UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION
 Washington,
D.C. 20549
 ______________________
  FORM
10-K
  (Mark
      One)x
              ANNUAL REPORT PURSUANT TO
      SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934.For
      the fiscal year ended March 31, 2009o
              TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934.For
      the transition period from ____ to ____Commission
      file number ________
 
 PERF-GO
GREEN HOLDINGS, INC.
 (Exact
name of registrant as specified in its Charter)
 
 Delaware
              20-3079717(State
      or Other Jurisdiction of
                Incorporation
      or Organization)
              (I.R.S.
      Employer Identification No.)12
      East 52nd
      Street, 4th
      Floor
                New
      York, New York 10022(Address
      including zip code of registrant’s Principal Executive
      Offices)
 
 (212)
935-3550
 (Issuer’s
Telephone Number, Including Area Code)
  Securities
registered under Section 12(b) of the Act:  None
  Securities
registered under Section 12(g) of the Act:  None
 
 Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.
 Yes
      o
              No
      x
 
 Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act.
 Yes
      o
              No
      x
 
 Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.
 Yes
      x
              No
      o
 
 Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Website, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§229.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files.
 Yes
      o
              No
      o
 
 Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K (§229.405 of this chapter) is not contained herein, and will not
be contained, to the best of the registrant’s knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K.
 Yes
      o
              No
      x
  Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer,” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.
 Large
      accelerated filer 
              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
      o
              No
      x
 
 State the
aggregate market value of the voting and non-voting common equity held by
non-affiliates computed by reference to the price at which the common equity was
last sold, or the average bid and asked price of such common equity, as of the
last business day of the registrant’s most recently completed second fiscal
quarter (solely for the purposes of this calculation, the term "affiliate"
refers to all directors and executive offices of the registrant and all
stockholders beneficially owning more than 5% of the registrant's common stock):
$12,178,026.25 at October 31, 2008 (calculated on the basis of shares issued and
outstanding).
 
 Indicate
the number of shares outstanding of each of the registrant’s classes of common
stock, as of the latest practicable date:  34,461,721 shares of Common
Stock, $0.0001 par value at July 14, 2009.
  DOCUMENTS
INCORPORATED BY REFERENCE:  None.
   
 PART
I
  Item
      1.
              Description of
      Business.
 
 Our
executive office is located at 12 East 52nd Street, 4th Floor, New York, New
York  10022. Our telephone number is (212) 935-3550.  We
maintain an Internet Website at www.perfgogreen.com.  Information
contained on our Internet Website is for informational purposes
only.
 
 Perf-Go
Green Holdings, Inc., formerly known as ESYS Holdings, Inc. and La Solucion,
Inc., (the “Company”) was incorporated in Delaware in April 2005.  Its
business was originally intended to provide assistance to the non-English
speaking Hispanic population in building and maintaining a life in North
Carolina but it did not establish operations in connection with its business
plan.
 
 On May
13, 2008, the Company entered into a Share Exchange Agreement with Perf-Go
Green, Inc., (“Perf Go Green”) a privately-owned Delaware corporation in a share
exchange transaction and its stockholders pursuant to which the Company acquired
all of the outstanding shares of common stock of Perf-Go
Green.  Perf-Go Green was originally incorporated as a limited
liability company on November 15, 2007 and converted to a “C” corporation on
January 7, 2008.  As consideration for the Share Exchange, the Company
issued an aggregate of 21,079,466 shares of common stock, $0.0001 par value (the
“Common Stock”) to the Perf-Go Green. stockholders resulting in a change in
control of the Company with Perf-Go Green Stockholders owning approximately 65%
of the Company’s common stock.  In addition, the directors and
officers of Perf-Go Green were elected as directors and officers of the
Company.  As a result of the Share Exchange, the Company has succeeded
to the business of Perf-Go Green as its sole business.
 
 Our Perf
Go Green Brand represents an environmentally friendly “green” company. Our
mission continues to be the development and global marketing of eco-friendly,
non-toxic, food contact compliant, biodegradable plastic products and other
everyday green products that help ensure healthy environments and vibrant
communities for families, individuals, children and pets.
 
 The
Perf Go Green Products include:
 
 ·
              Biodegradable
      Trash Bags (retail &
commercial)
 ·
              Biodegradable
      Plastic Drop Cloths
 ·
              Biodegradable
      Doggie DutyTM Bags & Cat Pan
Liners
 ·
              PerfPowerTM
      Alkaline Batteries
 ·
              Perf
      Go CleanTM Cleaning Products
 
 After the
recent launch of our Perf Go Green Biodegradable trash bags, availability has
expanded nationwide throughout 25,000 locations in supermarkets, hardware, and
drug store chains. The additional launch of Perf Go Green pet products,
biodegradable doggie duty bags and cat pan liners, is increasing growth into
hardware chains and independent pet stores across the country.  In
addition, PerfPowerTM Batteries and Perf Go Clean ProductsTM are now being
introduced to our current retailers.
 
 Our
Perf Go Green products can currently be found at the following
retailers:
 
 ·
              Walgreens
 ·
              CVS
      Drug Stores
 ·
              Bashas
      Supermarkets
 ·
              Shaw’s
      Supermarkets
 ·
              Sprouts
      Farmer’s Market
 ·
              Hy-Vee
      Supermarkets
 ·
              Meijer
 ·
              Do
      it Best Hardware Stores
 ·
              Hardware
      Hank
  2
  ·
              United
      Hardware Distributors
 ·
              Bostwick-Braun
 ·
              Amazon.com
 ·
              Drugstore.com
 ·
              Nash
      Finch Wholesale Food Distributors
 ·
              Kehe
      Food Distributors
 ·
              Associated
      Food Distributors
 
 Our
commercial line of trash can liners are now being used in hotels and other
institutions including the Westin Time Square, the New York Grand Hyatt, Joie de
Vivre Hotels, the London West Hollywood Hotel, and Lehigh Valley Hospital and
Health Network.
 
 We have
relationships with the following distributors across the country:
 
 ·
              Five
      Star
 ·
              Blue
      Ribbon
 ·
              Edward
      Don
 ·
              JAD
      Corp of America
 ·
              Paper
      Enterprises
 
 We have
also partnered with one of our retailers to launch a line of co-branded
biodegradable plastic products.  On Earth Day 2009, Perf Go Green
launched co-branded 13 Gallon and 30 Gallon biodegradable trash bags under the
CVS Trade Mark Earth EssentialsTM.
 
 How
Perf Go Green Works
 We
believe our Perf Go Green plastic products will degrade and then biodegrade when
introduced to soil in the presence of microorganisms, moisture and oxygen. Our
plastic products are manufactured by Spectrum Bags, Incorporated, a division of
IPS Industries, Inc., a mid-sized manufacturer and distributor of plastic bags
and plastic products.  Based on the environmental claims made by the
maker of the additive used in our plastic products, we believe these plastic
products, when discarded in soil, will decompose into simple materials found in
nature, leaving no toxic or visible residue in 12-24 months. Perf Go Green uses
oxo-biodegradable additives, recycled post-consumer and post-industrial plastics
and a proprietary application method to produce the film for its plastic
products. When discarded in landfills, they decompose into CO2, water and
biomass.
 
 PerfPowerTM Alkaline
Batteries
 Perf Go
Green has launched PerfPowerTM Alkaline Batteries that are free of lead, mercury
and cadmium.  Our batteries are manufactured by Linythuatai Battery
Co., Ltd. (“LBC”).  LBC has tested our batteries and found that our
products are lead, mercury and cadmium free.  PerfPowerTM Batteries are
made with recycled materials and the packaging is made with 100% recycled
materials.  We are offering the first free recycling initiative for
PerfPowerTM Batteries at www.irecycled.com.
Perf Go Green has partnered with Battery Solutions, Inc. of Howell, Michigan and
the US Postal Service in our free recycling initiative.  SGS-CSTC
Chemical Laboratory has tested our battery line and certified that our batteries
are RoHS Compliant.
 
 Perf Go CleanTM Cleaning Products
 Our line
of five all natural and sustainable cleaning products, Perf Go
CleanTM  debuted in the marketplace in June 2009. Our cleaning products
are exclusively manufactured by Inventek Colloidal Cleaners, Inc. which are
pharmaceutical grade and biobased certified. We are in the process of
obtaining certification of these claims from NSF International, an independent
not-for-profit certification agency that is committed to making the world a
safer place for consumers by establishing standards and certification. Perf Go
Green has put the power of nanotechnology in a formula of plant-based
ingredients that effectively and safely clean. The Perf Go CleanTM packaging
materials are made with recycled materials and are 100% recyclable. Perf Go
CleanTM Cleaning Products are made in the USA.
  3
 
 The
Market Place and Opportunity
 
 According
to a survey conducted by Landor Associates (2008), the American population no
longer views the issues surrounding green as the concern of a small number of
environmental fanatics living on the outskirts of society. Green has become an
issue for all Americans and they are changing their individual behaviors to
contribute to the solution. As green becomes more personal, consumers expect
demonstrations of a similar commitment and concern from corporate America, the
media and the government.
 
 The need
to control and reduce plastic waste worldwide presents a compelling challenge.
According to a recycling study conducted by the University of Oregon, over 16
million tons of plastic waste is generated annually in the U.S.  Only
2.2% of all plastics are currently recycled with the other 97.8% ending up in
landfills.  These plastic products can take up to 1000 years to
breakdown. In the
U.S., 18 billion disposable diapers end up in landfills each
year.  These diapers take about 500 years to breakdown.  An
estimated 500 billion to one trillion new plastic bags are used annually; this
breaks down to more than one million plastic bags a minute.
 
 According
to the AARP, 40 million baby boomers have gone green.A study by
Accenture done in October 2007 found that two-thirds of consumers would pay a
premium for green products.
 
 A study
conducted by BDO Seidman, LLP in October 2007 found that 83% of the largest
retailers, including companies such as Nike, Gap, Sears, Wal-Mart, Target and
IKEA are involved in green practices. The majority of these companies are
pursuing a combination of selling green products and improving operations and
facility efficiencies.
 
 Competitive
Landscape
 
 Perf
Go Green Plastic Products
 
 Glad and
Hefty have yet to announce or market biodegradable plastic trash bags. We
believe these companies will be our strongest competitors as each are
well-capitalized, have high brand recognition, highly recognizable packaging and
split 75% of the shelf space allotted to plastic products in most retail
stores.
 
 According
to our research, the only other biodegradable or compostable trash bags
currently marketed, such as Compost-A-Bag, Al-PACK, BioBag and Econogreen suffer
from low consumer awareness, weak packaging, and overall minimal brand presence
in big box retailers.   Seventh Generation trash bags are made
from recycled plastics, with a 55% minimum total recycled content according to
its packaging.  Other bags marketed as biodegradable fall short of our
goal of using recycled plastic that is biodegradable, disappearing in landfill
in 12-24 months with extra strength at .9 and 1.0 mil.
 
 We
believe our packaging speaks to the customer in a smart and meaningful
way.  Our packaging is designed to give our products a strong and
distinctive presence on the shelves of our customers.
 
 Perf
Power Alkaline Batteries
 
 The U.S.
alkaline battery market is forecast to increase to $14.9 billion through 2011
and global sales are currently estimated $55 billion.  The market is
segmented into premium, performance and price brands. Premium batteries include
Duracell and Energizer.  Our PerfPowerTM battery is considered a
performance battery.  We believe we are the first and only company to
offer free recycling.
 
 In 2006,
California became the first State to ban alkaline batteries from
landfills.  We believe other states and municipalities will
follow.
 
 We
believe battery recycling is important because: (i) mining of metals is
expensive and a major pollutant to the environment, (ii) steel, zinc and other
metals can be recycled over and over without losing its properties and reduces
the need to mine for metals that are available, and (iii) according to the
Commission on the European Communities, recycling zinc from alkaline batteries
consumes 22.7% less energy than extracting zinc from primary
sources.
  4
 
 We offer
an effective method to reduce waste, reclaim valuable resources such as steel
and zinc from alkaline batteries at no charge to the customer.  While
providing our customers a high performance battery that meets or exceeds other
products in the market. We believe the market is ripe for this type of battery
recycling program.
 
 
 Perf
Go Clean Cleaning Products
 
 Perf Go
CleanTM cleaning products will be in competition with Method, Green Works
distributed by Clorox, Green Essentials, distributed by Arm & Hammer and
other emerging brands. We believe our natural and sustainable plant ingredient
sets Perf Go CleanTM apart from the others.
 
 Methods
of Competition
 
 We
compete with distributors, both within and outside the United States in the sale
of biodegradable plastic products, alkaline batteries and all natural cleaning
products. Principal methods of competition include quality of products, brand
presence of retailers, pricing, range of products and product design
features.
 
 Marketing
and Sales Objectives and Strategies
 
 The
Company continues to secure placement, premier featuring and exposure with
“brand-making” retailers across the country. We have in place thirty
representative firms that give will us reach to major national retailers in the
U.S. and Canada.
 
 A
combination of brand building messages are being delivered through several
marketing and advertising vehicles, including television, radio, national print,
online marketing and search engine optimization, and retail store promotions. We
started off our first quarter of 2009 with the Retailers Choice
Award from the National Hardware Show.  This award joins the
award we received in 2008 at the Chicago International Housewares Show Design Defined
Honoree.
 
 We
continue to receive valuable publicity in national long lead magazines with
features such as “O” At Home, Red Book, Parenting Magazine to name just a
few.  We are building our on-line social media outreach with daily
hits on well known websites.
 
 We have
launched the “Perf Go Green Hour with Dr. Pat Baccili, Talk Radio to Thrive By.”
This is a national and internationally syndicated show. This hour, entitled
“Green By Choice” will
focus on the Greening of the Environment will feature well known guests that are
making a difference by creating solutions, products and services that enable
people to make educated choices about living an eco-friendly life.
 
 We have
developed a multi-level distribution strategy with our accounts that includes
selling direct to large dealers and distributors as well as to broad line and
value-added distributors for all of our product categories.
 
 The
PerfPowerTM Battery marketing plan focuses on targeting supermarket and drug
store chains, national distributors as well as home shopping
channels.
 
 Perf Go
CleanTM will focus on acquiring shelf space at all of our current retailers and
present as part of the Perf Go Green family of products.
 
 Green
21.0 Foundation
 
 We have
established the Go Green 21.0 Foundation that brings another level of awareness
to our products. Go Green 21.0 will foster and promote green initiatives around
the world with the help of schools, communities and individuals wanting to make
a difference. We will capitalize and fund Go Green 21.0 with a percentage of our
profits and shares of our common stock while seeking sponsorships with
like-minded brands, associations and institutions.  Our first green
initiative was rolled out at the Pilgrim School as a result of our January Los
Angeles marketing initiatives with NBC and The Earth Dome. The Pilgrim School
used Perf Go Green 13 Gallon Trash Bags as a fund-raiser. The children were able
to sell enough product to give their school solar panels for the roof on the
school. The education piece included Perf Go Green media and educational
materials. This initiative and several other Earth Day projects gained press for
the brand. The 21.0 Foundation has joined in partnership with the Green
Education Network, an on-line green education initiative with national and
global reach.
  5
 
 Patents
and Trademarks
 
 We
presently hold a registered patent in the United States on the unique dispensing
system utilized for our trash container liners.  The dispensing system
includes a ridge box containing a supply of liners in the form of a cylindrical
roll of a continuous strip of liners.  The liners extend through an
open slot in the top of the box and the inner most liner of the roll is securely
attached to a cylindrical spindle on which the liners are wound.  The
dispenser also includes a reinforcing insert in the form of a piece of sheet
rock in a U-shape partially surrounding the role of liners.  The box
is detachably secured to the bottom of the trash container and the spindle is
dimensioned so as not to pass through the slot.  Accordingly, when the
last line in the box is used and removed from the container, the box is removed
as well.  We also own (together with Ben Tran, a principal of Spectrum
and a former Director of our Company) a patent application which is currently
pending in the United States Patent and Trademark Office which covers a roll of
plastic bags having integral handles and which can also be used to close each
bag.  Both the patent and patent application are owned by the Company
by assignment from Tracy Productions, LLC of which our Chief Executive Officer,
Anthony Tracy, is a principal.
 
 In
addition, we are the exclusive licensee, for biodegradable plastic bags of the
trademark “PERF”.  We own certain trademark registrations and
presently have several trademark applications pending in the United States
Patent and Trademark Office and trademarks.  Below is a chart
summarizing our pending trademark registrations
and  applications.
 
 
 MARK
              SERIAL
      NO.
              REG.
      NO.
              FILING
      DATE
              DESCRIPTIONBIODEGRADABLE
      BY NATURE GREEN BY CHOICE
              77/390,864
              
              February
      7, 2008
              Plastic
      sheeting for use as drop clothsDrinking
      strawsBIODEGRADABLE
      BY NATURE GREEN BY CHOICE
              77/977,325
              
              February
      7, 2008
              Trash
      bags, trash can liners; lawn and leaf disposal bags; disposable
      diapersDisposable
      trash bag dispenser; disposable kitty litter bag dispenser; beverage
      stirrersGO
      GREEN & DESIGN
              77/390,510
              
              February
      7, 2008
              Trash
      bags; trash can liners; lawn and leaf disposal bags; disposable
      diapersPlastic
      drop clothsDrinking
      strawsDisposable
      trash bag dispenser; disposable kitty litter bag dispenser; beverage
      stirrersGLOBAL
      COOLING
              77/418,766
              
              March
      11, 2008
              Disposable
      diapers; plastic bags for disposal of pet waste; plastic bags for disposal
      of trash; plastic bags for disposal of lawn clippings and leaves; general
      purpose plastic bagsPlastic
      sheeting for use as drop clothGO
      GREEN (Green Stylized)
              77/390,475
              
              February
      6, 2008
              Trash
      bags; trash can liners; lawn and leaf disposal bagsPlastic
      sheeting for use as drop clothsDrinking
      strawsDisposable
      trash bag dispenser; disposable kitty litter bag dispenser; beverage
      stirrersGREEN
      FUTURE
              77/418,792
              
              March
      11, 2008
              Disposable
      diapers; plastic bags for disposal of pet waste; plastic bags for disposal
      of trash; plastic bags for disposal of lawn clippings and leaves; general
      purpose plastic bagsPlastic
      sheeting for use as drop clothGREEN
      GENERATION
              77/418,777
              
              March
      11, 2008
              Disposable
      diapers; plastic bags for disposal of pet waste; plastic bags for disposal
      of trash; plastic bags for disposal of lawn clippings and leaves; general
      purpose plastic bagsPlastic
      sheeting for use as drop clothHELPING
      OUR PLANET, ONE DIAPER AT A TIME
              77/390,838
              
              February
      7, 2008
              Disposable
      diaperHELPING
      OUR PLANET, ONE BAG AT A TIME
              77/390,833
              
              February
      7, 2008
              Trash
      bags; trash can liners; lawn and leaf disposal bagsPERF
      (Stylized in Red)
              77/390,425
              
              February
      6, 2008
              Trash
      bags; trash can liners; lawn and leaf disposal bags; disposable
      diapersPlastic
      sheeting for use as a drop clothDrinking
      strawsDisposable
      trash bag dispenser; disposable kitty litter bag dispenser; beverage
      stirrersPERF*
              78/892,604
              3,360,802
              May
      25, 2006
              Disposable
      trash bag dispenser; disposable kitty litter liner bag
      dispenserPERFPOWER
              77/590,916
              
              October
      11, 2008
              BatteriesSTRONGER
      SMARTER SUSTAINABLE
              77/550,623
              3,601,779
              August
      19, 2008
              Plastic
      bags for disposal of trashDOGGIE
      DUTY
              77/590,913
              
              October
      11, 2008
              Plastic
      bags for disposal of pet waste
 
 ___________________________
 *The
trademark PERF is owned by Tracy Productions, LLC.
  6
 
 Government
Regulation
 
 We are
subject to a variety of federal, state and local government
regulations.  Our business is subject to local, state and federal laws
and regulations concerning environmental, health and safety matters, including
those relating to air emissions, wastewater discharges and the generation,
handling, storage, transportation, treatment and disposal of hazardous
materials. We believe we are in substantial compliance with all applicable laws
and regulations. In addition, the manufacture, sale and use of biodegradable
plastic products are subject to regulation by the U.S. Food and Drug
Administration (the “FDA”) as well as other federal and state agencies. The
FDA’s regulations are concerned with substances used in food packaging
materials, not with specific finished food packaging products. Thus, food and
beverage containers are in compliance with FDA regulations if the components
used in the food and beverage containers: (i) are approved by the FDA as
indirect food additives for their intended uses and comply with the applicable
FDA indirect food additive regulations; or (ii) are generally recognized as
safe for their intended uses and are of suitable purity for those intended uses.
We may develop additional products, including food packaging
products.  Additionally, we advertise our products as biodegradable
and must conform with the Federal Trade Commission’s Guides for the use of
Environmental Marketing Claims.  The formulation, manufacturing,
packaging, labeling, distribution, importation, sale and storage of our cleaning
products and battery lines are subject to extensive regulation by various
federal agencies, including the FDA, the Federal Trade Commission (“FTC”), the
Consumer Product Safety Commission (“CPSC”), the Environmental Protection Agency
(“EPA”), and by various agencies of the states, localities and foreign countries
in which our products are manufactured, distributed and sold.  Our
team works closely with our third-party manufacturers on quality related matters
while we monitor their compliance with FDA regulations and perform periodic
audits to ensure such compliance.  If we or our manufacturers fail to
comply with applicable regulations, we could become subject to significant
claims or penalties or be required to discontinue the sale of the non-compliant
product, which could have a material adverse effect on our business, financial
condition and results from operations.  In addition, the adoption of
new regulations or changes in the interpretations of existing regulations may
result in significant additional compliance costs or discontinuation of product
sales and may also have a material adverse effect on our business, financial
condition and results from operations.
  7
 
 Certain
of our household cleaning products are considered pesticides under the Federal
Insecticide, Fungicide and Rodenticide Act (“FIFRA”).  Generally
speaking, any substance intended for preventing, destroying, repelling, or
mitigating any pest is considered to be a pesticide under FIFRA.  We
market and distribute certain cleaning products which make antibacterial and/or
disinfectant claims.  Due to the antibacterial and/or disinfectant
claims on certain of these products, such products are considered to be
pesticides under FIFRA and are required to be registered with the EPA and
contain certain disclosures on the product labels.  In addition, the
contract manufacturers from which we source these products must be registered
with the EPA.  Our cleaning products that make antibacterial and/or
disinfectant claims are also subject to state regulations and the rules and
regulations of the various jurisdictions where these products are
sold.
 
