UNITED
STATES SECURITIES AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549





FORM
10-Q




xQUARTERLY REPORT UNDER SECTION
      13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
  1934




For
the quarterly period ended March 31, 2010




oTRANSITION REPORT UNDER
      SECTION 13 OR 15(d) OF THE EXCHANGE
ACT




For
the transition period from ____________ to____________




Commission
File No. 000-32507




EGPI FIRECREEK,
INC.


(Exact
name of Registrant as specified in its charter)





Nevada
            88-0345961(State
      or Other Jurisdiction of
              Incorporation
      or organization)
            (I.R.S.
      Employer Identification No.)




6564
Smoke Tree Lane


Scottsdale,
Arizona 85253


(Address
of Principal Executive Offices)




(480)
948-6581


(Registrant’s
Telephone Number)




N/A


(Former
name, former address and former fiscal year,


if
changed since last report)




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




Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).  Yes £  No £





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  T


(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 T





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





As of May
21, 2010, the registrant had 181,401,746 shares of its $0.001 par value common
stock issued and outstanding. There are no shares of Series A and B
preferred stock, and 5,000 shares of Series C preferred stock issued
and outstanding, at $0.001 par value for each of the Series of Preferred, and no
shares of non-voting common stock issued and outstanding.









EGPI
FIRECREEK, INC


f/k/a
Energy Producers, Inc.


10-Q


March
31, 2010





TABLE
OF CONTENTS





PAGEPART
      1:
            
            FINANCIAL
      INFORMATIONItem
      1.
            
            Financial
      Statements - UnauditedConsolidated
      Balance Sheets
            
            3Consolidated
      Statement of Operations
            
            4Consolidated
      Statement of Cash Flows
            
            5Consolidated
      Statement of Changes in Shareholders' Equity
            
            6Notes
      to the Unaudited Consolidated Financial Statements
            
            7Item
      2.
            
            Management's
      Discussion and Analysis or Plan of Operation
            
            20Item
      3.
            
            Quantitative
      and Qualitative Disclosures About Market Risk
            
            23Item
      4(T)
            
            Controls
      and Procedures
            
            23PART
      II:
            
            OTHER
      INFORMATIONItem
      1.
            
            Legal
      Proceedings
            
            25Item
      1A.
            
            Risk
      Factors
            
            25Item
      2.
            
            Unregistered
      Sales of Equity Securities and Use of Proceeds
            
            25Item
      3.
            
            Defaults
      upon Senior Securities
            
            26Item
      4.
            
            Removed
      and Reserved
            
            26Item
      5.
            
            Other
      Information
            
            26Item
      6.
            
            Exhibits
            
            27CertificationsSignature
            
            28





2




PART
I FINANCIAL INFORMATION




ITEM
1 – FINANCIAL STATEMENTS




EGPI
FIRECREEK, INC.


CONSOLIDATED
BALANCE SHEETS


AS
OF MARCH 31, 2010 AND DECEMBER 31, 2009





Unaudited31-Mar-10
              
              
              31-Dec-09ASSETSCurrent
      assets:Cash
              
              $
              613
              
              
              $
              17,625Accounts
      receivable, net of allowance
              
              
              484,443
              
              
              
              739,166Inventory
              
              
              58,834
              
              
              
              66,290Prepaid
      expenses
              
              
              50,766
              
              
              
              47,566Total
      current assets
              
              
              594,656
              
              
              
              870,647Other
      assets:Trade
      name, net of amortization
              
              
              640,703
              
              
              
              653,921Customer
      list, net of amortization
              
              
              154,772
              
              
              
              158,939Goodwill
              
              
              2,001,840
              
              
              
              2,001,840Oil
      and natural gas properties (successful efforts method of
      accounting):Proved,
      net of accumulated depletion, depreciation, and
    amortization
              
              
              225,000
              
              
              
              225,000Fixed
      Assets, net
              
              
              41,467
              
              
              
              49,319Total
      other assets
              
              
              3,063,782
              
              
              
              3,089,019Total
      assets
              
              $
              3,658,438
              
              
              $
              3,959,666LIABILITIES
      AND SHAREHOLDERS' DEFICITCurrent
      liabilities:Accounts
      payable & accrued expenses
              
              $
              2,912,630
              
              
              $
              2,729,515Notes
      payable and convertible notes
              
              
              4,965,242
              
              
              
              941,990Advances
      & notes payable to shareholders
              
              
              161,291
              
              
              
              240,918Derivative
      liabilities
              
              
              41,850
              
              
              
              0Total
      current liabilities
              
              
              8,081,013
              
              
              
              3,912,423Total
      liabilities
              
              
              8,081,013
              
              
              
              3,912,423Shareholders'
      deficit:Series
      A preferred stock, 20 million authorized, par value $0.001, one share
      convertible to one common share, no stated dividend, none
      outstanding
              
              
              0
              
              
              
              0Series
      B preferred stock, 20 million authorized, par value $0.001, one share
      convertible to one common share, no stated dividend, none
      outstanding
              
              
              0
              
              
              
              0Series
      C preferred stock, 20 million authorized, par value $.001, each share has
      21, 200 votes per share, are not convertible, have no stated dividend. 5
      thousand shares outstanding
              
              
              0
              
              
              
              0Common
      stock- $0.001 par value, authorized 1,300,000,000 shares, issued and
      outstanding, 76,460,069 at March 31, 2010 and 51,455,743 at December 31,
      2009
              
              
              1,454,503
              
              
              
              1,429,499Additional
      paid in capital
              
              
              21,610,642
              
              
              
              25,283,090Other
      comprehensive income
              
              
              67,279
              
              
              
              0Common
      stock subscribed
              
              
              240,876
              
              
              
              0Accumulated
      deficit
              
              
              (27,795,875
              )
              
              
              (26,665,346
              )Total
      shareholders' deficit
              
              
              (4,422,575
              )
              
              
              47,243Total
      liabilities & shareholders' deficit
              
              $
              3,658,438
              
              
              $
              3,959,666




See the
notes to the unaudited consolidated financial statements.





3




EGPI
FIRECREEK, INC.


UNAUDITED
CONSOLIDATED STATEMENTS OF OPERATIONS


FOR
THE QUARTERS ENDED MARCH 31, 2010 AND MARCH 31, 2009




Unaudited
              31-Mar-10
            
            
            Unaudited
              31-Mar-09RevenuesGross
      revenues from sales
            
            $
            508,660
            
            
            $
            0Cost
      of sales
            
            
            433,328
            
            
            
            0Net
      revenues from sales
            
            
            75,332
            
            
            
            0General
      and administrative expenses:General
      administration
            
            
            885,046
            
            
            
            187,618Total
      general & administrative expenses
            
            
            885,046
            
            
            
            187,618Net
      loss from operations
            
            
            (809,714
            )
            
            
            (187,618
            )Other
      revenues and expenses:Gain
      (loss) on asset disposal
            
            
            1,672
            
            
            
            0Loss
      on Retirement of debt
            
            
            (278,737
            )
            
            
            0Gain
      (loss) on derivatives
            
            
            68,801
            
            
            
            0Interest
      expense
            
            
            (112,551
            )
            
            
            (7,215
            )Net
      income (loss) before provision for income taxes
            
            
            (1,130,529
            )
            
            
            (194,833
            )Provision
      for income taxes
            
            
            0
            
            
            
            0Net
      income (loss)
            
            $
            (1,130,529
            )
            
            $
            (194,833
            )Other
      comprehensive income (loss)Gain
      (loss) from Foreign exchange translation
            
            
            (67,279
            )
            
            
            0Total
      comprehensive income (loss)
            
            $
            (1,063,250
            )
            
            $
            (194,833
            )Basic
      and fully diluted net loss per common share:Net
      loss per share - continuing operations
            
            $
            (0.02
            )
            
            $
            (0.02
            )Net
      loss per share
            
            $
            (0.02
            )
            
            $
            (0.02
            )Weighted
      average of common shares outstanding:Basic
      and fully diluted
            
            
            66,849,412
            
            
            
            8,459,884




See the
notes to the unaudited consolidated financial statements.




4




EGPI
FIRECREEK, INC.


UNAUDITED
CONSOLIDATED STATEMENTS OF CASH FLOWS


FOR
THE QUARTERS ENDED MARCH 31, 2010 AND MARCH 31, 2009





Unaudited
              
              
              Unaudited31-Mar-10
              
              
              31-Mar-09Operating
      Activities:Net
      loss
              
              $
              (1,063,250
              )
              
              $
              (194,833
              )Adjustments
      to reconcile net loss items not requiring the use of cash:Capital
      stock issued for services
              
              
              287,950
              
              
              
              0Derivative
              
              
              41,850
              
              
              
              7,215Note
      Payable Discount
              
              
              (26,565
              )
              
              
              141,434Depreciation
      of intangibles
              
              
              17,385
              
              
              
              0Depreciation  and
      amortization PPE
              
              
              9,525
              
              
              
              0Gain/Loss
      on disposal of debt
              
              
              278,737
              
              
              
              0Gain/Loss
      on disposal of fixed assets
              
              
              (1,673
              )Changes
      in other operating assets and
      liabilities:Accounts
      receivable
              
              
              254,723
              
              
              
              0Inventory
              
              
              7,456
              
              
              
              0Accounts
      payable and accrued expenses
              
              
              (51,708
              )
              
              
              12,387Prepaid
      expenses
              
              
              (3,200
              )Net
      cash  used by operations
              
              
              (248,770
              )
              
              
              (33,797
              )Investing
      activities:0
              
              
              
              0Net
      cash used for investing activities
              
              
              0
              
              
              
              0Financing
      Activities:Proceeds
      from sale of stock
              
              
              70,004
              
              
              
              0Borrowings
      on debt
              
              
              1,268,471
              
              
              
              0Principal
      payments on debt
              
              
              (1,039,438
              )
              
              
              31,607Net
      cash provided by financing activities
              
              
              299,037
              
              
              
              31,607Gain
      due to foreign currency translation
              
              
              67,279Net
      decrease in cash during the period
              
              $
              (17,012
              )
              
              $
              (2,190
              )Cash
      balance at January 1st
              
              
              17,625
              
              
              
              2,230Cash
      balance at March 31st
              
              $
              613
              
              
              $
              40Supplemental
      disclosures of cash flow information:Interest
      paid during the year- discontinued component
              
              $
              
              
              
              $Income
      taxes paid during the year
              
              $
              
              
              
              $Non-cash
      activities:Common
      stock issued for:Debt
      conversion
              
              
              542,481
              
              
              
              -SATCO
      acquisition
              
              
              
              
              
              
              -M3
      acquisition
              
              
              
              
              
              
              -Exchange
      of PP&E for loan payable
              
              
              
              
              
              
              -Net
      asset value of subsidiary spin-off
              
              
              
              
              
              
              -




See
the notes to the unaudited consolidated financial statements.




5




EGPI
FIRECREEK, INC.


UNAUDITED
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ DEFICIT


FOR
THE QUARTERS ENDED MARCH 31, 2010 AND MARCH 31, 2009





Common
              Shares
            
            
            Par
              Value
            
            
            Paid
      in
              Capital
            
            
            Accumulated
              Deficit
            
            
            Other
              Comprehensive
              Loss
            
            
            Common
              Stock
              Subscribed
            
            
            TotalBalance
      at December 31,2009
            
            
            51,455,743
            
            
            
            1,429,499
            
            
            
            25,283,090
            
            
            
            (26,665,346
            )
            
            
            -
            
            
            
            -
            
            
            
            47,243Issued
      shares for services
            
            
            4,650,000
            
            
            
            4,650
            
            
            
            196,154
            
            
            
            -
            
            
            
            
            
            
            
            
            
            
            
            200,804Stock
      subscriptions paid
            
            
            1,333,467
            
            
            
            1,333
            
            
            
            47,338
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            48,671Issued
      shares for debt
            
            
            19,020,859
            
            
            
            19,021
            
            
            
            548,460
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            567,481Other
      Comprehensive  Loss
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            67,279
            
            
            
            
            
            
            
            67,279Acquisition
      of subsidiary
            
            
            
            
            
            
            
            
            
            
            (4,464,400
            )
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (4,464,400
            )Commons
      Stock Subscribed
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            240,876
            
            
            
            240,876Net
      loss for the period
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (1,130,529
            )
            
            
            
            
            
            
            
            
            
            
            (1,130,529
            )Balance
      at March 31, 2010
            
            
            76,460,069
            
            
            
            1,454,503
            
            
            
            21,610,642
            
            
            
            (27,795,875
            )
            
            
            67,279
            
            
            
            240,876
            
            
            
            (4,422,275
            )




6





EGPI
FIRECREEK, INC.


