UNITED
STATES SECURITIES AND EXCHANGE COMMISSION





WASHINGTON,
DC  20549





FORM
10-Q





Quarterly
Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934





For
Quarter
Ended:             September 30,
2009





Commission
File
Number:           0-19944





Green St. Energy,
Inc.


(Exact
name of registrant as specified in its charter)





Delaware
                36-3809819(State
      or Jurisdiction of
                (IRS
      Employer ID No)Incorporation
      or Organization)





123 Green St., Tehachapi,
California  93561


(Address
of principal executive office) (zip code)





(310)
556-9688


(Issuer’s
telephone number)





Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter periods as 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 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.  (Check one):





Large
accelerated filer  ̈
Accelerated filer  ̈
Non-accelerated filer  ̈ Smaller reporting
company x





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





The
number of shares outstanding of registrant’s common stock, par value $0.005 per
share, as of November 18, 2009, was 7,174,157 shares.







GREEN
ST. ENERGY, INC. and Subsidiary


(A
Development Stage Company)





INDEX





PageNo.Part
      I
                  Financial
      InformationItem
      1:
                  Condensed
      Consolidated Financial Statements (Unaudited)Condensed
      Consolidated Balance Sheets as of September 30, 2009 (Unaudited) and
      December 31, 2008
                  3Condensed
      Consolidated Statements of Operations (Unaudited) – For the Three Months
      Ended September 30, 2009 and 2008
                  4Condensed
      Consolidated Statements of Operations (Unaudited) – For the Nine Months
      Ended September 30, 2009 and 2008 and period from inception of development
      stage (January 1, 2009) through September 30, 2009
                  5Condensed
      Consolidated Statements of Changes in Stockholders' Equity (Unaudited) -
      For the period from inception of development stage (January 1, 2009)
      through September 30, 2009
                  6Condensed
      Consolidated Statements of Cash Flows (Unaudited) – For the Nine Months
      Ended September 30, 2009 and 2008 and period from inception of development
      stage (January 1, 2009) through September 30, 2009
                  7Notes
      to Condensed Consolidated Financial Statements (Unaudited)
                  9Item
      2:
                  Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
                  18Item
      3:
                  Quantitative
      and Qualitative Disclosure about Market Risk
                  19Item
      4:
                  Controls
      and Procedures
                  19Part
      II
                  Other
      InformationItem
      6:
                  Exhibits
                  20


2





PART
I  FINANCIAL INFORMATION





GREEN
ST. ENERGY, INC. and Subsidiary


(A
Development Stage Company)


Condensed
Consolidated Balance Sheets


September
30, 2009 (Unaudited) and December 31, 2008





2009
                              
                              
                              2008AssetsCurrent
      assets:Cash
      and cash equivalents
                              
                              $
                              -
                              
                              
                              $
                              456,000Prepaid
      expenses
                              
                              
                              9,000
                              
                              
                              
                              25,300Total
      current assets
                              
                              
                              9,000
                              
                              
                              
                              481,300Land
                              
                              
                              250,000
                              
                              
                              
                              -Land
      option
                              
                              
                              16,250,462
                              
                              
                              
                              -Deferred
      financing costs
                              
                              
                              119,280
                              
                              
                              
                              -Total
      assets
                              
                              $
                              16,628,742
                              
                              
                              $
                              481,300Liabilities
      and Stockholders' EquityCurrent
      liabilities:Cash
      overdraft
                              
                              $
                              159
                              
                              
                              $
                              -Accounts
      payable
                              
                              
                              548,120
                              
                              
                              
                              284,144Accrued
      expenses
                              
                              
                              717,451
                              
                              
                              
                              98,886Advance
      from related party
                              
                              
                              20,320
                              
                              
                              
                              -Note
      payable
                              
                              
                              300,000
                              
                              
                              
                              -Total
      current liabilities
                              
                              
                              1,586,050
                              
                              
                              
                              383,030Convertible
      debenture
                              
                              
                              12,839,281
                              
                              
                              
                              -Total
      liabilities
                              
                              
                              14,425,331
                              
                              
                              
                              383,030Commitments
      and contingenciesStockholders'
      equity:Preferred
      stock, $100 par value:Series
      A authorized 30,000 shares; issued and outstanding 12,500 shares at
      September 30, 2009 and December 31, 2008, respectively
                              
                              
                              656,800
                              
                              
                              
                              656,800Series
      B authorized 70,000 shares; issued and outstanding 69,648 shares at
      September 30, 2009 and December 31, 2008, respectively
                              
                              
                              6,842,797
                              
                              
                              
                              6,842,797Common
      stock: $0.005 par value; authorized 200,000,000 shares; 7,608,111 and
      2,247,104 shares issued and 7,174,157 and 1,813,150 shares outstanding at
      September 30, 2009 and December 31, 2008, respectively
                              
                              
                              38,041
                              
                              
                              
                              11,236Additional
      paid-in capital
                              
                              
                              18,449,149
                              
                              
                              
                              14,514,556Accumulated
      deficit
                              
                              
                              (19,641,949
                              )
                              
                              
                              (19,641,949
                              )Deficit
      accumulated during the development stage
                              
                              
                              (1,856,257
                              )
                              
                              
                              -Treasury
      stock, at cost, 433,954 shares in 2009 and 2008
                              
                              
                              (2,285,170
                              )
                              
                              
                              (2,285,170
                              )Total
      stockholders' equity
                              
                              
                              2,203,411
                              
                              
                              
                              98,270Total
      liabilities and stockholders' equity
                              
                              $
                              16,628,742
                              
                              
                              $
                              481,300





See
accompanying notes to condensed consolidated financial
statements.