 Research
and Development
 
 We have
not incurred any significant expenditures in research and development since
inception.
 
 Compliance
with Environmental Laws
 
 We did
not incur any costs in connection with the compliance with any federal, state,
or local environmental laws.
 
 Employees
 
 As of
June, 2009, we had twelve employees.  None of our employees are
represented by a labor union, and we consider our employee relations to be
excellent.
 
 Item
      2.
              Description of
      Property.
 
 On
October 1, 2008, we entered into a five year lease agreement for executive
office space at 12 East 52nd Street,
4th
Floor, New York, New York 10022 in which we are presently
located.  This office is approximately 2,700 square feet. The rent on
such space is presently $198,000 in the first year escalating to approximately
$223,000 in the fifth year.  The Company is obligated to pay an
electricity adjustment and real estate taxes on this space.  We
currently sublease certain office space in Westport,
Connecticut.  This office is 1,500 square feet and is leased on a
month-to-month basis with rent of $1,500 for the month.
 
 Item
      3.
              Legal
      Proceedings.
 
 None.
 
 Item
      4.
              Submission of Matters
      to a Vote of Security
Holders.
 
 In May
2009, the Company received the written consent of the holders of a majority of
its outstanding common stock: (a) increasing the number of authorized shares of
common stock from 100,000,000 shares of common stock to 250,000,000 shares of
common stock and (b) approving the Company’s 2008 Share Incentive
Plan.
  8
  PART
II
  Item
      5.
              Market for
      Registrant’s Common Equity and Related Stockholder
      Matters.
 
 Our
common stock was approved for trade on the Over the Counter Bulletin Board
(“OTC-BB”) and is quoted under the symbol “PGOG.”  Our common stock
has been listed on the OTC-BB since July 2007.
 
 High
              
              
              LowYear
      Ended March 31, 2009:1st
      Quarter
              
              $
              3.08
              
              
              $
              1.262nd
      Quarter
              
              
              1.74
              
              
              
              0.853rd
      Quarter
              
              
              1.07
              
              
              
              0.214th
      Quarter
              
              
              0.64
              
              
              
              0.22
 
 High
              
              
              LowYear
      Ended March 31, 2008:1st
      Quarter
              
              
              N/A
              
              
              
              N/A2nd
      Quarter
              
              
              N/A
              
              
              
              N/A3rd
      Quarter
              
              
              N/A
              
              
              
              N/A4th
      Quarter
              
              
              N/A
              
              
              
              N/A
 
 As of
July 9, 2009, there were 42 holders of record of our common stock, and the
closing sales price of our common stock as reported on the OTC-BB was
$0.38.
 
 Dividend
Policy
 
 Holders
of our common stock are entitled to receive dividends if, and when declared by
the Board of Directors out of funds legally available therefore. We have never
declared or paid any dividends on our common stock. We intend to retain any
future earnings for use in the operation and expansion of our business.
Consequently, we do not anticipate paying any cash dividends on our common stock
to our stockholders for the foreseeable future.
 
 Transfer
Agent
 
 The
transfer agent for the common stock is Island Stock Transfer.  The
transfer agent phone number is 727-289-0010.
  9
 
 Equity
Compensation Plan Information
 
 The
following table provides information about shares of our common stock that may
be issued upon the exercise of options under all of our existing compensation
plans as of March 31, 2009.
 
 Plan
      Category
                    
                    (a)
                      Number
      of securities to be issued upon exercise of outstanding options, warrants
      and rights
                    
                    (b)
                      Weighted-average
      exercise price of outstanding options, warrants and rights
                    
                    (c)
                      Number
      of securities remaining available for future issuance under equity
      compensation plan (excluding securities reflected in column
      (a))Equity
      compensation plans approved by security holders
                    
                    7,773,600
                    
                    1.51
                    
                    2,236,400Equity
      compensation plans not approved by security holders
                    
                    2,246,666
      (1)
                    
                    0.50
                    
                    -Total
  
 (1)
                Represents
      warrants issued to the placement agent in connection with our private
      placement offering effectuated in May and June
  2008.
 
 Recent
Sales Of Unregistered Securities
 
 On June
6, 2008, the Board of Directors approved the issuance of 50,000 shares of its
common stock to Robert Hantmann, an attorney providing legal services to the
Company.  The shares are to be issued under the 2008 Share Incentive
Plan.
 
 On March
20, 2009, the Company issued Star Funding, Inc. warrants to purchase 800,000
shares of its common stock at an exercise price of $1.00 in connection with a
supply agreement and factoring agreement.
 
 On April
1, 2009, the Company agreed to issue Joseph Tracy 75,000 shares of its common
stock at a price per share of $0.50 under the Company’s 2008 Share Incentive
Plan, subject to the approval of the Company’s Board of Directors.
 
 In April
2009, the Company issued Excalibur Limited Partnership 250,000 shares of its
common stock under the Company’s 2008 Share Incentive Plan for certain
consulting services.
 
 On April
27, 2009, the Company issued Optimus Solutions Consulting 130,400 shares of its
common stock under the Company’s 2008 Share Incentive Plan for certain
consulting services.
 
 On May
27, 2009, the Company agreed to issue BGR Government Affairs, LLC (“BGR”)
$10,000 dollars of the Company’s Common Stock per month during the term of the
Company’s consulting agreement with BGR, subject to the approval of the
Company’s Board of Directors.  The Shares shall be issued under the
Company’s 2008 Share Incentive Plan.
 
 On June
1, 2009, the Company agreed to issue PR Financial Marketing, LLC 300,000 shares
of its common stock and options to purchase an additional 200,000 shares of its
common stock at an exercise price of $0.75 per share under the Company’s 2008
Share Incentive Plan in consideration for certain consulting services, subject
to the approval of the Company’s Board of Directors.
  10
 
 On June
15, 2009, the Company agreed to issue Frank Seyer 100,000 shares of its common
stock at a price per share of $0.50 under the Company’s 2008 Share Incentive
Plan in consideration for certain consulting services, subject to approval of
the Company’s Board of Directors.
 
 On June
25, 2009, Perf-Go Green Holdings, Inc. (the “Company”) entered into a
Distributor/Blenders Agreement with Inventek Colloidal Cleaners, Inc.
(“Inventek”) under which Inventek has granted the Company the exclusive right to
sell certain colloidal-based biodegradable cleaning products invented and
manufactured by Inventek.  The products shall be purchased at the
prices set forth on Exhibit A to the agreement which is included as an exhibit
to this Form 10-K.  In consideration of the foregoing, the Company has
an outstanding commitment under the agreement to issue up to 2,000,000 shares of
its commons tock to Inventek and warrants to purchase an additional 2,000,000
shares of its common stock with an exercise price of $0.50 per share, subject to
the approval of the Company’s Board of Directors.
 
 Purchases
of Equity Securities by the Issuer and Affiliated Purchasers
 
 None.
 
 Item
      6.
              Selected Financial
      Data
 
 Not
Applicable.
 
 Item
      7.
              Management’s
      Discussion And Analysis Of Financial Condition And Results Of
      Operations
 
 Forward
Looking Statements
 
 Some of the statements contained in
this Report on Form 10-K that are not historical facts are "forward-looking
statements" which can be identified by the use of terminology such as
"estimates," "projects," "plans," "believes," "expects," "anticipates,"
"intends," or the negative or other variations, or by discussions of strategy
that involve risks and uncertainties.  We urge you to be cautious of
the forward-looking statements, that such statements, which are contained in
this Report on Form 10-K, reflect our current beliefs with respect to future
events and involve known and unknown risks, uncertainties, and other factors
affecting our operations, market growth, services, products, and
licenses.  No assurances can be given regarding the achievement of
future results, as actual results may differ materially as a result of the risks
we face, and actual events may differ from the assumptions underlying the
statements that have been made regarding anticipated events.  Factors
that may cause actual results, our performance or achievements, or industry
results to differ materially from those contemplated by such forward-looking
statements include without limitation:
 
 1. Our
ability to attract and retain management, and to integrate and maintain
technical information and management information systems;
 
 2. Our
ability to generate customer demand for our products;
 
 3. The
intensity of competition; and
 
 4.
General economic conditions.
 
 All written and oral forward-looking
statements made in connection with this Report on Form 10-K that are
attributable to us or persons acting on our behalf are expressly qualified in
their entirety by these cautionary statements.  Given the
uncertainties that surround such statements, you are cautioned not to place
undue reliance on such forward-looking statements.
 
 Since our common stock is considered a
“penny stock” we are ineligible to rely on the safe harbor for forward-looking
statements provided in Section 27A of the Securities Act and Section 21E of the
Exchange Act.
  11
  Overview
 
 Background
and History; Share Exchange
 
 Perf-Go
Green Holdings, Inc., (“Holdings”) formerly known as ESYS Holdings, Inc.
(“ESYS”) and La Solucion, Inc., (collectively known as the “Company”) was
incorporated in Delaware in April 2005. Its business was originally intended to
provide assistance to the non-English speaking Hispanic population in building
and maintaining a life in North Carolina but it did not establish operations in
connection with its business plan.
 
 On May
13, 2008, the Company entered into a Share Exchange Agreement (the “Share
Exchange”) with Perf-Go Green, Inc. (“Perf-Go Green”), a privately-owned
Delaware corporation and its stockholders pursuant to which the Company acquired
all of the outstanding shares of common stock of Perf-Go
Green.  Perf-Go Green was originally incorporated as a limited
liability company on November 15, 2007 and converted to a “C” corporation on
January 7, 2008.  As consideration for the Share Exchange, the Company
issued an aggregate of 21,079,466 shares of common stock, $0.0001 par value (the
“Common Stock”), for the 20,322,767 Perf-Go Green shares outstanding (a 1.03:1
exchange ratio), to the Perf-Go Green stockholders resulting in a change in
control of the Company with Perf-Go Green stockholders owning approximately 65%
out of a total of 32,279,470, and the former stockholders of the accounting
acquiree owning 11,200,004 shares, of the Company’s outstanding common stock at
the date of the Share Exchange.  In addition, the directors and
officers of Perf-Go Green were elected as directors and officers of the
Company.  As a result of the Share Exchange, the Company has succeeded
to the business of Perf-Go Green as its sole business.
 
 The
accounting for the Share Exchange, commonly called a reverse acquisition, calls
for Perf-Go Green, to be treated as the accounting acquirer.  The
acquired assets and assumed liabilities of the Company were carried forward at
their historical values, which approximated fair value.  Perf-Go
Green’s historical financial statements, after the restatement the auditedconsolidated financial
statements, are carried forward as those of the combined entity.  The
common stock and per share amounts have been retroactively restated the earliest
period presented to reflect the Share Exchange.
 
 Business,
Products and Plans
 
 Our Perf
Go Green Brand represents an environmentally friendly “green” company. Our
mission continues to be the development and global marketing of eco-friendly,
non-toxic, food contact compliant, biodegradable plastic products and other
everyday green products that help ensure healthy environments and vibrant
communities for families, individuals, children and pets.
 
 The
Perf Go Green Products include:
 
 Biodegradable
Trash Bags (retail & commercial)
 Biodegradable
Plastic Drop Cloths
 Biodegradable
Doggie DutyTM Bags & Cat Pan Liners
 PerfPowerTM
Alkaline Batteries
 Perf Go
CleanTM Cleaning Products
 
 After
launch of our Perf Go Green Biodegradable trash bags, availability has expanded
nationwide throughout 25,000 locations in supermarkets, hardware, and drug store
chains. The additional launch of Perf Go Green pet products, biodegradable
doggie duty bags and cat pan liners, is increasing growth into hardware chains
and independent pet stores across the country.  In addition,
PerfPowerTM Batteries and Perf Go Clean ProductsTM are now being introduced and
offered to our current retailers.
 
 A combination of brand building messages are being
delivered through several marketing and advertising vehicles, including
television, radio, national print, online marketing and search engine
optimization, and retail store promotions. We started off our first quarter of
2009 with theRetailers Choice
Awardfrom the National Hardware
Show.  This award joins the award we received in 2008 at the Chicago
International Housewares ShowDesign Defined
Honoree.
 
 The
Company’s activities have included capital raising to support its business plan,
recruiting board and management personnel, establishing sources of supply and
customer relationships.
  The
Company is considered to be in the development stage as defined in Statement of
Financial Accounting Standards (“SFAS”) No. 7, “Accounting and Reporting By
Development Stage Enterprises,” and is subject to the risks associated with
activities of development stage companies.  While we have raised a
significant amount of financing in connection with the Share Exchange, our
operations are unproven and therefore it is not certain that we will have
sufficient cash to continue our activities for the coming twelve
months.  We currently do not have any commitments for new
funding.
  12
 
 Recent
Financings
 
 The
Company completed the following financings during the period from November 15,
2007 (inception) to March 31, 2009:
 
 Equity Financing - In December
2007, prior to its merger with Perf-Go Green, Inc., Perf-Go Green Holdings, Inc.
(the accounting acquiree) raised $2,100,000 in proceeds in the private placement
of 4,200,000 common shares and warrants to purchase 4,200,000 shares of the
Company’s common stock.  This financing was not conditioned on the
reverse acquisition and was done to enhance the ability of the accounting
acquiree to consummate a reverse merger transaction.  In June 2008,
the warrants were reissued to conform to the same terms as the Warrants in the
Convertible Debenture and Warrants financing described below and in Note 6 to
the audited consolidated financial statements. In
March 2009, the Company re-priced the above warrants, and issued an
additional 4,200,000  warrantsat $.50
per share to these investors.  These warrants have the same anti-dilution
provision discussed below, and this issuance relates to the anti-dilution
provision.  The warrants have immediate vesting, and the same net cash
settlement provisions as the  warrants issued to the convertible
debenture holders.  As a result, the Company recorded $1,295,904 in
derivative expense for the period ended March 31, 2009 related to these warrants
for the re-pricing and additional warrants issued.
 
 Bridge Notes and Warrants -In
January and February 2008, Perf-Go Green, Inc. raised an aggregate $750,000
proceeds through the sale of secured convertible notes (“Bridge Notes”) together
with warrants to purchase 1,500,000 shares of the Company’s common stock. The
Bridge Notes, together with approximately $11,000 of accrued interest, were
converted into 1,579,466 shares of the Company’s common stock in March 2008.  In March 2009, the Company re-priced
the above warrants, and lowered the exercise price from $.75 per share to $.69,
and issued an additional 145,010 detachable warrants, as further
described further in Note 7 to the audited
consolidated financial statements.
 
 Convertible Debentures and Warrants
- In connection with the Share Exchange, on May 13, 2008 and June 10,
2008, the Company raised an aggregate $5,950,000 proceeds a private placement of
its senior secured convertible debentures in the principal amount of $5,950,000
and warrants to purchase 7,933,333 shares (“initial warrants”) of the Company’s
common stock as described further in Note 7 to the audited consolidated
financial statements.  The warrants are subject to adjustment for
certain anti-dilution provisions.  Additionally, during fiscal year
2009, we re-priced the initial warrants to $.50
per share andissued an additional 10,800,000 and 7,933,333 warrants to the equity investors on the
same terms as the initial warrants above. The
7,933,333 additional warrants were issued as a result of the anti-dilution
provision.
 
 Because
of the net cash settlement features, and variability of the conversion option in
the Convertible Debentures, all of the above Warrants, the conversion option,
and the warrants that were re-issued in May 2008 to the December 2007 equity
investors, together with certain placement agent warrants all as discussed in
Note 6 to the audited consolidated
financial statements, these instruments are considered derivative liabilities
and are marked-to-market each reporting period.  The additional
warrants that were granted to the equity investors above was deemed to be a
substantial modification of the above debentures, and resulted in an
extinguishment of the debentures.  As a result, we recorded a 4,578,112 loss on extinguishment of debt related
to the issuance of the additional warrants above, as well as a debt discount of
$1,336,320.
 
 In March 2009, for no additional consideration to the
Placement Agent, the Company re-priced the above warrants to $.50 per share and
issued an additional 1,213,333 warrants for $.50 per share. These warrants have
the same anti-dilution provisions as the warrants issued to the convertible debt
investors, and accordingly, this issuance relates to that
provision     Because the above  warrants
have the same variable exercise price feature, and cash settlement provisions,
as the Investor Warrants described above, these warrants are also considered
derivative liabilities. As such, their fair value at inception of approximately
$1,394,000 was charged to derivative liability expense and this amount is
required to be marked-to-market at each reporting period.  The
additional warrants and re-pricing resulted in additional derivative expense of
$374,372 for the period ended March 31, 2009.
 
 In March
2009, we issued 800,000 warrants at $1.00 per share as part of a credit facility
to a  lender.These warrants
have the same net cash settlement features as the above warrants, and
accordingly, as more fully described in note 6 to the audited consolidated financial
statements, were recorded as a derivative liability.
 
 Financial
Condition, Liquidity and Capital Resources
 
 As
indicated in the accompanying audited consolidated financial statements, at
March 31, 2009, the Company had  $-0- cash and $15,345,579 in negative working capital and a
stockholders’ deficit of $13,925,803.
  For the
period ended March 31, 2009, the Company had a loss from operations of $22,210,472 (and a net loss of $32,876,813) and utilized $7,359,939 of cash in operating activities.
Further, losses from operations are continuing subsequent to March 31, 2009 and
the Company anticipates that it will continue to generate significant losses
from operations for the near future. These conditions raise substantial doubt
about the Company’s ability to continue as a going concern.
  13
  Our cash
flow projections presently indicate that projected revenues will not be
sufficient to fund operations over the coming twelve months. As such, we will
need to raise additional financing or take other measures during fiscal year
March 31, 2010 in order to continue our operations. To that end, the Company has entered into a working
capital loan facility, based on accounts receivable and inventory, for up to
$10,000,000 of debt financing. However,
as a company that has just recently emerged from the development stage, our
ability to accurately project revenues and expenses can be significantly
impacted by unforeseen events, developments and contingencies that cannot be
anticipated. As such, there can be no assurance that management’s plans to raise
additional financing will be successful or sufficient in order to sustain our
operations over the coming twelve months. No adjustment has been made in the
accompanying financial statements to the amounts and classification of assets
and liabilities which could result if we are unable to continue as a going
concern.
 
 We
currently have no material commitments for capital expenditures.
 
 Results
of Operations
 
 We began
operations on November 15, 2007 and emerged from the development stage during
the three months ended September 30, 2008 as we commenced principal operations
and generated significant revenues. Our activities during the period ended March
31, 2009 have included capital raising (resulting in the debt and equity-based
financing described in Recent Financings above), development and marketing of
our biodegradable plastic products, development of mass market product
distribution networks for the intended distribution of the products, recruiting
personnel, development of an infrastructure to support the planned business and
commencement of revenues.
  Our
results of operations for the periods ended March 31, 2009 and for the period
November 15, 2007 (inception) to March 31, 2008 are as follows:
  March 31, 2009
              
              
              November 15, 2007 to March 31,
      2008Revenues
              
              $
              1,743,340
              
              
              $
              -0-Loss
      from operations
              
              
              (22,210,472
              )
              
              
              (627,025
              )Other
      (expense)
              
              
              (10,666,341
              )
              
              
              (797,990
              )Net
      (loss)
              
              $
              (32,876,813
              )
              
              $
              (1,425,015
              )
  Revenues
for the period ended March 31, 2009 reflected initial shipments to new customers
Walgreens and CVS Pharmacy as well as sales to a variety of smaller
customers.
  Loss from
operations is driven by general and administrative costs of $22,734,129 and
$627,025 for the year ended March 31, 2009 and for the period November 15,
2007 (inception) to March 31, 2008, respectively. Included in general and
administrative costs for the period ended March 31, 2009 are non-cash charges
for stock compensation of  $16,319,657, including stock compensation
for employees, officers, and directors of $13,148,682, and $856,483 to various
consultants, respectively.  Additionally, we issued 939,194 shares of
common stock to employees and consultants and recognized $2,314,492 in
consulting expense for the period ended March 31, 2009. The large amount of
stock compensation results from the fact that the majority of the stock options
and common stock during the period ended March 31, 2009 contain immediate
vesting provisions and therefore were expensed in full during the
period.  We expect to incur significant increases in stock-based
compensation as we issue additional options and stock grants to employees,
directors, officers and consultants.  Stock-based compensation for the
period November 15, 2007 (inception) to March 31, 2008 was negligible and
related to stock issued to founders of $1,880.
 
