining
      Lease, dated as of January 16, 2009, by and between Carbon County
      Holdings, LLC, a Delaware limited liability company, on the one hand, and
      Edith L. Bolzer and Richard L. Bolzer, on the other hand
    (2)10.4.1
                
                Stock
      Purchase Agreement, dated July 23, 2009 (6)10.4.2
                
                Addendum
      to Stock Purchase Agreement (6)10.5
                
                Consulting
      Agreement, dated July 16, 2009, with Lotus Asset
    Management*21.1*
                
                Subsidiaries
      of Registrant23.1*
                
                Consent
      of M&K CPAs, PLLCConsent
      of John-Kinross Kennedy31.1*
                
                Certification
      of Chief Executive Officer pursuant to Rules 13a-14 and 15d-14 promulgated
      under the Securities Exchange Act of 193431.2*
                
                Certification
      of Principal Financial Officer pursuant to Rules 13a-14 and 15d-14
      promulgated under the Securities Exchange Act of 193432.1*
                
                Certification
      of Chief Executive Officer and Chief Financial Officer pursuant to 18
      U.S.C. Section 1350, as adopted pursuant to Section 906 of the
      Sarbanes-Oxley Act of
2002


*  Filed
herewith




(1)
                  Incorporated
      herein by reference to the registrant’s Current Report on Form 8-K filed
      with the SEC on March 4, 2009.(2)
                  Incorporated
      herein by reference to the registrant’s Current Report on Form 8-K filed
      with the SEC on April 6, 2009.(3)
                  Incorporated
      herein by reference to the registrant’s Registration Statement on Form S-1
      filed with the SEC on July 29, 2008.(4)
                  Incorporated
      herein by reference to the registrant’s Current Report on Form 8-K filed
      with the SEC on May 29, 2009.(5)
                  Incorporated
      herein by reference to the registrant’s Quarterly Report on Form 10-Q, as
      filed with the SEC on March 17, 2009.(6)
                  Incorporated
      herein by reference to the registrant’s Current Report on Form 8-K filed
      with the SEC on July 28,
2009.




30




Item
15.Principal Accountant Fees and Services





On February 26, 2009, our Board of
Directors approved the engagement of M&K CPAs, PLLC (“M&K”) to serve as
our principal independent public accountant to audit our financial statements
for the fiscal year ended April 30, 2009.  Prior to February 26, 2009,
our principal independent public accountant was John Kinross-Kennedy
(“JKK”).  Audit fees billed by M&K relate to the audits for the
fiscal year ended April 30, 2009.  The accountant fees paid to JKK
relate to the fiscal year end April 30, 2008.  Audit fees billed by
our principal independent public accountants for services rendered for the audit
of our annual financial statements and review of our quarterly financial
statements included in Form 10-Q for the last two fiscal years are presented
below.  Audit-related fees, tax fees, and other fees for services
billed by our principal independent public accountant during each of the last
two fiscal years are also presented in the following table:




Years Ended April 30,2009
                                            
                                            
                                            2008M&K
      CPAs, PLLCAudit
      fees
                                            
                                            $
                                            6,700
                                            
                                            
                                            $
                                            -Audit-related
      fees (a)
                                            
                                            $
                                            -
                                            
                                            
                                            $
                                            -Tax
      fees (b)
                                            
                                            $
                                            -
                                            
                                            
                                            $
                                            -Registration
      Statement Fees
                                            
                                            $
                                            -
                                            
                                            
                                            $
                                            -All
      other fees
                                            
                                            $
                                            -
                                            
                                            
                                            $
                                            -John
      Kinross KennedyAudit
      fees
                                            
                                            $
                                            1,000
                                            
                                            
                                            $
                                            2,000Audit-related
      fees (a)
                                            
                                            $
                                            -
                                            
                                            
                                            $
                                            -Tax
      fees (b)
                                            
                                            $
                                            -
                                            
                                            
                                            $
                                            -Registration
      Statement Fees
                                            
                                            $
                                            -
                                            
                                            
                                            $
                                            -All
      other fees
                                            
                                            $
                                            -
                                            
                                            
                                            $
                                            -




(a)
Audit-related fees primarily include research services to validate certain
accounting policies.




(b) Tax
fees include costs for the preparation of our corporate income tax
return.




Our Board of Directors established a
policy whereby the outside auditors are required to seek pre-approval on an
annual basis of all audit, audit-related, tax and other services by providing a
prior description of the services to be performed. For the year ended April 30,
2009, 100% of all audit-related services were pre-approved by the Board of
Directors, which concluded that the provision of such services by M&K was
compatible with the maintenance of that firm’s independence in the conduct of
its auditing functions.




31




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.




Dated:
      August 13, 2009
            MANAGEMENT
      ENERGY, INC.(Registrant)By:
            /s/
      David WaltersChief
      Executive Officer(Principal
      Executive Officer)




Pursuant
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 indicated.




Signature
                                        
                                        Title
                                        
                                        Date/s/
      David Walters
                                        
                                        Chief
      Executive Officer (Principal Executive Officer and
Director
                                        
                                        August
      13, 2009David
      Walters/s/
      Matthew Szot
                                        
                                        Chief
      Financial Officer(Principal Financial and Accounting Officer)
                                        
                                        August
      13, 2009Matthew
      Szot




SUPPLEMENTAL
INFORMATION TO BE FURNISHED WITH REPORTS FILED


PURSUANT
TO SECTION 15(d) OF THE EXCHANGE ACT BY NON-REPORTING ISSUERS




1.
              No annual report to security
      holders covering the company’s fiscal year ended April 30, 2009, has been
      sent as of the date of this
report.
 
 2.
              No proxy soliciting material has
      been sent to the company’s security holders with respect to the 2009
      annual meeting of security
holders.
 
 3.
              If such report or proxy material
      is furnished to security holders subsequent to the filing of this Report
      on Form 10-K, the company will furnish copies of such material to the
      Commission at the time it is sent to security
    holders.




32




ANNUAL
REPORT ON FORM 10-K


ITEM
7


FINANCIAL
STATEMENTS


FISCAL
YEARS ENDED APRIL 30, 2009 and 2008


MANAGEMENT
ENERGY, INC.


SAN
JUAN CAPISTRANO, CA









MANAGEMENT
ENERGY, INC.