3





GREEN
ST. ENERGY, INC. and Subsidiary


(A
Development Stage Company)


Condensed
Consolidated Statements of Operations


Three
Months Ended September 30, 2009 and 2008


(Unaudited)





2009
                              
                              
                              2008Costs
      and expensesGeneral
      and administrative expense
                              
                              $
                              76,300
                              
                              
                              $
                              -Stock
      option and warrant expense
                              
                              
                              14,599
                              
                              
                              
                              -Total
      costs and expenses
                              
                              
                              90,899
                              
                              
                              
                              -Net
      loss from operations
                              
                              
                              (90,899
                              )
                              
                              
                              -Other
      income (expense):Interest
      expense
                              
                              
                              (302,745
                              )
                              
                              
                              -Other
      income (expense)
                              
                              
                              (302,745
                              )
                              
                              
                              -Net
      loss before income taxes from continuing operations
                              
                              
                              (393,644
                              )
                              
                              
                              -Provision
      for income taxes
                              
                              
                              -
                              
                              
                              
                              -Net
      loss from continuing operations
                              
                              
                              (393,644
                              )
                              
                              
                              -Loss
      from discontinued operations
                              
                              
                              -
                              
                              
                              
                              (174,847
                              )Net
      loss
                              
                              
                              (393,644
                              )
                              
                              
                              (174,847
                              )Preferred
      dividends
                              
                              
                              -
                              
                              
                              
                              528,165Net
      loss attributable to common shareholders
                              
                              $
                              (393,644
                              )
                              
                              $
                              353,318Net
      loss per basic shareContinuing
      operations
                              
                              $
                              (0.05
                              )
                              
                              $
                              -Discontinued
      operations
                              
                              
                              -
                              
                              
                              
                              0.19$
                              (0.05
                              )
                              
                              $
                              0.19Basic
      weighted average shares outstanding
                              
                              
                              7,174,157
                              
                              
                              
                              1,813,150Net
      loss per diluted shareContinuing
      operations
                              
                              $
                              (0.05
                              )
                              
                              $
                              -Discontinued
      operations
                              
                              
                              -
                              
                              
                              
                              0.18$
                              (0.05
                              )
                              
                              $
                              0.18Diluted
      weighted average shares outstanding
                              
                              
                              7,174,157
                              
                              
                              
                              1,923,150





See
accompanying notes to condensed consolidated financial statements.




4





GREEN
ST. ENERGY, INC. and Subsidiary


(A
Development Stage Company)


Condensed
Consolidated Statements of Operations


Nine
Months Ended September 30, 2009 and 2008 and from inception (January 1,
2009)


of
Development Stage to September 30, 2009


(Unaudited)





DevelopmentStageInception(January 1,2009) untilSeptember 30,2009
                                  
                                  
                                  2008
                                  
                                  
                                  2009Costs
      and expensesGeneral
      and administrative expense
                                  
                                  $
                                  809,611
                                  
                                  
                                  $
                                  -
                                  
                                  
                                  $
                                  809,611Stock
      option and warrant expense
                                  
                                  
                                  103,837
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  103,837Total
      costs and expenses
                                  
                                  
                                  913,448
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  913,448Net
      loss from operations
                                  
                                  
                                  (913,448
                                  )
                                  
                                  
                                  -
                                  
                                  
                                  
                                  (913,448
                                  )Other
      income (expense):Interest
      expense
                                  
                                  
                                  (942,809
                                  )
                                  
                                  
                                  -
                                  
                                  
                                  
                                  (942,809
                                  )Other
      income (expense)
                                  
                                  
                                  (942,809
                                  )
                                  
                                  
                                  -
                                  
                                  
                                  
                                  (942,809
                                  )Net
      loss before income taxes from continuing operations
                                  
                                  
                                  (1,856,257
                                  )
                                  
                                  
                                  -
                                  
                                  
                                  
                                  (1,856,257
                                  )Provision
      for income taxes
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -Net
      loss from continuing operations
                                  
                                  
                                  (1,856,257
                                  )
                                  
                                  
                                  -
                                  
                                  
                                  
                                  (1,856,257
                                  )Loss
      from discontinued operations
                                  
                                  
                                  -
                                  
                                  
                                  
                                  (496,599
                                  )
                                  
                                  
                                  -Net
      loss
                                  
                                  
                                  (1,856,257
                                  )
                                  
                                  
                                  (496,599
                                  )
                                  
                                  
                                  (1,856,257
                                  )Preferred
      dividends
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -Net
      loss attributable to common shareholders
                                  
                                  $
                                  (1,856,257
                                  )
                                  
                                  $
                                  (496,599
                                  )
                                  
                                  $
                                  (1,856,257
                                  )Net
      loss per share, basic and dilutedContinuing
      operations
                                  
                                  $
                                  (0.31
                                  )
                                  
                                  $
                                  -
                                  
                                  
                                  $
                                  (0.31
                                  )Discontinued
      operations
                                  
                                  
                                  -
                                  
                                  
                                  
                                  (0.27
                                  )
                                  
                                  
                                  -$
                                  (0.31
                                  )
                                  
                                  $
                                  (0.27
                                  )
                                  
                                  $
                                  (0.31
                                  )Weighted
      average shares outstanding, basic and diluted
                                  
                                  
                                  5,986,090
                                  
                                  
                                  
                                  1,813,150
                                  
                                  
                                  
                                  5,986,090





See
accompanying notes to condensed consolidated financial
statements.