 14
  Other
general and administrative expenses excluding stock-based compensation consisted
of the following for the periods ended March 31, 2009 and for the period
November 15, 2007 (inception) to March 31, 2008:
 
 March 31, 2009
              
              
              November 15, 2007 to March 31,
      2008Salary
      expense and related
              
              $
              1,294,338
              
              
              $
              627,025Advertising
              
              
              908,004Investor
      relations & marketing
              
              
              1,659,462Legal
      and professional
              
              
              557,594All
      other general & administrative
              
              
              1,995,058$
              6,414,456
              
              
              $
              627,025
  We expect
that our operating expenses, to the extent we have cash to fund them, will
continue to increase in subsequent quarters as we focus our attention on
expanding our product introduction, marketing, investor and public relations and
investments in our operating infrastructure.
  Other
income (expense) includes the following:
  March 31, 2009
              
              
              November 15, 2007 to March 31,
      2008Derivative
      liability expense at
              
              $
              (27,980,162
              )
              
              $
              -0-Change
      in value of derivative liability
              
              
              26,217,330
              
              
              $
              -0-Loss
      on debt extinguishment
              
              
              (4,578,112
              )Damages
      accrued under registration rights agreement
              
              
              (892,500
              )
              
              $
              -0-Amortization
      of debt discount
              
              
              (2,234,441
              )
              
              $
              -0-Amortization
      of debt issuance costs
              
              
              (715,296
              )
              
              $
              -0-Interest
      expense and amortization
              
              
              (521,200
              )
              
              
              (798,381
              )Interest
      income
              
              
              38,040
              
              
              
              391Total
      other expense
              
              $
              (10,666,341
              )
              
              $
              (797,990
              )
  15
  Derivatives–As discussed further in
Notes 6 to the audited consolidated
financial statements, the Company issued Convertible Debentures and Warrants
which contain features that have variability in the conversion or exercise price
and, with respect to the Warrants, contain a settlement in cash feature if
sufficient registered shares cannot be delivered upon exercise of the Warrant.
As such, these instruments are accounted for as derivative liabilities because
(a) the ultimate amount of shares which we could be required to issue is not
known and may increase significantly and (b) we could have to pay cash to the
warrant holders for the market value of the shares underlying the warrants. As
Derivative liabilities, these uncertainties are reflected as obligations of the
Company until they are resolved through conversion, exercise or expiration. In
addition, warrants issued to a placement agent, and warrants that were issued to
replace warrants issued to investors in the December 2007 equity financings at
the accounting acquiree, have the same features and are also accounted for as
derivative liabilities.Additionally,
in March 2009 additional warrants were issued as part of the above anti-dilution provisions to the
convertible debt holders, the placement agent, as well as certain equity
investors. Derivative liability expense for conversion
feature of convertible debt, re-pricing ofwarrants and other warrants of $27,980,162 results from the fair value of these
derivative instruments, less the amount allocated to the related convertible
debt as debt discount, and the amounts allocated to deferred finance costs, at inception.  As a result of the re-pricing
of the warrants, and additional warrants issued, the Company determined that a
substantial modification of the debentures hadoccurred, and recorded a loss on debt extinguishment of
$4,578,112 for the period ended March 31, 2009.Additionally, the Company recorded $1,670,276 in
derivative expense associated with the debt extinguishment.
 
 Fair
value accounting requires that these derivative liabilities be marked-to-market
at each reporting period and therefore, since the underlying market price of the
stock generally decreased from the prices used at inception (ranging from $1.48
at inception to $.38 per share at March 31, 2009)the Company recorded other income for the aggregate change in value of
these derivative liabilities of $26,217,330 for
the period ended March 31, 2009. Each reporting period, a charge or
credit will be recorded for the change in fair value these derivative
liabilities. The principal driver of the charge or credit going forward will be
the market price of the Company’s common stock. Specifically, if the market
price of the Company’s common stock increases from the prior quarter, the fair
value of the derivative liability would increase and conversely, if the market
price of the Company’s common stock decreases from the prior quarter, the
derivative liability would decrease. An additional driver of the liability going
forward could be any additional shares which could become issuable if we trigger
certain anti-dilution provisions, for example if we did a dilutive
financing.
  Registration
Rights Agreement – Under a registration rights agreement, the common stock
underlying the conversion feature of the Convertible Debentures and the Warrants
is required to be registered and maintain such registration. The Company can be
assessed liquidated damages, as defined in the related agreements, for the
failure to file a registration statement in a certain timeframe or for the
failure to obtain or maintain effectiveness of such registration statement. Such
penalties are generally limited to approximately $893,000 in the aggregate.
Because obtaining and maintaining effectiveness of the registration statement is
not within the Company’s control, the Company has concluded to record a
liability for approximately $893,000 representing the liquidated damages that
may be assessed if the Company fails to satisfy its registration obligations.
The Company’s registration  statement  was  declared 
effective  on  February 10, 2009  at  which  time 
an  aggregate of approximately $225,000 of liquidated
damages, before interest thereon, had accrued under the agreement. If the
Company ultimately concludes that it can maintain effectiveness of the
registration statement, the remaining liability would be
reversed.
  Interest expense and amortization of
debt discount–The Company accrues
interest on the face amount of the convertible debentures at 10% per annum, and
is payable quarterly in cash or equity.  For the period ended March
31, 2009, the Company recognized $473,295 in interest expense related to the
convertible debentures. The debt discount is amortized into interest
expense for any conversions of the debentures based on the pro-rata amount of
debenture converted to total debt.  For the period ended March 31,
2009, the Company amortized $344,355 into interest expense for conversions
during 2009.   For the period ended March 31, 2009, the Company
recognized $2,234,441 in interest expense related to debt discount amortization.The amortization of debt discount represents the amortization of the
entire proceeds, $5,950,000 of the Convertible Debentures and Warrants, which
was allocated to debt discount, over the three year life of the Convertible
Debentures.  Additional amortization
was recorded related to the debt discount
discussed above.
  Interest
income – Consists of interest earned on bank deposits and deposits in an
institutional money market fund with a broker-dealer.
 16
  Contractual Arrangements
  Significant
contractual obligations as of March 31, 2009 are as follows:
  Amount
      Due inType
      of Obligation
              
              Total
      Obligation
              
              
              Less
      than 1 year
              
              
              1
      to 3
                years
              
              
              4
      to 5
                Years
              
              
              More
      than 5 yearsConvertible
      Debentures (1)
              
              $
              5,190,000
              
              
              $
              -
              
              
              $
              5,190,000
              
              
              $
              -
              
              
              $
              -Derivative
      liabilities (2)
              
              
              2,908,000
              
              
              
              2,908,000
              
              
              
              -
              
              
              
              -
              
              
              
              -Facility
      lease (3)
              
              
              1,033,000
              
              
              
              198,000
              
              
              
              628,000
              
              
              
              207,000Employment
      contracts (4)
              
              
              1,968,000
              
              
              
              791,000
              
              
              
              1,177,000Total
              
              $
              11,099,000
              
              
              $
              3,897,000
              
              
              $
              6,995,000
              
              
              $
              207,000
              
              
              $
              -
 (1)
                See Note 6 to audited  consolidated
      financial statements for additional information.
 
 (2)
                See Note 6 to audited consolidated financial
      statements for additional information.
 
 (3)
                See Note 11 to audited consolidated financial
      statements for additional information on the lease for the
      Company’s executive office.
 
 (4)
                See Note 11 to audited consolidated financial
      statements for additional information. Amounts includeannual increases but not annual bonus
      eligibility.
 
 (5)
                Excludes commitments under an employment agreement
      with an officer entered into in January 2009, see Note 11 to
      audited  Consolidated Financial Statements.  Off
Balance Sheet Arrangements
 
 The
Company has no material off balance sheet arrangements that are likely to have a
current or future effect on our financial condition, changes in financial
condition, revenues or expenses, results of operations, liquidity, capital
resources or capital expenditures.
 
 Critical
Accounting Principles
 
 We have
identified critical accounting principles that affect our condensed consolidated
financial statements by considering accounting policies that involve the most
complex or subjective decisions or assessments as well as considering newly
adopted principals.  They are:
 
 Use of Estimates, Going Concern
Consideration – 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
revenue and expenses during the reporting period. Actual results could differ
from those estimates.  Among the estimates we have made in the
preparation of the financial statements is an estimate of our projected
revenues, expenses and cash flows in making the disclosures about our liquidity
in this report.  As a development stage company, many variables may
affect our estimates of cash flows that could materially alter our view of our
liquidity and capital requirements as our business develops.  Our
unaudited condensed consolidated financial statements have been prepared
assuming we are a “going concern”.  No adjustment has been made in the
unaudited condensed consolidated financial statements which could result should
we be unable to continue as a going concern.
 
 Share-Based Payments –We
follow SFAS 123(R), “Share-Based Payment” which establishes standards for
share-based transactions in which an entity receives employee’s or consultants
services for (a) equity instruments of the entity, such as stock options or
warrants, or (b) liabilities that are based on the fair value of the entity’s
equity instruments or that may be settled by the issuance of such equity
instruments.  SFAS 123(R) requires that we expense the fair value of
stock options and similar awards, as measured on the awards’ grant
date.  SFAS 123(R) applies to all awards granted after the date of
adoption, and to awards modified, repurchased or cancelled after that
date.
 
 We
estimate the value of stock option awards on the date of grant using the
Black-Scholes option-pricing model (the “Black-Scholes model”). The
determination of the fair value of share-based payment awards on the date of
grant is affected by our stock price as well as assumptions regarding a number
of complex and subjective variables.  These variables include our
expected stock price volatility over the term of the awards, expected term,
risk-free interest rate, expected dividends and expected forfeiture
rates.
  17
 
 If
factors change and we employ different assumptions in the application of SFAS
123(R) in future periods, the compensation expense that we record under SFAS
123(R) may differ significantly from what we have recorded in the current
period. There is a high degree of subjectivity involved when using option
pricing models to estimate share-based compensation under SFAS
123(R).  Consequently, there is a risk that our estimates of the fair
values of our share-based compensation awards on the grant dates may bear little
resemblance to the actual values realized upon the exercise, expiration, early
termination or forfeiture of those share-based payments in the
future.  Employee stock options may expire worthless or otherwise
result in zero intrinsic value as compared to the fair values originally
estimated on the grant date and reported in our financial
statements.  Alternatively, value may be realized from these
instruments that are significantly in excess of the fair values originally
estimated on the grant date and reported in our financial
statements.
 
 The
guidance in SFAS 123(R) and Securities and Exchange Commission’s Staff
Accounting Bulletin No. 107 and 110 is relatively new, and best practices are
not well established. There are significant differences among valuation models,
and there is a possibility that we will adopt a different valuation model in the
future. Theoretical valuation models are evolving and may result in lower or
higher fair value estimates for share-based compensation. The timing, readiness,
adoption, general acceptance, reliability and testing of these methods is
uncertain. Sophisticated mathematical models may require voluminous historical
information, modeling expertise, financial analyses, correlation analyses,
integrated software and databases, consulting fees, customization and testing
for adequacy of internal controls.  The uncertainties and costs of
these extensive valuation efforts may outweigh the benefits to
investors.
 
 Derivative liabilities– SFAS
No. 133, “Accounting for
Derivative Instruments and Hedging Activities,” requires bifurcation of
embedded derivative instruments and measurement of their fair value for
accounting purposes.  In addition, freestanding derivative instruments
such as certain warrants are also derivative liabilities.  We estimate
the fair value of these instruments using the Black-Scholes option pricing model
which takes into account a variety of factors, including historical stock price
volatility, risk-free interest rates, remaining term and the closing price of
our common stock.  Changes in the assumptions used to estimate the
fair value of these derivative instruments could result in a material change in
the fair value of the instruments. Although we believe the
assumptions used to estimate the fair values of the warrants are reasonable, we
cannot assure the accuracy of the assumptions or
estimates.  Derivative liabilities are recorded at fair value at
inception and then are adjusted to reflect fair value as at each period end,
with any increase or decrease in the fair value being recorded in results of
operations as an adjustment to fair value of derivatives.
 
 At March 31, 2009, we had derivative instruments
principally related to our issuance of Convertible Debentures and Warrants as
discussed further in Note 6 to the audited consolidated financial
statements.  The Convertible Debentures and Warrants have features
which make their conversion or exercise price variable and the Warrants contain
provisions calling for cash settlement in certain circumstances. As of March 31, 2009, we have a derivative liability of
$15,381,809.  The decrease in the derivative liability from inception
represents the decrease in the market price of our stock during fiscal year
2009, as evidence by income of $26,217,330 inchange in fair value of the derivative
liabilities.  This was offset by increases in the derivative liability
related to the issuance of additional warrants to investors, and the re-pricing
of these warrants, as discussed in note 6 to the consolidated audited financial
statements.
  Recent
Accounting Pronouncements
 
 Effective
April 1, 2008, the Company adopted Statement of Financial Accounting Standard
(“SFAS”) No. 157, Fair Value Measurement (“SFAS 157”), for its financial assets
and liabilities that are re-measured and reported at fair value at each
reporting period, and non-financial assets and liabilities that are re-measured
and reported at fair value at least annually.  In accordance with the
provisions of FSP No. FAS 157-2, Effective Date f FASB Statement No. 157, the
Company elected to defer implementation of SFAS 157 as it relates to our
non-financial assets and non-financial liabilities that are recognized and
disclosed at fair value in the financial statements on a nonrecurring basis
until April 1, 2009.  The Company is evaluating the impact, if any,
this Standard will have on our consolidated non-financial assets and
liabilities.
 
 SFAS 157
defines fair value, thereby eliminating inconsistencies in guidance found in
various prior accounting pronouncements, and increases disclosures surrounding
fair value calculations.  SFAS 157 establishes a three tiered fair
value hierarchy that prioritizes inputs to valuation techniques used in fair
value calculations.  SFAS 157 requires the Company to maximize the use
of observable inputs and to minimize the use of unobservable inputs in making
fair value judgments.
 
 The
Company’s financial assets and liabilities measured at fair value on a recurring
basis include those securities classified as cash and cash equivalents on the
unaudited condensed consolidated balance sheet.  All securities owned
are valued under the first tier of the hierarchy where the assets are measured
using quoted prices in active markets.
  18
 
 On April
1, 2008, the Company adopted SFAS No. 159, “The Fair Value Option for Financial
Assets and Financial Liabilities.”  The adoption of SFAS No. 159 did
not have any material impact on the Company’s consolidated financial
statements.
 
 In
December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
Consolidated Financial Statements, an amendment of Accounting Research Bulletin
No 51” (SFAS 160). SFAS 160 establishes accounting and reporting
standards for ownership interests in subsidiaries held by parties other than the
parent, changes in a parent’s ownership of a noncontrolling interest,
calculation and disclosure of the consolidated net income attributable to the
parent and the noncontrolling interest, changes in a parent’s ownership interest
while the parent retains its controlling financial interest and fair value
measurement of any retained noncontrolling equity investment.  The
Company’s adoption of SFAS No. 160 on April 1, 2008 did not have a material
effect on its financial position, results of operations or cash
flows.
 
 In
December 2007, the FASB issued SFAS No 141R, “Business Combinations” (“SFAS
141R”).  SFAS 141R replaces SFAS 141 and establishes principles and
requirements for how an acquirer recognizes and measures in its financial
statements the identifiable assets acquired, the liabilities assumed, any
non-controlling interest in the acquiree and the goodwill
acquired.  SFAS 141R also establishes disclosure requirements which
will enable users to evaluate the nature and financial effects of the business
combination.  Acquisition costs associated with the business
combination will generally be expensed as incurred.  SFAS 141R is
effective for business combinations occurring in the fiscal years beginning
after December 15, 2008, which will require the Company to adopt these
provisions for business combinations occurring in fiscal 2009 and
thereafter.
 
 In
January 2008, the SEC released SAB No. 110, which amends SAB No. 107 which
provided a simplified approach for estimating the expected term of a “plain
vanilla” option, which is required for application of the Black-Scholes option
pricing model (and other models) for valuing share options. At the time, the
Staff acknowledged that, for companies choosing not to rely on their own
historical option exercise data (i.e., because such data did not provide a
reasonable basis for estimating the term), information about exercise patterns
with respect to plain vanilla options granted by other companies might not be
available in the near term; accordingly, in SAB No. 107, the Staff permitted use
of a simplified approach for estimating the term of plain vanilla options
granted on or before December 31, 2007. The information concerning exercise
behavior that the Staff contemplated would be available by such date has not
materialized for many companies. Thus, in SAB No. 110, the Staff continues to
allow use of the simplified rule for estimating the expected term of plain
vanilla options until such time as the relevant data becomes widely available.
The Company does not expect its adoption of SAB No. 110 to have a material
impact on its financial position, results of operations or cash
flows.
 
 In March
2008, the FASB issued SFAS No. 161 “Disclosures about Derivative
Instruments and Hedging Activities—An Amendment of FASB Statement
No. 133.” (“SFAS161”).SFAS161 establishes the
disclosure requirements for derivative instruments and for hedging activities
with the intent to provide financial statement users with an enhanced
understanding of the entity’s use of derivative instruments, the accounting of
derivative instruments and related hedged items under Statement 133 and its
related interpretations, and the effects of these instruments on the entity’s
financial position, financial performance, and cash flows. This statement
is effective for financial statements issued for fiscal years beginning after
November 15, 2008. The Company does not expect its adoption of SFAS 161 to
have a material impact on its financial position, results of operations or cash
flows.
 
 In May
2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted
Accounting Principles” (SFAS 162”).  SFAS 162 identifies the sources
of accounting principles and the framework for selecting principles to be used
in the preparation of financial statements of nongovernmental entities that are
presented in conformity with generally accepted accounting principles in the
United States.  This statement is effective 60 days following the SEC’s
approval of the Public Company Accounting Oversight Board’s amendments to AU
section 411, The Meaning of Present Fairly in Conformity with Generally Accepted
Accounting Principles.  The Company is currently evaluating the impact of
SFAS 162, but does not expect the adoption of this pronouncement will have a
material impact on its financial position, results of operations or cash
flows.
 
 Other
accounting standards that have been issued or proposed by the FASB or other
standards-setting bodies that do not require adoption until a future date and
are not expected to have a material impact on the financial statements upon
adoption.
  19
 
 Other
accounting standards that have been issued or proposed by the FASB or other
standards-setting bodies that do not require adoption until a future date and
are not expected to have a material impact on the financial statements upon
adoption.
 
 
 Item
      7A.
              Quantitative and
      Qualitative Disclosures About Market
Risk
 
 Not
Applicable.
 
 Item
      8.
              Financial
      Statements.
 
 The
consolidated financial statements and supplementary data required by this item
are included in this annual report beginning on page F-1.
 
 Item
      9.
              Changes in and
      Disagreements with Accountants on Accounting and Financial
      Disclosure.
 
 We
dismissed Webb & Company, P.A. (“Webb”) as our principal accountant and we
appointed Berman & Company, P.A. (“Berman”) as our new independent
registered public accounting firm on May 13, 2008.  Webb’s report on
our financial statements for fiscal year 2007 did not contain an adverse opinion
or a disclaimer of opinion, nor was it qualified or modified as to uncertainty,
audit scope, or accounting principles, with the exception of a qualification
with respect to uncertainty as to our ability to continue as a going
concern.  The decision to change accountants was recommended and
approved by our Board of Directors.
 
 During
fiscal year 2007, and the subsequent interim period through May 13, 2008, there
were no disagreements with Webb on any matter of accounting principles or
practices, financial statement disclosures, or auditing scope or procedures,
which disagreement(s), if not resolved to the satisfaction of Webb, would have
caused them to made reference to the subject matter of the disagreement(s) in
connection with their report, nor were there any reportable events as defined in
Item 304(a)(1)(iv)(B) of Regulation S-K.
 
 We
engaged Berman as our new independent registered public accounting firm as of
May 13, 2008.  During fiscal year 2007, and the subsequent interim
period through May 13, 2008, we nor anyone on our behalf engaged Berman
regarding either the application of accounting principles to a specified
transaction, either completed or proposed, or the type of audit opinion that
might be rendered on our financial statements, or any matter that was either the
subject of a “disagreement” or a “reportable event,” both as such terms are
defined in Item 304 of Regulation S-K.
 
 Item
      9A(T).
              Controls and
      Procedures.
  (a) Evaluation of Disclosure Controls
and Procedures. The Company’s senior management is responsible for
establishing and maintaining a system of disclosure controls and procedures (as
defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act
of 1934 (the “Exchange Act”) that is designed to ensure that the information
required to be disclosed by the Company in the reports it files or submits under
the Exchange Act is recorded, processed, summarized and reported within the time
periods specified in the Securities and Exchange Commission’s rules and forms.
Disclosure controls and procedures include, without limitation, controls and
procedures designed to ensure that information required to be disclosed by an
issuer in the reports that it files or submits under the Exchange Act is
accumulated and communicated to the issuer’s management, including its principal
executive officer or officers and principal financial officer or officers, or
persons performing similar functions, as appropriate to allow timely decisions
regarding required disclosure.
  20
  The
Company has evaluated the effectiveness of the design and operation of its
disclosure controls and procedures under the supervision of and with the
participation of management, including the Chief Executive Officer and our
Acting Chief Financial Officer as of the end of the period covered by this
report. Based on that evaluation, our Chief Executive Officer and Acting Chief
Financial Officer have concluded that our disclosure controls and procedures are
not fully effective.  We have identified certain material weaknesses
in the Company’s ability to timely and accurately generate the needed
information to fully comply with its reporting requirements.  We have
recently begun reporting as a public company and are in the process of obtaining
the assistance needed to generate financial statements and reports to be filed
with the Securities and Exchange Commission which fully comply as to required
contents and which can be provided on a timely basis.  In addition,
the recent departure of our Chief Financial Officer has hampered this
effort.
  (b) Changes in Internal Control Over
Financial Reporting. Our management is responsible for establishing and
maintaining effective internal control over financial reporting as defined in
Rules 13a-15(f) and 15d-15(f) under the Exchange Act (“ICFR”). Our ICFR
should be designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with U.S. generally accepted accounting principles. The
failure to maintain effective ICFR could result in a deficiency or deficiencies
in internal controls such that there is a reasonable possibility that a material
misstatement of our annual or interim financial statements would not be
prevented or detected on a timely basis.
 