NOTES
TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


FOR
THE QUARTERS ENDED MARCH 31, 2010 AND MARCH 31, 2009




1. Organization of the Company and Significant Accounting
Principles




The
Company was incorporated in the State of Nevada October 1995. Effective October
13, 2004 the Company, previously known as Energy Producers Inc., changed its
name to EGPI Firecreek, Inc.




Prior to
December 2008, the Company held interests in various gas & oil wells located
in the Wyoming and Texas area. In December 2008, the Company’s major creditor,
Dutchess Private Equities Ltd. (Dutchess), foreclosed on the assets of the
Company.  As a result, all of the Company’s oil and gas properties
were transferred to Dutchess in satisfaction of debt owed.





In
October 2008, the Company effected a 1 share for 200 shares reverse split of its
common stock.





In May
2009 the Company acquired M3 Lighting, Inc. (“M3”) as a wholly owned subsidiary
via reverse triangular merger. The Company was determined to be the acquirer in
the transaction for accounting purposes. M3 is a distributor of commercial and
decorative lighting to the trade and direct to retailers.  As part of the
Merger the Company effected a name change for its wholly owned subsidiary Malibu
Holding, Inc. to Energy Producers, Inc. (“EPI”) as a conduit for its oil and gas
activities.





In
November 2009 the Company acquired all of the issued and outstanding capital
stock of South Atlantic Traffic Corporation, a Florida corporation
(“SATCO”). SATCO has been in business since 2001 and has several offices
throughout the Southeast United States. SATCO carries a variety of products and
inventory geared primarily towards the transportation industry.  SATCO
offers transportation products ranging from loop sealant, traffic signal
equipment, traffic and light poles, data/video systems and Intelligent Traffic
Systems (ITS) surveillance systems. SATCO works closely with Department of
Transportation (DOT) agencies, local traffic engineers, contractors, and
consultants to customize high quality traffic control systems.





In
December 2009, the Company’s wholly owned subsidiary Energy Producers, Inc.
acquired 50% working interests and corresponding 32% net revenue interests in
oil and gas leases, reserves, and equipment located in West Central Texas. The
Company entered into a turnkey work program included for three wells
located on the leases.





On March
3, 2010, the Company executed a Stock Purchase Agreement with the stockholders
of Redquartz LTD (“Sellers” or “RQTZ”), a company formed and existing under the
laws of the country of Ireland, whereas the Company agreed to issue 100,000
shares of its restricted common stock valued at USD $2,500 in exchange for 100%
of the issued and outstanding shares of common stock, par value $0.01 per share,
of RQTZ. All assets and liabilities, other than the Shareholder Notes Payable,
of the RQTZ were transferred to the prior owners of Redquartz. The Notes Payable
represent a debt burden to RQTZ of USD $4,464,262. This obligation is based in
Euros and converted to our functional currency the dollar. Redquartz LTD was
inactive in the first quarter of 2010 and had no income and expense that would
affect the financial statements of the Company and therefore no pro-forma is
necessary.




Consolidation - the
accompanying consolidated financial statements include the accounts of the
Company and its wholly owned subsidiaries.  All significant inter-company
balances have been eliminated.





The
financial information included in this quarterly report should be read in
conjunction with the consolidated financial statements and related notes thereto
in our Form 10-K for the year ended December 31, 2009.




Use of Estimates- The
preparation of the financial statements in conformity with generally accepted
accounting principles requires management to make reasonable estimates and
assumptions that affect the reported amounts of the assets and liabilities and
disclosure of contingent assets and liabilities and the reported amounts of
revenues and expenses at the date of the consolidated financial statements and
for the period they include.  Actual results may differ from these
estimates.




Revenue and Cost Recognition
- Revenue is recognized from oil & gas sales at such time as the oil
& gas is delivered to the buyer. For its producing activities, the Company
uses successful efforts costing.




7





Sales
from South Atlantic Traffic Company revenues are recognized at the time product
has been delivered to the customer. Sales are recorded net of discounts or other
adjustments which may be applied to the gross sales price. Customer sales are
specialty orders drop-shipped from the
manufacturer.   Accordingly, all sales are final upon delivery to
the customer under the terms of the sales order.  The Company’s policy
is not to grant customer refunds. Customer deposits received upon execution of a
sales order are recorded as revenue upon completion of the sale.





The
Company records commission revenue, usually 3% of the amount invoiced, based on
contracts with suppliers, once the purchase order is placed with the supplier
and the customer is invoiced.  The Company, in turn, sends an invoice
to the supplier for 3% of the total order amount.  Commission sales are
specialty orders drop-shipped from the
manufacturer.  Accordingly, all sales are final upon delivery to the
customer under the terms of the sales order.





Cash Equivalents -The Company
considers all highly liquid investments with the original maturities of three
months or less to be cash equivalents. There were no cash equivalents as of
March 31, 2010 or December 31, 2009.




Accounts Receivable -The
Company extends credit to its customers in the normal course of business and
performs ongoing credit evaluations of its customers, maintaining allowances for
potential credit losses which, when realized, have been within management's
expectations. The allowance method is used to account for uncollectible amounts.
The evaluation is inherently subjective, as it requires estimates that are
susceptible to significant revision as more information becomes available.
Allowance for doubtful accounts was $377,762 at March 31, 2010 and $651,913 at
December 31, 2009.





Inventory -Inventories
consist of merchandise purchased for resale and are stated at the lower of cost
or market using the first-in, first-out (FIFO) method.





Prepaid Expenses -Prepaid
expenses are recorded at cost for payments for goods and services purchased
during an accounting period but not used or consumed during that accounting
period. The costs are amortized over time as the benefit is received onto the
income statement.





Oil and Gas Activities - The
Company uses the successful efforts method of accounting for oil and gas
producing activities. Under this method, acquisition costs for proved and
unproved properties are capitalized when incurred. Exploration costs, including
geological and geophysical costs, the costs of carrying and retaining unproved
properties and exploratory dry hole drilling costs, are expensed. Development
costs, including the costs to drill and equip development wells, and successful
exploratory drilling costs to locate proved reserves are
capitalized.




Exploratory
drilling costs are capitalized when incurred pending the determination of
whether a well has found proved reserves. A determination of whether a well has
found proved reserves is made shortly after drilling is completed. The
determination is based on a process which relies on interpretations of available
geologic, geophysic, and engineering data. If a well is determined to be
successful, the capitalized drilling costs will be reclassified as part of the
cost of the well. If a well is determined to be unsuccessful, the capitalized
drilling costs will be charged to expense in the period the determination is
made. If an exploratory well requires a major capital expenditure before
production can begin, the cost of drilling the exploratory well will continue to
be carried as an asset pending determination of whether proved reserves have
been found only as long as: i) the well has found a sufficient quantity of
reserves to justify its completion as a producing well if the required capital
expenditure is made and ii) drilling of the additional exploratory wells is
under way or firmly planned for the near future. If drilling in the area is not
under way or firmly planned, or if the well has not found a commercially
producible quantity of reserves, the exploratory well is assumed to be impaired,
and its costs are charged to expense.




In the
absence of a determination as to whether the reserves that have been found can
be classified as proved, the costs of drilling such an exploratory well is not
carried as an asset for more than one year following completion of drilling. If,
after that year has passed, a determination that proved reserves exist cannot be
made, the well is assumed to be impaired, and its costs are charged to expense.
Its costs can, however, continue to be capitalized if a sufficient quantity of
reserves is discovered in the well to justify its completion as a producing well
and sufficient progress is made in assessing the reserves and the well’s
economic and operating feasibility.




The
impairment of unamortized capital costs is measured at a lease level and is
reduced to fair value if it is determined that the sum of expected future net
cash flows is less than the net book value. The Company determines if impairment
has occurred through either adverse changes or as a result of the annual review
of all fields. During 2009 after conducting an impairment analysis, the Company
did not record impairment as the PV 10 value as our reserves exceeded our
cost.





Asset Retirement Obligations
(“ARO”).  The estimated costs of restoration and removal of
facilities are accrued. The fair value of a liability for an asset's retirement
obligation is recorded in the period in which it is incurred and the
corresponding cost capitalized by increasing the carrying amount of the related
long-lived asset. The liability is accreted to its then present value each
period, and the capitalized cost is depreciated with the related long-lived
asset. If the liability is settled for an amount other than the recorded amount,
a gain or loss is recognized. For all periods presented, estimated future costs
of abandonment and dismantlement are included in the full cost amortization base
and are amortized as a component of depletion expense. At March 31, 2010, the
ARO of $4,337 is included in accrued expenses and fixed assets.




8




Development
costs of proved oil and gas properties, including estimated dismantlement,
restoration and abandonment costs and acquisition costs, are depreciated and
depleted on a field basis by the units-of-production method using proved
developed and proved reserves, respectively. The costs of unproved oil and gas
properties are generally combined and impaired over a period that is based on
the average holding period for such properties and the Company's experience of
successful drilling.




Costs of
retired, sold or abandoned properties that make up a part of an amortization
base (partial field) are charged to accumulated depreciation, depletion and
amortization if the units-of-production rate is not significantly affected.
Accordingly, a gain or loss, if any, is recognized only when a group of proved
properties (entire field) that make up the amortization base has been retired,
abandoned or sold.





Stock-Based Compensation
-The
Company estimates the fair value of share-based payment awards made to employees
and directors, including stock options, restricted stock and employee stock
purchases related to employee stock purchase plans, on the date of grant using
an option-pricing model.  The value of the portion of the award that
is ultimately expected to vest is recognized as an expense ratably over the
requisite service periods.  We estimate the fair value of each
share-based award using the Black-Scholes option pricing model. The
Black-Scholes model is highly complex and dependent on key estimates by
management. The estimates with the greatest degree of subjective judgment are
the estimated lives of the stock-based awards and the estimated volatility of
our stock price. The Black-Scholes model is also used for our valuation of
warrants.





Earnings Per Common Share -Basic earnings per common share is calculated based upon the weighted
average number of common shares outstanding for the period. Diluted earnings per
common share is computed by dividing net income by the weighted average number
of common shares and dilutive common share equivalents (convertible notes and
interest on the notes, stock awards and stock options) outstanding during the
period. Dilutive earnings per common share reflects the potential dilution that
could occur if options to purchase common stock were exercised for shares of
common stock.  Basic and diluted EPS are the same as the effect of our
potential common stock equivalents would be anti-dilutive.





Fair Value Measurements -On
January 1, 2008, the Company adopted guidance which defines fair value,
establishes a framework for using fair value to measure financial assets and
liabilities on a recurring basis, and expands disclosures about fair value
measurements. Beginning on January 1, 2009, the Company also applied the
guidance to non-financial assets and liabilities measured at fair value on a
non-recurring basis, which includes goodwill and intangible assets. The guidance
establishes a hierarchy for inputs used in measuring fair value that maximizes
the use of observable inputs and minimizes the use of unobservable inputs by
requiring that the most observable inputs be used when available. Observable
inputs are inputs that market participants would use in pricing the asset or
liability developed based on market data obtained from sources independent of
the Company. Unobservable inputs are inputs that reflect the Company’s
assumptions of what market participants would use in pricing the asset or
liability developed based on the best information available in the
circumstances. The hierarchy is broken down into three levels based on the
reliability of the inputs as follows:





Level 1 -
Valuation is based upon unadjusted quoted market prices for identical assets or
liabilities in active markets that the Company has the ability to
access.