5





GREEN
ST. ENERGY, INC. and Subsidiary


(A
Development Stage Company)


Condensed
Consolidated Statements of Changes in Stockholders' Equity


From
inception of development stage (January 1, 2009) through September 30,
2009


(Unaudited)





DeficitAccumulatedAdditional
                              
                              
                              
                              
                              
                              During thePreferredStock
                              
                              
                              Common
                              
                              
                              Paid-in
                              
                              
                              Accumulated
                              
                              
                              Development
                              
                              
                              TreasurySeriesA
                              
                              
                              SeriesB
                              
                              
                              Stock
                              
                              
                              Capital
                              
                              
                              Deficit
                              
                              
                              Stage
                              
                              
                              Stock
                              
                              
                              TotalBalance,
      December 31, 2008
                              
                              $
                              656,800
                              
                              
                              $
                              6,842,797
                              
                              
                              $
                              11,236
                              
                              
                              $
                              14,514,556
                              
                              
                              $
                              (19,641,949
                              )
                              
                              $
                              -
                              
                              
                              $
                              (2,285,170
                              )
                              
                              $
                              98,270Common
      stock issued to acquire land
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              5,000
                              
                              
                              
                              245,000
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              250,000Common
      stock issued in exchange
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -for
      convertible debenture
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              20,000
                              
                              
                              
                              2,186,800
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              2,206,800Beneficial
      conversion
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              -feature
      of convertible debenture
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              1,400,761
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              1,400,761Share
      correction
                              
                              
                              -
                              
                              
                              
                              
                              
                              
                              
                              1,805
                              
                              
                              
                              (1,805
                              )
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -Common
      stock options and warrants
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              103,837
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              103,837Net
      loss
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              (1,856,257
                              )
                              
                              
                              -
                              
                              
                              
                              (1,856,257
                              )Balance,
      September 30, 2009
                              
                              $
                              656,800
                              
                              
                              $
                              6,842,797
                              
                              
                              $
                              38,041
                              
                              
                              $
                              18,449,149
                              
                              
                              $
                              (19,641,949
                              )
                              
                              $
                              (1,856,257
                              )
                              
                              $
                              (2,285,170
                              )
                              
                              $
                              2,203,411





See
accompanying notes to consolidated financial statements.


6




GREEN
ST. ENERGY, INC. and Subsidiary


(A
Development Stage Company)


Condensed
Consolidated Statements of Cash Flows


Nine
Months Ended September 30, 2009 and 2008 and from inception (January 1,
2009)


of
Development Stage through September 30, 2009


(Unaudited)





DevelopmentStageInception(January 1,2009) untilSeptember 30,2009
                            
                            
                            2008
                            
                            
                            2009Cash
      flows from operating activitiesNet
      loss
                            
                            $
                            (1,856,257
                            )
                            
                            $
                            (496,599
                            )
                            
                            $
                            (1,856,257
                            )Less
      loss from discontinued operations
                            
                            
                            -
                            
                            
                            
                            (496,599
                            )
                            
                            
                            -Loss
      from continuing operations
                            
                            
                            (1,856,257
                            )
                            
                            
                            -
                            
                            
                            
                            (1,856,257
                            )Adjustment
      to reconcile net loss to net cash used in operating
      activities:Interest
      accretion of beneficial conversion feature
                            
                            
                            446,842
                            
                            
                            
                            -
                            
                            
                            
                            446,842Non-cash
      common stock options and warrants expense
                            
                            
                            103,837
                            
                            
                            
                            -
                            
                            
                            
                            103,837Amortization
      of deferred financing cost
                            
                            
                            41,777
                            
                            
                            
                            -
                            
                            
                            
                            41,777Change
      in other assets and liabilities:Prepaid
      expenses
                            
                            
                            16,300
                            
                            
                            
                            -
                            
                            
                            
                            16,300Deferred
      financing costs
                            
                            
                            (161,057
                            )
                            
                            
                            
                            
                            
                            
                            (161,057
                            )Accounts
      payable
                            
                            
                            263,977
                            
                            
                            
                            -
                            
                            
                            
                            263,977Accrued
      expenses
                            
                            
                            618,564
                            
                            
                            
                            -
                            
                            
                            
                            618,564Advances
      from related party
                            
                            
                            20,320
                            
                            
                            
                            -
                            
                            
                            
                            20,320Net
      cash used in continuing operations
                            
                            
                            (505,697
                            )
                            
                            
                            -
                            
                            
                            
                            (505,697
                            )Net
      cash used in discontinued operations
                            
                            
                            -
                            
                            
                            
                            (857,260
                            )
                            
                            
                            -Net
      cash used in operating activities
                            
                            
                            (505,697
                            )
                            
                            
                            (857,260
                            )
                            
                            
                            (505,697
                            )Cash
      flows from investing activitiesInvestment
      in land option
                            
                            
                            (250,462
                            )
                            
                            
                            -
                            
                            
                            
                            (250,462
                            )Net
      cash provided by investing activities
                            
                            
                            (250,462
                            )
                            
                            
                            -
                            
                            
                            
                            (250,462
                            )Cash
      flows from financing activitiesCash
      overdraft
                            
                            
                            159
                            
                            
                            
                            -
                            
                            
                            
                            159Loan
      proceeds
                            
                            
                            300,000
                            
                            
                            
                            -
                            
                            
                            
                            300,000Net
      cash provided by financing activities
                            
                            
                            300,159
                            
                            
                            
                            -
                            
                            
                            
                            300,159Net
      decrease in cash and cash equivalents
                            
                            
                            (456,000
                            )
                            
                            
                            (857,260
                            )
                            
                            
                            (456,000
                            )Cash and cash
      equivalents, beginning of period
                            
                            
                            456,000
                            
                            
                            
                            1,081,019
                            
                            
                            
                            456,000Cash and cash
      equivalents, end of period
                            
                            $
                            -
                            
                            
                            $
                            223,759
                            
                            
                            $
                            -





(Continued)


See
accompanying notes to condensed consolidated financial
statements.