  The
Company’s predecessor, Perf-Go Green Holdings, Inc., was previously a shell
company with the objective to acquire an operating business. As such, it only
had to maintain internal and disclosure controls on a very limited number of
activities. On May 13, 2008, Perf-Go Green Holdings, Inc. acquired Perf-Go
Green, Inc., a privately held, development-stage company, in a transaction
accounted for as a reverse acquisition (the “Share Exchange”). Upon the
consummation of the Share Exchange, Perf-Go Green Holdings, Inc.’s former
internal controls and management were entirely supplanted by those of Perf-Go
Green, Inc.
  Our
current management acknowledges that they are responsible for establishing and
maintaining effective internal control over financial reporting for the Company.
Because of the abbreviated period of approximately ten months during which the
Company, operating as Perf-Go Green, Inc., was a reporting company during the
year ended March 31, 2009, management had not completed, as of March 31, 2009,
an assessment of the Company’s internal control over financial reporting under a
recognized control framework.   That assessment process is ongoing and
will be completed during the fiscal year ending March 31, 2010. Accordingly, the
Company will include management’s required and formal report on its assessment
of the effectiveness of the Company’s internal control over financial reporting
in its annual report for that period.
 21
 M anagement
has remediated and/or identified the following material weaknesses in the
Company’s ICFR set forth below during the period covered by this report.
Management has taken and continues to take steps required, in its opinion, to
correct these deficiencies .
  Financial
Statements for Perf-Go Green, Inc.
  The
financial statements of Perf-Go Green, Inc., a private company that we acquired
in a reverse acquisition in May 2008, included in our Form 8-K filing on May 16,
2008 have been restated for an accounting error. Such restatement arose due to
the failure to record the fair value of warrants issued with convertible
debentures as required by generally accepted accounting principles. As we
migrate our internal controls as described below, we retained a financial
reporting consultant in July 2008 to assist us with our financial and SEC
reporting.  In June 2008, we added a director with financial expertise
to our Board of Directors.  We also formed an audit committee of the
board of directors. It is through the addition of these resources and processes
that the accounting error was discovered and, as such, we consider this
particular weakness to be remediated.
 
 Management
believes that the material weaknesses as set forth below were the result of the
scale of our operations and are intrinsic to our small size. Management
continues to identify compensating controls that can be implemented to remediate
each identified weaknesses.  As applicable, management is also
implementing “preventive” controls through its financial reporting application.
Management believes these weaknesses did not have a material effect on our
financial results.
 
 Entity
Level Controls
 
 The
Company currently has insufficient resources (including a dedicated Chief
Financial Officer) and an insufficient level of monitoring and oversight, which
may restrict the Company’s ability to gather, analyze and report information, in
a timely manner, relative to the financial statements. There is insufficient
documentation and review of the selection and application of generally accepted
accounting principles to significant non-routine
transactions.  Management will develop, and communicate on a
company-wide basis, formal and written policies and procedures to address this
weakness.
 
 Functional
Controls and Segregation of Duties
 
 We have
ineffective controls relating to the recording of revenue.
 
 The
Company has limited resources to ensure sufficient functional controls that will
provide for accuracy, completeness and authorization of transactions
processed.  There is also inadequate segregation of duties that are
consistent with control objectives. Our management is composed of a handfull of
individuals resulting in a situation where limitations on segregation of duties
exist, a situation which is common in new and small
companies.  Management will continue to reassess this matter in the
following year to determine whether improvement in segregation of duties is
feasible.
 Financial
Statement Close Process
 
 The
Company currently has insufficient written policies and procedures for
accounting and financial reporting with respect to the requirements and
applications of US GAAP and SEC disclosure requirements of material non-standard
transactions, and a lack of formal process and timeline for closing the books
and records at the end of each reporting period.
 
 The
Company currently has an insufficient level of monitoring and oversight controls
for review and recording of stock issuances, agreements and contracts, including
insufficient documentation and review of the selection and application of
generally accepted accounting principles to significant non-routine
transactions.
 
 Remedial
Action
 
 We are
committed to improving our internal controls over financial
reporting.  As part of this commitment, we will hire a qualified chief
financial officer to oversee our accounting and financial reporting and internal
control functions.  We will evaluate the need to increase our
personnel resources and technical accounting expertise within the accounting
function. Until we have a qualified full-time Chief Financial Officer, we have
retained the services of qualified consultants to assist the Company in the
preparation of its financial statements and the satisfaction of its SEC
regulatory requirements.
 
 We will
continue to monitor and evaluate the effectiveness of our entity wide internal
controls and our internal controls over financial reporting. We are committed to
taking further action and implementing additional enhancements or improvements,
identifying compensating and automating controls through information
techonology, to ensure that objectives are achieved. We intend to take
appropriate and reasonable steps to make the necessary improvements to remediate
these deficiencies and others which we may identify during the fiscal year ended
March 31, 2010.
 
 This
annual report does not include an attestation report of our registered public
accounting firm regarding internal control over financial
reporting.  Management’s report was not subject to attestation by our
registered public accounting firm pursuant to temporary rules of the Securities
and Exchange Commission that permit the Company to provide only management’s
report herein.
  22
  (c)
CHANGES IN INTERNAL CONTROLS OVER FINANCIAL REPORTING.
 
 There
were no significant changes in our internal controls over financial reporting
that have materially affected, or are reasonably likely to materially affect,
our internal control over financial reporting for our fiscal year ended March
31, 2009.
 Item
      9B.
              Other
      Information.
 
 On July
14, 2009, the Board of Directors terminated Louis Guisto, the Chief Financial
Officer of the Company effective immediately.  Following Mr Guisto’s
departure, Michael Caridi, the Registrant’s Chief Operating Officer, will act as
interim Chief Financial Officer until a permanent Chief Financial Officer is
appointed.  Mr. Caridi’s background is described
herein.  Candidates for the permanent position are under review and
the Company expects to name a replacement after such review is
completed.
 PART
III
 
 Item
      10.
              Directors, Executive
      Officers, Promoters, Control Persons and Corporate Governance; Compliance
      with Section 16(a) of the Exchange
Act.
 
 Executive
Officers and Directors
 
 Our Board
of Directors currently consists of seven members, three of which have been
determined to be “independent” as defined by the rules of the Nasdaq Capital
Market.  These independent directors are David Bach, Robert Dubner and
Governor George E. Pataki.  The primary responsibilities of our Board
of Directors are to provide oversight, strategic guidance, counseling and
direction to out management.  At this time, we do not maintain a
separate compensation committee or nominating committee but we intend to form
such committees in the future.  All Directors of the Company hold
office until the next annual meeting of stockholders or until their successors
are elected and qualified.  Officers serve at the discretion of the
Board of Directors of the Company.  There are no family relationships
among any of the officers or directors.
 
 The
following table sets forth the names and ages of our directors and executive
officers and the positions they hold with us as of July 14, 2009.
 
 
 Name
              Age
              PositionAnthony
      Tracy
              48
              Chairman
      of the Board and Chief Executive OfficerMichael
      Caridi
              45
              Director
      and Chief Operating OfficerDavid
      Bach
              42
              DirectorCharles
      Gargano
              74
              Director
      and Senior Vice President of Governmental AffairsRobert
      Dubner
              66
              DirectorGov.
      George E. Pataki
              63
              DirectorLinda
      Daniels
              60
              Director,
      Chief Marketing Officer and SecretaryClaudio
      Barbosa
              48
              Controller
  23
  The
principal occupation and business experience of each of the directors and
executive officers are as follows:
 
 Anthony
Tracy has been our Chairman of the Board of Directors and Chief Executive
Officer since May 2008 and held the same positions with Perf-Go Green since
January 2008.  He is the Chief Executive Officer of Tracy Productions
since 1996 and Prime 9 LLC since 2006 and is an entrepreneur and designer of 15
patented products ranging from household products, exercise equipment, and
grooming products for men and women.
 
 Michael
Caridi has been a director (since April 2009) and Chief Operating Officer (since
May 2008) and held the same position with Perf-Go Green since January
2008.  He is currently or has been an executive officer of several
companies including MAJIC Development Group LLC since 2003, Protection Plus
Security Consultants, Inc. since 1993, Quest imports international since 1999
and Berkshire Financial Grip Inc.  His business endeavors span various
industries including residential construction and development, concrete
operations, interior/exterior and ground-up commercial construction for Fortune
500 corporations.  In addition, Michael is also engaged in a diverse
mix of independent business ventures including residential and commercial
property-management, management and banking, ship salvaging and dismantling,
hotel ownership and development, consulting and management, corporate janitorial
services, magazines publishing, and alcohol/non-alcoholic import and
export.  Mr. Caridi is also a licensed real estate
broker.  As head of MAJIC Development Group LLC, he has been involved
in several significant development projects, as well as construction for many
Fortune 500 clients and retailers.  Mr. Caridi also advises the Boards
of Directors of Isonics since 2005, Immune Regen since 2004 and Vysiys since
2006.
 
 Mr. Bach
has been a director since June 2008.  He has been the chief executive
officer of FinishRich Media, a corporation dedicated to revolutionizing how
people learn about money and the environment since
2005.  Mr. Bach has also been an executive officer of Finish
Rich, Inc. since 2002.  Mr. Bach was a senior vice president of Morgan
Stanley and a partner of The Bach Group which managed over a half billion
dollars during his tenure from 1993-2001.
 
 Mr.
Gargano has been a director and Senior Vice President of Governmental Affairs
since June 2008.  Mr. Gargano currently is a partner at Greenview
Realty Corporation.  Mr. Gargano served as Chairman of the Empire
State Development Corporation of New York State and Vice Chairman of the Port
Authority of New York and New Jersey from 1995-2007.
 
 Mr.
Dubner has been a director since July 2008.  He is presently an
independent consultant providing senior advisory services to companies including
Momentive, a silicon manufacturing company (since October 2007) and Noranda, a
company which manufactures aluminum castings (since march 2008).  Mr.
Dubner previously served as an independent consultant to Covalence, a company
which manufactures plastic packaging (from September 2006 until July
2007).  From October 2002 until December 2004, Mr. Dubner was a senior
partner with IBM, serving as one of the leaders of IBM’s middle market
consulting practice.  In addition, Mr. Dubner serves on the board of
directors of Hudson Highland Group, Inc., a temporary and permanent staffing
company (since March 2006).
 
 Governor
George E. Pataki has been a director since May 2008 and held the same positions
with Perf-Go Green since January 2008.  He has been of counsel to the
law firm of Chadbourne & Park since March 2007.   He is a
principal of Pataki Cahill Group, a consulting firm specializing in climate
change issues.  He is a director of Cosan Ltd.  Mr.
Pataki was Governor of New York from 1995 until 2006.
 
 Linda
Daniels has been our Chief Marketing Officer and Secretary since May 2008 and
held the same positions with Perf-Go Green since January 2008.  Ms.
Daniels was the Senior Account Director for Jack Morton Worldwide from 1992 to
2002.  She has 20 years of experience as a creative, strategic, global
marketing executive with exceptionally diverse experience in creating business
to business and business to consumer initiatives across many
industries.  She has worked with IBM, Xerox, NYSE, CNBC, MSNBC,
Citigroup, Smith Barney, Prudential Securities and The New York Clearing House
producing inventive, provocative, and engaging marketing strategies that succeed
in building their brand equity.  Ms. Daniels was President and Founder
of The Punch Factory from 2002-January, 2008, a marketing consultancy based in
Westport, CT.  She is also a director of Prime 9, LLC.
 
 Claudio
Barbosa has been our Controller since June 2009.  He is a CPA and has
an MBA from the Kellogg Graduate School of Management of Northwestern
University.  Prior to joining the Company, Mr. Barbosa worked in a
variety of practice areas, including consulting, advisory and assurance services
at KPMG.  Mr. Barbosa also worked in various publicly traded
companies, where he was involved in diverse senior roles in the finance and
accounting areas.
  24
 
 Involvement
in Certain Legal Proceedings
 
 In
accordance with a plea agreement entered into on May 15, 2006 in County Court,
Rockland County New York, Michael Caridi, our Chief Operating Officer and
Interim Chief Financial Officer, pled guilty to one misdemeanor count pertaining
to the filing of a false certification in connection with a violation of a
“prevailing wage” statute.   Mr. Caridi received a conditional
discharge by the Court.
 
 Audit
Committee
 
 The
members of the Audit Committee are Governor George E. Pataki, Robert Dubner and
David Bach.  Our Board of Directors has determined that Messrs.
Dubner, Pataki and Bach are “independent” under Rule 10A-3(b) of the Exchange
Act.
 
 Our Audit
Committee recommends our independent accountants for appointment to audit our
financial statements and to perform services related to the audit, reviews the
scope and results of the audit, reviews with management and the independent
accountants our annual and quarterly operating results, considers the adequacy
of the internal accounting procedures and controls, considers the effect of such
procedures and controls on the accountant’s independence.  During the
fiscal year ended March 31, 2009, the Audit Committee held four
meetings.
 
 Code
Of Ethics
 
 The
Company adopted a Code of Conduct and Ethics that applies to its employees,
senior management and Board of Directors, including the Chief Executive Officer
and Chief Financial Officer.  A copy of the Code of Conduct and Ethics
will be provided to any person without charge upon written request to our
address to the attention of the Secretary.
 
 Item
      11.
              Executive
      Compensation.
 
 Summary
Compensation Table
 
 The
following table sets forth the compensation of our chief executive officer and
chief financial officer and our “named executive officers,” for the fiscal years
ended March 31, 2008 and 2009.  The Company has no executive officers
other than the “named executive officers.”
 
 
 Name
      and
                principal
      position
              Year
              Salary
      ($)
              Bonus
              Option
                Awards
      ($)(1)
              All
      other Compensation
      (2)
              Total
      ($)Anthony
      Tracy, Chairman of the Board and Chief Executive Officer
              2009
                
                2008
              218,725
                
                45,066
              ______
                
                ______
              2,823,078
                
                ______
              12,000
                
                ______
              3,041,803Michael
      Caridi, Chief Operating Officer and Interim Chief Financial
      Officer
              2009
                
                2008
              180,000
                
                31,533
              ______
                
                ______
              3,975,738
                
                ______
              24,000
                
                ______
              4,155,738Linda
      Daniels, Chief Marketing Officer
              2009
                
                2008
              156,250
                
                31,270
              ______
                
                ______
              1,155,950
                
                ______
              ______
                
                ______
              1,312,200Charles
      Gargano, Senior Vice President of Governmental Affairs
              2009
                
                2008
              72,000
                
                ______
              ______
                
                ______
              462,380
                
                ______
              ______
                
                ______
              534,380
                
                ______
  (1)
              Amounts shown do not
      reflect compensation actually received by the named executive officers.
      Instead the amounts shown are the compensation costs recognized by the
      Company in fiscal 2009 pursuant to FAS
123-R.
  (2)
              Represent automobile
      allowances.
 
 25
  Outstanding
Equity Awards at March 31, 2009
 
 The
following table sets forth the outstanding equity awards held by our executive
officers as of March 31, 2009
  OPTION
      AWARDSName
              
              Number
      of Securities Underlying Unexercised Options Exercisable
      (#)
              
              Number
      of Securities Underlying Unexercised Options Unexercisable
      (#)
              
              Option
                Exercise
                Price ($)
              
              Option
                Expiration
                DateAnthony
      Tracy
              
              1,224,658
              
              275,342
              
              2.00
              
              June
      5, 2013Michael
      Caridi
              
              2,041,096
              
              458,904
              
              2.00
              
              June
      5, 2013Linda
      Daniels
              
              663,288
              
              36,712
              
              0.50-2.00
              
              June
      5, 2013Charles
      Gargano
              
              200,000
              
              -
              
              0.50
              
              June
      5, 2013
 
 2009
Director Compensation
 
 The
following table sets forth a summary of the compensation we paid to our
non-employee directors in 2009.
 
 Name
              
              Fees
      Earned or
                Paid in Cash
      ($)
              
              Option Awards ($)
      (1)
              
              All
      Other
                Compensation
      ($)
              
              Total
      ($)David
      Bach
              
              -
              
              1,421,903
              
              -
              
              1,421,903Robert
      Dubner
              
              -
              
              163,341
              
              -
              
              163,341Gov.
      George E. Pataki
              
              -
              
              2,311,900
              
              -
              
              2,311,900
 
 (1)
Amounts shown do not reflect compensation actually received by the named
director. Instead, the amounts shown are the compensation costs recognized by
the Company in fiscal 2009 for option awards as determined pursuant to FAS
123R.
 
 Item
      12.
              Security Ownership of
      Certain Beneficial Owners and Management and Related Stock Holder
      Matters.
 
 The
following table sets forth, as of July 14, 2009, information regarding the
beneficial ownership of our common stock by (a) each person who is known to us
to be the owner of more than five percent of our common stock, (b) each of our
directors, (c) each of the named executive officers, and (d) all directors and
executive officers and executive employees as a group.  For purposes
of the tab le, a
person or group of persons is deemed to have beneficial ownership of any shares
that such person has the right to acquire within 60 days of July 14,
2009.
  Name and Address of Beneficial Owner
      (1)
              
              Amount and Nature of Beneficial
      Ownership
              
              
              Percent of Class (%)Anthony
      Tracy
              
              
              14,092,606
              (2)
              
              
              39.42Michael
      Caridi
              
              
              5,435,372
              (3)
              
              
              14.79Robert
      Dubner
              
              
              200,000
              (4)
              
              
              0.58Charles
      Gargano
              
              
              200,000
              (5)
              
              
              0.58David
      Bach
              
              
              890,000
              (6)
              
              
              2.53Gov.
      George Pataki
              
              
              1,000,000
              (7)
              
              
              2.84Linda
      Daniels
              
              
              907,447
              (9)
              
              
              2.60Officers
      and Directors as a
      group (7 persons)
              
              
              23,145,425
              
              
              
              55.55
  26
  Name and Address of Beneficial Owner
      (1)
                    
                    Amount and Nature of Beneficial
      Ownership
                    
                    
                    Percent of Class (%)Rig
      Fund II A, Ltd.
                      40
      A. Route De Malagnon
                      Geneva,
      Switzerland 1208
                    
                    
                    9,000,000
                    (9)
                    
                    
                    22.36Semper
      Gestion SA
                      40
      A. Route De Malagnon
                      Geneva,
      Switzerland 1208
                    
                    
                    10,000,000
                    (10)
                    
                    
                    22.60Castlerigg
      Master Investments Ltd.
                      40
      W. 57th
      Street, 26th
      Floor
                      New
      York, NY  10019
                    
                    
                    16,666,667
                    (11)
                    
                    
                    32.76E&P
      Fund
                      40
      A. Route De Malagnon
                      Geneva,
      Switzerland 1208
                    
                    
                    3,000,000
                    (12)
                    
                    
                    8.27Bhansali
      Equities
                    
                    
                    3,333,333
                    (13)
                    
                    
                    4.68
 
 * Less
than 1% of the outstanding common stock or less than 1% of the voting
power.
  (1)
              The
      address for Messrs. Tracy, Caridi, Dubner, Gargano, Bach, Pataki, and Tran
      and Ms. Daniels is c/o Perf-Go Green Holdings, Inc., 12 East 52nd
      Street, 4th
      Floor, New York, New York  10022.  Beneficial
      ownership percentages gives effect to the completion of the Share
      Exchange, and are calculated based on shares of common stock issued and
      outstanding.  Beneficial ownership is determined in accordance
      with Rule 13d-3 of the Exchange Act.  The number of shares
      beneficially owned by a person includes shares of common stock underlying
      options or warrants held by that person that are currently exercisable or
      exercisable within 60 days of June 14, 2009.  The shares
      issuable pursuant to the exercise of those options or warrants are deemed
      outstanding for computing the percentage ownership of the person holding
      those options and warrants but are not deemed outstanding for the purposes
      of computing the percentage ownership of any other person.  The
      persons and entities named in the table have sole voting and sole
      investment power with respect to the shares set forth opposite that
      person’s name, subject to community property laws, where applicable,
      unless otherwise noted in the applicable
  footnote.
  (2)
              Includes
      options to purchase 1,500,000 shares of common stock of the Company to be
      issued at an exercise price of $2.00 per share vesting over a one year
      period under the 2008 Share Incentive Plan as approved by our Board of
      Directors on June 6, 2008.
  (3)
              Includes
      options to purchase 2,500,000 shares of common stock of the Company to be
      issued at an exercise price of $2.00 per share vesting over a one year
      period under the 2008 Share Incentive Plan as approved by our Board of
      Directors on June 6, 2008.
  (4)
              Includes
      options to purchase 200,000 shares of common stock of the Company at an
      exercise price of $1.95 per share under the 2008 Share Incentive
      Plan.  Does not include options to purchase 10,000 shares of
      common stock at fair market value vesting 18 months after the date of
      grant at each Board meeting Mr. Dubner attends during the next three
      years.  All of the aforesaid options will be granted pursuant to
      our 2008 Share Incentive Plan.
 
 (5)
              Includes
      options to purchase 200,000 shares of the Company’s common stock to be
      issued at an exercise price of $0.50 under the Registrant’s 2008 Share
      Incentive Plan as approved by our Board of Directors on June 6,
      2008.
 
 (6)
              Includes
      options to purchase 650,000 shares of common stock of the Company to be
      issued at an exercise price of $1.81 per share under the 2008 Share
      Incentive Plan as approved by our Board of Directors on June 6, 2008 and
      includes options to purchase 240,000 shares of common stock of the Company
      to be issued at an exercise price of $1.00 per share under the 2008 Share
      Incentive Plan as approved by our Board of Directors on June 6,
      2008.
 