Level 2 -
Valuation is based upon quoted prices for similar assets or liabilities in
active markets; quoted prices for identical or similar assets or liabilities in
inactive markets; or valuations based on models where the significant inputs are
observable in the market.





Level 3 -
Valuation is based on models where significant inputs are not observable. The
unobservable inputs reflect the Company's own assumptions about the inputs that
market participants would use.





Non-Recurring
fair value metrics:





Level 1 –
None





Level 2 –
None





Level 3 –
Intangible assets – Trade Name $661,000, Customer List $163,000, Goodwill
$2,004,340 = Total $2,828,340




The
Company has goodwill and intangible assets as a result of the 2009 business
combinations discussed throughout this form 10K. These assets were valued with
the help of a valuation consultant and consisted of level 3 valuation
techniques.




The
Company’s financial instruments consist of cash and cash equivalents, accounts
receivable, accounts payable, accrued liabilities and long-term debt. The
estimated fair value of cash, accounts receivable, accounts payable and accrued
liabilities approximate their carrying amounts due to the short-term nature of
these instruments. The carrying value of long-term debt also approximates
fair value since their terms are similar to those in the lending market for
comparable loans with comparable risks. None of these instruments are held for
trading purposes.




9




Fixed Assets- Fixed assets are stated at
cost. Depreciation expense is computed using the straight-line method over the
estimated useful life of the asset. The following is a summary of the estimated
useful lives used in computing depreciation expense:




Office
      equipment
            
            3
      yearsComputer
      hardware & software
            
            3
      yearsImprovements
      & furniture
            
            5
      yearsWell
      equipment
            
            7
      years




Expenditures
for major repairs and renewals that extend the useful life of the asset are
capitalized.  Minor repair expenditures are charged to expense as
incurred.




Impairment of Long-Lived Assets -The Company has adopted Accounting Standards Codification subtopic
360-10, Property, Plant and Equipment ("ASC 360-10"). ASC 360-10 requires that
long-lived assets and certain identifiable intangibles held and used by the
Company be reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount of an asset may not be recoverable. The
Company evaluates its long-lived assets for impairment annually or more often if
events and circumstances warrant. Events relating to recoverability may include
significant unfavorable changes in business conditions, recurring losses or a
forecasted inability to achieve break-even operating results over an extended
period. The Company evaluates the recoverability of long-lived assets based upon
forecasted undiscounted cash flows. Should impairment in value be indicated, the
carrying value of intangible assets will be adjusted, based on estimates of
future discounted cash flows resulting from the use and ultimate disposition of
the asset. ASC 360-10 also requires assets to be disposed of be reported at the
lower of the carrying amount or the fair value less costs to
sell.





Goodwill and Other Intangible
Assets-The
Company periodically reviews the carrying value of intangible assets not subject
to amortization, including goodwill, to determine whether impairment may exist.
Goodwill and certain intangible assets are assessed annually, or when certain
triggering events occur, for impairment using fair value measurement techniques.
These events could include a significant change in the business climate, legal
factors, a decline in operating performance, competition, sale or disposition of
a significant portion of the business, or other
factors.  Specifically, goodwill impairment is determined using a
two-step process. The first step of the goodwill impairment test is used to
identify potential impairment by comparing the fair value of a reporting unit
with its carrying amount, including goodwill. The Company uses level 3 inputs
and a discounted cash flow methodology to estimate the fair value of a reporting
unit. A discounted cash flow analysis requires one to make various judgmental
assumptions including assumptions about future cash flows, growth rates, and
discount rates. The assumptions about future cash flows and growth rates are
based on the Company’s budget and long-term plans. Discount rate assumptions are
based on an assessment of the risk inherent in the respective reporting units.
If the fair value of a reporting unit exceeds its carrying amount, goodwill of
the reporting unit is considered not impaired and the second step of the
impairment test is unnecessary. If the carrying amount of a reporting unit
exceeds its fair value, the second step of the goodwill impairment test is
performed to measure the amount of impairment loss, if any. The second step of
the goodwill impairment test compares the implied fair value of the reporting
unit’s goodwill with the carrying amount of that goodwill. If the carrying
amount of the reporting unit’s goodwill exceeds the implied fair value of that
goodwill, an impairment loss is recognized in an amount equal to that excess.
The implied fair value of goodwill is determined in the same manner as the
amount of goodwill recognized in a business combination. That is, the fair value
of the reporting unit is allocated to all of the assets and liabilities of that
unit (including any unrecognized intangible assets) as if the reporting unit had
been acquired in a business combination and the fair value of the reporting unit
was the purchase price paid to acquire the reporting unit.  The
Company’s evaluation of goodwill completed during the year ended December 31,
2009 resulted in no impairment.




As of
March 31, 2010, amortizable intangible assets consist of trade names and
customer contracts.  These intangibles are being amortized on a
straight-line basis over their estimated useful lives of 12 and 10 years,
respectively. For the period ended March 31, 2010 the Company recorded
amortization of our intangibles of $17,385, and amortization of $11,140 at
December 31, 2009.





Foreign currency translation
-The Company’s functional currency is the U.S dollar. We have
an obligation related to our acquisition of Red Quartz as discussed in Note 6
which is denominated in Euro’s. The change in currency valuation from our
reporting this obligation in U.S dollars is reported as a component of other
comprehensive income consistent with the relevant accounting
literature.




Income taxes - The
Company accounts for income taxes using the asset and liability method, which
requires the establishment of deferred tax assets and liabilities for the
temporary differences between the financial reporting basis and the tax basis of
the Company’s assets and liabilities at enacted tax rates expected to be in
effect when such amounts are realized or settled. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in income in the
period that includes the enactment date.  A valuation allowance is
provided to the extent deferred tax assets may not be recoverable after
consideration of the future reversal of deferred tax liabilities, tax planning
strategies, and projected future taxable income.





The
Company uses a recognition threshold and measurement attribute for the financial
statement recognition and measurement of a tax position taken or expected to be
taken in a tax return. The guidance requires the Company to recognize tax
benefits only for tax positions that are more likely than not to be sustained
upon examination by tax authorities.  The amount recognized is
measured as the largest amount of benefit that is greater than 50 percent likely
to be realized upon settlement.  A liability for “unrecognized tax
benefits” is recorded for any tax benefits claimed in our tax returns that do
not meet these recognition and measurement standards.





Foreign Currency Translation and
Transaction -The financial position at present for the
Company’s foreign subsidiary Redquartz LLC, established under the laws of the
Country of Ireland are determined using (U.S. dollars) reporting currency as the
functional currency. All exchange gains and losses from remeasurement of
monetary assets and liabilities that are not denominated in U.S. dollars are
recognized currently in other comprehensive income. All transactional gains and
losses are part of income or loss from operations (if and when incurred) will be
pursuant to current accounting literature.




10





Derivative Financial Instruments
-The Company does not use derivative instruments to hedge exposures to
cash flow, market, or foreign currency risks. Derivative financial instruments
are initially measured at their fair value. For derivative financial instruments
that are accounted for as liabilities, the derivative instrument is initially
recorded at its fair value and is then re−valued at each reporting date, with
changes in the fair value reported as charges or credits to income. For
option−based derivative financial instruments, the Company uses the
Black−Scholes model to value the derivative instruments. The classification of
derivative instruments, including whether such instruments should be recorded as
liabilities or as equity, is reassessed at the end of each reporting period.
Derivative instrument liabilities are classified in the balance sheet as current
or non−current based on whether or not net−cash settlement of the derivative
instrument could be required within 12 months of the balance sheet
date.




Recently
Adopted and Recently Enacted Accounting Pronouncements




In
April 2008, the FASB issued ASC 350-10, "Determination of the Useful Life of
Intangible Assets." ASC 350-10 amends the factors that should be considered in
developing renewal or extension assumptions used to determine the useful life of
a recognized intangible asset under ASC 350-10, "Goodwill and Other Intangible
Assets." ASC No. 350-10 is effective for fiscal years beginning after
December 15, 2008. The adoption of this ASC did not have a material impact
on our consolidated financial statements.




In
April 2009, the FASB issued ASC 805-10, "Accounting for Assets Acquired and
Liabilities assumed in a Business Combination That Arise from Contingencies—an
amendment of FASB Statement No. 141 (Revised December 2007), Business
Combinations". ASC 805-10 addresses application issues raised by preparers,
auditors and members of the legal profession on initial recognition and
measurement, subsequent measurement and accounting and disclosure of assets and
liabilities arising from contingencies in a business combination. ASC 805-10 is
effective for assets or liabilities arising from contingencies in 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.
ASC 805-10 will have an impact on our accounting for any future
acquisitions and its consolidated financial statements.




In
May 2009, the FASB issued ASC Topic 855, “Subsequent Events”. ASC Topic 855
established principles and requirements for evaluating and reporting subsequent
events and distinguishes which subsequent events should be recognized in the
financial statements versus which subsequent events should be disclosed in the
financial statements. ASC Topic 855 also requires disclosure of the date through
which subsequent events are evaluated by management. ASC Topic 855 was effective
for interim periods ending after June 15, 2009 and applies prospectively.
Because ASC Topic 855 impacts the disclosure requirements, and not the
accounting treatment for subsequent events, the adoption of ASC Topic 855 did
not impact our consolidated results of operations or financial condition. See
Note 10 for disclosures regarding our subsequent events.




Effective
July 1, 2009, we adopted the Financial Accounting Standards Board ("FASB")
Accounting Standards Codification ("ASC") 105-10, Generally Accepted Accounting
Principles—Overall ("ASC 105-10"). ASC 105-10 establishes the FASB Accounting
Standards Codification (the "Codification") as the source of authoritative
accounting principles recognized by the FASB to be applied by nongovernmental
entities in the preparation of financial statements in conformity with
U.S. GAAP. Rules and interpretive releases of the SEC under authority of
federal securities laws are also sources of authoritative U.S. GAAP for SEC
registrants. All guidance contained in the Codification carries an equal level
of authority. The Codification superseded all existing non-SEC accounting and
reporting standards. All other non-grandfathered, non-SEC accounting literature
not included in the Codification is non-authoritative. The FASB will not issue
new standards in the form of Statements, FASB Staff Positions or Emerging Issues
Task Force Abstracts. Instead, it will issue Accounting Standards Updates
("ASUs"). The FASB will not consider ASUs as authoritative in their own right.
ASUs will serve only to update the Codification, provide background information
about the guidance and provide the bases for conclusions on the change(s) in the
Codification. References made to FASB guidance throughout these consolidated
financials have been updated for the Codification.




In
August 2009, the FASB issued ASU No. 2009-05, Measuring Liabilities at Fair
Value, which provides additional guidance on how companies should measure
liabilities at fair value under ASC 820. The ASU clarifies that the quoted price
for an identical liability should be used. However, if such information is not
available, an entity may use the quoted price of an identical liability when
traded as an asset, quoted prices for similar liabilities or similar liabilities
traded as assets, or another valuation technique (such as the market or income
approach). The ASU also indicates that the fair value of a liability is not
adjusted to reflect the impact of contractual restrictions that prevent its
transfer and indicates circumstances in which quoted prices for an identical
liability or quoted price for an identical liability traded as an asset may be
considered level 1 fair value measurements. This ASU is effective
October 1, 2009. We are currently evaluating the impact of this standard,
but would not expect it to have a material impact on the our consolidated
results of operations or financial condition.




In
October 2009, the Financial Accounting Standards Board (“FASB”) issued new
revenue recognition standards for arrangements with multiple deliverables, where
certain of those deliverables are non-software related. The new standards permit
entities to initially use management’s best estimate of selling price to value
individual deliverables when those deliverables do not have Vendor Specific
Objective Evidence (“VSOE”) of fair value or when third-party evidence is not
available. Additionally, these new standards modify the manner in which the
transaction consideration is allocated across the separately identified
deliverables by no longer permitting the residual method of allocating
arrangement consideration. These new standards are effective for annual periods
ending after June 15, 2010 and early adoption is permitted. The Company is
currently evaluating the impact of adopting this standard on the Company’s
consolidated financial position, results of operations and cash
flows.