7





GREEN
ST. ENERGY, INC. and Subsidiary


(A
Development Stage Company)


Condensed
Consolidated Statements of Cash Flows, Continued


Nine
Months Ended September 30, 2009 and 2008 and from inception (January 1,
2009)


of
Development Stage to September 30, 2009


(Unaudited)





DevelopmentStageInception(January 1,2009) untilSeptember 30,2009
                  
                  
                  2008
                  
                  
                  2009Supplemental
      cash flow informationCash
      paid for interest and income taxes:Interest
                  
                  $
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  -Income
      taxes
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -Noncash
      investing and financing activities:Reverse
      accrued divedends on preferred stock
                  
                  
                  -
                  
                  
                  
                  528,165
                  
                  
                  
                  -Land
      acquired for common stock
                  
                  
                  250,000
                  
                  
                  
                  -
                  
                  
                  
                  250,000Land
      option acquired for convertible debenture
                  
                  
                  16,000,000
                  
                  
                  
                  -
                  
                  
                  
                  16,000,000Convertible
      debenture converted to common stock
                  
                  
                  2,206,800
                  
                  
                  
                  -
                  
                  
                  
                  2,206,800





See
accompanying notes to condensed consolidated financial
statements.


8





GREEN
ST. ENERGY, INC. and Subsidiary


NOTES
TO CONDENSED CONSOLIDATED


FINANCIAL
STATEMENTS


(UNAUDITED)




NOTE
1:      GENERAL ORGANIZATION AND BUSINESS





The
condensed consolidated financial statements include the accounts of Green St.
Energy, Inc. (formerly M-Wave, Inc.) ("Green St." or the "Company"), a Delaware
corporation formed on January 31, 1992 and its wholly owned subsidiary Ocean
Merger Sub (the "Subsidiary").





Until
December 30, 2008, the Company provided supply chain services and sourced
printed circuit boards, custom electronic components, extrusions assemblies and
non-electronic products from Southeast Asia.  The parts and components
sourced were utilized in a wide range of commercial and industrial electronics,
and other consumer products.  On December 30, 2008, the Company sold
substantially all of its assets and became a public shell on that
date.





The
Company became a development stage enterprise on December 30, 2008. Accordingly,
the costs associated with the development stage activities discussed below, have
an inception date of January 1, 2009.  Prior losses relating to the
supply chain service business discussed above have been transferred to
accumulated deficit.  On January 13, 2009, the Company changed its
name to Green St. Energy, Inc. with the intent to enter into the alternative
energy business.




Unaudited
Condensed Interim Financial Statements Basis of Presentation





The
condensed consolidated financial statements included in this report have been
prepared by the Company in accordance with accounting principles generally
accepted in the United States of America and pursuant to the rules and
regulations of the Securities and Exchange Commission for interim reporting
including, the instructions to Form 10-Q and Rule 8-03 of Regulation
S-X.  The condensed consolidated financial statements include all
adjustments (consisting only of normal and recurring adjustments) that are, in
the opinion of management, necessary to make the financial statements not
misleading.





Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with accounting principles generally accepted in the
United States of America have been condensed or omitted pursuant to such rules
and regulations for interim reporting.  The Company believes that the
disclosures contained herein are adequate to make the information presented not
misleading.  However, these condensed consolidated financial
statements should be read in conjunction with the consolidated financial
statements and notes thereto included in the Company’s Annual Report for the
year ended December 31, 2008, which is included in the Company’s Form 10-K for
the year ended December 31, 2008.  The financial data for the interim
periods presented may not necessarily reflect the results to be anticipated for
the complete year.




9




In
preparing the accompanying unaudited condensed consolidated financial
statements, the Company has reviewed, as determined necessary by the Company's
management, events that have occurred after September 30, 2009 up until the
issuance of the financial statements, which occurred on November 20,
2009.





Certain
reclassifications of the amounts presented for the comparative period have been
made to conform to the current presentation.





GOING
CONCERN





As
discussed above, the Company is in process of entering the alternative energy
segment, focusing primarily on wind energy.  In this regard, the
Company has obtained land, has had prepared a feasibility study and has
commenced raising funds and completing its business plan.  The Company
will require substantial funding to meet its goal of developing a wind energy
farm.  It is the Company's intention to raise capital through private
placement of its common stock and through debt financing to meet the capital
requirements of its business plan.  The Company has no current
revenues and expects it will require a substantial amount of time to develop its
infrastructure and begin selling energy.  The Company has discontinued
accruing compensation for its officers until it completes a
financing.





These
conditions raise substantial doubt about the Company's ability to continue as a
going concern.  The consolidated financial statements do not include
any adjustments that may result from the outcome of this
uncertainty.




NOTE
2:     SIGNIFICANT ACCOUNTING POLICIES





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





Principles of
consolidation - The consolidated financial statements include the
accounts of Green St. and its wholly owned subsidiary, Ocean Merger Sub.
Significant intercompany transactions and account balances have been
eliminated.  This Subsidiary had no activity.





Cash and cash
equivalents - Cash and cash equivalents comprise cash in banks and highly
liquid investments that are both readily convertible to known amounts of cash or
purchased with an original maturity of three months or less.





Fair value of financial
instruments - The Company has issued preferred stock, convertible debt
with an embedded conversion feature and warrants and options to purchase common
stock in connection with debt and equity raises.  If the Company
determines that a financial instrument is to be recorded as a liability, the
Company accounts for that liability at fair value.  The liability is
marked to market each reporting period with the resulting gains or losses shown
on the consolidated statements of operations as a decrease or increase to
interest expense.  At September 30, 2009 and December 31, 2008, all of
these financial instruments are classified as equity.




10




The
Company's financial instruments include cash and cash equivalents, prepaid
expenses, accounts payable and accrued liabilities.  The fair values
of all financial instruments are not materially different from their carrying
values.