 (7)
              Includes
      options to purchase 1,000,000 shares of common stock to be issued at an
      exercise price of $0.50 per share pursuant to our 2008 Share Incentive
      Plan approved by our Board of Directors on June 6,
  2008.
  (8)
              Includes
      options to purchase 500,0000 shares of common stock of the Company to be
      issued at an exercise price of $0.50 per share under the 2008 Share
      Incentive Plan and options to purchase 200,000 shares to be issued at an
      exercise price of $2.00 per share pursuant to our 2008 Share Incentive
      Plan approved by our Board of Directors on June 6,
  2008.
 
 (9)
              Includes
      6,000,000 shares issuable upon exercise of the 2007 Warrants and 3,000,000
      shares of Common Stock held by Rig.
  (10)
                Includes
      3,000,000 shares of our common stock issuable upon conversion of the Notes
      and 7,000,000 shares issuable upon the exercise of the Pipe Warrants
      beneficially owned by Semper and shares issuable as interest on the Notes
      due within the next 60 days.
  (11)
              Includes
      40,000 shares of common stock, 4,960,000 shares of our common stock
      issuable upon conversion of the Notes and 11,666,667 shares issuable upon
      exercise of the Pipe Warrants beneficially owned by Castlerigg Master
      Investments Ltd.
  (12)
              Includes
      2,000,000 shares issuable upon the exercise of the 2007 Warrants and
      1,000,000 shares of our common stock held by
  E&P.
  (13)
              Includes
      1,000,000 shares issuable upon conversion of the Notes and 2,333,333
      shares issuable upon exercise of the
Warrants.
  27
  Item
      13.
                Certain Relationships
      and Related Transactions, and Director
  Independence.
 
 On April
1, 2009, the Company agreed to issue Joseph Tracy, brother of our chief
financial officer and director, 75,000 shares of the Company’s common stock at a
price per share of $0.50 under the Company’s 2008 Share Incentive Plan, subject
to the approval of the Board of Directors.
 
 Item
      14.
                Principal Accountant
      Fees and Services.
 
 The
following presents fees for professional audit services rendered by Berman &
Company, P.A., for the audit of our financial statements for the years ended
March 31, 2009 and March 31, 2008.
  Audit
Fees
 
 The
aggregate fees billed by Berman & Company, P.A for the annual audit of the
Company, quarterly interim reviews of financial statements including the
Company's reports on Form 10-Q and services normally provided by them in
connection with statutory and regulatory filings, including the Company's
registration statement for fiscal years 2009 and 2008, were $115,834 and $0,
respectively.
 Audit-
Related Fees
 
 We did
not incur any audit-related fees in 2009 or 2008.
 
 Tax
Fees
 
 We did
not incur any tax fees in 2009 or 2008.
 
 All
Other Fees
 
 We did
not incur any other fees in 2009 or 2008.
  Audit
Committee Approval
 
 The
engagement of the Company’s independent registered public accounting firm is
pre-approved by the Company’s Audit Committee. The Audit Committee pre-approves
all fees billed and all services rendered by the Company’s independent
registered public accounting firm.
  28
 
  Item 15.
              Exhibits.
 
 Exhibit
              Description3.1
              Certificate
      of Incorporation is incorporated by reference to Form SB-2 filed on March
      5, 2007. Amendment to Certificate of Incorporation is incorporated by
      reference to Current Report on Form 8-K filed December 21,
      2007.   Amendment to Certificate of Incorporation is
      incorporated by reference to Current Report on Form 8-K filed January 7,
      2007.  Amendment to Certificate of Incorporation is incorporated
      by reference to Current Report on Form 8-K filed June 12,
      2008.3.2
              Bylaws
      incorporated by reference to Form SB-2 filed on March 5,
      2007.  Amendment to Bylaws is incorporated by reference to
      Current Report on Form 8-K filed May 16, 2008.4.1
              Form
      of 10% Secured Convertible Debenture issued to certain investors
      incorporated by reference to Current Report on Form 8-K filed June 17,
      2008.4.3
              Form
      of Warrant issued to Selling Stockholders incorporated by reference to
      Current Report on Form 8-K filed June 17, 2008.4.3
              Form
      of Security Agreement issued to certain investors incorporated by
      reference to Current Report on Form 8-K filed June 17,
    2008.4.4
              Form
      of Registration Rights Agreement issued to certain investors incorporated
      by reference to Current Report on Form 8-K filed June 17,
      2008.10.1
              Form
      of Subscription Agreement by and between the Company and certain investors
      incorporated by reference to Current Report on Form 8-K filed December 28,
      2007.10.2
              Form
      of Subscription Agreement by and between the Company and certain investors
      incorporated by reference to Current Report on Form 8-K filed May 16,
      2008.10.3
              Form
      of Subscription Agreement dated June 10, 2008, by and between the Company
      and a certain Selling Stockholder incorporated by reference to Current
      Report on Form 8-K filed June 17, 2008.10.4
              Share
      Exchange Agreement by and among the Company, Perf-Go Green, Inc. and the
      stockholders of Perf-Go Green, Inc. incorporated by reference to Current
      Report on Form 8-K filed May 16, 2008.10.5
              Employment
      Agreement between the Company and Anthony Tracy incorporated by reference
      to Current Report on Form 8-K filed May 16, 2008.10.6
              Employment
      Agreement between the Company and Michael Caridi incorporated by reference
      to Current Report on Form 8-K filed May 16, 2008.10.7
              Employment
      Agreement between the Company and Linda Daniels incorporated by reference
      to Current Report on Form 8-K filed May 16, 2008.10.8
              Consulting
      Services Agreement between the Company and Charles Gargano incorporated by
      reference to Amendment No. 1 to Registration Statement on Form S-1 filed
      on September 25, 2008.10.9
              Exclusive
      Manufacturing Agreement between the Company and Spectrum Plastics
      incorporated by reference to Amendment No. 1 to Registration Statement on
      Form S-1 filed on September 25, 2008.10.10
              Office
      lease by and between Dryland 52, LLC and the Registrant dated October 1,
      2008 incorporated by reference to Registrant’s Quarterly Report on Form
      10-Q filed on November 14, 2008.10.11
              Supply
      Agreement between Registrant and Star Funding, Inc. filed
      herein.10.12
              Factoring
      Agreement between Registrant and Star Funding, Inc. filed
      herein.10.13
              Security
      Agreement between Registrant and Star Funding, Inc. filed
      herein.
  29
   Exhibit
              Description
 10.14
              Security
      Agreement between Perf-Go Green, Inc. and Star Funding, Inc. filed
      herein.10.15
              Subordination
      Agreement between the Registrant, Star Funding, Inc. and the holders of
      the Company’s promissory notes filed herein.10.16
              Warrant
      to purchase common stock issued to Star Funding, Inc. filed
      herein.10.17
              Distributor/Blenders
      Agreement between the Registrant and Inventek Colloidal Cleaners, Inc.
      filed herein.16
              Letter
      regarding change in certifying account incorporated by reference to
      Current Report on Form 8-K filed May 21, 2008.23.1
              Consent
      of Berman & Company, P.A. filed herein.31.3
              Rule
      13a-14(a)/15d-14(a) Certification of Chief Executive
    Officer.31.4
              Rule
      13a-14(a)/15d-14(a) Certification of Chief Financial
    Officer.32.1
              Section
      1350 Certification of Principal Executive Officer.32.2
              Section
      1350 Certification of Principal Financial Officer.
  30
   SIGNATURES
 
 In
accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
 
 
 PERF-GO
      GREEN HOLDINGS, INC.By:
      /s/ Michael
      CaridiMichael
      Caridi
                Acting
      Chief Financial Officer
                (Principal
      Financial and Accounting Officer)
 
 
 Pursuant
to the requirements of the Securities Act of 1933, this Annual Report on Form
10-K has been signed by the following persons in the capacities and on the dates
indicated.
  Signature
                                                                
                                                                Title
                                                                
                                                                Date/s/ Anthony Tracy
                                                                
                                                                Chairman
      of the Board and Chief ExecutiveOfficer
      and Director (Principal Officer)
                                                                
                                                                July
      14, 2009Anthony
      Tracy/s/ Michael Caridi
                                                                
                                                                Acting
      Chief Financial Officer, Chief Operating Officer and
      Director
                                                                
                                                                July
      14, 2009Michael
      CaridiDirector
                                                                
                                                                July
      14, 2009David
      BachDirector
                                                                
                                                                July
      14, 2009Charles
      GarganoDirector
                                                                
                                                                July
      14, 2009Robert
      DubnerDirector
                                                                
                                                                July
      14, 2009George
      E. Pataki/s/ Linda Daniels
                                                                
                                                                Director,
      Chief Marketing Officer and Secretary
                                                                
                                                                July
      14, 2009Linda
      Daniels
  31
  PERF-GO
GREEN HOLDINGS, INC. AND SUBSIDIARY


FINANCIAL
STATEMENTS


MARCH
31, 2009 (CONSOLIDATED) AND 2008


Page(s)


Report
      of Independent Registered Public Accounting Firm
            1Balance
      Sheets as of March 31, 2009 (Consolidated) and 2008
            2Statements
      of Operations for the Year Ended March 31, 2009
    (Consolidated)and
      for the Period from November 15, 2007 (inception) to March 31,
      2008
            3Statement
      of Changes in Stockholders’ Equity (Deficit) for the Year
      EndedMarch
      31, 2009 (Consolidated) and for the Period fromNovember
      15, 2007 (inception) to March 31, 2008
            4Statements
      of Cash Flows for the Year Ended March 31, 2009
    (Consolidated)and
      for the Period from November 15, 2007 (inception) to March 31,
      2008
            5Notes
      to the Financial Statements for the Years EndedMarch
      31, 2009 (Consolidated) and for the Period from November 15, 2007
      (inception) to March 31, 2008
            6-33









REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





To the
Board of Directors and Stockholders of:


Perf-Go
Green Holdings, Inc.





We have
audited the accompanying balance sheets of Perf-Go Green Holdings, Inc. and
Subsidiary as of March 31, 2009 (Consolidated) and 2008, and the related
statements of operations, changes in stockholders' equity (deficit) and cash
flows for the year ended March 31, 2009 and for the period from November 15,
2007 (inception) to March 31, 2008.  These financial statements are
the responsibility of the Company's management.  Our responsibility is
to express an opinion on these financial statements based on our
audits.





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





In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Perf-Go Green Holdings, Inc. and
Subsidiary as of March 31, 2009 (Consolidated) and 2008, and the results of its
operations and its cash flows for the years ended March 31, 2009 (Consolidated)
and for the period from November 15, 2007 (inception) to March 31, 2008, in
conformity with accounting principles generally accepted in the United States of
America.





T he
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern.  As discussed in Note 3 to the
financial statements, the Company has a net loss of $32,876,813 and net cash
used in operations of $7,359,939 for the year ended March 31, 2009; and has a
working capital deficit of $15,345,579 and a stockholders’ deficit of
$13,925,803. These factors raise substantial doubt about the Company’s ability
to continue as a going concern.  Management’s plan in regards to these
matters is also described in Note 3.  The financial statements do not
include any adjustments that might result from the outcome of this
uncertainty .





/s/
Berman & Company, P.A.








Boca
Raton, Florida


July 13,
2009
  1




Perf-Go Green Holdings, Inc. and Subsidiary
 Balance
Sheets
 
 March 31, 2009
                      
                      
                      March 31, 2008(Consolidated)AssetsCurrent
      Assets:Cash
      and cash equivalents
                      
                      $
                      —
                      
                      
                      $
                      270,185Accounts
      receivable - net
                      
                      
                      481,614
                      
                      
                      
                      —Due
      from factor
                      
                      
                      92,106Deposits
                      
                      
                      1,533,047
                      
                      
                      
                      —Prepaid
      and other current assets
                      
                      
                      61,328
                      
                      
                      
                      32,615Total
      Current Assets
                      
                      
                      2,168,095
                      
                      
                      
                      302,800Debt
      issue costs - net
                      
                      
                      1,272,971
                      
                      
                      
                      —Equipment
      - net
                      
                      
                      285,397
                      
                      
                      
                      2,460Total
      Assets
                      
                      $
                      3,726,463
                      
                      
                      $
                      305,260Liabilities and
      Stockholders' (Deficit) EquityCurrent
      Liabilities:Cash
      overdraft
                      
                      $
                      67,811
                      
                      
                      $
                      —Accounts
      payable
                      
                      
                      964,836
                      
                      
                      
                      199,645Accrued
      expenses
                      
                      
                      84,668
                      
                      
                      
                      55,270Deferred
      revenue
                      
                      
                      22,050
                      
                      
                      
                      —Derivative
      liabilities
                      
                      
                      15,381,809
                      
                      
                      
                      —Registration
      rights liability
                      
                      
                      892,500
                      
                      
                      
                      —Common
      stock payable
                      
                      
                      100,000
                      
                      
                      
                      —Total
      Current Liabilities
                      
                      
                      17,573,674
                      
                      
                      
                      254,915Long
      Term LiabilitiesConvertible
      debt - net
                      
                      
                      138,592
                      
                      
                      
                      —Total
      Liabilities
                      
                      
                      17,652,266
                      
                      
                      
                      254,915Commitments
      and ContingenciesStockholders'
      (Deficit) Equity:Preferred
      stock, ($0.0001 par value, 5,000,000 shares authorized,none
      issued and outstanding)
                      
                      
                      —Common
      stock, ($0.0001 par value, 250,000,000 shares authorized,34,265,368
      and 11,200,005 shares issued and outstanding)
                      
                      
                      3,427
                      
                      
                      
                      1,120Additional
      paid in capital
                      
                      
                      20,372,598
                      
                      
                      
                      1,474,240Accumulated
      deficit
                      
                      
                      (34,301,828
                      )
                      
                      
                      (1,425,015
                      )Total
      Stockholders' (Deficit) Equity
                      
                      
                      (13,925,803
                      )
                      
                      
                      50,345Total
      Liabilities and Stockholders' (Deficit) Equity
                      
                      $
                      3,726,463
                      
                      
                      $
                      305,260
 See
accompanying notes to financial statements
  2
  Perf-Go
Green Holdings, Inc. and Subsidiary
 Statements of
Operations
 
 For
      the Period fromFor
      the Year Ended
                  
                  
                  November
      15, 2007 (inception) toMarch
      31, 2009
                  
                  
                  March
      31, 2008(Consolidated)Sales
                  
                  $
                  1,743,340
                  
                  
                  $
                  —Cost
      of sales
                  
                  
                  1,219,683
                  
                  
                  
                  —Gross
      profit
                  
                  
                  523,657
                  
                  
                  
                  —General
      and administrative
                  
                  
                  22,734,129
                  
                  
                  
                  627,025Loss
      from operations
                  
                  
                  (22,222,472
                  )
                  
                  
                  (627,025
                  )Other
      income (expense)Derivative
      liabilities expense
                  
                  
                  (27,980,162
                  )
                  
                  
                  —Change
      in fair value of derivative liabilities
                  
                  
                  26,217,330
                  
                  
                  
                  —Registration
      rights damages
                  
                  
                  (892,500
                  )
                  
                  
                  —Amortization
      of debt discount
                  
                  
                  (2,234,441
                  )
                  
                  
                  —Amortization
      of debt issue costs
                  
                  
                  (715,296
                  )
                  
                  
                  —Loss
      on extinguisment of debt due to repricing
                  
                  
                  (4,578,112
                  )
                  
                  
                  —Interest
      expense
                  
                  
                  (521,200
                  )
                  
                  
                  (798,381
                  )Interest
      income
                  
                  
                  38,040
                  
                  
                  
                  391Total
      other income (expense)
                  
                  
                  (10,666,341
                  )
                  
                  
                  (797,990
                  )Net
      loss
                  
                  $
                  (32,876,813
                  )
                  
                  $
                  (1,425,015
                  )Net
      loss per share - basic and diluted
                  
                  $
                  (0.99
                  )
                  
                  $
                  (0.05
                  )Weighted
      average number of shares outstandingduring
      the period - basic and diluted
                  
                  
                  33,344,841
                  
                  
                  
                  29,664,000
 See accompanying notes to
financial statements
  3
  Perf-Go
Green Holdings, Inc. and Subsidiary
 Statement
of Changes in Stockholders' Equity (Deficit)
 For the Year Ended March 31,
2009 (Consolidated) and for the Period from November 15, 2007 (inception) to
March 31, 2008
 
 Common
      Stock
                  
                  
                  Additional
                  
                  
                  AccumulatedShares
                  
                  
                  Amount
                  
                  
                  Paid
      -in Capital
                  
                  
                  Deficit
                  
                  
                  TotalContributed
      capital - related party
                  
                  
                  —
                  
                  
                  $
                  —
                  
                  
                  $
                  100
                  
                  
                  $
                  —
                  
                  
                  $
                  100Common
      stock issued for compensation
                  
                  
                  10,360,798
                  
                  
                  
                  1,036
                  
                  
                  
                  844
                  
                  
                  
                  —
                  
                  
                  
                  1,880Conversion
      of bridge notes to stock
                  
                  
                  839,207
                  
                  
                  
                  84
                  
                  
                  
                  761,299
                  
                  
                  
                  —
                  
                  
                  
                  761,383Warrants
      paid as direct offering costs in connection with debt
      financing
                  
                  
                  —
                  
                  
                  
                  —
                  
                  
                  
                  711,997
                  
                  
                  
                  —
                  
                  
                  
                  711,997Net
      Loss, period from November 15, 2007 (inception) to March 31,
      2008
                  
                  
                  —
                  
                  
                  
                  —
                  
                  
                  
                  —
                  
                  
                  
                  (1,425,015
                  )
                  
                  
                  (1,425,015
                  )Balance,
      March 31, 2008
                  
                  
                  11,200,005
                  
                  
                  
                  1,120
                  
                  
                  
                  1,474,240
                  
                  
                  
                  (1,425,015
                  )
                  
                  
                  50,345Issuance
      of shares in reverse acquisition treated as a
    recapitalization
                  
                  
                  21,079,466
                  
                  
                  
                  2,108
                  
                  
                  
                  2,047,440
                  
                  
                  
                  —
                  
                  
                  
                  2,049,548In-kind
      contribution in connection with recapitalization
                  
                  
                  —
                  
                  
                  
                  —
                  
                  
                  
                  51,088
                  
                  
                  
                  —
                  
                  
                  
                  51,088Cash
      paid as direct offering costs in connection with debt
      financing
                  
                  
                  —
                  
                  
                  
                  —
                  
                  
                  
                  (210,000
                  )
                  
                  
                  —
                  
                  
                  
                  (210,000
                  )Warrants
      paid as direct offering costs in connection with debt
      financing
                  
                  
                  —
                  
                  
                  
                  —
                  
                  
                  
                  (480,246
                  )
                  
                  
                  —
                  
                  
                  
                  (480,246
                  )Debt
      converted to equity
                  
                  
                  1,046,703
                  
                  
                  
                  105
                  
                  
                  
                  759,424
                  
                  
                  
                  —
                  
                  
                  
                  759,529Stock
      issued as compensation
                  
                  
                  10,000
                  
                  
                  
                  1
                  
                  
                  
                  25,699
                  
                  
                  
                  —
                  
                  
                  
                  25,700Stock
      issued for consulting
                  
                  
                  929,194
                  
                  
                  
                  93
                  
                  
                  
                  2,288,699
                  
                  
                  
                  —
                  
                  
                  
                  2,288,792Recognition
      of stock based consulting
                  
                  
                  —
                  
                  
                  
                  —
                  
                  
                  
                  856,483
                  
                  
                  
                  —
                  
                  
                  
                  856,483Recognition
      of stock based compensation
                  
                  
                  —
                  
                  
                  
                  —
                  
                  
                  
                  13,148,682
                  
                  
                  
                  —
                  
                  
                  
                  13,148,682Reclassification
      of derivative liability at fair value in connection with conversion of
      convertible debt
                  
                  
                  —
                  
                  
                  
                  —
                  
                  
                  
                  363,953
                  
                  
                  
                  —
                  
                  
                  
                  363,953Ratchet
      warrant expense
                  
                  
                  —
                  
                  
                  
                  —
                  
                  
                  
                  47,136
                  
                  
                  
                  —
                  
                  
                  
                  47,136Net
      Loss - 2009
                  
                  
                  —
                  
                  
                  
                  —
                  
                  
                  
                  —
                  
                  
                  
                  (32,876,813
                  )
                  
                  
                  (32,876,813
                  )Balance,
      March 31, 2009
                  
                  
                  34,265,368
                  
                  
                  $
                  3,427
                  
                  
                  $
                  20,372,598
                  
                  
                  $
                  (34,301,828
                  )
                  
                  $
                  (13,925,803
                  )
 4
  Perf-Go
Green Holdings, Inc. and Subsidiary
 Consolidated Statements of
Cash Flows
 
 For
      the Period fromFor
      the Year Ended
                        
                        
                        November
      15, 2007 (inception) toMarch 31, 2009
                        
                        
                        March 31, 2008CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      loss
                        
                        $
                        (32,876,813
                        )
                        
                        $
                        (1,425,015
                        )Adjustments
      to reconcile net loss to net cash used in operating
      activities:Amortization
      of debt issue costs
                        
                        
                        715,296
                        
                        
                        
                        75,000Amortization
      of debt discount
                        
                        
                        2,234,441
                        
                        
                        
                        —Loss
      on extingusihment of debt
                        
                        
                        4,578,112
                        
                        
                        
                        —Depreciation
                        
                        
                        40,756
                        
                        
                        
                        85Derivative
      expenses - at commitment date
                        
                        
                        27,980,162
                        
                        
                        
                        —Change
      in fair value remeasurement - embedded conversion option and
      warrants
                        
                        
                        (26,217,330
                        )
                        