11





In
June 2009, the FASB issued guidance establishing the Codification as the source
of authoritative U.S. Generally Accepted Accounting Principles (“U. S. GAAP”)
recognized by the FASB to be applied by non-governmental entities. Rules and
interpretive releases of the Securities and Exchange Commission (“SEC”) under
authority of federal securities laws are also sources of authoritative U.S. GAAP
for SEC registrants. The Codification supersedes all existing non-SEC accounting
and reporting standards. All other non-grandfathered non-SEC accounting
literature not included in the Codification will become non-authoritative. The
FASB will no longer issue new standards in the form of Statements, FASB Staff
Positions, or Emerging Issues Task Force Abstracts. Instead, the FASB will issue
Accounting Standards Updates, which will serve only to update the Codification,
provide background information about the guidance and provide the bases for
conclusions on changes in the Codification. All content in the Codification
carries the same level of authority, and the U.S. GAAP hierarchy was modified to
include only two levels of U.S. GAAP: authoritative and non-authoritative. The
Codification is effective for the Company’s interim and annual periods beginning
with the Company’s year ending December 31, 2009. Adoption of the Codification
affected disclosures in the Consolidated Financial Statements by eliminating
references to previously issued accounting literature, such as SFASs, EITFs and
FSPs.





In
June 2009, the FASB issued amended standards for determining whether to
consolidate a variable interest entity. These new standards amend the
evaluation criteria to identify the primary beneficiary of a variable interest
entity and require ongoing reassessment of whether an enterprise is the primary
beneficiary of the variable interest entity. The provisions of the new standards
are effective for annual reporting periods beginning after November 15, 2009 and
interim periods within those fiscal years. The adoption of the new standards
will not have an impact on the Company’s consolidated financial position,
results of operations and cash flows.





In
May 2009, the FASB issued guidance establishing general standards for accounting
for and disclosure of events that occur after the balance sheet date but before
financial statements are issued or are available to be issued and shall be
applied to subsequent events not addressed in other applicable generally
accepted accounting principles. This guidance, among other things, sets forth
the period after the balance sheet date during which management should evaluate
events or transactions that may occur for potential recognition or disclosure in
the financial statements, the circumstances under which an entity should
recognize events or transactions occurring after the balance sheet date in its
financial statements and the disclosures an entity should make about events or
transactions that occurred after the balance sheet date. The adoption of this
guidance had no impact on the Company’s consolidated financial position, results
of operations and cash flows.





2.
Going Concern





The
accompanying consolidated financial statements have been prepared on a going
concern basis of accounting, which contemplates continuity of operations,
realization of assets and liabilities and commitments in the normal course of
business.  The accompanying consolidated financial statements do not
reflect any adjustments that might result if the Company is unable to continue
as a going concern.  The Company has experienced substantial losses,
maintains a negative working capital and capital deficits, which raise
substantial doubt about the Company's ability to continue as a going concern.





The
Company is working to manage its current liabilities while it continues to make
changes in operations to improve its cash flow and liquidity position. The
ability of the Company to continue as a going concern and appropriateness of
using the going concern basis is dependent upon the Company’s ability to
generate revenue from the sale of its services and the cooperation of the
Company’s note holders to assist with obtaining working capital to meet
operating costs in addition to our ability to raise funds.




3.
Common and Preferred Stock Transactions




In the
first quarter 2010, the Company issued 4,650,000 shares of common stock for
services valued at $205,450. The shares were issued to various business
consultants, advisors, and legal consultants for assisting the Company’s growth
plan. We used the closing share price on the date of grant for valuation of the
expense.





In the
first quarter 2010, the Company issued 19,020,859 shares of common stock to
extinguish debt of $429,148.





In the
first quarter of 2010, the Company issued 1,333,467 shares of common stock for
subscription price of $50,004.





In the
first quarter of 2010, 100,000  shares were agreed to be issued to Red
Quartz in conjunction with the acquisition. These shares have not yet been
issued and are portion of common stock subscribed.





Common
stock subscribed consists of shares that are agreed to be issued for debt and
the Red Quartz acquisition. The balances consist of 8,581,000 shares not yet
issued for debt forgiveness and 100,000 shares to be issued to Red
Quartz.





12





4.
Preferred Stock Series




Series A preferred stock:
Series A preferred stock has a par value of $0.001 per share and no stated
dividend preference.  The Series A is convertible into common stock at a
conversion ratio of one preferred share for one common share.   Preferred A
has liquidation preference over Preferred B stock and common stock.




Series B preferred stock:
Series B preferred stock has a par value of $0.001 per share and no stated
dividend preference.  The Series B is convertible into common stock at a
conversion ratio of one preferred share for one common share.  The Series B
has liquidation preference over Preferred C stock and common stock.




Series C preferred stock: The
Preferred C stock has a stated value of $.001 and no stated dividend rate and is
non-participatory.   The Series C has liquidation preference over
common stock. Effective May 20, 2009 i) Voting Rights for each share of Series C
Preferred Stock shall have 21,200 votes on the election of directors of the
Company and for all other purposes, and, ii) regarding Conversion to Common
Shares, Series C have no right to convert to common or any other series of
authorized shares of the Company.





5.
Fixed Assets and Oil and Gas Properties




The
following is a detailed list of fixed assets:




31-Mar-10
            
            
            31-Dec-09Property
      and Equipment
            
            $ 101,520
            
            
            $ 109,488Well
      leases
            
            
            150,263
            
            
            
            163,500Well
      equipment
            
            
            74,737
            
            
            
            61,500Asset
      Retirement Obligation
            
            
            4,337
            
            
            
            4,337Accumulated
      depreciation & depletion
            
            
            (64,390
            )
            
            
            (64,506
            )Fixed
      assets- net
            
            $
            266,467
            
            
            $
            274,319




6.
 Options & Warrants Outstanding




All
options and warrants granted are recorded at fair value using a Black-Scholes
model at the date of the grant.   There is no formal stock option plan for
employees.




A listing
of options and warrants outstanding at March 31, 2010 is as
follows.  Option and warrants outstanding and their attendant exercise
prices have been adjusted for the 1 for 200 reverse split of the common stock
discussed in Note 5.




Amount
            
            
            Weighted
              Average
              Exercise
              Price
            
            
            Weighted
              Average
              Years to
              MaturityOutstanding
      at December 31, 2009
            
            
            6,566,310
            
            
            $
            1.18533
            
            
            
            2.89Issued
            
            
            0Exercised
            
            
            0Expired
            
            
            0Outstanding
      at March 31, 2010
            
            
            6,566,310
            
            
            $
            1.18533
            
            
            
            2.64





There
were no options or warrants granted during the three months ended March 31,
2010. During 2009 we granted 6,500,000 warrants. 500,000 warrants were granted
to a consultant pursuant to an advisory agreement with an exercise price of
$1.00 per share, 3 year term, an estimated 95% volatility and an estimated fair
value of $7,934.





During
2009 we granted 6,000,000 to continue to try and improve our relationship with
our debt holders. There were two issuances of 3,000,000. The first issuance
included an exercise price of $1.00 per share, 3 year term, an estimated 95%
volatility and an estimated fair value of $25,550. The second issuance included
an exercise price of $1.25 per share, 3 year term, an estimated 95% volatility
and an estimated fair value of $20,553.





The
estimated total value of the above warrants was $54,037 and this value was
expensed during 2009.





7.
Acquisition of M3 Lighting, Inc. (M3), South Atlantic Traffic Corporation
(SATCO), and Redquartz LTD (RQTZ)





2010





i)
            On
      March 3, 2010, the Company executed a Stock Purchase Agreement with the
      stockholders of Redquartz LTD (“Sellers” or “RQTZ”), a company formed and
      existing under the laws of the country of Ireland, whereas the Company
      agreed to issue 100,000 shares of its restricted common stock valued at
      USD $2,500 in exchange for 100% of the issued and outstanding shares of
      common stock, par value $0.01 per share, of RQTZ. All assets and
      liabilities, other than the Shareholder Notes Payable, of the RQTZ were
      transferred to the prior owners of Redquartz. The Notes Payable represent
      a debt burden to RQTZ of USD $4,464,262. This obligation is based in Euros
      and converted to our functional currency the dollar. Redquartz LTD was
      inactive in the first quarter of 2010 and had no income and expense that
      would affect the financial statements of the Company and therefore no
      pro-forma is necessary.




13




2009





i)
            On
      May 21, 2009, The Company, Asian Ventures Corp., a Nevada corporation (the
      “Subsidiary”), M3 Lighting, Inc., a Nevada corporation (“M3”), and
      Strategic Partners Consulting, L.L.C., a Georgia limited liability company
      (“Strategic Partners”) executed and closed a Plan and Agreement of
      Triangular Merger (the “Plan of Merger”), whereby M3 merged into the
      Subsidiary, a wholly-owned subsidiary of the Company. The acquisition has
      been accounted for at cost basis with no step up in purchase price
      due to M3 no having ongoing operations as a development stage company and
      no meeting the definition of a business. We gave 14,320,808 shares of our
      commons stock to acquire M3. No pro-forma is necessary as given the
      development stage nature of this Company the results of our operations
      would not materially change had the acquisition occurred at the beginning
      of the prior year.




ii)
            On
      November 4, 2009, the Company, Bob Joyner, a Florida resident
      ("Joyner"), Stewart Hall, a North Carolina resident ("Hall"), Hunter
      Intelligent Traffic Systems, LLC, a Georgia limited liability company
      (“Hunter”) and South Atlantic Traffic Corporation, a Florida corporation (
      “SATCO”), executed a Stock Purchase Agreement (the "Agreement") whereas
      the Registrant acquired all of the outstanding stock and interests held in
      SATCO. A copy of the Agreement was attached as an exhibit to our Current
      Report filed with the Commission on November 12, 2009. The acquisition has
      been accounted for as a purchase under accounting principles generally
      accepted in the United States (GAAP). Under the purchase method of
      accounting, in accordance with ARC 805, the assets and
      liabilities of SATCO are recorded as of the acquisition date at their
      respective fair values, and consolidated with the Company’s assets and
      liabilities.




The
Agreement calls for the following material terms:




I.
Purchase of Stock, Purchase Price:




1. The
Registrant agreed to pay to the Sellers aggregate consideration of $2,326,300
(the "PURCHASE PRICE"), adjusted to $2,058,373 as a result of the estimated make
whole provision below by delivery of:




(a) Cash
in available funds equal to the greater of: (i) sum of Fifty Percent (50%) of
SATCO’s available cash balance at Closing plus Twenty-Five Percent (25%) of
SATCO’s trade accounts receivables aged less than Ninety (90) days past due at
Closing with an additional amount to be negotiated for the outstanding retainage
and imminent collections of receivables over 90 days old as negotiated prior to
Closing; which was (ii) $600,000.




(b)
Promissory notes issued to each Seller in the aggregate principal amount of Five
Hundred Sixty Three Thousand One Hundred US Dollars ($563,100.00) (the
“PROMISSORY NOTES”). The Promissory Notes will accrue interest at a rate of Nine
Percent (9%) per annum and will amortize with a principal and interest payment
at the First Anniversary Date of the Transaction of Twenty-Five Percent (25%) of
the Promissory Notes plus accrued interest, a principal and interest payment at
the Second Anniversary Date of the Transaction of Twenty-Five Percent (25%) of
the Promissory Notes plus accrued interest and a Final Payment of the
Outstanding Balance of the Promissory Notes plus any unpaid interest on the
Third Anniversary Date of the Transaction.




(c)
2,908,000 shares of the Registrant’s common stock issued to the Sellers pro rata
based on their ownership in SATCO representing $1,163,200.00 in value at a price
per share of $0.40 ("STOCK CONSIDERATION").