Financial
      Statements
                                                PageReport
      Of Independent Registered Public Accounting Firm
                                                F-1Report
      Of Independent Registered Public Accounting Firm
                                                F-2Balance
      Sheets –  April 30, 2009 and 2008
                                                F-3Statements
      of Operations – For the Years Ended April 30, 2009 and 2008 and for the
      period of inception, from May 19, 2005 through April 30,
    2009
                                                F-4Statements
      of Cash Flows - For the Years Ended April 30, 2009 and 2008 and for the
      period of inception, from May 19, 2005 through April 30,
    2009
                                                F-5Statements
      of Stockholders’ Equity  – For the Year Ended April 30,
      2009
                                                F-6Notes
      to Financial Statements
                                                F-7




F-ii




REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





To the
Board of Directors


Management
Energy, Inc.


San Juan
Capistrano, California





We have
audited the accompanying balance sheet of Management Energy, Inc. (the
“Company”) (an exploration stage company) as of April 30, 2009 and the related
statements of operations, shareholders' equity and cash flows for the twelve
month period then ended and the period from inception (May 19, 2005) through
April 30, 2009.  The financial statements for the year ended April 30,
2008 were audited by other auditors whose report expressed an unqualified
opinion on those statements.  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 audit.





We
conducted our audit in accordance with standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.





In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Management Energy, Inc. as of April
30, 2009 and the results of its operations and cash flows for the period
described above in conformity with accounting principles generally accepted in
the United States of America.





The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern.  As discussed in Note 1 to the
financial statement, the Company suffered a net loss from operations and has a
net capital deficiency, which raises substantial doubt about its ability to
continue as a going concern.  Management’s plans regarding those
matters are also described in Note 1.  The financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.




/s/
M&K CPAS, PLLC





www.mkacpas.com


Houston,
Texas


August
10, 2009




F-1










F-2





MANAGEMENT
ENERGY, INC.


(An
Exploration Stage Company)


Balance
Sheets









April
      30,
                          
                          
                          April
      30,2009
                          
                          
                          2008ASSETSCurrent
      AssetsCash
      and Cash Equivalents
                          
                          $
                          900
                          
                          
                          $
                          76,697Total
      Current Assets
                          
                          
                          900
                          
                          
                          
                          76,697Assets
      of discontinued operations, net
                          
                          
                          -
                          
                          
                          
                          24,764Total
      Assets
                          
                          $
                          900
                          
                          
                          $
                          101,461LIABILITIES
      & STOCKHOLDERS' EQUITY (DEFICIT)Current
      LiabilitiesAccounts
      Payable
                          
                          $
                          41,295
                          
                          
                          $
                          -Accrued
      Expenses
                          
                          
                          100,917
                          
                          
                          
                          -Liabilities
      of discontinued operations, net
                          
                          
                          -
                          
                          
                          
                          1,750Total
      Current Liabilities
                          
                          
                          142,212
                          
                          
                          
                          1,750Stockholders'
      Equity (Deficit)Common
      Stock, $0.001 par value, 300,000,000 shares authorized,71,925,000 shares
      issued and outstanding at April 30, 2009 and,14,300,000 shares
      issued and outstanding at April 30, 2008
                          
                          
                          71,925
                          
                          
                          
                          14,300Additional
      paid-in capital
                          
                          
                          1,239,411
                          
                          
                          
                          108,698Deficit
      accumulated in the development stage
                          
                          
                          (1,452,648
                          )
                          
                          
                          (23,287
                          )Total
      Stockholders' Equity (Deficit)
                          
                          
                          (141,312
                          )
                          
                          
                          99,711Total
      Liabilities and Stockholders' Equity (Deficit)
                          
                          $
                          900
                          
                          
                          $
                          101,461





See
accompanying notes to financial statements


F-3


MANAGEMENT
ENERGY INC.
 (An
Exploration Stage Company)
 Statements
of Operations
 
 For the periodof Inception,For the
                      
                      
                      from May 19,Years Ended
                      
                      
                      2005 throughApril 30,
                      
                      
                      April 30,2009
                      
                      
                      2008
                      
                      
                      2009Expenses:Professional
      Fees
                      
                      $
                      51,800
                      
                      
                      $
                      -
                      
                      
                      $
                      51,800Consulting
                      
                      
                      66,668
                      
                      
                      
                      -
                      
                      
                      
                      66,668Mining
      Lease
                      
                      
                      62,541
                      
                      
                      
                      -
                      
                      
                      
                      62,541Stock
      Based Compensation
                      
                      
                      1,163,500
                      
                      
                      
                      -
                      
                      
                      
                      1,163,500Other
      General & Administrative
                      
                      
                      24,866
                      
                      
                      
                      -
                      
                      
                      
                      24,866Total
      Operating Expenses
                      
                      
                      1,369,375
                      
                      
                      
                      -
                      
                      
                      
                      1,369,375Operating
      Loss From Continuing Operations
                      
                      $
                      (1,369,375
                      )
                      
                      $
                      -
                      
                      
                      $
                      (1,369,375
                      )Discontinued
      operationsLoss
      from discontinued operations
                      
                      
                      (59,986
                      )
                      
                      
                      (23,287
                      )
                      
                      
                      (83,273
                      )Net
      Loss
                      
                      $
                      (1,429,361
                      )
                      
                      $
                      (23,287
                      )
                      
                      $
                      (1,452,648
                      )Basic
      and Dilutive Net Loss From Continuing Operations Per Share
                      
                      $
                      (0.083
                      )
                      
                      $
                      -Basic
      and Dilutive Net Loss From Discontinued Operations Per
    Share
                      
                      $
                      (0.004
                      )
                      
                      $
                      (0.006
                      )Weighted
      average number of shares outstanding, basic and diluted
                      
                      
                      16,597,321
                      
                      
                      
                      3,753,425
 
 See
accompanying notes to financial statements


F-4





MANAGEMENT
ENERGY INC.


(An
Exploration Stage Company)


Statements
of Cashflows










For the periodof Inception,For the
                          
                          
                          May 19,Years Ended
                          
                          
                          2005 toApril 30,
                          
                          
                          April 30,2009
                          
                          
                          2008
                          
                          
                          2009Cash
      Flows from Operating ActivitiesNet
      Loss from continuing operations
                          
                          $
                          (1,369,375
                          )
                          
                          $
                          -
                          
                          
                          $
                          (1,369,375
                          )Net
      Loss from discontinued operations
                          
                          
                          (59,986
                          )
                          
                          
                          (23,287
                          )
                          
                          
                          (83,273
                          )Adjustments
      to reconcile net loss to netcash
      used in operating activities:Depreciation
      expense
                          
                          
                          1,179
                          
                          
                          
                          300
                          
                          
                          
                          1,479Stock
      issued to acquire mining lease
                          
                          
                          62,541
                          
                          
                          
                          -
                          
                          
                          
                          62,541Stock
      Based Compensation
                          
                          
                          1,163,500
                          
                          
                          
                          -
                          
                          
                          