                        
                        —Warrants
      issued as compensation in connection with convertible debt
      funding
                        
                        
                        244,985
                        
                        
                        
                        711,997Stock
      issued for compensation
                        
                        
                        25,700
                        
                        
                        
                        1,880Stock
      issued for consulting
                        
                        
                        2,288,792
                        
                        
                        
                        —Stock
      issued for compensation - consultants
                        
                        
                        856,483
                        
                        
                        
                        —Stock
      issued for consulting - employees
                        
                        
                        13,148,682
                        
                        
                        
                        —Ratchet
      warrant expense
                        
                        
                        47,136
                        
                        
                        
                        —Changes
      in Operating Assets and Liabilities:(Increase)
      Decrease in:Accounts
      receivable
                        
                        
                        (481,614
                        )
                        
                        
                        —Due
      from factor
                        
                        
                        (92,106
                        )
                        
                        
                        —Prepaids
      and other current assets
                        
                        
                        (28,713
                        )
                        
                        
                        (32,615
                        )Product
      deposit
                        
                        
                        (1,533,047
                        )
                        
                        
                        —Increase
      (Decrease) in:Accounts
      payable
                        
                        
                        765,191
                        
                        
                        
                        199,645Accrued
      expenses
                        
                        
                        29,398
                        
                        
                        
                        66,653Deferred
      revenue
                        
                        
                        22,050
                        
                        
                        
                        —Registration
      rights payable
                        
                        
                        892,500
                        
                        
                        
                        —Net
      Cash Used In Operating Activities
                        
                        
                        (7,359,939
                        )
                        
                        
                        (402,370
                        )CASH
      FLOWS FROM INVESTING ACTIVITIES:Cash
      acquired in reverse acquisition with Esys
                        
                        
                        2,100,636
                        
                        
                        
                        —Cash
      paid to acquire equipment
                        
                        
                        (323,693
                        )
                        
                        
                        (2,545
                        )Net
      Cash Provided By (Used In) Investing Activities
                        
                        
                        1,776,943
                        
                        
                        
                        (2,545
                        )CASH
      FLOWS FROM FINANCING ACTIVITIES:Contributed
      capital - related party
                        
                        
                        —
                        
                        
                        
                        100Proceeds
      from sale of convertible debt
                        
                        
                        5,950,000
                        
                        
                        
                        750,000Proceeds
      from common stock payable
                        
                        
                        100,000
                        
                        
                        
                        —Cash
      overdraft
                        
                        
                        67,811
                        
                        
                        
                        —Cash
      paid as offering costs for debt and equity based financing
                        
                        
                        (805,000
                        )
                        
                        
                        (75,000
                        )Net
      Cash Provided By Financing Activities
                        
                        
                        5,312,811
                        
                        
                        
                        675,100Net
      Increase (Decrease) in Cash and Cash Equivalents
                        
                        
                        (270,185
                        )
                        
                        
                        270,185Cash
      and Cash Equivalents - Beginning of Period
                        
                        
                        270,185
                        
                        
                        
                        —Cash
      and Cash Equivalents - End of Period
                        
                        $
                        —
                        
                        
                        $
                        270,185SUPPLEMENTARY CASH
      FLOW INFORMATION:Cash
      Paid During the Year/Period for:Income
      taxes
                        
                        $
                        —
                        
                        
                        $
                        —Interest
                        
                        $
                        582,523
                        
                        
                        $
                        —SUPPLEMENTARY
      DISCLOSURE OF NON-CASH INVESTING AND FINANCING
      ACTIVITIES:Derivative
      liabilities recorded at commitment date in conneciton with issuance of
      convertible debt with warrants
                        
                        $
                        5,950,000
                        
                        
                        $
                        —Derivative
      liability recorded in connection with placement agent warrants and debt
      & equity financing
                        
                        $
                        1,873,513
                        
                        
                        $
                        —Conversion
      of debt and accrued interest to common stock
                        
                        $
                        759,529
                        
                        
                        $
                        761,383Reclassification
      of derivative liability to additional paid in capital in connection
      with conversion of debt to common stock
                        
                        $
                        363,953
                        
                        
                        $
                        —Debt
      discount and derivative liability recorded in connection with issuance of
      warrants to placement agent
                        
                        $
                        1,336,320
                        
                        
                        $
                        —
 See accompanying notes to
financial statements
 5
   Perf-Go
Green Holdings, Inc. and Subsidiary
 Notes
to Consolidated Financial Statements
 For
the Year Ended March 31, 2009 and for the Period from
 November 15, 2007
(inception) to March 31, 2008





Note 1 Organization and
Nature of Operations




Perf-Go
Green Holdings, Inc., (“Holdings”) formerly known as ESYS Holdings, Inc.
(“ESYS”) and La Solucion, Inc., (the “Company”) was incorporated in Delaware in
April 2005. Its business was originally intended to provide assistance to the
non-English speaking Hispanic population in building and maintaining a life in
North Carolina but it did not establish operations in connection with its
business plan.




On May
13, 2008, Holdings, a then public shell corporation, in a share exchange
transaction with the stockholders of Perf-Go Green, Inc. (“Perf-Go Green”), a
privately-owned Delaware corporation pursuant to which Holdings
acquired all of the outstanding shares of common stock of Perf-Go Green. Perf-Go
Green was originally incorporated as a limited liability company on November 15,
2007 and converted to a “C” corporation on January 7, 2008. Upon the
consummation of the transaction, Perf-Go Green became a wholly-owned subsidiary
of Holdings.





Perf-Go
Green became the surviving corporation, in a transaction treated as a reverse
acquisition. Holdings did not have any operations and majority-voting control
was transferred to Perf-Go Green.  The transaction also requires a
recapitalization of Perf-Go Green.





Since
Perf-Go Green acquired a controlling voting interest, it was deemed the
accounting acquirer, while Holdings was deemed the legal acquirer. The
historical financial statements of the Company are those of Perf-Go Green, and
of the consolidated entities from the date of merger and
subsequent.





Since the
transaction is considered a reverse acquisition and recapitalization, the
guidance in SFAS No. 141 does not apply for purposes of presenting
pro-forma financial information.





Pursuant
to the merger, Holdings issued 21,079,466 shares of common stock to Perf-Go
Green in exchange for Perf-Go Green’s 20,322,767 shares outstanding (1.03:1
exchange ratio).  Upon the closing of the reverse acquisition, Perf-Go
Green and its stockholders held 65% of the issued and outstanding shares of
common stock. The remaining 11,200,004 shares of Holdings commons stock was a
deemed issuance to the former shareholders of Holdings.





T he
Company is focused on the development and global marketing of eco-friendly,
non-toxic, food contact compliant, biodegradable plastic products. The Company’s
biodegradable plastic products offer a practical and viable solution for
reducing plastic waste from the environment. The Company believes that its
plastic products will break down in landfill environments within twelve (12) to
twenty four (24) months, leaving no visible or toxic residue. The Company’s
activities have included capital raising to support its business plan,
recruiting board and management personnel, establishing sources of supply and
customer relationships. During the year ended March 31, 2009, the Company
commenced principal operations with the initiation of significant revenues and
exited the development stage .




6




Perf-Go
Green Holdings, Inc. and Subsidiary
 Notes
to Consolidated Financial Statements
 For
the Year Ended March 31, 2009 and for the Period from
 November 15, 2007
(inception) to March 31, 2008


Note 2 Summary of
Significant Accounting Policies




Principles
of consolidation




All
significant intercompany accounts and transactions have been eliminated in
consolidation.




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 revenue and expenses during
the reporting period. Actual results could differ from those
estimates.




Significant
estimates in 2009 included the valuation of stock issued for compensation and
services, stock based compensation arrangements with employees and third
parties, warrants issued as compensation, fair value of derivative financial
instruments, estimated useful life of equipment, and a 100% valuation allowance
for deferred taxes due to the Company’s continuing and expected future
losses.




Risks
and uncertainties





The
Company operates in an industry that is subject to intense competition and
change in consumer demand. The Company's operations are subject to significant
risk and uncertainties including financial and operational risks including the
potential risk of business failure.





The
Company has experienced, and in the future expects to continue to experience,
variability in sales and earnings. The factors expected to contribute to this
variability include, among others, (i) the cyclical nature of the
industries we sell and cater to, (ii) general economic conditions in the
various local markets in which the Company competes, including the general
downturn in the economy over the past year, and (iii) the volatility of
prices  pertaining to our vendors and suppliers. These factors, among
others, make it difficult to project the Company’s operating results on a
consistent basis.





Cash
and cash equivalents





The
Company considers all highly liquid instruments purchased with a maturity of
three months or less to be cash equivalents.  There were no cash
equivalents at March 31, 2009 and 2008, respectively.




The
Company minimizes its credit risk associated with cash by periodically
evaluating the credit quality of its primary financial institution. The balance
at times may exceed federally insured limits. At March 31, 2009 and 2008, the
balance exceeding the insured limits were $0 and approximately $185,000,
respectively.




7


Perf-Go
Green Holdings, Inc. and Subsidiary
 Notes
to Consolidated Financial Statements
 For
the Year Ended March 31, 2009 and for the Period from
 November 15, 2007
(inception) to March 31, 2008




Accounts
Receivable and Allowance for Doubtful Accounts




Accounts
receivable represents trade obligations from customers that are subject to
normal trade collection terms. The Company periodically evaluates the
collectability of its accounts receivable and considers the need to adjust an
allowance for doubtful accounts based upon historical collection experience and
specific customer information. Actual amounts could vary from the recorded
estimates.





At March
31 2009 and 2008, the Company recorded an allowance for doubtful accounts
receivable of $4,033 and $0, respectively.





Due
from Factor





On March
20, 2009, the Company entered into an agreement with a factor, who will provide,
on a discretionary basis, a combined credit facility of $10 million for purchase
order financing and factoring.  Under the agreement, the Company
agreed to pay the factor a commission of 1.0% to 1.5% of the gross amount of
each receivable.  In addition, the Company agreed that the factor will
receive a minimum of $100,000 in commissions in the first 12
months.  As collateral for the Company’s obligations under this
agreement, the Company has granted the factor a security interest in all of the
company’s assets.  The factor advances 80% of the factored receivables
and pays a percentage of the 20% when the factored receivable is
collected.
 
 Deposits
 
 The
manufacturing of our biodegradable plastic products is outsourced to a sole
supplier (“supplier).  In order to secure initial product shipments
expected, we have deposits of $1,533,047 and $0 with the supplier at March 31,
2009 and 2008, respectively. In order to secure our full payment, the
supplier retains title and risk of loss to the related inventory until we
make final payment which occurs shortly before shipment to the customer. As
such, we do not currently carry inventory for any significant period of time and
had no inventory at March 31, 2009 and 2008, respectively.
 
 Long
Lived Assets
 
 In
accordance with Statement of Financial Statements SFAS No. 144, “Accounting for Impairment or Disposal of Long-Lived
Assets”, the Company carries long-lived assets at the lower of the
carrying amount or fair value. Impairment is evaluated by estimating future
undiscounted cash flows expected to result from the use of the asset and its
eventual disposition. If the sum of the expected undiscounted future cash flow
is less than the carrying amount of the assets, an impairment loss is
recognized. Fair value, for purposes of calculating impairment, is measured
based on estimated future cash flows, discounted at a market rate of interest.
At March 31, 2009 and 2008, the Company did not record any impairment
losses.
  8
  Perf-Go
Green Holdings, Inc. and Subsidiary
 Notes
to Consolidated Financial Statements
 For
the Year Ended March 31, 2009 and for the Period from
 November 15, 2007
(inception) to March 31, 2008


Equipment




E quipment
is stated at cost, less accumulated depreciation computed on a straight-line
basis over the estimated useful life, which is three to seven
years .




Debt
Discount and Debt Issue Costs





These
amounts are amortized over the life of the debt to interest
expense.





Fair
value of financial instruments





Statement
of Financial Accounting Standards No. 107, “Disclosures about Fair Value of
Financial Instruments,” requires disclosures of information about the
fair value of certain financial instruments for which it is practicable to
estimate the value.  For purpose of this disclosure, the fair value of
a financial instrument is the amount at which the instrument could be exchanged
in a current transaction between willing parties, other than in a forced sale or
liquidation.





The
carrying amount reported in the balance sheet for accounts receivable, due from
factor, deposits, prepaids, accounts payable and accrued expenses, deferred
revenues, and common stock payable approximates its fair market value based on
the short-term maturity of these instruments.





Derivative
Financial Instruments





SFAS No.
133, “Accounting for
Derivative Instruments and Hedging Activities,”requires bifurcation of
embedded derivative instruments such as conversion options and warrants, and
measurement of their fair value for accounting purposes. In determining the
appropriate fair value, the Company uses the Black-Scholes option-pricing model.
In assessing the convertible debt instruments, management first reviews the
guidance of EITF No.’s 98-5, 00-27 and 05-2 as well as SFAS No. 150 to determine
if the convertible debt host instrument is conventional convertible debt and
further if there is a beneficial conversion feature requiring measurement. If
the instrument is not considered conventional convertible debt, the Company will
continue its evaluation process of these instruments as derivative financial
instruments.




Once
determined, derivative liabilities are adjusted to reflect fair value at each
reporting period end, with any increase or decrease in the fair value being
recorded in results of operations as an adjustment to fair value of derivatives.
In addition, the fair value of freestanding derivative instruments such as
warrants, are also valued using the Black-Scholes option-pricing model. In
assessing the nature of a financial instrument as freestanding, the Company has
applied the guidance pursuant to EITF No.’s 00-19. Finally, the Company has
applied the related guidance in EITF No.’s 00-19-2 and 05-4 as well as SFAS No.
5 when determining the existence of liquidated damage provisions. At March 31,
2009, the Company had various derivative instruments.





9




Perf-Go
Green Holdings, Inc. and Subsidiary
 Notes
to Consolidated Financial Statements
 For
the Year Ended March 31, 2009 and for the Period from
 November 15, 2007
(inception) to March 31, 2008


Segment
information





The
Company follows Statement of Financial Accounting Standards No. 131, "Disclosures about Segments of an
Enterprise and Related Information."  During 2009 and 2008, the
Company only operated in one segment; therefore, segment information has not
been presented.





Revenue
recognition




The
Company follows the guidance of the Securities and Exchange Commission’s Staff
Accounting Bulletin No. 104 for revenue recognition. The Company records revenue
when the risks and rewards of ownership have transferred to customers which
generally occurs when products are shipped and all of the following have
occurred; (1) persuasive evidence of an arrangement exists, (2) product delivery
has occurred, (3) the sales price to the customer is fixed or determinable, and
(4) collectability is reasonably assured. In arriving at net sales, the Company
estimates the amount of deductions that are likely to be taken by customers and
adjusts that periodically based on historical experience.





The
Company records revenues upon shipment.





Cost
of Sales




Cost of
sales represents the purchase of the Company’s products.




Advertising





In
accordance with Accounting Standards Executive Committee Statement of Position
93-7, costs incurred for producing and communicating advertising for the Company
are charged to operations as incurred.
 
 Advertising
expense for the year ended March 31, 2009 and for the period November 15, 2007
(inception) to March 31, 2008 was $908,004 and $2,840,
respectively.
 10
  Perf-Go
Green Holdings, Inc. and Subsidiary
 Notes
to Consolidated Financial Statements
 For
the Year Ended March 31, 2009 and for the Period from
 November 15, 2007
(inception) to March 31, 2008


Earnings
per share




Basic
earnings (loss) per share is computed by dividing net income (loss) by weighted
average number of shares of common stock outstanding during each
period.  Diluted earnings (loss) per share is computed by dividing net
income (loss) by the weighted average number of shares of common stock, common
stock equivalents and potentially dilutive securities outstanding during the
period.




At March
31, 2009 and 2008 the Company’s  common stock equivalents consisted of
the following:





2009
            
            
            2008Shares
      underlying convertible debt
            
            
            10,380,942
            
            
            
            —Stock
      options
            
            
            7,723,600
            
            
            
            —Warrants
            
            
            40,338,340
            
            
            
            1,650,000Total
      common stock equivalents
            
            
            58,442,882
            
            
            
            1,650,000





Since the
Company reflected a net loss in 2009 and 2008, the effect of considering any
common stock equivalents, if outstanding, would have been anti-dilutive. A
separate computation of diluted earnings (loss) per share is not
presented.





Stock-based
compensation





All
share-based payments to employees are recorded and expensed in the statement of
operations as applicable under SFAS No. 123(R) “Share-Based
Payment”.  SFAS No. 123(R) requires the measurement and
recognition of compensation expense for all share-based payment awards made to
employees, directors and third parties, including grants of stock options based
on estimated fair values.  The Company has used certain weighted
average assumptions and applied these to the Black-Scholes option-pricing model
to estimate grant date fair value for all option grants.





Share-based
compensation expense is based on the value of the portion of share-based payment
awards that is ultimately expected to vest during the year, less expected
forfeitures.  SFAS No. 123(R) requires forfeitures to be estimated at
the time of grant and revised, if necessary in subsequent periods if actual
forfeitures differ from those estimates.





Non-employee
equity based compensation





Equity-based
compensation awards issued to non-employees for services will be recorded at
either the fair value of the services rendered or the instruments issued in
exchange for such services, whichever is more readily determinable, using the
measurement date guidelines enumerated in Emerging Issues Task Force Issue EITF
No. 96-18, “Accounting for
Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in
Conjunction with Selling, Goods or Services” (“EITF 96-18”).


11
  Perf-Go
Green Holdings, Inc. and Subsidiary
 Notes
to Consolidated Financial Statements
 For
the Year Ended March 31, 2009 and for the Period from
 November 15, 2007
(inception) to March 31, 2008


Income
Taxes





The
Company accounts for income taxes under the liability method in accordance with
Statement of Financial Accounting Standards No. 109, "Accounting for Income
Taxes." Under this method,  deferred income tax assets and
liabilities are determined based on differences  between the financial
reporting and tax bases of assets and  liabilities  and are
measured using the enacted tax rates and laws  that will be in
effect  when
the  differences  are  expected  to
reverse.




The
Company adopted the provisions of FASB Interpretation No. 48; “Accounting for Uncertainty in
Income Taxes-An Interpretation of FASB Statement No. 109” (“FIN
48”).  FIN 48 contains a two-step approach to recognizing and
measuring uncertain tax positions. The first step is to evaluate the tax
position for recognition by determining if the weight of available evidence
indicates it is more likely than not, that the position will be sustained on
audit, including resolution of related appeals or litigation processes, if any.
The second step is to measure the tax benefit as the largest amount, which is
more than 50% likely of being realized upon ultimate settlement. The Company
considers many factors when evaluating and estimating the Company’s tax
positions and tax benefits, which may require periodic adjustments. At March 31,
2009 and 2008, the Company did not record any liabilities for uncertain tax
positions.





Recent
accounting pronouncements





In
December 2007, the FASB issued SFAS 141R, Business Combinations (“SFAS 141R”),
which replaces FASB SFAS 141, Business Combinations.  This Statement
retains the fundamental requirements in SFAS 141 that the acquisition method of
accounting be used for all business combinations and for an acquirer to be
identified for each business combination. SFAS 141R defines the acquirer as the
entity that obtains control of one or more businesses in the business
combination and establishes the acquisition date as the date that the acquirer
achieves control.  SFAS 141R will require an entity to record
separately from the business combination the direct costs, where previously
these costs were included in the total allocated cost of the
acquisition.  SFAS 141R will require an entity to recognize the assets
acquired, liabilities assumed, and any non-controlling interest in the acquired
at the acquisition date, at their fair values as of that date.  This
compares to the cost allocation method previously required by SFAS No.
141.  SFAS 141R will require an entity to recognize as an asset or
liability at fair value for certain contingencies, either contractual or
non-contractual, if certain criteria are met.  Finally, SFAS 141R will
require an entity to recognize contingent consideration at the date of
acquisition, based on the fair value at that date.  This Statement
will be effective for business combinations completed on or after the first
annual reporting period beginning on or after December 15,
2008.  Early adoption of this standard is not permitted and the
standards are to be applied prospectively only.  Upon adoption of this
standard, there would be no impact to the Company’s results of operations and
financial condition for acquisitions previously completed.  The
adoption of SFAS No. 141R is not expected to have a material effect on its
financial position, results of operations or cash flows.


12
  Perf-Go
Green Holdings, Inc. and Subsidiary
 Notes
to Consolidated Financial Statements
 For
the Year Ended March 31, 2009 and for the Period from
 November 15, 2007
(inception) to March 31, 2008





In December 2007, the FASB issued SFAS No. 160,
“Noncontrolling Interests in Consolidated Financial Statements, an amendment of
Accounting Research Bulletin No 51” (“SFAS 160”). SFAS 160 establishes
accounting and reporting standards for ownership interests in subsidiaries held
by parties other than the parent, changes in a parent’s ownership of a
noncontrolling interest, calculation and disclosure of the consolidated net
income attributable to the parent and the noncontrolling interest, changes in a
parent’s ownership interest while the parent retains its controlling financial
interest and fair value measurement of any retained noncontrolling equity
investment. SFAS 160 is effective for financial statements issued for fiscal
years beginning after December 15, 2008, and interim periods within those fiscal
years. Early adoption is prohibited. The adoption of SFAS No. 160 is not
expected to have a material effect on its financial position, results of
operations or cash flows.




In March
2008, the FASB issued SFAS No. 161 “Disclosures about Derivative
Instruments and Hedging Activities—An Amendment of FASB Statement
No. 133.” (“SFAS 161”). SFAS 161 establishes the disclosure
requirements for derivative instruments and for hedging activities with the
intent to provide financial statement users with an enhanced understanding of
the entity’s use of derivative instruments, the accounting of derivative
instruments and related hedged items under Statement 133 and its related
interpretations, and the effects of these instruments on the entity’s financial
position, financial performance, and cash flows. This statement is
effective for financial statements issued for fiscal years beginning after
November 15, 2008. The Company does not expect its adoption of SFAS 161 to
have a material impact on its financial position, results of operations or cash
flows.