Share-based payment -
The Company is required to recognize compensation expense for equity awards over
the requisite service period based on their grant date fair
values.  Compensation expense is recognized using a straight-line
method only for share-based payments expected to vest.  We estimate
forfeitures at the date of grant based on our historical experience and future
expectations.  Estimated forfeitures are expected to be minor and not
material to the financial statements.





Earningspershare - Potentially
dilutive common shares consist of the incremental common shares issuable upon
conversion of convertible preferred shares, convertible debt and the exercise of
common stock options and warrants for all periods.  When dilutive,
dividends on preferred shares are added back to the numerator of net loss when
calculating earnings per share.  For all periods ended September 30,
2009 and 2008, the basic and diluted shares reported are equal because the
common share equivalents are anti-dilutive due to the net losses for each
period, except for the quarter ended September 30, 2008 when previously accrued
preferred stock dividends were reversed, resulting in net earnings available to
common shareholders.  Fully diluted weighted average shares
outstanding in 2008 were 1,923,150 as compared to basic weighted average shares
outstanding of 1,813,150.  Basic and fully diluted weighted average
shares were 7,174,157 for the 2009 quarter.





Income taxes – We
recognize deferred tax assets and liabilities for the expected future tax
consequences of events that have been included in the financial statements or
tax returns. Under this method, deferred tax assets and liabilities are
determined based on the differences between the financial statement and tax
bases of assets and liabilities using enacted tax rates in effect for the year
in which the differences are expected to reverse. Deferred tax assets are also
provided for carry forwards for income tax purposes. In addition, the amount of
any future tax benefit is reduced by a valuation allowance to the extent such
benefits are not expected to be realized.  A full valuation allowance
is provided for all deferred tax assets.





The
Company has not recorded a reserve for any tax positions for which the ultimate
deductibility is highly certain but for which there is uncertainty about the
timing of such deductibility.




The
Company files tax returns in all appropriate jurisdictions, which formerly
included a federal tax return and an Illinois state tax return. Commencing on
January 1, 2009, the Company no longer has operations in Illinois and will no
longer be required to file an Illinois state tax return.  Open tax
years for both jurisdictions are 2006 to 2008, which statutes expire in 2009 to
2011, respectively. When and if applicable, potential interest and penalty costs
are accrued as incurred with expenses recognized in selling, general and
administrative expenses in the Statements of Operations. As of September 30,
2009, the Company has no liability for unrecognized tax benefits.




11




New Accounting
Pronouncements - There are several new accounting pronouncements issued
by the FASB which are not yet effective.  Each of these
pronouncements, as applicable, has been or will be adopted by the
Company.  Management does not believe any of these accounting
pronouncements has had or will have a material impact on the Company’s financial
position or operating results.




On June
29, 2009, the FASB issued an accounting pronouncement establishing the FASB Accounting Standards
Codification (the “ASC”) as the source of authoritative accounting
principles recognized by the FASB to be applied by nongovernmental
entities.  This pronouncement was effective for financial statements
issued for interim and annual periods ending after September 15, 2009, for most
entities.  On the effective date, all non-SEC accounting and reporting
standards will be superseded.  Rules and interpretive releases of the
SEC under the authority of federal securities laws are also sources of
authoritative GAAP for SEC registrants. All other accounting literature is
considered non-authoritative. The switch to the ASC affects the manner in which
companies refer to U.S. GAAP in financial statements and note disclosures.
Citing particular content in the ASC involves specifying the unique numeric path
to the content through the Topic, Subtopic, Section and Paragraph
structure.  The Company adopted this body of accounting for the
quarterly period ended September 30, 2009, as required, and adoption did not
have a material impact on our consolidated financial statements taken as a
whole.




FASB ASC Topic 260, “Earnings Per
Share.”On January 1, 2009, we adopted new authoritative accounting
guidance under FASB ASC Topic 260, “Earnings Per Share,” which provides that
unvested share-based payment awards that contain non-forfeitable rights to
dividends or dividend equivalents (whether paid or unpaid) are participating
securities and shall be included in the computation of earnings per share
pursuant to the two-class method.




FASB ASC Topic 320, “Investments -
Debt and Equity Securities.” New authoritative accounting guidance under
ASC Topic 320, “Investments - Debt and Equity Securities,” (i) changes
existing guidance for determining whether an impairment is other than temporary
to debt securities and (ii) replaces the existing requirement that the
entity’s management assert it has both the intent and ability to hold an
impaired security until recovery with a requirement that management assert:
(a) it does not have the intent to sell the security; and (b) it is
more likely than not it will not have to sell the security before recovery of
its cost basis. Under ASC Topic 320, declines in the fair value of
held-to-maturity and available-for-sale securities below their cost that are
deemed to be other than temporary are reflected in earnings as realized losses
to the extent the impairment is related to credit losses. The amount of the
impairment related to other factors is recognized in other comprehensive income.
We adopted the provisions of the new authoritative accounting guidance under ASC
Topic 320 during the first quarter of 2009. Adoption of the new guidance did not
significantly impact our consolidated financial statements.




12




FASB ASC Topic 715, “Compensation -
Retirement Benefits.”New authoritative accounting guidance under ASC
Topic 715, “Compensation - Retirement Benefits,” provides guidance related to an
employer’s disclosures about plan assets of defined benefit pension or other
post-retirement benefit plans. Under ASC Topic 715, disclosures should provide
users of financial statements with an understanding of how investment allocation
decisions are made, the factors that are pertinent to an understanding of
investment policies and strategies, the major categories of plan assets, the
inputs and valuation techniques used to measure the fair value of plan assets,
the effect of fair value measurements using significant unobservable inputs on
changes in plan assets for the period and significant concentrations of risk
within plan assets. The disclosures required by ASC Topic 715 are not applicable
to us.