(d)
Principal and interest on the Promissory Notes will be allocated to the Sellers
pro rata based on their equity ownership SATCO. The Promissory Notes carry a
cumulative claw-back feature (the “Claw Back”) for the term of the Promissory
Notes listed in the agreement.




(e) Stock
consideration shall be issued at closing as follows: The Purchaser shall issue
to the Sellers an aggregate of 2,908,000 shares of its Common Stock (“the “STOCK
CONSIDERATION”) the total Stock Consideration to be paid to the Sellers based
upon a share price of Forty Cents ($0.40) per share.




(f) Stock
Consideration issued at Closing will carry a make whole provision (the “Make
Whole”). It is the parties’ intention that the Proposed Transaction will be
structured as a tax-free reorganization under Section 368(a) of the Internal
Revenue Code of 1986, as amended. The Make Whole provides down-side protection
against a decline in the Registrant’s common share price. The Make Whole is
available only for shares held from the Stock Consideration by the Seller for a
period of one year following Closing. In the event that the Market Price
Per Share of the Stock Consideration during the thirty (30) consecutive trading
days immediately prior to the first anniversary of the Closing (the “Make Whole
Date”) is less than $.40, the Registrant would, at the Registrant’s option,
either issue to Sellers that number of additional shares of EGPI common stock
equal to (1) the number of shares of EGPI common stock comprising the Stock
Consideration held at the Make Whole Date, multiplied by $.40, less (2) the
number of shares of EGPI common stock comprising the Stock Consideration held at
the Make Whole Date, multiplied by the Market Price Per Share of the Stock
Consideration on the Make Whole Date. Notwithstanding the foregoing, the
Registrant’s obligation to make any adjustment pursuant to the preceding
sentence shall terminate in the event that, at any time prior to the Make Whole
Date, the aggregate Market Price Per Share of the Registrant’s common stock
during any twenty consecutive trading days exceeds $.75. The termination of the
Make Whole mechanism will only apply if the Sellers’ shares are registered
during the entire twenty consecutive trading days period, during which the
Market Price Per Share of the Registrant’s common stock exceeds $.75, by virtue
of eligibility and effectiveness of either i) 144 legend removal or
ii) self imposed registration process by the Registrant.




14




A
breakdown of the purchase price is as follows:





Cash
      consideration paid
            
            $
            600,000Promissory
      note to Sellers
            
            
            295,173Shares
      issued
            
            
            174,480Contingent
      consideration liability - make whole provision (accounted for in
      equity)
            
            
            988,720Contingent
      asset – claw back provision
            
            
            -Total
      purchase price
            
            
            2,058,373




Final
Purchase Price Allocation:




Current
      assets
            
            $
            1,425,881P    Property,
      plant and equipment
            
            
            85,530Trade
      name
            
            
            661,000Customer
      relationships
            
            
            163,000Assumed
      liabilities
            
            
            (2,278,878
            )Goodwill
            
            
            2,001,840Total
      purchase price
            
            $
            2,058,373




The
following unaudited pro-forma assumes the transaction occurred as of the
beginning of the periods presented as if it would have been reported during the
twelve month periods below.


EGPI
                Firecreek,
      Inc.
                Three
      Months
                Ending
                31-Mar-09
              
              
              South
      Atlantic
                Traffic
      Corporation
                Three
      Months
                Ending
                31-Mar-09
              
              
              Adjustments
              
              
              CombinedRevenuesSales
              
              $
              -
              
              
              $
              2,972,374
              
              
              $
              -
              
              
              $
              2,972,374Cost
      of goods sold
              
              
              -
              
              
              
              2,463,863
              
              
              
              -
              
              
              
              2,463,863Gross
      profit
              
              
              -
              
              
              
              508,511
              
              
              
              -
              
              
              
              508,511Operating
      expensesSelling,
      general and administrative
              
              
              187,618
              
              
              
              378,232
              
              
              
              -
              
              
              
              565,850Depreciation
              
              
              -
              
              
              
              11,115
              
              
              
              -
              
              
              
              11,115Total
      operating expenses
              
              
              187,618
              
              
              
              389,347
              
              
              
              -
              
              
              
              576,965Net
      loss from operations
              
              
              (187,618
              )
              
              
              119,165
              
              
              
              -
              
              
              
              (68,453
              )Other
      income (expenses)Disposal
      of assets
              
              
              -
              
              
              
              -
              
              
              
              
              
              
              
              -Interest
      expense, net
              
              
              (7,215
              )
              
              
              (7,114
              )
              
              
              
              
              
              
              (14,329
              )Total
      other income (expenses)
              
              
              (7,215
              )
              
              
              (7,114
              )
              
              
              -
              
              
              
              (14,329
              )Net
      loss before provision for income taxes
              
              
              (194,833
              )
              
              
              112,051
              
              
              
              -
              
              
              
              (82,782
              )Provision
      for income taxes
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -Net
      income (loss)
              
              $
              (194,833
              )
              
              $
              112,051
              
              
              $
              -
              
              
              $
              (82,782
              )Basic
      & fully diluted loss per share
              
              
              
              
              
              
              
              
              
              
              
              
              
              $
              (0.01
              )Weighted
      average of common shares outstanding:Basic
      & fully diluted
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              8,459,884




15




8.
Income Tax Provision





Deferred
income tax assets and liabilities consist of the following at March 31,
2010:




Deferred
      Tax asset
            
            $
            680,625Valuation allowance
            
            
            (680,625
            )Net
      deferred tax assets
            
            
            0





The
Company estimates that it has an NOL carryfoward of approximately $3,363,392
that begins to expire in 2026.





After
evaluating any potential tax consequence from our former subsidiary and our own
potential tax uncertainties, the Company has determined that there are no
material uncertain tax positions that have a greater than 50% likelihood of
reversal if the Company were to be audited. The Company believes that it is
current with all payroll and other statutory taxes. Our tax return for the years
ended December 31, 2002 to December 31, 2009 may be subject to IRS
audit.





9.  Related
Party Transactions




During
fiscal year 2009, three shareholders had unsecured non-interest bearing advances
receivable from the Company. Imputed interest at a rate of 10% was immaterial on
these advances which total $161,291 at March 31, 2010 and $240,918 at December
31, 2009.





Relative
to the May 21, 2009 acquisition of M3 Lighting, Inc. the Company approved an
Administrative Services Agreement (ASA), and amended terms thereof, with
Strategic Partners Consulting, LLC (SPC), Two of the Company’s officers,
directors and shareholders, David H. Ray, Director and Executive Vice President
and Treasurer of the Company and M3 since May 21, 2009 and Brandon D. Ray
Director and Executive Vice President of Finance of the Company and M3 are also
owners and managers of SPC. Information is listed in Exhibit 10.1 to a Current
Report on form 8-K, Amendment No. 1, filed on June 23, 3009. The ASA initiated
on November 4, 2009, in accordance with its terms thereof, and is being
currently billed at the rate of $20,833 per month. The ASA is current as of
March, 2010, with $35,200 being paid to SPC to for the three months ending March
31, 2010, with a balance payable due in the amount of approximately $42,997
running balance owing on account.




16




10.
Notes Payable




At March
31, 2010, the Company was liable on the following Promissory notes:





(see
notes to the accompanying table)





Date
      of
            
            Date
      Obligation
            
            Interest
            
            
            Balance
      DueObligation
            
            Matures
            
            Rate
      (%)
            
            
            03/31/10
      ($)9/17/2009
            
            9/17/2010
            
            
            12
            
            
            $
            11,3505/29/2009
            
            9/17/2010
            
            
            12
            *
            
            
            23,5169/17/2009
            
            9/17/2010
            
            
            18
            *
            
            
            3,29311/4/2009
            
            11/4/2012
            
            
            9
            
            
            
            98,39111/4/2009
            
            11/4/2012
            
            
            9
            
            
            
            98,39111/4/2009
            
            11/4/2012
            
            
            9
            
            
            
            98,39112/22/2009
            
            6/22/2010
            
            
            20
            
            
            
            50,00012/22/2009
            
            6/22/2010
            
            
            20
            
            
            
            50,00012/22/2009
            
            6/22/2010
            
            
            20
            
            
            
            50,00012/22/2009
            
            6/22/2011
            
            
            8
            
            
            
            120,00012/7/2007
            
            12/7/2010
            
            
            9
            
            
            
            55,1491/15/2010
            
            7/15/2010
            
            
            18
            
            
            
            142,5693/1/2009
            
            3/31/12
            
            
            10
            
            
            
            4,325,483$
            5,126,533







*
Compounded




Notes:





On
January 15, 2010, the Company received cash proceeds of $86,000 from the same
investor discussed above in exchange for the issuance of a Convertible
Promissory Note (“Convertible Note”) and a registration rights agreement
(“RRA”).  The Convertible Note has no specified interest rate and is
scheduled to mature six months from the closing date.  At the
investor’s option, the outstanding principal amount, including all accrued and
unpaid interest and fees, may be converted into shares of common stock at the
conversion price, which is 75% of the lower of (a) $0.08 per share; or (b) the
lowest three-day common stock volume weighted average price during the prior
twenty business days. In addition, if the Company sells common shares or
securities convertible into common shares, the Conversion Price shall become the
lower of: (a) the conversion price in effect immediately prior to the sale of
securities; or (b) the conversion price of the securities
sold.   Finally, upon the occurrence of Trigger Events, as
defined, (a) the outstanding principal amount will increase no more than two
times by 25%; and (b) default interest will accrue at the rate of
18%




Upon
occurrence of an Event of Default (various specified events), the Lender may (a)
declare the unpaid principal balance and all accrued and unpaid interest thereon
immediately due and payable; (b) at anytime after January 31, 2010, immediately
draw on the LOC to satisfy EGPI’s obligations; and (c) interest will accrue at
the rate of 18%.
 
 Upon
occurrence of a Trigger event: (a) the outstanding principal amount will
increase by 25%; and (b) interest will accrue at the rate of 18%. The Trigger
Event effects shall not be applied more than two times. There are various
Trigger Events, including (a) the five-day common stock VWAP declines below
$0.04; (b) the ten-day average daily trading volume declines below $5,000; (c) a
judgment against EGPI in excess of $100,000; (d) failure to file a registration
statement on time; (e) failure to cause a registration statement to become
effective on time; (f) events of default; and (g) insufficient authorized common
shares.
 
 During
the first quarter the Company tripped two trigger events and incurred resulting
penalties and incremental debt obligation. Based on the
indeterminable amount of shares that can be issued under the VWAP formula (no
cap on shares that could be issued, and penalties and interest having been added
to the principle amount of the convertible note then eligible due the triggering
events, and other factors, derivative treatment associated with the original
note balances became applicable under EITF 00-19, and caused reclassification of
other equity (warrants and options outstanding) of the Company, including Note 2
below:





Note 2:
During December 2009 we also issued $150,000 of notes that will become
convertible either at maturity in June 2010 or upon an event of default. The
Company evaluated these notes and for the period ended December 31,
2009determined since the note is currently not convertible no beneficial
conversion feature or derivative exists within this note. The Company also
granted warrants to these note holders as noted previously in these footnotes.
These warrants were not attached to the debt and as a result were expensed when
issued and not treated as a discount to the notes. Based upon analysis of the
terms of conversion for the notes, the contingent optional conversion is deemed
to be within the control of the Company. Accordingly, pursuant to the guidance
of ASC 470-20-40-5 through 40-10, these do not represent a substantive
conversion feature. As such there was no beneficial conversion feature for
accounting purposes until conditions change either triggering the conversion
option or making a conversion thereto more likely. For the period ended December
31, 2009, other feature of the notes, and the warrants, such as anti-dilution
features did not carry the attributes under EITF 07-05 that would have then
caused the instrument(s) to become a derivative. The other notes listed above
did not contain conversion features.