                          1,163,500Change
      in operating assets and liabilities:Accounts
      Receivable
                          
                          
                          (15,118
                          )
                          
                          
                          -
                          
                          
                          
                          (15,118
                          )Prepaids
                          
                          
                          -
                          
                          
                          
                          (1,500
                          )
                          
                          
                          (1,500
                          )Accounts
      Payable
                          
                          
                          41,295
                          
                          
                          
                          -
                          
                          
                          
                          41,295Accrued
      expenses
                          
                          
                          100,917
                          
                          
                          
                          -
                          
                          
                          
                          100,917Net
      Cash used in Operating Activities
                          
                          
                          (75,047
                          )
                          
                          
                          (24,487
                          )
                          
                          
                          (99,534
                          )Cash
      Flows from Investing ActivitiesPurchase
      of equipment
                          
                          
                          -
                          
                          
                          
                          (23,564
                          )
                          
                          
                          (23,564
                          )Net
      Cash used in Investing Activities
                          
                          
                          -
                          
                          
                          
                          (23,564
                          )
                          
                          
                          (23,564
                          )Cash
      Flows from Financing ActivitiesProceeds
      from the sale of Common Stock
                          
                          
                          1,000
                          
                          
                          
                          122,998
                          
                          
                          
                          123,998Repayment
      of loan from officer
                          
                          
                          (1,750
                          )
                          
                          
                          1,750
                          
                          
                          
                          -Net
      Cash provided by (used by) Financing Activities
                          
                          
                          (750
                          )
                          
                          
                          124,748
                          
                          
                          
                          123,998Net
      Increase (Decrease) in Cash
                          
                          $
                          (75,797
                          )
                          
                          $
                          76,697
                          
                          
                          $
                          900Cash
      at beginning of period
                          
                          $
                          76,697
                          
                          
                          $
                          -
                          
                          
                          $
                          -Cash
      at end of period
                          
                          $
                          900
                          
                          
                          $
                          76,697
                          
                          
                          $
                          900Cash
      paid forInterest
                          
                          $
                          -
                          
                          
                          $
                          -
                          
                          
                          $
                          -Income
      Taxes
                          
                          $
                          -
                          
                          
                          $
                          -
                          
                          
                          $
                          -Supplemental
      Disclosue of Non-Cash Disposal of Assets related to Discontinued
      Operations:Accounts
      receivable
                          
                          $
                          15,118
                          
                          
                          $
                          -
                          
                          
                          $
                          15,118Prepaids
                          
                          
                          1,500
                          
                          
                          
                          -
                          
                          
                          
                          1,500Property
      and Equipment
                          
                          
                          22,085
                          
                          
                          
                          -
                          
                          
                          
                          22,085Common
      stock
                          
                          
                          (4,000
                          )
                          
                          
                          -
                          
                          
                          
                          (4,000
                          )Additional
      Paid in Capital
                          
                          
                          (34,703
                          )
                          
                          
                          -
                          
                          
                          
                          (34,703
                          )$
                          -
                          
                          
                          $
                          -
                          
                          
                          $
                          -





See
accompanying notes to financial statements


F-5





MANAGEMENT
ENERGY INC.


(An
Exploration Stage Company)


Statement
of Stockholders' Equity (Deficit)





AccumulatedAdditional
                    
                    
                    Deficit
      DuringCommon Stock
                    
                    
                    Paid-in
                    
                    
                    ExplorationShares
                    
                    
                    Amount
                    
                    
                    Capital
                    
                    
                    Stage
                    
                    
                    TotalBalances
      at May 19, 2007
                    
                    
                    -
                    
                    
                    $
                    -
                    
                    
                    $
                    -
                    
                    
                    $
                    -
                    
                    
                    $
                    -Common
      stock issued for cash on January 10, 2008 at $0.002 per
    share
                    
                    
                    9,000,000
                    
                    
                    
                    9,000
                    
                    
                    
                    9,000
                    
                    
                    
                    -
                    
                    
                    
                    18,000Common
      stock issued for cash on February 20, 2008 at $0.02 per
    share
                    
                    
                    5,300,000
                    
                    
                    
                    5,300
                    
                    
                    
                    99,698
                    
                    
                    
                    -
                    
                    
                    
                    104,998Net
      loss for the year ended April 30, 2008
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (23,287
                    )
                    
                    
                    (23,287
                    )Balances
      at April 30, 2008
                    
                    
                    14,300,000
                    
                    
                    $
                    14,300
                    
                    
                    $
                    108,698
                    
                    
                    $
                    (23,287
                    )
                    
                    $
                    99,711Shares
      retired in the disposal of assets
                    
                    
                    (4,000,000
                    )
                    
                    
                    (4,000
                    )
                    
                    
                    (34,703
                    )
                    
                    
                    -
                    
                    
                    $
                    (38,703
                    )Common
      stock issued for cash on February 27, 2009 at $0.0002 per
      share
                    
                    
                    5,000,000
                    
                    
                    
                    5,000
                    
                    
                    
                    (4,000
                    )
                    
                    
                    -
                    
                    
                    $
                    1,000Common
      Stock issued for professional services on April 15, 2009
                    
                    
                    1,625,000
                    
                    
                    
                    1,625
                    
                    
                    
                    1,161,875
                    
                    
                    
                    -
                    
                    
                    $
                    1,163,500Common
      Stock issued in acquisition of mining lease on April 15,
    2009
                    
                    
                    60,000,000
                    
                    
                    
                    60,000
                    
                    
                    
                    2,541
                    
                    
                    
                    -
                    
                    
                    $
                    62,541Common
      Stock issued for professional services on April 16, 2009
                    
                    
                    2,010,500
                    
                    
                    
                    2,010
                    
                    
                    
                    1,465,655
                    
                    
                    
                    -
                    
                    
                    $
                    1,467,665Shares
      retired due to termination of consulting agreement
                    
                    
                    (7,010,500
                    )
                    
                    
                    (7,010
                    )
                    
                    
                    (1,460,655
                    )
                    
                    
                    -
                    
                    
                    $
                    (1,467,665
                    )Net
      loss from discontinued operations for the year ended April 30,
      2009
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (59,986
                    )
                    
                    $
                    (59,986
                    )Net
      loss from continuing operations for the year ended April 30,
      2009
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (1,369,375
                    )
                    
                    $
                    (1,369,375
                    )Balances
      at April 30, 2009
                    
                    
                    71,925,000
                    
                    
                    $
                    71,925
                    
                    
                    $
                    1,239,411
                    
                    
                    $
                    (1,452,648
                    )
                    
                    $
                    (141,312
                    )





See
accompanying notes to financial statements


F-6





Management
Energy, Inc.