FASB ASC Topic 805, “Business
Combinations.” On January 1, 2009, new authoritative accounting
guidance under ASC Topic 805, “Business Combinations,” became applicable to the
Corporation’s accounting for business combinations closing on or after
January 1, 2009. ASC Topic 805 applies to all transactions and other events
in which one entity obtains control over one or more other businesses. ASC Topic
805 requires an acquirer, upon initially obtaining control of another entity, to
recognize the assets, liabilities and any non-controlling interest in the
acquiree at fair value as of the acquisition date. Contingent consideration is
required to be recognized and measured at fair value on the date of acquisition
rather than at a later date when the amount of that consideration may be
determinable beyond a reasonable doubt. This fair value approach replaces the
cost-allocation process required under previous accounting guidance whereby the
cost of an acquisition was allocated to the individual assets acquired and
liabilities assumed based on their estimated fair value. ASC Topic 805 requires
acquirers to expense acquisition-related costs as incurred rather than
allocating such costs to the assets acquired and liabilities assumed, as was
previously the case under prior accounting guidance. Assets acquired and
liabilities assumed in a business combination that arise from contingencies are
to be recognized at fair value if fair value can be reasonably estimated. If
fair value of such an asset or liability cannot be reasonably estimated, the
asset or liability would generally be recognized in accordance with ASC Topic
450, “Contingencies.” Under ASC Topic 805, the requirements of ASC Topic 420,
“Exit or Disposal Cost Obligations,” would have to be met in order to accrue for
a restructuring plan in purchase accounting. Pre-acquisition contingencies are
to be recognized at fair value, unless it is a non-contractual contingency that
is not likely to materialize, in which case, nothing should be recognized in
purchase accounting and, instead, that contingency would be subject to the
probable and estimable recognition criteria of ASC Topic 450,
“Contingencies.”




FASB ASC Topic 810,
“Consolidation.” New authoritative accounting guidance under ASC Topic
810, “Consolidation,” amended prior guidance to establish accounting and
reporting standards for the non-controlling interest in a subsidiary and for the
deconsolidation of a subsidiary. Under ASC Topic 810, a non-controlling interest
in a subsidiary, which is sometimes referred to as minority interest, is an
ownership interest in the consolidated entity that should be reported as a
component of equity in the consolidated financial statements. Among other
requirements, ASC Topic 810 requires consolidated net income  to be
reported at amounts that include the amounts attributable to both the parent and
the non-controlling interest. It also requires disclosure, on the face of the
consolidated income statement, of the amounts of consolidated net income
attributable to the parent and to the non-controlling interest. The new
authoritative accounting guidance under ASC Topic 810 became effective for us on
January 1, 2009 and did not have a significant impact on our consolidated
financial statements.




13




Further
new authoritative accounting guidance under ASC Topic 810 amends prior guidance
to change how a company determines when an entity that is insufficiently
capitalized or is not controlled through voting (or similar rights) should be
consolidated. The determination of whether a company is required to consolidate
an entity is based on, among other things, an entity’s purpose and design and a
company’s ability to direct the activities of the entity that most significantly
impact the entity’s economic performance. The new authoritative accounting
guidance requires additional disclosures about the reporting entity’s
involvement with variable-interest entities and any significant changes in risk
exposure due to that involvement as well as its affect on the entity’s financial
statements. The new authoritative accounting guidance under ASC Topic 810 will
be effective January 1, 2010 and is not expected to have a significant
impact on our consolidated financial statements.




FASB ASC Topic 815, “Derivatives and
Hedging.” New authoritative accounting guidance under ASC Topic 815,
“Derivatives and Hedging,” amends prior guidance to amend and expand the
disclosure requirements for derivatives and hedging activities to provide
greater transparency about (i) how and why an entity uses derivative
instruments, (ii) how derivative instruments and related hedge items are
accounted for under ASC Topic 815, and (iii) how derivative instruments and
related hedged items affect an entity’s financial position, results of
operations and cash flows. To meet those objectives, the new authoritative
accounting guidance requires qualitative disclosures about objectives and
strategies for using derivatives, quantitative disclosures about fair value
amounts of gains and losses on derivative instruments and disclosures about
credit-risk-related contingent features in derivative agreements. The new
authoritative accounting guidance under ASC Topic 815 became effective for us on
January 1, 2009 and did not impact our consolidated financial
statements.




FASB ASC Topic 820, “Fair Value
Measurements and Disclosures.”New authoritative accounting guidance
under ASC Topic 820,”Fair Value Measurements and Disclosures,” affirms that the
objective of fair value when the market for an asset is not active is the price
that would be received to sell the asset in an orderly transaction, and
clarifies and includes additional factors for determining whether there has been
a significant decrease in market activity for an asset when the market for that
asset is not active. ASC Topic 820 requires an entity to base its conclusion
about whether a transaction was not orderly on the weight of the evidence. The
new accounting guidance amended prior guidance to expand certain disclosure
requirements. We adopted the new authoritative accounting guidance under ASC
Topic 820 during the first quarter of 2009. Adoption of the new guidance did not
significantly impact our consolidated financial statements.




Further
new authoritative accounting guidance (Accounting Standards Update
No. 2009-5) under ASC Topic 820 provides guidance for measuring the fair
value of a liability in circumstances in which a quoted price in an active
market for the identical liability is not available. In such instances, a
reporting entity is required to measure fair value utilizing a valuation
technique that uses (i) the quoted price of the identical liability when
traded as an asset, (ii) quoted prices for similar liabilities or similar
liabilities when traded as assets, or (iii) another valuation technique
that is consistent with the existing principles of ASC Topic 820, such as an
income approach or market approach. The new authoritative accounting guidance
also clarifies that when estimating the fair value of a liability, a reporting
entity is not required to include a separate input or adjustment to other inputs
relating to the existence of a restriction that prevents the transfer of the
liability. The forgoing new authoritative accounting guidance under ASC Topic
820 will be effective for our consolidated financial statements beginning
October 1, 2009 and is not expected to have a significant impact on our
consolidated financial statements.