17







However,
upon the issuance on January 15, 2010of the $86,000 instrument stated above with
the VWAP driven conversion feature, the warrants were required to be treated as
a derivative pursuant to 00-19 Reclassification of Contracts. The classification
of a contract should be reassessed at each balance sheet date and should be
reclassified as of the date of the event that caused the reclassification.
Therefore the Company then determined the fair value of the warrants using
black-scholes and then used the relative fair value basis to allocate against
proceeds received in order to determine the amount to be allocated to additional
paid in capital under EITF 00-27. The Company first allocated the proceeds
received in the financing transaction that incudes any other detachable
instruments included in the exchange (such as detachable warrants) on a relative
fair value basis and then the 98-5 model was applied to the amount allocated to
the convertible instrument, used to measure the intrinsic value of the embedded
conversion option. The amount attributed to the warrants was treated as a
discount on the note, and amortized under the interest method over the remaining
term of the note.




Note 3:
During 2009 we received cash proceeds for debt obligations of
$933,133.




Note 4:
Although a portion of our debt is not due within 12 months given our working
capital deficit and cash positions and our ability to service the debt on a long
term basis is questionable, the notes are all treated as current
liabilities.





11.
January 15, 2010
Financing





Secured
Note





On
January 15, 2010, the Company received cash proceeds of $1,000,000 from an
investor in exchange for the issuance of a Secured Promissory Note (“Secured
Note”) and a Funding and Letter of Credit Agreement (“LOC”).  The
Secured Note had no specified interest rate unless an event of default which
then becomes 18%, and was scheduled to mature at the earlier of (a) February 15,
2010, or (b) upon the closing of a specified investment.  The LOC
provides for $925,000 of the investor’s funds to be deposited with a bank which
will, in turn, issue a $925,000 letter of credit in favor of the investor, as
security for the repayment of the Secured Note.  Upon occurrence of an
Event of Default, as defined, the Lender may (a) declare the unpaid principal
balance and all accrued and unpaid interest thereon immediately due and payable;
(b) at anytime after January 31, 2010, immediately draw on the LOC to satisfy
the Company’s obligations; and (c) interest will begin to accrue at the rate of
18%.  On or about February 22, 2010, the Company indirectly via its
pending third party acquisition candidate Southwest Signal, Inc,, and through
its line of credit repaid its obligation under the Secured Note. Southwest
Signal, Inc. is not a subsidiary of the Company as of May 21, 2010.





Convertible
Note/ Derivative





On
January 15, 2010, the Company received cash proceeds of $86,000 from the same
investor discussed above in exchange for the issuance of a Convertible
Promissory Note (“Convertible Note”) and a registration rights agreement
(“RRA”).  The Convertible Note has no specified interest rate and is
scheduled to mature six months from the closing date.  At the
investor’s option, the outstanding principal amount, including all accrued and
unpaid interest and fees, may be converted into shares of common stock at the
conversion price, which is 75% of the lower of (a) $0.08 per share; or (b) the
lowest three-day common stock volume weighted average price during the prior
twenty business days. In addition, if the Company sells common shares or
securities convertible into common shares, the Conversion Price shall become the
lower of: (a) the conversion price in effect immediately prior to the sale of
securities; or (b) the conversion price of the securities
sold.   Finally, upon the occurrence of Trigger Events, as
defined, (a) the outstanding principal amount will increase no more than two
times by 25%; and (b) default interest will accrue at the rate of
18%.





The RRA
provides both mandatory and piggyback registration rights.  The
Company is obligated to (a) file a registration statement for 2,000,000 common
shares (subject to adjustment) no later than 14 days after the closing date, and
(b) have it declared effective no later than the earlier of (i) five days after
the SEC notifies the Company that it may be declared effective or (ii) 90 days
from the closing date.  The Company is obligated to pay the investor a
penalty of $100 for each day that it is late in meeting these obligations. The
Company’s registration statement was filed late and on March 18, 2010 it was
withdrawn.





During
the three months ended March 31, 2010, the maximum of two Trigger Events
occurred, which increased the outstanding principal amount of the Convertible
Note by approximately (a) $22,000 and $27,000 of trigger penalties; (b) $4,000
of interest at the trigger rate of 18%; and (c) $5,000 of penalties associated
with the RRA. As a result, the outstanding principal amount of the Convertible
Note is approximately $143,000 as of March 31, 2010.  (Note: The
Company, as of May 14, 2010 received a preliminary waiver from the investor,
subject to formal signed documentation, for stopping future penalties based on
approved negotiations which will include removal of Section 4a. of the
Convertible Promissory Note Agreement, insertion of a stated floor, interest
rate of 9%, and a cap on the amount of shares to be issued so as not to be an
indeterminable amount.)





Aggregate
note discounts of approximately $26,565 have been recorded, which represent the
initial fair values of the beneficial conversion feature associated with the
outstanding principal amount of the Convertible Note.  The note
discount is being amortized using the interest method over the six month
duration of the Convertible Note and interest expense of approximately $56,570
was recognized during the three months ended March 31, 2010.




18





The value
of the beneficial conversion feature (expected term of 0.5 years; risk-free rate
of 0.15%; and volatility of 95%) of approximately $41,850 has been classified as
a derivative liability because (a) the Convertible Note provides conversion
price protection; and (b) the quantity of shares issuable pursuant to the
beneficial conversion feature is indeterminate.  In addition, because
the potential share issuance is now indeterminate, the approximately $21,000
aggregate value of the warrants (volatility of 95%) to purchase an aggregate of
6,566,310 shares of common stock which were outstanding as of January 15, 2010
(plus all futures issuances) was reclassified from equity to derivative
liabilities.  On the March 31, 2010 reporting date, the derivative
liabilities were revalued (volatility of 95%) and the approximately $68,801
reduction in the value of the derivative liabilities was recorded as a benefit
on the statement of operations.





Professional
Service Agreements





On March
1, 2010, the Company entered into two professional service agreements (the
“Agreements”) which are intended to be automatically renewable
annually.  Aggregate fees pursuant to the Agreements are comprised of
(a) $20,000 in cash per month; (b) a one-time issuance of 6,000,000 shares of
restricted common stock; and (c) three-year options to purchase for $20,000 the
lower of (i)  shares of common stock representing 1% of the Company’s
outstanding common stock; or (ii) shares of common stock representing a fair
market value of $150,000.  In addition, the vendors are entitled to
convert any unpaid cash fees into common stock at a 50% discount to the fair
market value of the stock on the date of conversion.  The options and
the conversion option associated with the cash fees were determined to be
derivative liabilities due to the indeterminate potential share issuance
associated with the securities issued pursuant to the January 15, 2010
financing. The derivative was valued using the Black Scholes Model.





As of
March 31, 2010, the approximately $25,000 value of the conversion option
(expected term of 1.4 years; risk-free rate of 0.72%; and volatility of
95%)  associated with the $20,000 of aggregate outstanding cash fees
was recorded as general administration expense in the statement of operations
and a derivative liability on the balance sheet.  Through March 31,
2010, the Company recognized approximately $14,000 of general administration
expense, with a corresponding credit to paid-in-capital, which represented
one-twelfth of the approximately $165,000 March 1, 2010 value of the 6,000,000
shares of restricted common stock, which is being amortized over the expected
one year service period.  As of March 31, 2010, the value of the
three-year options (expected term of 0.9 years; risk-free rate of 1.02%; and
volatility of 95%) was negligible.





12.
Concentrations and Risk





Customers





During
the year ended December 31, 2009, and for the three months ended March 31, 2010,
revenue generated under the top five customers accounted for 45% and 73% of the
Company’s total revenue. For the year ended December 31, 2009, and for the three
months ended March 31, 2010 three customers accounted for 29% and 72% of the
total outstanding accounts receivable. Concentration with a single or a few
customers may expose the Company to the risk of substantial losses if a single
dominant customer stops conducting business with the
Company.  Moreover, the Company may be subject to the risks faced by
these major customers to the extent that such risks impede such customers’
ability to stay in business and make timely payments.




Suppliers




The
Company obtained approximately 27% of its products from one manufacturer in the
United States and for the three months ending March 31, 2010. Management
believes this poses no business risk as the Company believes alternative product
sources are readily available if needed.




13.
Contingencies





The
Company is subject to various claims and legal proceedings covering a wide range
of matters that arise in the ordinary course of its business activities.
Management believes that any liability that may ultimately result from the
resolution of these matters will not have a material adverse effect on the
financial condition or results of operations of the Company.





In April
2010 we received a lawsuit on behalf of our SATCO subsidiary whereas Acuity
Brands Lighting Inc. (“Acuity”) is seeking a judgment to collect amounts owed to
Acuity by SATCO. Acuity is seeking an amount of $156,000 plus accrued interest
of $19,000, which has been accrued and properly recorded as a liability and
interest payable to Acuity.





As noted
in our business combination footnote our SATCO acquisition contained certain
make whole provisions that may impact us in the future.





As noted
in our debt footnote above, we have certain notes that may become convertible in
the future and potential result in further dilution to our common
shareholders.





19





14.
Subsequent Events





In April
2010, the Company issued 70,608,344 shares of common stock to various entities
to reduce debt owed to a debt holder.





In April
2010, the Company issued 8,500,000 shares of common stock to a consultants and
advisors for services rendered.





In May
2010 the Company issued 1,000,000 share of common stock to an accredited
individual for working capital in behalf of its M3 subsidiary.





In May
2010 the Company issued 24,833,333 shares of common stock to various entities to
reduce debt owed to a debt holder.





ITEM
2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.




You
should read the following discussion and analysis in conjunction with the
Consolidated Financial Statements in Form 10-K, as amended, and the other
financial data appearing elsewhere in this Form 10-Q Report.




The
information set forth in Management’s Discussion and Analysis of Financial
Condition and Results of Operations (“MD&A”) contains certain
“forward-looking statements” within the meaning of Section 27A of the Securities
Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as
amended, and the Private Securities Litigation Reform Act of 1995, including,
among others (i) expected changes in the Company’s revenues and profitability,
(ii) prospective business opportunities and (iii) the Company’s strategy for
financing its business. Forward-looking statements are statements other than
historical information or statements of current condition. Some forward-looking
statements may be identified by use of terms such as “believes”, “anticipates”,
“intends” or “expects”. These forward-looking statements relate to the plans,
objectives and expectations of the Company for future operations. Although the
Company believes that its expectations with respect to the forward-looking
statements are based upon reasonable assumptions within the bounds of its
knowledge of its business and operations, in light of the risks and
uncertainties inherent in all future projections, the inclusion of
forward-looking statements in this report should not be regarded as a
representation by the Company or any other person that the objectives or plans
of the Company will be achieved. In light of these risks and uncertainties,
there can be no assurance that actual results, performance or achievements of
the Company will not differ materially from any future results, performance or
achievements expressed or implied by such forward-looking statements. The
foregoing review of important factors should not be construed as exhaustive. The
Company undertakes no obligation to release publicly the results of any future
revisions it may make to forward-looking statements to reflect events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events.




The
Company has been focused on oil and gas activities for development of interests
held that were acquired in Texas and Wyoming for the production of oil and
natural gas through December 2, 2008. The Company throughout 2008 was seeking to
continue expansion and growth for oil and gas development in its core projects.
EGPI Firecreek Inc. was formerly known as Energy Producers, Inc., an oil and gas
production company focusing on the recovery and development of oil and natural
gas. This strategy is centered on rehabilitation and production enhancement
techniques, utilizing modern management and technology applications in upgrading
certain proven reserves.





In its
2005 fiscal year, the Company initiated a program to review domestic oil and gas
prospects and targets.  As a result, EGPI acquired non-operating oil and
gas interests in a project titled Ten Mile Draw (“TMD”) located in Sweetwater
County, Wyoming USA for the development and production of natural gas. In July,
2007, the Company acquired and began production of oil at the 2,000 plus acre
Fant Ranch Unit in Knox County, Texas. This was followed by the acquisition and
commencement of oil and gas production at the J.B. Tubb Leasehold Estate located
in the Amoco Crawar Field in Ward County, Texas in March, 2008. The Company
successfully increased production and revenues derived from its properties and
in late 2008, the Company was able to retire over 90% of its debt through the
disposition of those improved properties.