(An
Exploration Stage Company)


Notes
to Financial Statements





NOTE
1 – BACKGROUND, ORGANIZATION, AND BASIS OF PRESENTATION




Organization





The
Company was initially incorporated in the State of Nevada on May 19, 2005, as
Inkie Entertainment Group, Inc., for the purpose of engaging in the production,
distribution and marketing of filmed entertainment products.  On
January 15, 2008, the Company changed its name to Quantum Information, Inc. In
January 2009, the Company announced that it would transition out of the filmed
entertainment products business and into the coal business.





As part
of that transition, on January 14, 2009, the Company sold all of its assets to
Joel Klandrud, the Company’s former officer and director, in exchange for the
surrender to the Company by Mr. Klandrud of 4,000,000 shares (800,000 shares
pre-split) of the Company’s common stock, and the assumption by Mr. Klandrud all
of the Company’s liabilities.  The Company also changed its name to
MGMT Energy, Inc. on February 5, 2009 and to Management Energy, Inc. on May 28,
2009 to better reflect the Company’s business focus.  See Note 7 –
Discontinued Operations for further discussion.





On April
13, 2009, the Company entered into a Contribution and Assignment Agreement (the
“Contribution Agreement”) with Carbon County Holdings, LLC, a Delaware limited
liability company (“CCH”), John P. Baugues, Jr., the Company’s former Chief
Executive Officer and director, The John Paul Baugues, Sr. Family Trust, the
beneficiaries of which are John P. Baugues, Jr. and his children  (the
“Baugues Trust”), and Tydus Richards, the former Chairman of the Company’s board
of directors.  Pursuant to the Contribution Agreement, CCH agreed to
contribute and assign to the Company all of CCH’s rights and obligations under
that certain Mining Lease, dated on or around January 16, 2009 (the “Bridger
Lease”), between CCH, on the one hand, and Edith L. Bolzer and Richard L.
Bolzer, as lessors, on the other hand, for the purpose of mining and removing
coal from the Bridger Property.  In exchange for the contribution and
assignment of the Bridger Lease, the Company agreed to issue to each of Mr.
Baugues, the Baugues Trust, and Mr. Richards, the sole members of CCH, the
number of shares of the Company’s Common Stock set forth opposite such member’s
name below.





Name of Member
                                            
                                            Number of SharesJohn
      P. Baugues, Jr.
                                            
                                            15,925,000
      (3,185,000 pre-split)The
      John Paul Baugues, Sr. Family Trust
                                            
                                            16,575,000
      (3,315,000 pre-split)Tydus
      Richards
                                            
                                            27,500,000
      (5,500,000 pre-split)Total
                                            
                                            60,000,000 (12,000,000
      pre-split





Under the
terms of the Bridger Lease, the Company is required to pay to the lessors (1) a
minimum annual payment in an amount equal to $62,541 in each year during the
initial ten (10) year term of the Bridger Lease, subject to increases in future
years (the “Minimum Annual Payment”) and (2) a royalty equal to 12.5% of the
gross proceeds on all coal mined from the Bridger Property (the
“Royalty”).  In addition, unless coal is mined from minerals owned by
the lessors, for each ton of coal mined from, stored on or transported across
the Bridger Property, the Company is required to pay a damage fee of $0.15 per
ton for such coal (the “Damage Fee”).  In the event that the Royalty
and/or the Damage Fee in any year during the term exceeds twice the Minimum
Annual Payment, the Company is not required to make the Minimum Annual Payment
for that year.





The
Bridger Lease is effective for a 10 year term.  The Company has the
right to renew the Bridger Lease for two additional 10 year terms upon at least
90 days written notice to the lessors prior to the expiration of the
then-current term.  After 3 years from the effective date, the Company
has the right to terminate the Bridger Lease, on any annual anniversary, upon 90
days prior written notice to the lessors and upon payment of all damage fees,
rentals and royalties accrued through the date of termination.





The
consideration that the Company agreed to pay to acquire the Bridger Lease was
approved by holders of a majority of the Company’s common
stock.


F-7





The
closing of the transaction under the Contribution Agreement was subject to
approval of the Company’s stockholders.  On April 11, 2009, the
stockholders approved the transaction.  On April 13, 2009, the Company
consummated the transactions contemplated by the Contribution Agreement,
including acquisition of the Bridger Lease.





On May 28, 2009, the Company completed
a five-for-one stock split of the Company’s common stock and an increase in the
number of our authorized shares of common stock to 300,000,000.  The
share and per-share information disclosed within this Form 10-K reflect the
completion of this stock split.





Business
Overview





The
Company’s business plan is to engage in the exploration, extraction and
distribution of coal.  The Company is currently considered to be an
exploration stage corporation because its engaged in the search for coal
deposits and are not engaged in the exploitation of a coal
deposit.  The Company has not engaged in the preparation of an
established commercially mineable coal deposit for extraction or in the
exploitation of a coal deposit. The Company will be in the exploration stage
until it discovers commercially viable coal deposits on the Property or any
other property that the Company acquires, if ever. In an exploration stage
company, management devotes most of its activities to acquiring and exploring
mineral properties.





The
Company currently lease approximately 6,254 acres located in the vicinity of
Bridger in Carbon County, Montana (the “Bridger Property”), for the purpose of
mining, removing, marketing and selling coal.  Further exploration
will be required before a final evaluation as to the economic feasibility of
coal extraction on the Bridger Property can be determined.  The
Company has done preliminary estimates of the surface seams on the Bridger
Property, and intends to perform phase 1 drilling commencing in the fourth
quarter of the calendar year 2009 in order to determine whether it contains a
commercially viable coal deposit.





Going
Concern





The
Company's financial statements are prepared using the accrual method of
accounting in accordance with accounting principles generally accepted in the
United States of America, and have been prepared on a going concern basis, which
contemplates the realization of assets and the settlement of liabilities in the
normal course of business.  The Company incurred a net loss of
$1,369,375 from continuing operations and loss from discontinued operations of
$59,986 during the year ended April 30, 2009, and an accumulated deficit of
$1,452,648 since inception. The Company has recently changed its principal
business to the coal business, but has not yet established an ongoing source of
revenues sufficient to cover its operating costs and to allow it to continue as
a going concern.  The ability of the Company to continue as a going
concern is dependent on the Company obtaining adequate capital to fund operating
losses until it becomes profitable.  If the Company is unable to
obtain adequate capital, it could be forced to cease development of
operations.





In order
to continue as a going concern, develop a reliable source of revenues, and
achieve a profitable level of operations the Company will need, among other
things, additional capital resources.  Management’s plans to continue
as a going concern include raising additional capital through sales of common
stock and or a debt financing.  However, management cannot provide any
assurances that the Company will be successful in accomplishing any of its
plans.