14




FASB ASC Topic 825 “Financial
Instruments.” New authoritative accounting guidance under ASC Topic
825,”Financial Instruments,” requires an entity to provide disclosures about the
fair value of financial instruments in interim financial information and amends
prior guidance to require those disclosures in summarized financial information
at interim reporting periods. The new interim disclosures required under Topic
825 had no impact on our consolidated financial statements.




FASB ASC Topic 855, “Subsequent
Events.” New authoritative accounting guidance under ASC Topic 855,
“Subsequent Events,” establishes general standards of accounting for and
disclosure of events that occur after the balance sheet date but before
financial statements are issued or available to be issued. ASC Topic 855 defines
(i) the period after the balance sheet date during which a reporting
entity’s management should evaluate events or transactions that may occur for
potential recognition or disclosure in the financial statements, (ii) the
circumstances under which an entity should recognize events or transactions
occurring after the balance sheet date in its financial statements, and
(iii) the disclosures an entity should make about events or transactions
that occurred after the balance sheet date. The new authoritative accounting
guidance under ASC Topic 855 became effective for our consolidated financial
statements for periods ending after June 15, 2009 and did not have a
significant impact on our consolidated financial statements.





FASB ASC Topic 860, “Transfers and
Servicing.”New authoritative accounting guidance under ASC Topic 860,
“Transfers and Servicing,” amends prior accounting guidance to enhance reporting
about transfers of financial assets, including securitizations, and where
companies have continuing exposure to the risks related to transferred financial
assets. The new authoritative accounting guidance eliminates the concept of a
“qualifying special-purpose entity” and changes the requirements for
derecognizing financial assets. The new authoritative accounting guidance also
requires additional disclosures about all continuing involvements with
transferred financial assets including information about gains and losses
resulting from transfers during the period. The new authoritative accounting
guidance under ASC Topic 860 will be effective January 1, 2010 and is not
expected to have a significant impact on our consolidated financial
statements.




NOTE
3:     DISCONTINUED OPERATIONS





On
December 30, 2008, the shareholders of the Company approved the sale of
substantially all of its assets to M-Wave International, L.L.C., an Illinois
limited liability company controlled by former executive management members as
set forth in the Asset Purchase Agreement dated September 9, 2008 (the "Asset
Purchase Agreement").  As consideration for the acquisition, the
Company received net cash proceeds of $455,000 at closing, less cash retained by
the purchaser of $216,919.  The Company recognized a loss on the sale
of these assets of $604,915.  Results for the three and nine months
ended September 30, 2008, which are included in discontinued operations, are as
follows:




15




Three Months
                      
                      
                      Nine MonthsEnded
                      
                      
                      EndedSeptember30,2008
                      
                      
                      September30,2008Net
      sales
                      
                      $
                      3,192,203
                      
                      
                      $
                      9,267,972Cost
      of goods sold
                      
                      
                      2,494,018
                      
                      
                      
                      7,078,101Gross
      profit
                      
                      
                      698,185
                      
                      
                      
                      2,189,871Operating
      expenses
                      
                      
                      873,032
                      
                      
                      
                      2,686,470Loss
      from discontinued operations
                      
                      $
                      (174,847
                      )
                      
                      $
                      (496,599
                      )




NOTE 4:     LAND





On
January 14, 2009, the Company entered into a Real Estate Purchase Contract with
The Nacelle Corporation for the purchase of one hundred and sixty (160) acres of
unimproved property near Tehachapi, California (the "Purchase
Contract").  The terms of the Purchase Contract provide for a cash
equivalent purchase price of $250,000 in the form of one million restricted
shares of the Company's common stock, par value $0.005 based upon the closing
price of $0.25 for the Company's common stock on January 12,
2009.  The shares were subsequently issued on February 12,
2009.




NOTE 5:     LAND
OPTION AND CONVERTIBLE DEBENTURE





On
February 12, 2009, the Company entered into an Exclusive Option to Purchase
Unimproved Land with The Nacelle Corporation (the
"Agreement").  Pursuant to the terms of the Agreement, the Company
obtained a three year option to purchase 4,840 acres of unimproved property near
Tehachapi, California (the "Property").  In consideration for the
option to purchase the Property, the Company issued a three year $16 million
convertible debenture with interest at 5% per annum (the
"Debenture").  The Debenture is convertible into shares of the
Company's common stock six months following its issuance at the fixed conversion
price of $0.5517 (subject to customary adjustment for stock splits or other
capital changes) subject to the limitation that the holder may not acquire in
excess of 19.99% of the Company's outstanding common stock at any given time
without prior shareholder approval.  In addition to the Debenture, the
Company agreed to pay the land owner or its assignees the sum of approximately
$260,000.  In the event the Company exercises the option to acquire
the Property and the appraised fair market value of the Property as of February
12, 2009 is less than the face value of the Debenture and cash consideration
tendered under the Agreement, then the value of the Debenture will be adjusted
to reflect the value of the Property as of February 12, 2009 less the cash
consideration paid by the Company in connection with the Agreement.





In the
event the Company does not exercise the option, The Nacelle Corporation would
retain the Debenture and any cash proceeds.  Should the Company
exercise the option the cash consideration and any payments on the Debenture
would be applied toward the purchase price of the Property.  Pursuant
to the approval of the Board of Directors, the Holder converted $2,206,800 of
the Debenture into 4 million shares of the Company's common stock on February
23, 2009.