In April
2008, the FASB issued FASB Staff Position (“FSP”) SFAS No. 142-3, “ Determination of the Useful Life of
Intangible Assets” . This FSP 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 FASB Statement No. 142,
“Goodwill and Other Intangible
Assets” (“SFAS 142”). The intent of this FSP is to improve the
consistency between the useful life of a recognized intangible asset under
SFAS 142 and the period of expected cash flows used to measure the fair
value of the asset under SFAS 141R, and other GAAP. This FSP is effective for
financial statements issued for fiscal years beginning after December 15,
2008, and interim periods within those fiscal years. Early adoption is
prohibited. The Company does not expect the adoption of SFAS FSP 142-3, to have
a material impact on its financial position, results of operations or cash
flows.


13
  Perf-Go
Green Holdings, Inc. and Subsidiary
 Notes
to Consolidated Financial Statements
 For
the Year Ended March 31, 2009 and for the Period from
 November 15, 2007
(inception) to March 31, 2008




In May
2008, the FASB issued FSP Accounting Principles Board (“APB”) 14-1 “Accounting for Convertible Debt
instruments That May Be Settled in Cash upon Conversion (Including Partial Cash
Settlement)” ( “FSP APB
14-1” ). FSP APB 14-1 requires the issuer of certain convertible debt
instruments that may be settled in cash (or other assets) on conversion to
separately account for the liability (debt) and equity (conversion option)
components of the instrument in a manner that reflects the issuer’s
non-convertible debt borrowing rate. FSP APB 14-1 is effective for fiscal years
beginning after December 15, 2008 on a retroactive basis. The Company does not
expect the adoption of FSP APB 14-1, to have a material impact on its financial
position, results of operations or cash flows.





In
October 2008, the FASB issued FSP FAS 157-3, “ Determining the Fair Value of a
Financial Asset When the Market For That Asset Is Not Active” (“FSP FAS
157-3”), with an immediate effective date, including prior periods for which
financial statements have not been issued.  FSP FAS 157-3 amends FAS 157 to
clarify the application of fair value in inactive markets and allows for the use
of management’s internal assumptions about future cash flows with appropriately
risk-adjusted discount rates when relevant observable market data does not
exist.  The objective of FAS 157 has not changed and continues to be the
determination of the price that would be received in an orderly transaction that
is not a forced liquidation or distressed sale at the measurement date. 
The adoption of FSP FAS 157-3 is not expected to have a material effect on the
Company’s financial position, results of operations or cash flows.





In April
2009, the FASB issued FSP SFAS 157-4, “Determining Whether a Market Is Not
Active and a Transaction Is Not Distressed,” which further clarifies the
principles established by SFAS No. 157. The guidance is effective for the
periods ending after June 15, 2009 with early adoption permitted for the periods
ending after March 15, 2009. The adoption of FSP FAS 157-4 is not expected to
have a material effect on the Company’s financial position, results of
operations, or cash flows.




In May
2009, the FASB issued SFAS No. 165 “Subsequent Events” (“SFAS 165”). SFAS 165
establishes general standards of 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. SFAS 165 sets forth (1) The period after the balance
sheet date during which management of a reporting entity should evaluate events
or transactions that may occur for potential recognition or disclosure in the
financial statements, (2) The circumstances under which an entity should
recognize events or transactions occurring after the balance sheet date in its
financial statements and (3) The disclosures that an entity should make about
events or transactions that occurred after the balance sheet date. SFAS 165 is
effective for interim or annual financial periods ending after June 15, 2009.
The Company is evaluating the impact the adoption of SFAS 165 will have on its
financial statements.
 14
  Perf-Go
Green Holdings, Inc. and Subsidiary
 Notes
to Consolidated Financial Statements
 For
the Year Ended March 31, 2009 and for the Period from
 November 15, 2007
(inception) to March 31, 2008
 In June
2009, the FASB issued SFAS No. 166 “Accounting for Transfers of Financial
Assets—an amendment of FASB Statement No. 140” (“SFAS 166”). SFAS 166 improves
the relevance, representational faithfulness, and comparability of the
information that a reporting entity provides in its financial statements about a
transfer of financial assets; the effects of a transfer on its financial
position, financial performance, and cash flows; and a transferor’s continuing
involvement, if any, in transferred financial assets. SFAS 166 is effective as
of the beginning of each reporting entity’s first annual reporting period that
begins after November 15, 2009, for interim periods within that first annual
reporting period and for interim and annual reporting periods thereafter. The
Company is evaluating the impact the adoption of SFAS 166 will have on its
financial statements.
 
 In June
2009, the FASB issued SFAS No. 167 “Amendments to FASB Interpretation No. 46(R)”
(“SFAS 167”). SFAS 167 improves financial reporting by enterprises involved with
variable interest entities and to address (1) the effects on certain provisions
of FASB Interpretation No. 46 (revised December 2003), “Consolidation of
Variable Interest Entities”, as a result of the elimination of the qualifying
special-purpose entity concept in SFAS 166 and (2) constituent concerns about
the application of certain key provisions of Interpretation 46(R), including
those in which the accounting and disclosures under the Interpretation do not
always provide timely and useful information about an enterprise’s involvement
in a variable interest entity. SFAS 167 is effective as of the beginning of each
reporting entity’s first annual reporting period that begins after November 15,
2009, for interim periods within that first annual reporting period, and for
interim and annual reporting periods thereafter. The Company is evaluating the
impact the adoption of SFAS 167 will have on its financial
statements.
 
 In
June 2009, the FASB issued SFAS No. 168 “The FASB Accounting Standards
Codification and the Hierarchy of Generally Accepted Accounting Principles—a
replacement of FASB Statement No. 162”. The FASB Accounting Standards
Codification (“Codification”) will be the single source of authoritative
nongovernmental U.S. generally accepted accounting principles. Rules and
interpretive releases of the SEC under authority of federal securities laws are
also sources of authoritative GAAP for SEC registrants. SFAS 168 is effective
for interim and annual periods ending after September 15, 2009. All existing
accounting standards are superseded as described in SFAS 168. All other
accounting literature not included in the Codification is nonauthoritative. The
Codification is not expected to have a significant impact on the Company’s
financial statements.




Other
accounting standards have been issued or proposed by the FASB or other
standards-setting bodies that do not require adoption until a future date and
are not expected to have a material impact on the financial statements upon
adoption.


15
  Perf-Go
Green Holdings, Inc. and Subsidiary
 Notes
to Consolidated Financial Statements
 For
the Year Ended March 31, 2009 and for the Period from
 November 15, 2007
(inception) to March 31, 2008


Note 3 Going Concern and
Liquidity





As
reflected in the accompanying consolidated financial statements, the Company has
a net loss of $32,876,813 and net cash used in operations of $7,359,939 for
the year ended March 31, 2009; and has a working capital deficit of $15,345,579
and a stockholders’ deficit of $13,925,803.
 
 Further,
losses from operations are continuing subsequent to March 31, 2009 and the
Company anticipates that it will continue to generate significant losses from
operations for the near future. The Company believes its current available cash
along with anticipated revenues may be insufficient to meet its cash needs for
the near future.  There can be no assurance that financing will be
available in amounts or terms acceptable to the Company, if at all.
 
 These
conditions raise substantial doubt about the Company’s ability to continue as a
going concern. The ability of the Company to continue its operations is
dependent on Management's plans, which include the raising of capital through
debt and/or equity markets with some additional funding from other traditional
financing sources, including term notes, until such time that funds provided by
operations are sufficient to fund working capital requirements.  The
Company may need to incur additional liabilities with certain related parties to
sustain the Company’s existence.
 
 The
accompanying financial statements have been prepared on a going concern basis,
which contemplates the realization of assets and the satisfaction of liabilities
in the normal course of business.  These financial statements do not
include any adjustments relating to the recovery of the recorded assets or the
classification of the liabilities that might be necessary should the Company be
unable to continue as a going concern.





Note 4 Due from
Factor





Due from
factor at March 31, 2009 is as follows:


Accounts
      Receivable
            
            $
            253,272Less:
      Advances
            
            
            (156,216
            )Less:
      Commissions
            
            
            (2,829
            )Less:
      Other Factoring Expenses
            
            
            (2,121
            )Due
      From Factor
            
            $
            92,106





Note 5
Equipment





Equipment
at March 31, 2009 and 2008 consist of the following:





2009
            
            
            2008Furniture
      and fixtures
            
            $
            171,181
            
            
            $
            —Computer
      equipment
            
            
            71,665
            
            
            
            2,545Software
            
            
            83,392
            
            
            
            —326,238
            
            
            
            2,545Less:
      accumulated depreciation
            
            
            (40,841
            )
            
            
            (85
            )Equipment
      – net
            
            $
            285,397
            
            
            $
            2,460




16
  Perf-Go
Green Holdings, Inc. and Subsidiary
 Notes
to Consolidated Financial Statements
 For
the Year Ended March 31, 2009 and for the Period from
 November 15, 2007
(inception) to March 31, 2008


Note 6 Convertible Debt,
Warrants, Derivative Liabilities and Registration Rights
Liability





(A)
            Senior Secured Convertible
      Debentures and Warrants





D uring May
and June 2008, the Company issued $5,950,000 of senior secured convertible
debentures with five-year detachable warrants to purchase shares of the
Company’s common stock. The convertible debt issued is secured by all assets of
the Company. The convertible debt bears interest at 10%, and is payable
quarterly in arrears in cash or equity .




During
fiscal year 2009, $759,529 of the convertible debentures was converted into
1,046,703 shares of common stock. The remaining face amount of the debentures is
$5,190,471 as of March 31, 2009, and are due in May 2011, with respect to
$2,250,000 of principal amount, and in June 2011, with respect to $2,940,471 of
principal amount.  There were no debentures outstanding at March 31,
2008.





The
Convertible Debentures contain various covenants which, among other things,
restrict the Company’s ability to incur additional debt or liens or engage in
certain transactions as specified therein. Additionally, the Convertible
Debentures define various events of default including non-payment of interest or
principal when due, failure to comply with covenants, breach of representations
or warranties, failure to obtain effective registration of the common stock
underlying the conversion feature or failure to deliver registered common stock,
when requested, within a specified timeframe as well as other matters discussed
therein. Various remedies exist for an event of default including the
acceleration of the maturity of the obligation, an increase in the interest rate
to 15%, accrual of certain costs of the debt holders and a reduction of the
conversion rate, among other things. The Convertible Debentures also provide
that in the event of a “fundamental transaction” such as a change in control,
the holder may require that such holder’s Convertible Note be redeemed at an
“alternative consideration” which can be, among other things, 135% of the
principal amount of the Convertible Note or 130% of the equity conversion value
of the Convertible Note. For the period ended March 31, 2009, there were no
defaults as defined above.
  The
Convertible Debentures are convertible at the option of the Investors into
shares of our common stock at the lower of the (a) “fixed conversion price” of
$0.50 per share.  As of March 31, 2009, the debentures can be
converted into 10,380,942 shares of common stock based on the $0.50 per share
conversion price, subject to adjustment for stock splits, stock dividends, or
similar transactions, (b) “lowest conversion price” representing the lowest
price, conversion price or exercise price offered by the Company in a subsequent
equity financing, convertible security (subject to certain exceptions) or
derivative instruments or (c) “mandatory default amount” representing the amount
necessary to convert 110% of the face amount of the Convertible Debentures plus
accrued interest and costs at the lower of the price of the common stock on the
date of demand or the date of payment. The Company’s common stock price at the
time of issuance of both the May and June 2008 Convertible Debentures exceeded
the relevant conversion price (the fixed conversion price). As a result, the
Company assessed the applicability of EITF No.’s 98-5 and 00-27 to determine if
this constitutes a beneficial conversion feature. However, since the conversion
feature can result in a variable amount of shares being issued, the conversion
feature is considered an embedded derivative liability, not a beneficial
conversion feature, that needs to be separated from the “host contract” as
described further below.


17




Perf-Go
Green Holdings, Inc. and Subsidiary
 Notes
to Consolidated Financial Statements
 For
the Year Ended March 31, 2009 and for the Period from
 November 15, 2007
(inception) to March 31, 2008


The
Warrants entitled the Investors to purchase approximately 7,933,333 (“initial
warrants”) shares of common stock at $1.00 per share subject to certain
anti-dilution provisions to adjust the shares and exercise price in the event of
(a) stock dividends, splits or similar recapitalizations or (b) a rights
offering at less than market value to all stockholders, (c) certain dividends or
distributions and (d) the offering or issuance of common stock or derivative
instruments (warrants, options or conversion features), subject to certain
exceptions, at a price that is less than the exercise price of the
Warrants.





In
March 2009, for no additional consideration, the Company issued an additional
10,800,000
and issued 7,933,333
detachable warrants, at an exercise price of $0.50 per share, and lowered the
exercise price for the 7,933,333 initial warrants to $0.50 per
share.  The 7,933,333 warrants were issued as a result of certain
anti-dilution provision discussed above.  The Company is obliged to
issue registered shares of common stock upon the exercise of all the above
warrants and if it cannot do so within three business days, it is obliged to pay
in cash the market value, plus brokerage commissions, of the common stock.
Because of the “pay in cash” feature and the variability of the exercise price,
the warrants above are considered to be a derivative liabilities as discussed
further below. The Company performed a present value calculation of the new debt
immediately before and after the modification above (including the fair value of
the additional warrants).  The modification of the convertible
debentures or repricing (including the fair value of the additional warrants) of
the exercise price resulted in a fair value of the new debt that was
substantially in excess of the old debt.  As a result, the Company
determined that a substantial modification of the debentures had occurred, and
recorded a loss on debt extinguishment of $4,578,112 for the period ended March
31, 2009.     The fair value of the 10,800,000
and 7,933,33 warrants related to this modification were recorded as a
derivative liabilities, as these warrants have the same net cash settlement
features as the initial warrants.  In determining the loss on
extinguishment, at the modification date, the unamortized discount associated
with the convertible debt was subtracted from the face amount of the convertible
debt, and a debt discount of $1,336,320 was recorded.  As a result,
the carrying value of the new debt was reduced to zero, and the excess fair
value of the additional warrants was recorded as a loss on debt extinguishment
of $4,578,112 for the period ended March 31,
2009. Additionally,
the Company recorded $1,670,276 in derivative expense related to the debt
extinguishment.


18
  Perf-Go
Green Holdings, Inc. and Subsidiary
 Notes
to Consolidated Financial Statements
 For
the Year Ended March 31, 2009 and for the Period from
 November 15, 2007
(inception) to March 31, 2008




(B)
Derivative Liabilities





Embedded
conversion option in the Convertible Debentures and the detachable Warrants are
deemed “freestanding financial instruments” that cannot be classified as equity
instruments at the commitment date related to their issuance and instead are
classified as “derivative liabilities subject to fair value
accounting.”




Because
the Convertible Debentures were issued with a variable conversion feature and
with detachable Warrants, the fair value of these attributes are calculated and
assigned before a value is assigned to the Convertible Debentures.




The
Company computed the fair value by using a Black Scholes calculation assuming
the following assumptions





Expected
      dividends
            0%Expected
      volatility
            93%
      - 150%Expected
      term – embedded conversion option
            3
      yearsExpected
      term – warrants
            5
      yearsRisk
      free interest rate
            1.39%
      - 3.2%





The
following is a summary of the Company’s derivative financial instruments
associated with the convertible debt and warrants issued in May and June 2008,
at the commitment date:





Fair
      value – debt
            
            $
            13,739,000Fair
      value – warrants
            
            
            13,718,000Derivative
      fair value at commitment date
            
            
            27,457,000Less:
      face amount of debt
            
            
            (5,950,000
            )Derivative
      expense at commitment date
            
            $
            21,507,000





The fair
value of the conversion feature of the Convertible Debentures and the initial
warrants that is assigned to debt discount (originally $5,950,000) is being
amortized over the life of the Convertible Debentures (three
years).
 
 The debt
discount is amortized to interest expense for any conversions of the debentures
based on the pro-rata amount of debenture converted to total
debt.  For the period ended March 31, 2009, the Company amortized
$759,529 to interest expense for conversions during 2009. For the period ended
March 31, 2009, the Company recognized $2,234,441 in interest expense related to
debt discount amortization.
 19
  Perf-Go
Green Holdings, Inc. and Subsidiary
 Notes
to Consolidated Financial Statements
 For
the Year Ended March 31, 2009 and for the Period from
 November 15, 2007
(inception) to March 31, 2008
  During
2009, the Debt holders converted $759,529 of Convertible Debentures into
1,046,703 shares of common stock of the Company (the “Conversion”). In
connection with the Conversion, the Company recorded the face amount of these
Convertible Debentures at the date of conversion ($759,529) plus the
proportionate share of the related derivative liability, as remeasured on the
conversion date, of $363,953 (for a total recorded of $1,123,482) to
shareholders equity.




Convertible
debt at March 31, 2009 is as follows:




At inceptionFace
      amount of Debentures
            
            $
            5,950,000Less:Debt
      converted to equity
            
            
            (759,529
            )Face
      amount of debentures at March 31, 2009
            
            
            5,190,471Less:
            
            
            —Value
      assigned to conversion feature and warrants as debt
    discount
            
            
            (5,950,000
            )Value
      assigned to additional warrants in repricing as debt
    discount
            
            
            (1,336,320
            )Add:Amortization
      of debt discount
            
            
            2,234,441Convertible
      debt – net at March 31, 2009
            
            $
            138,592




(C)
Placement Agent Warrants




In
connection with the issuance of the Convertible Debentures and Warrants, the
company paid a placement agent (the “Placement Agent”) a cash fee of $595,000
and issued them warrants, on the same terms as the Warrants, to purchase 793,333
shares (subject to adjustment) of common stock at $1.00 for five
years.  In March 2009, for no additional consideration to the
Placement Agent, the Company repriced the above warrants to $0.50 per share and
issued an additional 1,213,333 warrants for $0.50 per share. These
warrants have the same anti-dilution provisions as the warrants issued to the
convertible debt investors, and accordingly, this issuance relates to that
provision. Because
the above  warrants have the same variable exercise price feature, and
cash settlement provisions, as the Investor Warrants described above, these
warrants are also considered derivative liabilities. As such, their fair value
at inception of approximately $1,394,000 was charged to derivative liability
expense and this amount is required to be marked-to-market at each reporting
period.  The additional warrants and re-pricing resulted in additional
derivative expense of $374,372 for the period ended March 31,
2009.  The Company recorded the aggregate of the cash and warrant
compensation of approximately $1,873,513 as debt issue costs. For the
year ended March 31, 2009, total amortization expense was $715,296
(including $228,099 from the above conversions). At March 31, 2009, unamortized
debt issue costs was $1,272,971.
 
 In March 2009,the Company issued 800,000
warrants at $1.00 per share as part of the negotiations of a non-binding credit
facility to a potential lender.  The Company is currently negotiating
this credit facility.   These warrants have the same net cash
settlement features as the above warrants issued to the investors,
and  were recorded as a derivative
liability.       ***repricingdiscussion needed
in  more detail???





20




Perf-Go
Green Holdings, Inc. and Subsidiary
 Notes
to Consolidated Financial Statements
 For
the Year Ended March 31, 2009 and for the Period from
 November 15, 2007
(inception) to March 31, 2008





The
Company computed the fair value of the Placement Agent warrants and the
non-binding credit facility warrants by using a Black Scholes calculation
assuming the following assumptions





Expected
      dividends
            0%Expected
      volatility
            150%Expected
      term
            4.19
      – 4.97 yearsRisk
      free interest rate
            1.39%





I n May
2008, the Company issued 4,200,000 warrants at $1.00 per share with immediate
vesting to certain investors unrelated to the investors of the convertible
debentures.  The warrants have the same net cash settlement provisions
as the investor warrants above, and accordingly, were recorded as derivative
liability and derivative expense at the commitment date.  In March
2009, the Company issued 4,200,000 warrants at $.50 per share to these equity
investors.  The warrants have immediate vesting, and the same net cash
settlement provisions as the above warrants.  As a result, the Company
recorded $1,295,904 in derivative expense for the period ended March 31, 2009
related to these warrants .





The
Company computed the fair value of the 4,200,000 warrants by using a Black
Scholes calculation assuming the following assumptions





Expected
      dividends
            0%Expected
      volatility
            150%Expected
      term
            4.19
      yearsRisk
      free interest rate
            1.39%




(D)
Registration Rights Liability





The
Company also granted the Debt holders registration rights for the common stock
underlying the embedded conversion feature in the Convertible Debentures and the
Warrants. The Company can be assessed liquidated damages, as defined in the
related agreements, for the failure to file a registration statement in a
certain timeframe or for the failure to obtain or maintain effectiveness of such
registration statement. Such penalties shall not exceed, in the aggregate, 15%
of the aggregate Purchase Price (as defined in the Convertible Debentures). In
assessing the likelihood and amount of possible liability for liquidated
damages, the Company considered the guidance of EITF No.’s 00-19-2 and 05-04 as
well as SFAS No. 5. Because obtaining and maintaining effectiveness of the
registration statement is not within the Company’s control, the Company has
concluded that it is probable that a liability will be incurred and therefore recorded a liability for  $892,500 representing its
estimate that such liability will be 15% of the proceeds of the Convertible
Debentures as registration rights liability. The Company’s registration
statement was declared effective on February 10, 2009 and approximately $75,000,
plus interest, of liquidated damages had been incurred as of March 31, 2009 and
approximately $225,000, plus interest, as of February 10, 2009. The Company
continues to be exposed to further registration rights liquidated damages if it
does not maintain the effectiveness of such registration statement. At such time
as it becomes clear that such effectiveness can be maintained, the remaining
liability would be reversed.