In early
2009, based on the economic downturn, struggling financial markets and the
implementation of the federal stimulus package for infrastructure projects, the
Company embarked on a transition from an emphasis on the oil and gas focused
business to that of an acquisition strategy focused on the transportation
industry serving federal DOT and state/local DOT agencies. In addition, the
acquisition targets being reviewed by the Company also had a presence in the
telecommunications and general construction industries. The acquisition strategy
focuses on vertically integrating manufacturing entities, distributors and
construction groups. In May 2009, the Company acquired M3 Lighting Inc. (M3) as
the flagship subsidiary with key additional management team to begin this
process, and as a result on November 4, 2009, the Company acquired all of the
capital stock of South Atlantic Traffic Corporation, a Florida corporation,
which distributes a variety of products geared primarily towards the
transportation industry where it derives its revenues.





Through
2009 we continued our previous decisions to limit and wind down the historical
pursuit of our oil and gas projects overseas in Central Asian and European
countries. In late 2009 and in 2010, the Company began pursuing a reentry to the
oil and gas industry and again as part of our strategic plans. The Company is
currently a party to a pending agreement to acquire an entity that owns
approximately 2,100 miles of a pipeline system initially used as a crude oil
transportation system by Koch Industries and, on December 31, 2009, the Company,
through its wholly-owned subsidiary, Energy Producers, Inc., effectively
acquired a 50% working interest and corresponding 32% revenue interest in
certain oil and gas leases, reserves and equipment located in West Central
Texas.





The
Company has been making presentations to asset-based lenders and other financial
institutions for the purpose of (i) expanding and supporting our growth
potential by development of its new line of operations for M3, and SATCO, or
acquisitions by the Company that are vertically related to M3, and SATCO, such
as Redquartz, and the pending SWSC and (ii) building new infrastructure for its
oil and gas operations in 2009. The Company throughout its first quarter of
operations for 2010 has been pursuing projects for acquisition and development
of select targeted oil and gas proved producing properties with revenues, having
upside potential and prospects for enhancement, rehabilitation, and future
development. These prospects are primarily located in Eastern Texas, and in
other core areas of the Permian Basin.




20





The
Company’s goal is to rebuild our revenue base and cash flow; however, the
Company makes no guarantees and can provide no assurances that it will be
successful in these endeavors.





One
of the ways our plans for growth could be altered if current opportunities now
available become unavailable:




General




The
Company historically derived its revenues primarily from retail sales of oil and
gas field inventory equipment, service, and supply items primarily in the
southern Arkansas area, and from acquired interests owned in revenue producing
oil wells, leases, and equipment located in Olney, Young County, Texas. The
Company disposed of these two segments of operations in 2003. The Company
acquired a marine vessel sales brokerage and charter business, International
Yacht Sales Group, Ltd. of Great Britain in December 2003 later disposing of its
operations in late 2005. In 2009 we disposed of our wholly owned subsidiary
Firecreek Petroleum, Inc. (see further information in this report and in our
current Report on Form 8-K filed May 20, 2009, incorporated herein by
reference). We account for or have accounted for these segments as discontinued
operations in the consolidated statements of operations for the related fiscal
year.




Sale/Assignment
of 100% Stock of FPI Subsidiary





Having
disposed of all of the assets of FPI, on May 18, 2009, the Company and Firecreek
Global, Inc., entered into a Stock Acquisition Agreement effective the 18th day
of May, 2009, relating to the Assignees acquisition of all of the issued and
outstanding shares of the capital stock of Firecreek Petroleum, Inc., a Delaware
corporation. Moreover, included and inherent in the Assignment was all of the
Company’s debt held in the FPI subsidiary. In addition, the Company, and
Assignee executed a right of first refusal agreement attached as Exhibit to the
Agreement, granting to the Company the right of first refusal, for a period of
two (2) years after Closing, to participate in certain overseas projects in
which Assignee may have or obtain rights related to Assignors’ previous
activities in certain areas of the world. For further information please see our
current Report on Form 8-K filed on May 20, 2009, incorporated herein by
reference.





Completion
of Recent Merger Acquisition with M3 Lighting, Inc.





On May
21, 2009, EGPI Firecreek, Inc., a Nevada corporation (the “Company” or
“Registrant”), Asian Ventures Corp., a Nevada corporation (the “Subsidiary”), M3
Lighting, Inc., a Nevada corporation (“M3”), and Strategic Partners Consulting,
L.L.C., a Georgia limited liability company (“Strategic Partners”) executed and
closed a Plan and Agreement of Triangular Merger (the “Plan of Merger”), whereby
M3 merged into the Subsidiary, a wholly-owned subsidiary of the registrant (the
“Merger”).  Further information can be found along with copy of the
Plan of Merger attached as an exhibit to our Current Report on Form 8-K, filed
with the Commission on May 27, 2009, as amended. Amendment No. 1 and No. 2 to
the May 27, 2009 current Report on Form 8-K were filed on June 24 and August 4,
2009, respectively, and incorporated herein by reference.




In
accordance with the Company’s plans and strategy we are currently developing two
lines of business, one line of business for our historical oil and gas
operations now reorganized into the Company’s wholly owned subsidiary unit,
Energy Producers, Inc. F/K/A Malibu Holding, Inc., this replacing Firecreek
Petroleum, Inc., and one for M3 Lighting, Inc., F/K/A Asian Ventures, Corp.
which is involved in distribution of commercial and decorative lighting to the
trade, and to direct retailers.  M3 specializes in the areas of
lighting industry sales, design, product development, and sourcing, contracting
and capital markets.   M3 has a presence in the U.S. and Asia.
With a sales representative in China and offices in the U.S., the M3 team
through this footprint, as required, can effectively monitor price competition,
expediting product shipments and grow the business through sales.  M3
can import both finished goods and sub-assemblies for domestic final assembly.
Through its experience, knowledge and contacts in the lighting and DOT industry,
M3 created a business plan to create a vertical rollup and stream of
acquisitions targeted strategically for the Company that included manufactures,
distributors and contractors. This change in strategy allowed the management and
key decision makers at M3 more time to focus on potential acquisitions who they
had done business with for numerous years. Focusing on the Obama Infrastructure
Stimulus funding that is being released for roadwork throughout the country; M3
is pursing companies that are involved in the lighting, traffic signs/signals
and ITS components of the industry.  M3 is also actively pursuing
federal contracts to provide lighting and contracting through our partnership
with CST Federal who are a disabled veteran’s agency that bids government
contracts.  Future acquisitions in the DOT construction industry are
expected to provide a labor force for the maintenance and remediation services
the Company plans on providing.





Completion
of South Atlantic Traffic, Inc. (SATCO) Acquisition





Effective
as of November 4, 2009, the Company acquired all of the issued and outstanding
capital stock of South Atlantic Traffic Corporation, a Florida corporation
(“SATCO”). In the course of this acquisition, SATCO stockholders exchanged
all outstanding common shares for cash consideration, the Company’s common
shares and sellers’ notes. SATCO has been in business since 2001 and has several
offices throughout the Southeast United States. Please see further discussion
and information listed in “The Business” and “Description of Properties”
sections and elsewhere in this document.




21





Completion
of Acquisition of 50% Oil and Gas Working Interests, Callahan, Stephens, and
Shakelford Counties, Texas, Three Well Program





Effective
December 31, 2009, the Company through its wholly owned subsidiary Energy
Producers, Inc. closed an Acquisition Agreement including an Assignment of
Interests in Oil and Gas Leases (the “Assignment”), with Whitt Oil & Gas,
Inc., (“Whitt”) a Texas corporation acquiring 50% working interests and
corresponding 32% net revenue interests in oil and gas leases representing the
aggregate total of 240 acre leases, reserves, three wells, and equipment located
in Callahan, Stephens, and Shakelford Counties, West Central Texas. Please see
further discussion and information listed in “The Business” and “Description of
Properties” sections of this report.








Completion
of Redquartz LTD Acquisition





On March
3, 2010, the Company acquired Redquartz LTD, a company formed and existing under
the laws of the country of Ireland.  Redquartz LTD has been in
business for 45 years, is known internationally and is our entrance into the
European markets with respect to Intelligent Traffic Systems (ITS) and the
transportation industry as well as expanding our relationship recently
established with Cordil, Inc. for the products sold by South Atlantic Traffic,
Inc. (SATCO), a wholly owned subsidiary of the Company. For further information
please see our Current Report on Form 8-K filed on March 11,
2010,  and in the section on “The Business”, listed in this
document.





The
Company expects to incur an increase in operating expenses during the next year
from commencing activities related to its plans for the Company’s oil and gas
business through EPI, and including any new or pending acquisitions discussed
herein, and those business activities and developments related to our newest M3
and SATCO strategy and operations, and new acquisitions, including new or
pending acquisitions related to signalization and lighting geared to the
transportation industry. The amount of net losses and the time required for the
Company to reach and maintain profitability are uncertain at this time. There is
a likelihood that the Company will encounter difficulties and
delays  in connection with business subsidiary operations, including,
but not limited to uncertainty as to development and the time and timing
required for the Company’s plans to be fully implemented, governmental
regulatory responses to the Company’s plans, fluctuating markets and
corresponding spikes, or dips in our products demand, currency exchange rates
between countries, acquisition and development pricing, related costs, expenses,
offsets, increases, and adjustments. There can be no assurance that the Company
will ever generate significant revenues or achieve profitability at all or on
any substantial basis.




General
Statement:  Factors that may affect future results:




With the
exception of historical information, the matters discussed in Management’s
Discussion and Analysis or Plan of Operation contain forward looking statements
under the 1995 Private Securities Litigation Reform Act that involve various
risks and uncertainties.  Typically, these statements are indicated by
words such as “anticipates”, “expects”, “believes”, “plans”, “could”, and
similar words and phrases.  Factors that could cause the company’s actual
results to differ materially from management’s projections, forecasts, estimates
and expectations include but are not limited to the following:




–
Inability of the company to secure additional financing.


–
Unexpected economic changes in the United States.


– The
imposition of new restrictions or regulations by government agencies that affect
the Company’s business activities.




To the
extent possible, the following discussion will highlight the Company’s business
activities for the quarters ended March 31, 2010 and March 31,
2009.




Results
of Operations




Three
months ended March 31, 2010 compared to the three months ended March 31,
2009.





There was
$508,660 in revenues generated from the Company’s sales activities in the
quarter ended March 31, 2010 compared to no revenues in same quarter of 2009.
Cost of goods sold in the quarter ended March 31, 2010 was $433,328 and $0 in
the same period of 2009, producing gross profits of $75,332 for the first
quarter of 2010 and $0 for the same period in 2009.




General
administrative expenses were $885,046 in for the three months ended March 31,
2010 compared to $187,618 for the three months ended March 31,
2009.  The increase in these expenses is due to the additional
subsidiaries.




22




Following
is a breakdown of general and administrative costs for this period versus a year
ago:





Detail
of general & administrative expenses:




31-Mar-10
            
            
            31-Mar-09Advertising
      & promotion
            
            $
            866
            
            
            $
            55,063Administration
            
            
            168,930
            
            
            
            6,125Consulting
            
            
            171,015
            
            
            
            70,820Depreciation/Amortization
            
            
            17,385
            
            
            
            0Investor
      incentives/commissions
            
            
            200,086
            
            
            
            9,000Professional
      fees
            
            
            105,170
            
            
            
            46,610Rent/Utilities
            
            
            22,676
            
            
            
            0Salaries
            
            
            198,918
            
            
            
            0Total
            
            $
            885,046
            
            
            $
            187,618




Promotional
fees of $866 were incurred in stock promotional activities.





Consulting
fees of $171,015 were incurred for business advisory services.




Professional
fees of $105,170 were incurred in regards to management advisory, legal costs,
and accounting, for new subsidiaries.





Investor
incentive fees of $200,086 were incurred in regards to funding
activities.