16




Upon
issuance of the Debenture, the Company recorded a discount from beneficial
conversion feature of $1,400,761 that is being amortized over the term of the
debenture using the straight-line method which, is not materially different from
the effective interest method promulgated by applicable accounting
pronouncements.  At September 30, 2009, the convertible debenture
consisted of the following:





Original
      face amount
                      
                      $
                      16,000,000Amount
      converted
                      
                      
                      (2,206,800
                      )Current
      face amount
                      
                      
                      13,793,200Intrinsic
      value of beneficial conversion feature
                      
                      
                      (1,400,761
                      )Interest
      accretion
                      
                      
                      446,842Convertible
      debenture
                      
                      $
                      12,839,281Accrued
      interest
                      
                      $
                      440,294




NOTE
6:          NOTE
PAYABLE





On May 1,
2009, the Company borrowed $300,000 from an individual creditor which is due on
May 1, 2010 and includes interest at the rate of 10% per annum.  The
note is secured by a Deed of Trust for the land owned by the
Company.




NOTE
7:          RELATED PARTY
TRANSACTION





During
2009, the Chief Executive Officer of the Company advanced the Company $20,320,
without interest, for working capital needs.


17





ITEM
      2:
            MANAGEMENT'S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS





This
information statement contains forward-looking statements.  For this purpose,
any statements contained herein that are not statements of historical fact may
be deemed to be forward-looking statements. These statements relate to future
events or our future financial performance. In some cases, you can identify
forward-looking statements by terminology such as "may", "will", "should",
"expects", "plans", "anticipates", "believes", "estimates", "predicts",
"potential", "continue" or the negative of such terms or other comparable
terminology. These statements are only predictions. Actual events or results may
differ materially. There are a number of factors that could cause our actual
results to differ materially from those indicated by such forward-looking
statements.





Although
we believe that the expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, levels of activity, performance
or achievements. Moreover, we do not assume responsibility for the accuracy and
completeness of such forward-looking statements. We are under no duty to update
any of the forward-looking statements after the date of this information
statement to conform such statements to actual results. Management's discussion
and analysis should be read in conjunction with our financial statements and the
notes herein.





Going
Concern





The
Company is in process of entering the alternative energy segment, focusing
primarily on wind energy.  In this regard, the Company has obtained
land, has had prepared a feasibility study and has commenced raising funds and
completing its business plan.  The Company will require substantial
funding to meet its goal of developing a wind energy farm.  It is the
Company's intention to raise capital through private placement of its common
stock and through debt financing to meet the capital requirements of its
business plan.  The Company has no current revenues and expects it
will require a substantial amount of time to develop its infrastructure and
begin selling energy.  The Company has discontinued accruing
compensation for its officers until it completes a financing.





These
conditions raise substantial doubt about the Company’s ability to continue as a
going concern.  The financial statements do not include any
adjustments that may result from the outcome of these
uncertainties.




Results of
Operations





Comparison of the
threeand ninemonths endedSeptember 30,
2009 and 2008





The
Company is in the initial stages of acquiring unimproved property near
Tehachapi, California to be used for generating, distributing and selling wind
energy.  The Company has acquired certain properties in exchange for
its common stock, cash and debt and intends to make private placements of its
common stock to raise capital to be used in implementing its business
plan.  In 2008, the Company was operating in a different business
which was discontinued at the end of that year.




18




Our Plan of Operation for
the Next Twelve
Months





We plan
to raise capital and acquire properties to be used to implement our business
plan of developing generating, distributing and selling wind
energy.  Due to the longer term nature of this business plan, we do
not expect to receive revenues during the next 12 months.




ITEM
      3:
            QUANTITATIVE
      AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK





None.





ITEM
      4:
            CONTROLS
      AND PROCEDURES




(a)
Evaluation of Disclosure Controls and Procedures




The
Company’s Chief Executive Officer has reviewed and evaluated the effectiveness
of the Company’s disclosure controls and procedures (as defined in Rules
240.13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of
1934) as of September 30, 2009.  Based on that review and evaluation,
which included inquiries made to certain other employees of the Company, the CEO
concluded that the Company’s current disclosure controls and procedures, as
designed and implemented, are not effective due primarily to a lack of
segregation of duties, in ensuring that information relating to the Company
required to be disclosed in the reports the Company files or submits under the
Securities Exchange Act of 1934 is recorded, processed, summarized and reported
within the time periods specified in the Securities and Exchange Commission’s
rules and forms, including insuring that such information is accumulated and
communicated to the Company’s management, including the CEO, as appropriate, to
allow timely decisions regarding required disclosure.  As a result of
a change in business, the Company was delayed in completing the necessary
information to make a timely filing of its report as of March 31,
2009.  The Company initiated steps insuring it complied with the SEC
filing requirements.





(b)  Changes
in Internal Controls





During
the quarter ended June 30, 2009, the Company hired an accounting consultant to
maintain its financial records and another consultant to assist in financial
reporting for making required SEC filings.  The Company's former CFO
left the Company during the first quarter of 2009 and has not yet been
replaced.  The hiring of the consultants is expected to minimize any
significant deficiencies or material weaknesses in internal controls from a
financial close and external financial reporting perspective.  No
additional changes in internal controls were made during the quarter ended
September 30, 2009.




19




PART II:
            OTHER
      INFORMATION




ITEM 6:
            EXHIBITS




The
following exhibits are filed with this report on Form 10-Q.





Exhibit
      31
            Certifications
      pursuant to 18 U.S.C. Section 1350
              Section
      302 of the Sarbanes-Oxley Act of
2002





Exhibit
      32
            Certifications
      pursuant to 18 U.S.C. Section 1350
              Section
      906 of the Sarbanes-Oxley Act of
2002


20




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.





GREEN
      ST. ENERGY, INC.Date:  November
      20, 2009
                  By:
                  /s/ Anthony CataldoChief
      Executive Officer andInterim
      Financial Officer


21