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





NOTE
2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





Use of
Estimates





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


F-8





Cash and
equivalents




Cash and
equivalents include investments with initial maturities of three months or
less.  The Company maintains its cash balances at credit-worthy
financial institutions that are insured by the Federal Deposit Insurance
Corporation ("FDIC") up to $250,000.




Concentration
of Credit Risk




Financial
instruments and related items, which potentially subject the Company to
concentrations of credit risk are cash and cash equivalents.  The
Company places its cash and temporary cash investments with credit quality
institutions.  At times, such investments may be in excess of FDIC
insurance limits.  As of April 30, 2009, there were no deposits in
excess of federally insured limits.




Fair Value of Financial
Instruments





The
Financial Accounting Standards Board issued Statement of Financial Accounting
Standards (“SFAS”) No. 107, “Disclosures About Fair Value of Financial
Instruments.”  SFAS No. 107 requires disclosure of fair value information
about financial instruments when it is practicable to estimate that value. 
The carrying amounts of the Company’s financial instruments as of April 30, 2009
approximate their respective fair values because of the short-term nature of
these instruments.  Such instruments consist of cash, accounts payable and
accrued expenses.





Income
Taxes





The
Company accounts for income taxes under the provisions of SFAS No. 109, Accounting for Income
Taxes.  Under SFAS No. 109, deferred tax assets and liabilities
are recognized for future tax benefits or consequences attributable to temporary
differences between the financial statement carrying amounts of existing assets
and liabilities and their respective tax bases.  Deferred tax assets
and liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are expected to
be recovered or settled.  A valuation allowance is provided for
significant deferred tax assets when it is more likely than not that such assets
will not be realized through future operations.





Equipment





Equipment
is recorded at cost and depreciated using straight line methods over the
estimated useful lives of the related assets.  The Company reviews the
carrying value of long-term assets to be held and used when events and
circumstances warrant such a review.  If the carrying value of a
long-lived asset is considered impaired, a loss is recognized based on the
amount by which the carrying value exceeds the fair market
value.  Fair market value is determined primarily using the
anticipated cash flows discounted at a rate commensurate with the risk
involved.  The cost of normal maintenance and repairs is charged to
operations as incurred.  Major overhaul that extends the useful life
of existing assets is capitalized.  When equipment is retired or
disposed, the costs and related accumulated depreciation are eliminated and the
resulting profit or loss is recognized in income.





Issuance of Shares for
Non-Cash Consideration





The
Company accounts for the issuance of equity instruments to acquire goods and/or
services based on the fair value of the goods and services or the fair value of
the equity instrument at the time of issuance, whichever is more reliably
determinable.





The
Company's accounting policy for equity instruments issued to consultants and
vendors in exchange for goods and services follows the provisions of EITF Issue
No. 96-18, Accounting for
Equity Instruments That are Issued to Other Than Employees for Acquiring, or in
Conjunction with Selling, Goods or Services and EITF Issue No. 00-18,
Accounting Recognition for
Certain Transactions Involving Equity Instruments Granted to Other Than
Employees.  The measurement date for the fair value of the
equity instruments issued is determined at the earlier of (i) the date at which
a commitment for performance by the consultant or vendor is reached or (ii) the
date at which the consultant or vendor's performance is complete.  In
the case of equity instruments issued to consultants, the fair value of the
equity instrument is recognized over the term of the consulting
agreement.


F-9





Stock-Based
Compensation




In
December of 2004, the Financial Accounting Standards Board (“FASB”) issued FAS
123R, which applies to transactions in which an entity exchanges its equity
instruments for goods or services and also applies to liabilities an entity may
incur for goods or services that are based on the fair value of those equity
instruments.  For any unvested portion of previously issued and
outstanding awards, compensation expense is required to be recorded based on the
previously disclosed FAS 123 methodology and amounts.  Prior periods
presented are not required to be restated.  The Company adopted FAS
123R as of January 1, 2006 and applied the standard using the modified
prospective method.  The Company has not issued any stock
options.




Exploration-Stage
Company





The
Company is considered an exploration-stage company, having limited operating
revenues during the period presented, as defined by Statement of Financial
Accounting Standards (“SFAS”) No. 7.  SFAS No. 7 requires companies to
report their operations, shareholders deficit and cash flows since inception
through the date that revenues are generated from management’s intended
operations, among other things.  Management has defined inception as
May 19, 2005.  Since inception, and more particularly since commencing
business in January 2008, the Company has incurred a net loss of $1,452,648.
Much of this related to consultants and professional fees, as a means to
generate working capital.  The Company’s working capital has been
generated through the sale of common stock and renting its camera
equipment.  Management has provided financial data since May 19, 2005,
“Inception”, in the financial statements.





Net Loss Per
Share





Statement
of Financial Accounting Standards No. 128 “Earnings Per Share” requires
presentation of basic earnings or loss per share and diluted earnings or loss
per share.  Basic income (loss) per share (“Basic EPS”) is computed by
dividing net loss available to common stockholders by the weighted average
number of common shares outstanding during the period.  Diluted
earnings per share (“Diluted EPS”) is similarly calculated using the treasury
stock method except that the denominator is increased to reflect the potential
dilution that would occur if dilutive securities at the end of the applicable
period were exercised. There were no potential dilutive securities as of April
30, 2009 and 2008.





For
      theYears
      EndedApril 30,2009
                        
                        
                        2008Net
      Loss
                        
                        $
                        (1,429,361
                        )
                        
                        $
                        (23,287
                        )Basic
      and Dilutive Net Loss From Continuing Operations Per Share
                        
                        $
                        (0.083
                        )
                        
                        $
                        -Basic
      and Dilutive Net Loss From Discontinued Operations Per
    Share
                        
                        $
                        (0.004
                        )
                        
                        $
                        (0.006
                        )Weighted
      average number of shares outstanding, basic and diluted
                        
                        
                        16,597,321
                        
                        
                        
                        3,753,425




The
weighted average number of shares included in the calculation above are
post-split.


F-10


NOTE
3 – RELATED PARTY TRANSACTIONS





On
January 10, 2008 the Board authorized the issue of common stock to two
Directors:





Joel
      Klandrud
                  
                  4,500,000
      shares (900,000 pre-split) at a price of $0.002
      per  sharePresident
      and Chief Operating OfficerDirectorSandra
      Dosdall
                  
                  4,500,000
      shares (900,000 pre-split) at a price of $0.002 per
  shareDirector





On
January 14, 2009, the Company sold all of its assets to Joel Klandrud, the
Company’s former officer and director, pursuant to an Asset Sale
Agreement.  In exchange, Mr. Klandrud (1) surrendered to the Company
for cancellation 4,000,000 shares (800,000 pre-split) of the Company’s Common
Stock, par value $0.001 per share, and (2) assumed all of the Company’s
liabilities.    See Note 7 – Discontinued Operations for
further discussion.