After
deducting general and administrative expenses, the Company experienced a loss
from operations of $809,714 for the three months ended March 31, 2010 compared
to a loss of $187,618 for the same period last year.





Interest
expense for the three months ended March 31, 2010 was $112,551 compared with
$7,215 for the same period last year.





The
Company incurred a net loss of $1,130,529 for the first three months ended March
31, 2010 compared to a loss of $194,833 for Q1 2009.





Fully
diluted income (loss) per share was ($0.02) per share for Q1 2010 compared to a
loss of ($0.02) per share for Q1 2009.





Professional
fees decreased approximately $58,560 to $105,170 in Q1 2010 from $46,610 for Q1
2009.




Net loss
for Q1 2010 was $1,130,529 or ($0.02) per share compared to a loss of $194,833,
or ($0.02) per share for Q1 2009.




Discussion
of Financial Condition:  Liquidity and Capital Resources




At March
31, 2010 cash on hand was $613 as compared with $17,625 at December 31, 2009.




At March
31, 2010, the Company had working capital deficit of $7,486,357 compared to a
working capital deficit of $3,041,776 at December 31, 2009.  Working
capital decreased mainly as a result of operating losses and financing
costs.




Total
assets at March 31, 2010 were $3,658,438 as compared to $3,959,666 at December
31, 2009.




The
Company’s total stockholders’ deficit decreased to $4,422,575 at March 31, 2010
from stockholders’ equity of $47,243 at December 31, 2009.





Item
3 – Quantitative and Qualitative Analysis of Market Risks





There are
no material changes in the market risks faced by us from those reported in
our Annual Report on Form 10-K for the year ended December 31,
2008.





ITEM
4(T) – CONTROLS AND PROCEDURES





(a)                 Evaluation
of Disclosure and Procedures




We
carried out an evaluation of the effectiveness of the design and operation of
our disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) as of March 31, 2010. This evaluation was carried out
under the supervision and with the participation of our Principal Executive
Officer and Principal Accounting Officer. Based upon that evaluation, our
Principal Executive Officer and Principal Accounting Officer concluded that, as
of March 31, 2010, that there are material weaknesses in our disclosure
controls and procedures and they were not effective for the following
reasons:




·
            In
      connection with the preparation of the Original Report, we identified a
      deficiency in our disclosure controls and procedures related to the
      communications the appropriate personnel involved with our 2008 and 2009
      audit.  We are utilizing additional accounting consultants to
      assist us in improving our controls and procedures. We believe these
      measures will benefit us by reducing the likelihood of a similar event
      occurring in the future.




23




·
            Subsequent
      to the filing of the Original report, we determined that we needed to
      restate the financial statements contained in the Original Report and
      Quarterly Report on Form 10-Q that we filed for the quarterly period ended
      September 30, 2009.




·
            Due
      to our relatively small size and not having present operations, we do not
      have segregation of duties which is a deficiency in our disclosure
      controls. We do not presently have the resources to cure this
      deficiency.





Disclosure
controls and procedures are controls and other procedures that are designed to
ensure that information required to be disclosed in our reports filed or
submitted under the Exchange Act are recorded, processed, summarized and
reported, within the time periods specified in the SEC's rules and forms.
Disclosure controls and procedures include, without limitation, controls and
procedures designed to ensure that information required to be disclosed in our
reports filed under the Exchange Act is accumulated and communicated to
management, including our Principal Executive Officer and Principal Accounting
Officer, to allow timely decisions regarding required disclosure.





All
internal control systems, no matter how well designed, have inherent limitations
and may not prevent or detect misstatements. Therefore, even those systems
determined to be effective can only provide reasonable assurance with respect to
financial reporting reliability and financial statement preparation and
presentation. In addition, projections of any evaluation of effectiveness to
future periods are subject to risk that controls become inadequate because of
changes in conditions and that the degree of compliance with the policies or
procedures may deteriorate.




(b)              Changes
in Internal Controls over financial reporting





There
have been no changes in our internal controls over financial reporting during
our last fiscal quarter, which has materially affected, or is reasonably likely
to materially affect, our internal control over financial
reporting.




24


PART
II.  OTHER INFORMATION





ITEM
1 – LEGAL PROCEEDINGS




As of the date hereof, there are no material
legal proceedings threatened against us.  In the ordinary course of
our business we may become subject to litigation regarding our products or our
compliance with applicable laws, rules, and regulations. In April 2010 we
received a lawsuit on behalf of our SATCO subsidiary whereas Acuity Brands
Lighting Inc. (“Acuity”) is seeking a judgment to collect amounts owed to Acuity
by SATCO. Bob Joyner, Stewart Hall and Michael Hunter were also named on the
lawsuit as each of the previous owners of SATCO had personal guarantees
contained in the agreement between Acuity and SATCO. The previous owners of
SATCO were indemnified for the personal guarantees in the Stock Purchase
Agreement between the Company and SATCO.





ITEM
1A. RISK FACTORS.




There
have been no material changes to the risk factors disclosed in the “Risk
Factors” section of our Annual Report on Form 10-K for the year ended December
31, 2009, as updated by our subsequent filings on Form 10-Q (and otherwise) with
the SEC.





ITEM
2 – UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS




Required
information has been furnished in current Report(s) on Form 8-K filings and
other reports, as amended, during the period covered by this Report and
additionally as listed and following:





Please
see information listed in the Part II, Item 5, under the sub heading Recent
Sales of Unregistered Securities, contained in our Annual Report on Form 10-K,
filed on April 15, 2010, incorporated herein by reference.





(*)(**)
On May 10, 2010, by majority consent of the Board of Directors, the Company
approved the following issuances of its restricted common stock, par value
$0.001 per share, to the following person for and behalf of consideration as
follows:





Type
      of
            
            Fair
      Market
              Value
      ofName
      and Address (***)
            
            Date
            
            Share
      Amount
            
            Consideration
            
            ConsiderationAlan
      Carlquist (1)
            
            1/28/2010
            
            1,000,000
            
            Working
      Capital
            
            $
            20,000.001110
      Allgood Industrial Center
            
            
            
            
            
            M3
      SubsidiaryMarietta,
      GA 30066





(*)
Issuances when approved, will be subject to such persons agreeing in writing to
i) comply with applicable securities laws and regulations and make required
disclosures; and ii) be solely and entirely responsible for their own personal,
Federal, State, and or relevant single or multi jurisdictional income taxes, as
applicable.




(**)
$20,000 worth of common stock in the immediately preceding table used primarily
in consideration of advances made for working capital requirements for the
Company’s wholly owned subsidiary M3 Lighting, Inc.





(1) The
above named individual is not an affiliate, director, or officer of the
Registrant.





(***) The
shares of common stock are to be issued pursuant to an exemption from
registration as provided by Section 4(2) of the Securities Act of 1933, as
amended (the “1933 Act”). All such certificates representing the shares issued
by the Company shall bear the standard 1933 Act restrictive legend restricting
resale.








I.  (*) (**)
On April 30, 2010, by majority consent of the Board of Directors, the Company
approved the following issuances of its restricted common stock, par value
$0.001 per share, to the following persons or entities for legal and advisory
and general consulting and advisory services.





Name
      and Address (***)
            
            Date
            
            Share
              Amount
              (***)
            
            Type of Consideration
            
            Fair Market
              Value of
              ConsiderationVincent
      & Rees, L.C. (1)
            
            3/1/2010
            
            
            1,500,000
            
            Legal
      and Advisory Services
            
            $
            41,250175
      S. Main Street, 15th
      FloorSalt
      Lake City, UT 84111Callie
      Jones (2)
            
            3/1/2010
            
            
            300,000
            
            Legal
      and Advisory Services
            
            $
            8,250175
      S. Main Street, 15th
      FloorSalt
      Lake City, UT 84111Chase
      Chandler (3)
            
            3/1/2010
            
            
            600,000
            
            Legal
      and Advisory Services
            
            $
            16,500175
      S. Main Street, 15th FloorSalt
      Lake City, UT 84111Lisa
      Demmons (4)
            
            3/1/2010
            
            
            600,000
            
            Legal
      and Advisory Services
            
            $
            16,500175
      S. Main Street, 15th FloorSalt
      Lake City, UT 84111Chienn
      Consulting Company LLC (5)
            
            3/1/2010
            
            
            3,000,000
            
            General
      Consulting and
            
            $
            82,500175
      S. Main Street, 15th Floor
            
            
            
            
            
            
            Advisory
      ServicesSalt
      Lake City, UT 84111




(*)
Issuances are approved, subject to such person being entirely responsible for
his own personal, Federal, State, and or relevant single or multi jurisdictional
income taxes, as applicable.
  25





(**)
$165,000 of the financing proceeds in the immediately preceding table was
used primarily for legal and advisory services, and exchange for cancellation of
debt owed, respectively.





(1)
            Vincent
      & Rees L.P. is a shareholder, and provides legal and advisory services
      to the Company. Vincent and Rees L.P. is not an affiliate of the
      Company.(2)
            Callie
      Jones is with the firm Vincent & Rees L.P. and provides legal and
      advisory services to the Company. Mrs. Jones is a shareholder, and is not
      an affiliate, officer, or director of the
  Company.





(3)
            Chase
      Chandler is with the firm Vincent & Rees L.P. and provides legal and
      advisory services to the Company. Mr. Chandler is a shareholder and is not
      an affiliate, officer, or director of the Company.(4)
            Lisa
      Demmons is with the firm Vincent & Rees L.P. and provides legal and
      advisory services to the Company. Mrs. Demmons is a shareholder, and is
      not an affiliate, officer, or director of the
  Company.





(5)
            Chienn
      Consulting Company, LLC is a shareholder, and is not an affiliate,
      officer, or director of the
Company.





(***)
The shares of common stock were issued pursuant to an exemption from
registration as provided by Section 4(2) of the Securities Act of 1933, as
amended (the “1933 Act”). All such certificates representing the shares issued
by the Company shall bear the standard 1933 Act restrictive legend restricting
resale.





II.  Pursuant
to an Engagement Letter Agreement with Vincent & Rees L.P. and a General
Consulting Agreement with Chienn Consulting Company, LLC the Company granted to
each entity, a cashless option to purchase 0.5% of the Company’s common stock
for $10,000 (“the Option”). Terms for the option: The option will vest on
September 1, 2010 and shall expire three (2.5) years from the date thereof. The
cap for the option shall be $150,000.





The
Company claims an exemption from the registration requirements of the Securities
Act of 1933, as amended (the “Act”) for the private placement of these
securities pursuant to Section 4(2) of the Act and/or Rule 506 of Regulation D
promulgated thereunder since, among other things, the transaction does not
involve a public offering, the Investor is an “accredited investor” and/or
qualified institutional buyer, the Investor has access to information about the
Company and its investment, the Investor will take the securities for investment
and not resale, and the Company is taking appropriate measures to restrict the
transfer of the securities.




ITEM
3 – DEFAULTS UPON SENIOR SECURITIES




None





ITEM
4 – (Removed and Reserved)





ITEM
5 – OTHER INFORMATION





Please
see information listed under ITEM 9B, OTHER INFORMATION, contained in our Annual
Report on Form 10-K, filed on April 15, 2010, incorporated herein by
reference.




The
Company and its Firecreek unit are presently in different stages of review and
discussion, gathering data and information, and any available reports on other
potential acquisitions in Texas, and other productive regions and areas in the
U.S.




26




From time
to time Management will examine oil and gas operations in other geographical
areas for potential acquisition and joint venture development.





ITEM
6 – EXHIBITS




Exhibit No.
            
            Description31.1
            
            Certification
      Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
    (3)32.1
            
            Certification
      Pursuant to 18 U.S.C. SECTION 1350
(3)




27




SIGNATURE




Pursuant to
the requirements 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.




Date:
 May 24, 2010




EGPI
      FIRECREEK, INC.By:
              /s/
      Dennis AlexanderName Dennis
      AlexanderTitle: Chairman,
      CEO, President, and CFO





28