On
January 14, 2009, the Company entered into a Support Services Agreement with
Strands Management Company, LLC (“Strands”).  Matt Szot, the Company’s
Chief Financial Officer, Treasurer, and Secretary, is the Chief Financial
Officer of Strands.  David Walters, a director, owns a 50% interest
and is a managing member of Strands.   Under the Support Services
Agreement, Strands will provide the Company with financial management services,
facilities and administrative services, and other services as agreed by the
parties.  Under the Support Services Agreement, the Company will pay
to Strands monthly cash fees of $16,667 for the services.  The initial
term of the Support Services Agreement expires January 8, 2010.  On
April 2, 2009, the Company entered into Amendment #1 to the Strands
Agreement.  Pursuant to the amendment, the Company agreed to issue to
Messrs. Walters and Szot and another principal of Strands an aggregate of
1,625,000 shares (325,000 pre-split) of the Company’s common stock as a
retainer, in exchange for Strands’ agreement to continue to provide services
under the Support Services Agreement.  The Company incurred $66,668
and $0 under the terms of the agreement for the years ended April 30, 2009 and
2008, respectively, which is included in consulting expenses in the accompanying
statements of operations.  As of April 30, 2009, $66,668 is
outstanding under the agreement.




On
January 14, 2009, the Company entered into a Placement Agency and Advisory
Services Agreement with Monarch Bay Associates (“Monarch
Bay”).  Monarch Bay is a FINRA member firm.  Matt Szot, the
Company’s Chief Financial Officer, Treasurer, and Secretary, is the Chief
Financial Officer of Monarch Bay.   Under the agreement, Monarch
Bay will act as the Company’s placement agent on an exclusive basis with respect
to private placements of the Company’s capital stock.  David Walters,
a director, owns a 50% interest and is a managing member of Monarch
Bay.  Pursuant the engagement letter, the Company is required to (1)
pay to Monarch Bay 3% of the gross proceeds of any financing from non-Monarch
Bay sources and issue to Monarch Bay warrants to purchase that number of shares
of our common stock equal to 3% of the number of shares of common stock
(including convertible securities) issued in such financing, and (2) pay to
Monarch Bay 5% of the gross proceeds of any financing from Monarch Bay sources
and issue to Monarch Bay warrants to purchase that number of shares of
our  common stock equal to 5% of the number of shares of common stock
(including convertible securities) issued in such financing.  The
Company did not incur any expenses under the terms of the agreement during the
year ended April 30, 2009.





On
January 9, 2009, the Company entered into an Acquisition Agreement (the
“Acquisition Agreement”) to acquire 100% of the ownership interests in Patoka
River Coal Company, LLC, a Delaware limited liability company (“PRCC”), Patoka
River Holdings, LLC, a Delaware limited liability company (“PRH”), and Carbon
County Holdings, LLC (PRCC, PRH and CCH are collectively referred to herein as
the “LLCs”) in exchange for the Company’s agreement to issue a total of
40,000,000 shares (8,000,000 pre-split) of the Company’s common stock to the
owners of the LLCs, John P. Baugues, Jr. (the Company’s former Chief Executive
Officer and director), the Baugues Trust, and TRX Capital, LLC, a California
limited liability controlled by Tydus Richards, the former Chairman of the
Company’s board of directors,.  At that time, PRCC held an exclusive
option to acquire two parcels of land in fee simple, which option expired on
January 26, 2009, and CCH held certain leasehold mining rights.   On
March 31, 2009, the Company entered into a Letter Agreement Regarding
Termination of Acquisition Agreement (the “Termination Letter”), pursuant to
which the parties agreed to terminate the Acquisition
Agreement.





On April
13, 2009, the Company entered into the Contribution Agreement with Carbon County
Holdings, LLC, John P. Baugues, Jr., the Company’s former Chief Executive
Officer and director, the Baugues Trust, and Tydus Richards, the former Chairman
of the Company’s board of directors.  Pursuant to the Contribution
Agreement, CCH agreed to contribute and assign to the Company all of CCH’s
rights and obligations under the Bridger Lease in exchange for the issuance to
the members of CCH of, the number of shares of the Company’s Common Stock set
forth opposite such member’s name below.


F-11





Name of Member
                                          
                                          Number of SharesJohn
      P. Baugues, Jr.
                                          
                                          15,925,000
      (3,185,000 pre-split)The
      John Paul Baugues, Sr. Family Trust
                                          
                                          16,575,000
      (3,315,000 pre-split)Tydus
      Richards
                                          
                                          27,500,000
      (5,500,000 pre-split)Total
                                          
                                          60,000,000 (12,000,000
      pre-split





On April
13, 2009, the Company entered into a Strategic Consulting Services Agreement
with Charles S. Leykum (the Company’s former Board Advisor).  Pursuant
to the Consulting Agreement, the Company agreed to issue to Mr. Leykum (or Mr.
Leykum’s designees) an aggregate of 2,010,500 shares (402,100 pre-split) of the
Company’s common stock as a payment, in exchange for Charles S. Leykum’s
agreement to provide services under the Consulting Agreement.  The
Consulting Agreement had a term of 24 months.  The Company recorded
the stock payment of $1,467,665 as a prepaid expense on April 13, 2009 which
reflected the numbers shares issued multiplied by the closing trading price on
the date of issuance.





On July
13, 2009, the Company agreed to the termination of its Strategic Consulting
Services Agreement with Charles S. Leykum.  In connection with the
termination of the agreement, Mr. Leykum and certain affiliated entities
surrendered 7,010,500 shares (1,402,100 pre-split) of the Company’s common stock
for cancellation and the parties agreed to a mutual release of all
claims.  The Company treated the termination and cancellation of
shares as a Type 1 subsequent event because the termination provided information
that led management to conclude that the prepaid asset no longer had future
economic value.  Accordingly, the termination of the Consulting
Agreement and the related cancellation of shares were recorded as of April 30,
2009.  See Note 6 for further discussion.





NOTE
4 - COMMITMENTS AND CONTINGENCIES





Consulting
Agreements





The
Company has entered into consulting agreements for services to be provided to
the Company in the ordinary course of business.  These agreements call
for expense reimbursement and various payments upon performance of
services.  See Note 3 for further discussion.





Legal





There
were no legal proceedings against the Company with respect to matters arising in
the ordinary course of business.





Operating Leases
Commitments





Under the
terms of the Bridger Lease, the Company is required to pay to the lessors (1) a
minimum annual payment in an amount equal to $62,541 in each year during the
initial ten (10) year term of the Bridger Lease, subject to increases in future
years (the “Minimum Annual Payment”) and (2) a royalty equal to 12.5% of the
gross proceeds on all coal mined from the Bridger Property (the
“Royalty”).  In addition, unless coal is mined from minerals owned by
the lessors, for each ton of coal mined from, stored on or transported across
the Bridger Property, the Company is required to pay a damage fee of $0.15 per
ton for such coal (the “Damage Fee”).  In the event that the Royalty
and/or the Damage Fee in any year during the term exceeds twice the Minimum
Annual Payment, the Company is not required to make the Minimum Annual Payment
for that year.


F-12


The
Bridger Lease is effective for a 10 year term.  The Company has the
right to renew the Bridger Lease for two additional 10 year terms upon at least
90 days written notice to the lessors prior to the expiration of the
then-current term.  After 3 years from the effective date, the Company
has the right to terminate the Bridger Lease, on any annual anniversary, upon 90
days prior written notice to the lessors and upon payment of all damage fees,
rentals and royalties accrued through the date of termination.





The
future minimum lease payments associated with the Bridger lease for the fiscal
years ending April 30 are as follows:





April
      30, 2010
                    
                    
                    62,541April
      30, 2011
                    
                    
                    62,541April
      30, 2012
                    
                    
                    62,541April
      30, 2013
                    
                    
                    62,541April
      30, 2014
                    
                    
                    62,541Thereafter
                    
                    
                    312,705625,410





NOTE
5 – ACCRUED EXPENSES





Accrued
expenses consist of the following:





April 30,
                  
                  
                  April 30,2009
                  
                  
                  2008Accrued
      Consulting Fees
                  
                  
                  66,668
                  
                  
                  
                  -Accrued
      Audit Fees
                  
                  
                  3,000
                  
                  
                  
                  -Accrued
      Legal Fees
                  
                  
                  10,000
                  
                  
                  
                  -Accrued
      Travel, Meals & Entertainment
                  
                  
                  21,249
                  
                  
                  
                  -100,917
                  
                  
                  
                  -





NOTE
6 – CAPITAL STOCK TRANSACTIONS





The
Company is authorized to issue up to 75,000,000 shares of its $0.001 common
stock.  At April 30, 2009, there were 71,925,000 shares (14,385,000
pre-split) issued and outstanding.  At April 30, 2008, there were
14,300,000 shares (2,860,000 pre-split) issued and outstanding.





On May
28, 2009, the Company completed a five-for-one stock split of the Company’s
common stock and an increase in the number of our authorized shares of common
stock from 75,000,000 to 300,000,000.





On
January 10, 2008, 9,000,000 common shares (1,800,000 pre-split) were issued for
cash at $0.002 per share, realizing $18,000.





On
February 20, 2008, 5,300,000 common shares (1,060,000 pre-split) were issued for
cash at $0.02 per share, realizing $104,998.





On
January 14, 2009, the Company sold all of its assets to Joel Klandrud, the
Company’s former officer and director, pursuant to an Asset Sale
Agreement.  In exchange, Mr. Klandrud (1) surrendered to the Company
for cancellation 4,000,000 shares (800,000 pre-split) of the Company’s Common
Stock, par value $0.001 per share, and (2) assumed all of the Company’s
liabilities.    See Note 7 – Discontinued Operations for
further discussion.


F-13





On
January 27, 2009, the Company entered into a stock purchase agreement (the
“Leykum SPA”) with Charles S. Leykum, pursuant to which the Company agreed to
sell to Mr. Leykum 1,250,000 shares (250,000 pre-split) of the Company’s Common
Stock, par value $0.001, for an aggregate price of $250.  The issuance
and sale of the shares of Common Stock to Mr. Leykum was subject to customary
closing conditions as set forth in the Leykum SPA.  This issuance was
subsequent to the January 14, 2009 change in control and is considered to be
founder’s shares.  These shares were issued on February 27,
2009.  See Note 3.





On
January 27, 2009, the Company entered into a stock purchase agreement (the
“Master Fund SPA”) with CSL Energy Master Fund, L.P., a Cayman Islands limited
partnership (“Master Fund”), pursuant to which the Company agreed to sell to
Master Fund 525,000 shares (105,000 pre-split) of the Company’s Common Stock,
par value $0.001, for an aggregate price of $105.  The issuance and
sale of the shares of Common Stock to Master Fund was subject to customary
closing conditions as set forth in the Master Fund SPA.  This issuance
was subsequent to the January 14, 2009 change in control and is considered to be
founder’s shares.  These shares were issued on February 27,
2009.  See Note 3.





On
January 27, 2009, the Company entered into a stock purchase agreement (the
“Energy Fund SPA”) with CSL Energy Fund, L.P., a Delaware limited partnership
(“Energy Fund”), pursuant to which the Company agreed to sell to Energy Fund
3,225,000 shares (645,000 pre-split) of the Company’s Common Stock, par value
$0.001, for an aggregate price of $645.  The issuance and sale of the
shares of Common Stock to Energy Fund was subject to customary closing
conditions as set forth in the Energy Fund SPA.  This issuance was
subsequent to the January 14, 2009 change in control and is considered to be
founder’s shares.  These shares were issued on February 27,
2009.  See Note 3.





On April
2, 2009, the Company entered into that certain Amendment #1 Support Services
Agreement, with Strands Management Company, LLC, a California limited liability
company (“Strands”), Keith Moore, David Walters, and Matt Szot (the
“Amendment”), which Amendment amends that certain Support Services Agreement,
dated as of January 8, 2009, between the Company and
Strands.  Pursuant to the Amendment, the Company agreed to issue to
Messrs. Moore, Walters, and Szot and aggregate of 1,625,000 shares (325,000
pre-split) of the Company’s common stock as a retainer, in exchange for Strands’
agreement to continue to provide services under the Support Services Agreement.
The shares were issued on April 15, 2009, accordingly, the Company recorded a
stock based compensation charge of $1,163,500 which is included in the statement
of operations for the year ended April 30, 2009.  See Note
3.





As
discussed in Note 1 and Note 3, on April 13, 2009, the Company entered into the
Contribution Agreement with Carbon County Holdings, LLC, John P. Baugues, Jr.,
the Company’s former Chief Executive Officer and director, the Baugues Trust,
and Tydus Richards, the former Chairman of the Company’s board of
directors.  Pursuant to the Contribution Agreement, CCH agreed to
contribute and assign to the Company all of CCH’s rights and obligations under
the Bridger Lease in exchange for the issuance to the members of CCH of, the
number of shares of the Company’s Common Stock set forth opposite such member’s
name below.





Name of Member
                                
                                Number of SharesJohn
      P. Baugues, Jr.
                                
                                15,925,000
      (3,185,000 pre-split)The
      John Paul Baugues, Sr. Family Trust
                                
                                16,575,000
      (3,315,000 pre-split)Tydus
      Richards
                                
                                27,500,000
      (5,500,000 pre-split)Total
                                
                                60,000,000 (12,000,000
      pre-split





The
Company has treated the 60,000,000 shares (12,000,000 pre-split) issued pursuant
to the Contribution Agreement as founder shares.  The Company
determined that the first year lease payment of $62,541 was the best indicator
of the cost of the acquisition, accordingly, the issuance of the 60,000,000
founder shares were recorded as a mining lease expense of $62,541





On April
13, 2009, the Company entered into that certain Strategic Consulting Services
Agreement (“Consulting Agreement”) between the Company and Charles S.
Leykum.  Pursuant to the Consulting Agreement, the Company agreed to
issue to Mr. Leykum (or Mr. Leykum’s designess) an aggregate of 2,010,500 shares
(402,100 pre-split) of the Company’s common stock as a payment, in exchange for
Charles S. Leykum’s agreement to provide services under the Consulting
Agreement.  The Consulting Agreement had a term of 24
months.  The Company recorded the stock payment of $1,467,665 as a
prepaid expense on April 13, 2009 which reflected the numbers shares issued
multiplied by the closing trading price on the date of
issuance.


F-14





On July
13, 2009, the Company agreed to the termination of its Strategic Consulting
Services Agreement with Charles S. Leykum.  In connection with the
termination of the agreement, Mr. Leykum and certain affiliated entities
surrendered 7,010,500 shares (1,402,100 pre-split) of the Company’s common stock
for cancellation and the parties agreed to a mutual release of all
claims.  The Company treated  the termination and
cancellation of shares as a Type 1 subsequent event because the termination
provided information that led management to conclude that the prepaid asset no
longer had future economic value.  Accordingly, the termination of the
Consulting Agreement and the related cancellation of shares were recorded as of
April 30, 2009.





NOTE 7 –
DISCONTINUED OPERATIONS





On
January 14, 2009, the Company sold all of its assets to Joel Klandrud, the
Company’s former officer and Director, pursuant to an Asset Sale
Agreement.  In exchange, Mr. Klandrud (1) surrendered to the Company
for cancellation 4,000,000 shares (800,000 pre-split) shares of the Company’s
Common Stock, par value $0.001 per share, and (2) assumed all of the Company’s
liabilities.





The
following schedule shows the assets and liabilities as of January 14,
2009:





Accounts
      receivable
                  
                  $
                  15,118Prepaids
                  
                  
                  1,500Property
      and Equipment
                  
                  
                  22,085





The
Company’s loss from discontinued operations, for the year ended April 30, 2009
and 2008, totaled $59,986 and $23,287, respectively.  The Company’s
loss from discontinued operations since inception through April 30, 2009,
totaled $83,273.  Prior year financial statements have been restated
to present the discontinued operations.





NOTE 8 –
INCOME TAXES




The
Company has adopted the provisions of FAS No. 109 “Accounting for Income
Taxes”.  The Company currently has no issues that create timing
differences that would mandate deferred tax expense.  Net operating
losses would create possible tax assets in future years.  Due to the
uncertainty as to the utilization of net operating loss carry forwards, a
valuation allowance has been made to the extent of any tax benefit that net
operating losses may generate.




No
provision for income taxes has been recorded due to the net operating loss
carryforwards totaling approximately $226,607 as of April 30, 2009 that will be
offset against future taxable income.  The available net operating
loss carry forwards of approximately $226,607 expire in various years through
2028.  No tax benefit has been reported in the financial statements
because the Company believes there is a 50% or greater chance the carry forwards
will expire unused.


F-15




Deferred
tax asset and the valuation account is as follows:




April
      30,2009
                    
                    
                    2008Deferred
      tax asset:NOL
      Carryforward
                    
                    $
                    77,046
                    
                    
                    $
                    7,918Valuation
      allowances
                    
                    
                    (77,046
                    )
                    
                    
                    (7,918
                    )Total
                    
                    $
                    -
                    
                    
                    $
                    -The
      components of income tax expense are as follows:Current
      Federal Tax
                    
                    $
                    -
                    
                    
                    $
                    -Current
      State Tax
                    
                    
                    -
                    
                    
                    
                    -Change
      in NOL benefit
                    
                    
                    69,128
                    
                    
                    
                    7,918Change
      in valuation allowance
                    
                    
                    (69,128
                    )
                    
                    
                    (7,918
                    )$
                    -
                    
                    
                    $
                    -





NOTE 9 -
SUBSEQUENT EVENTS





Effective
July 10, 2009, John P. Baugues, Jr. resigned from the Board of Directors
of  the Company and as the Company’s Chief Executive
Officer.  As stated in his resignation letter, Mr. Baugues’ decision
to resign was based on his belief that the Company had breached a number of
material agreements with him, including (but not limited to) the following: an
inability to agree on a suitable employment agreement with the Company, an
agreement that he would be paid a salary, an agreement that his expenses would
be reimbursed, and an agreement that the Company would secure adequate funding
to complete the development of a coal mining project in Carbon County,
Montana.  The Company disagrees with Mr. Baugues’ assertion that it
has breached any material agreement with him.




On July
13, 2009, the Company agreed to the termination of its Strategic Consulting
Services Agreement with Charles S. Leykum.  In connection with the
termination of the agreement, Mr. Leykum and certain affiliated entities
surrendered 7,010,500 shares (1,402,100 pre-split) of the Company’s common stock
for cancellation and the parties agreed to a mutual release of all
claims.  See Note 6 for further discussion.




On July
23, 2009, the Company entered into a stock purchase agreement with an accredited
investor controlled by Tydus Richards, the former Chairman of our board of
directors, for the sale of 400,000 shares (80,000 pre-split) of its common stock
at a purchase price of $1.00 per share.  In connection with the stock
purchase agreement, the Company has agreed that it will not expend the proceeds
of the offering without the consent of the investor.The
sale closed on July 24, 2009.





On July
16, 2009, the Company entered into a Consulting Services Agreement with Lotus
Asset Management (“Lotus”) controller by Tydus Richards, the former Chairman of
our board of directors.  Pursuant to the Agreement, in consideration
for providing certain services to us, Lotus is entitled to a monthly fee in the
amount of $20,000.  The initial term of the Agreement expires October
16, 2009.


F-16