21




Perf-Go
Green Holdings, Inc. and Subsidiary
 Notes
to Consolidated Financial Statements
 For
the Year Ended March 31, 2009 and for the Period from
 November 15, 2007
(inception) to March 31, 2008


Other -In connection with the
issuance of the Convertible Debentures and the related reverse acquisition
transaction, the Company agreed to pay a total of approximately $750,000 in
investor relations cost, all of which costs have been paid at March 31,
2008.




(E)
Derivative Liabilities As Remeasured – Summary at March 31, 2009


Fair
      value of embedded conversion feature – convertible debt
            
            $
            2,738,529Fair
      value of warrants – convertible debt
            
            
            2,588,093Fair
      value of warrants - placement agent – in convertible debt
      offering
            
            
            260,557Fair
      value of warrant issued in connection with reverse
    acquisition
            
            
            136,070Fair
      value of warrants issued to reverse acquisition equity debt
      holders
            
            
            1,366,781Fair
      value of additional warrants issued to equity debt holders
            
            
            3,668,806Fair
      value of warrants issued to factoring agent
            
            
            259,484Fair
      value of additional warrants to debt holders
            
            
            4,363,489Total
      derivative liabilities – March 31, 2009
            
            $
            15,381,809





In
connection with the Share Exchange discussed in Note 1, the Company paid the
Placement Agent a cash fee of $210,000 and issued them warrants to purchase
common stock on the same terms as the Warrants treated as derivatives. As such
these warrants entitle the holder to purchase approximately 420,000 shares
common stock at $.50 per share subject to adjustment of the shares and exercise
price in the event of (a) stock dividends, splits or similar recapitalizations
or (b) a rights offering at less than market value to all stockholders, (c)
certain dividends or distributions and (d) the offering or issuance of common
stock or derivative instruments (warrants, options or conversion features),
subject to certain exceptions, at a price that is less than the exercise price
of the warrants. The Company is obliged to issue registered shares of common
stock upon the exercise of the Warrants and if it cannot do so within three
business days, it is obliged to pay in cash the market value, plus brokerage
commissions, of the common stock. Because of the cash settlement feature and the
variability of the exercise price, the warrant is considered to be a derivative
liability Under SFAS No. 133 and EITF No. 00-19. Such warrants had a fair value
at inception of approximately $480,000, which amount was charged to derivative
liabilities expense.




At the
time of the Share Exchange, certain debt holders in a prior private placement of
common stock and warrants were granted the right to exchange their existing
warrants for new warrants on the same terms as the Warrants discussed above.
Because of the variability of the exercise price feature and the settlement in
cash provisions, the warrant is considered to be a derivative liability Under
SFAS No. 133 and EITF No. 00-19. Such warrants had a fair value at inception of
approximately $4,801,000, which amount was charged to derivative liabilities
expense.




22


Perf-Go
Green Holdings, Inc. and Subsidiary
 Notes
to Consolidated Financial Statements
 For
the Year Ended March 31, 2009 and for the Period from
 November 15, 2007
(inception) to March 31, 2008


Pursuant
to fair value accounting, the derivative liabilities for the conversion feature,
the Warrants, the placement agent warrants and the warrants issued to equity
debt holders are required to be marked-to-market at each reporting period during
their term, with the resulting difference reported as a component of income or
expense. During the period ended March 31, 2009, the Company recorded a total
change in fair value due to remeasurement of derivative liabilities of
$26,217,330 that is included as income in the consolidated statement of
operations.





The
Company computed the fair value of the above derivatives as of March 31, 2009 by
using a Black Scholes calculation assuming the following
assumptions





Expected
      dividends
            0%Expected
      volatility
            150%Expected
      term – embedded conversion option
            2.12
      – 2.19  yearsExpected
      term – warrants
            4.12
      – 4.97 yearsRisk
      free interest rate
            1.39%





Note
7 Bridge Notes and Warrants





In January and February 2008 Perf-Go Green sold an aggregate
$750,000 of secured convertible notes, due in January 2009 (with respect to
$350,000) and February 2009 (with respect to $400,000) and bearing interest at
10% per year, together with warrants to purchase Perf-Go Green’s common stock.
The notes were convertible at $0.48 per share and, together with approximately
$11,000 of accrued interest, were converted into 1,579,466 shares of the
Company’s common stock on March 27, 2008.




The
detachable warrants permit the holders to purchase an aggregate of 1,500,000
shares of common stock of the Company at a price of $0.75 until January 2013
(with respect to 700,000 shares) or February 2013 (with respect to 800,000
shares). Under EITF No. 00-19, the Company concluded that these warrants met the
definition of a freestanding financial instrument that could be classified as
equity. The Company determined the fair value of these warrants based upon a
Black Scholes valuation calculation with the following assumptions: one and one
half year expected life, 150% volatility, 2.11% risk free interest rate and a
market price of $0.48 for the underlying common stock. The market price was
determined based on the ultimate conversion of these notes into common stock at
that price shortly after issuance. The fair value, $669,000 was recorded to
deferred finance costs and then, upon the conversion of the notes in March 2008,
written off.




23
  Perf-Go
Green Holdings, Inc. and Subsidiary
 Notes
to Consolidated Financial Statements
 For
the Year Ended March 31, 2009 and for the Period from
 November 15, 2007
(inception) to March 31, 2008




I n March
2009, the Company issued an additional 145,010 detachable warrants, and lowered
the exercise price of the warrants from $0.75 to $0.69.  At the March
2009 modification date, the Company re-measured the above warrants, and recorded
additional interest expense of $47,136, and a corresponding credit to additional
paid-in capital.  The conversion option and warrants associated with
the bridge notes were deemed to be equity as discussed
below.   The carrying value of the debt was zero at the
re-measurement date, and accordingly, the fair value of the additional warrants
was recorded as additional interest expense.  The $47,136 represents
additional incremental fair value associated with re-pricing the warrants at the
re-measurement date .




The
Company computed the fair value of the repriced warrants as of the
re-measurement date assuming the following assumptions





Expected
      dividends
            0%Expected
      volatility
            149%Expected
      term
            3.95
      yearsRisk
      free interest rate
            1.39%





Pursuant
to EITF No.’s 98-5 and 00-27 and APB No. 14, the Company determined that the
exercise price of the convertible debt of $0.50 exceeded the market price of the
common stock at each commitment date. As a result, no allocation of fair value
was required amongst the convertible notes and warrants. The Company also
determined that SFAS No. 133 and EITF 00-19 were not applicable, as the embedded
conversion option did not require bifurcation.




In
connection with raising these proceeds, Perf-Go Green paid $75,000 as direct
offering costs to the placement agent. The Company also issued, as an additional
placement agent fee, warrants to purchase 150,000 shares of the Company’s common
stock.





The
Company determined the valuation of these warrants as follows:





The
Company computed the fair value of the these warrants assuming the following
assumptions





Expected
      dividends
            0%Expected
      volatility
            150%Expected
      term
            5
      yearsRisk
      free interest rate
            1.9
      – 2.7%





Upon
conversion of the notes on March 27, 2008, the remaining unamortized portion of
debt issue costs was charged to interest expense on the statement of
operations.




24


Perf-Go
Green Holdings, Inc. and Subsidiary
 Notes
to Consolidated Financial Statements
 For
the Year Ended March 31, 2009 and for the Period from
 November 15, 2007
(inception) to March 31, 2008


Note 8 Stockholders’
Equity(Deficit)





(A)
            Issuance
      of Common Stock





(1)
              For
      the Period from November 15, 2007 (inception) to March 31,
      2008





The
Company issued 10,260,798 shares of common stock for officer compensation,
having a fair value of $1,880, based upon the fair value of the services
provided.





The
Company issued 839,207 shares of common stock in connection with the conversion
of debt and related accrued interest aggregating $761,383.  There was
no gain or loss recorded upon conversion.





(2)
              For
      the Year Ended March 31, 2009





(A)
              Stock
      Issued in Debt Conversions





During
2009, the Company issued 1,046,703 shares of common stock, having a fair value
of $759,529 as follows:





In
November 2008, the Company issued 733,332 shares of common stock in connection
with the conversion of debt totaling $550,000 ($0.75/share).  There
was no gain or loss recorded upon conversion.





In
February 2009, the Company issued 212,705 shares of common stock in connection
with the conversion of debt totaling $159,529 ($0.75/share).  There
was no gain or loss recorded upon conversion.





I n March
2009, the Company issued 100,667 shares of common stock in connection with the
conversion of debt totaling $50,000 ($0.50/share).  There was no gain
or loss recorded upon conversion. The exercise price associated with this debt
conversion was reduced from $0.75/share in connection with the repricing from
March 20, 2009.





(B)
              Stock
      Issued for Compensation





In June
2008, the Company issued 10,000 shares of common stock to an employee, having a
fair value of $25,700 ($2.57/share), based upon the quoted closing trading price
at the grant date.




25




Perf-Go
Green Holdings, Inc. and Subsidiary
 Notes
to Consolidated Financial Statements
 For
the Year Ended March 31, 2009 and for the Period from
 November 15, 2007
(inception) to March 31, 2008


(C)
              Stock
      Issued for Consulting





During
2009, the Company issued 929,194 shares of common stock, having a fair value of
$2,288,792 as follows:





In June
2008, the Company issued 874,194 shares of common stock to third party
consultants for services rendered, having a fair value of $2,237,547
($2.56/share), based upon the quoted closing trading price at the grant
date.





In July
2008, the Company issued 11,000 shares of common stock to third party
consultants for services rendered, having a fair value of $13,860 ($1.26/share),
based upon the quoted closing trading price at the grant date.





In August
2008, the Company issued 11,000 shares of common stock to third party
consultants for services rendered, having a fair value of $14,740 ($1.34/share),
based upon the quoted closing trading price at the grant date.





In
September 2008, the Company issued 11,000 shares of common stock to third party
consultants for services rendered, having a fair value of $12,100 ($1.10/share),
based upon the quoted closing trading price at the grant date.





In
October 2008, the Company issued 11,000 shares of common stock to third party
consultants for services rendered, having a fair value of $7,150 ($0.65/share),
based upon the quoted closing trading price at the grant date.





In
November 2008, the Company issued 11,000 shares of common stock to third party
consultants for services rendered, having a fair value of $3,410 ($0.31/share),
based upon the quoted closing trading price at the grant date.





(B)
            Stock
      Options





In June
2008, the Company adopted the 2008 Share Incentive Plan (the “Plan”) which
permits the granting of stock options and other forms of stock based
compensation to employees and consultants of the Company. Under the Plan, the
Company has reserved 10,000,000 shares of common stock for issuance under the
Plan. There were no stock options outstanding at March 31, 2008.





The fair
value of each option grant under SFAS No. 123R is estimated on the date of the
grant using the Black-Scholes option pricing model with weighted average
assumptions as determined in part by management. The expected volatility for the
current period was developed by using historical volatility of the Company’s
stock history since the reverse acquisition.  The risk-free interest
rate was developed using the U.S. Treasury yield curve for periods equal to the
expected term of the options grant date.




26




Perf-Go
Green Holdings, Inc. and Subsidiary
 Notes
to Consolidated Financial Statements
 For
the Year Ended March 31, 2009 and for the Period from
 November 15, 2007
(inception) to March 31, 2008




The total
grant date fair value of options issued to employees, directors, officers and
consultants during fiscal year end 2009 was $15,459,094, based upon the use of a
Black-Scholes option-pricing model using the following management
assumptions:





Risk-free
      interest rate
            0.57%
      - 3.2%Expected
      dividend yield
            0%Expected
      volatility
            93%
      - 150%Expected
      term
            5
      yearsExpected
      forfeitures
            0%





The
following is a summary of the Company’s stock option activity:


Options
            
            
            Weighted Average Exercise
    PriceOutstanding
      – March 31, 2008
            
            
            —
            
            
            
            —Granted
            
            
            7,723,600
            
            
            $
            1.51Exercised
            
            
            —
            
            
            $
            —Forfeited
            
            
            —
            
            
            $
            —Outstanding
      – March 31, 2009
            
            
            7,723,600
            
            
            $
            1.51Exercisable
      – March 31, 2009
            
            
            6,929,472
            
            
            $
            1.45




Options
      OutstandingRange of
              Exercise price
            
            
            Number Outstanding
            
            Weighted Average Remaining Contractual Life (in
      years)
            
            Weighted Average Exercise
    Price$
            0.50-$2.00
            
            
            
            7,723,600
            
            4.47 years
            
            $
            1.51




Options
      ExercisableRange of
              Exercise price
            
            
            Number Exercisable
            
            Weighted Average Remaining Contractual Life (in
      years)
            
            Weighted Average Exercise
    Price$
            0.50
      - $2.00
            
            
            
            6,929,472
            
            4.47
      years
            
            $
            1.45





At March
31, 2009  the total intrinsic value of options outstanding and
exercisable was $0.




27


Perf-Go
Green Holdings, Inc. and Subsidiary
 Notes
to Consolidated Financial Statements
 For
the Year Ended March 31, 2009 and for the Period from
 November 15, 2007
(inception) to March 31, 2008





The
following summarizes the activity of the Company’s stock options that have not
vested for the year ended March 31, 2009:





Options
            
            
            Weighted Average Grant Date Fair
      ValueOutstanding
      – March 31, 2008
            
            
            —
            
            
            
            —Granted
            
            
            7,723,600
            
            
            $
            2.00Vested
            
            
            (6,929,472
            )
            
            
            2.00Cancelled
      or forfeited
            
            
            —
            
            
            
            —Outstanding
      – March 31, 2009
            
            
            794,128
            
            
            $
            2.05





Total
unrecognized share-based compensation expense from  stock options at
March 31, 2009 was $1,629,074, which is expected to be recognized over a
weighted average period of approximately of 0.47 years.




The
following table summarizes information about the exercise prices, grant date
fair value, weighted average life, and exercisability of warrants
granted.




The total grant date fair value of warrants issued to investors
and consultants during 2009 ranged from $0.33 to $1.01 per share based upon the
use of a Black-Scholes option-pricing model using the following management
assumptions:





Risk-free
      interest rate
            1.39%Expected
      dividend yield
            0%Expected
      volatility
            109%
      - 149%Expected
      term
            4
      - 5 yearsExpected
      forfeitures
            0%




28




Perf-Go
Green Holdings, Inc. and Subsidiary
 Notes
to Consolidated Financial Statements
 For
the Year Ended March 31, 2009 and for the Period from
 November 15, 2007
(inception) to March 31, 2008




The
following is a summary of the Company’s warrant activity:




Warrants
            
            
            Weighted Average Exercise
    PriceOutstanding
      – March 31, 2008
            
            
            1,650,000
            
            
            $
            . .69Granted
            
            
            38,688,340
            
            
            $
            .51Exercised
            
            
            —
            
            
            $
            —Forfeited
            
            
            —
            
            
            $
            —Outstanding
      – March 31, 2009
            
            
            40,338,340
            
            
            $
            .51Exercisable
      - March 31, 2009
            
            
            40,338,340
            
            
            $
            .51




Warrants Outstanding
      and ExercisableRange of
              exercise price
            
            
            Number Outstanding and
      Exercisable
            
            Weighted Average Remaining Contractual Life (in
      years)
            
            Weighted Average Exercise
    Price$
            0.50-$.69
            
            
            
            40,338,340
            
            4.19 years
            
            $
            .51





At March
31, 2009 and 2008, the total intrinsic value of warrants outstanding and
exercisable was $0.





Note 9 Income
Taxes
 
 SFAS No.
109 requires the recognition of deferred tax assets and liabilities for both the
expected impact of differences between the financial statements and the tax
basis of assets and liabilities, and for the expected future tax benefit to be
derived from tax losses and tax credit carryforwards.  SFAS No. 109
additionally requires the establishment of a valuation allowance to reflect the
likelihood of realization of deferred tax assets.
 
 The
Company has a net operating loss carryforward for tax purposes totaling
approximately $10,501,000 at March 31, 2009, expiring through the year 2028.
Internal Revenue Code Section 382 places a limitation on the amount of taxable
income that can be offset by carryforwards after a change in control (generally
greater than a 50% change in ownership).  Temporary differences, which
give rise to a net deferred tax asset, are as follows:


29




Perf-Go
Green Holdings, Inc. and Subsidiary
 Notes
to Consolidated Financial Statements
 For
the Year Ended March 31, 2009 and for the Period from
 November 15, 2007
(inception) to March 31, 2008


Significant
deferred tax assets at  March 31, 2009 and 2008 are as
follows:


Deferred
      tax assets (liabilities), current:Allowance
      for doubtful accounts
              
              $
              96,265
              
              
              $
              —Valuation
      allowance
              
              
              (96,265
              )
              
              
              —$
              —
              
              
              $
              —Deferred
      tax assets (liabilities), noncurrent:Debt
      discount
              
              $
              840,820
              
              
              $
              —Accrued
      warrant registration
              
              
              335,848
              
              
              
              —Derivative
      liability
              
              
              (8,142,838
              )
              
              
              —Stock
      compensation
              
              
              5,270,144
              
              
              
              —Net
      operating loss
              
              
              3,951,402
              
              
              
              536,233Valuation
      allowance
              
              
              (2,255,376
              )
              
              
              (536,233
              )$
              —
              
              
              $
              —





T he
valuation allowance at March 31, 2009 was $2,351,641. The net change in
valuation allowance during the year ended March 31, 200, was an increase of
$1,815,407 .





In
assessing the realizability of deferred tax assets, management considers whether
it is more likely than not that some portion or all of the deferred income tax
assets will not be realized.  The ultimate realization of deferred
income tax assets is dependent upon the generation of future taxable income
during the periods in which those temporary differences become
deductible.  Management considers the scheduled reversal of deferred
income tax liabilities, projected future taxable income, and tax planning
strategies in making this assessment.   Based on consideration of
these items, management has determined that enough uncertainty exists relative
to the realization of the deferred income tax asset balances to warrant the
application of a full valuation allowance as of March 31, 2009.





30




Perf-Go
Green Holdings, Inc. and Subsidiary
 Notes
to Consolidated Financial Statements
 For
the Year Ended March 31, 2009 and for the Period from
 November 15, 2007
(inception) to March 31, 2008





T he actual
tax benefit differs from the expected tax benefit for the period
ended  March 31, 2009 and 2008 (computed by applying the U.S. Federal
Corporate tax rate of 34% to income before taxes and 7.5% for State income
taxes, a blended rate of 38.95% as follows :





2009
            
            
            2008Tax
      expense (benefit) at U.S. statutory rate
            
            $
            (11,178,116
            )
            
            $
            (484,505
            )State
      income tax expense (benefit), net of federal benefit
            
            
            (175,124
            )
            
            
            (51,728
            )Derivative
      expense
            
            
            9,513,255
            
            
            
            —Effect
      of non-deductible expenses
            
            
            24,578
            
            
            
            —Change
      in valuation allowance
            
            
            1,815,407
            
            
            
            536,233$
            —
            
            
            $
            —





Note 10
Concentrations





Statement
of Position 94-6 (SOP 94-6), “Disclosure of Certain Significant
Risks and Uncertainties,” addresses corporate vulnerability to
concentrations.





(A)
              Accounts
      Receivable





Customer
            March 31,
      2009
            March 31,
      2008A
            64%
            —%





(B)
              Sales




Customer
                March 31,
      2009
                March 31,
      2008A
                50%
                —%B
                23%
                —%


(C)
            Purchases


Vendor
            March 31,
      2009
            March 31,
      2008A
            77%
            —%




Note 11
Commitments




(A)
            Litigations,
      Claims and Assessments





From time
to time, the Company may become involved in various lawsuits and legal
proceedings, which arise in the ordinary course of business. However, litigation
is subject to inherent uncertainties, and an adverse result in these or other
matters may arise from time to time that may harm its business. The Company is
currently not aware of any such legal proceedings or claims that they believe
will have, individually or in the aggregate, a material adverse affect on its
business, financial condition or operating results.


31
  Perf-Go
Green Holdings, Inc. and Subsidiary
 Notes
to Consolidated Financial Statements
 For
the Year Ended March 31, 2009 and for the Period from
 November 15, 2007
(inception) to March 31, 2008


(B)
            Employment
      Agreements







During
the period ended March 31, 2009, the Company entered into employment agreements
with four officers and four employees.  The significant terms of the
agreements are as follows::





(1)
            Officers





·
            3
      year terms


·
            Aggregate
      annual base salaries of $575,000


·
              Eligibility
      of bonus up to 20% of base
compensation


·
              Annual
      salary increase of 20%








(2)
            Employees





·
            1
      to 2 year terms


·
            Aggregate
      annual base salaries of $366,000


·
              Eligibility
      of bonus up to 20% of base
compensation


·
              Annual
      salary increase of 20%




(C)
Operating Lease





O n October
1, 2008, the Company entered into a five year, non-cancelable operating lease
agreement for its executive offices, expiring in February 2013. In connection
with the lease, the Company paid a security deposit of
$45,000 .




Future
minimum annual rental payments are as follows:





Year
Ended  March 31 2009,





2009
            
            $
            149,8202010
            
            
            208,2932011
            
            
            214,5362012
            
            
            220,9682013
            
            
            222,588Total
            
            $
            1,016,205


32
  Perf-Go
Green Holdings, Inc. and Subsidiary
 Notes
to Consolidated Financial Statements
 For
the Year Ended March 31, 2009 and for the Period from
 November 15, 2007
(inception) to March 31, 2008


Rent
expense for the years ended  March 31, 2009 and for the period
November 15, 2007 (inception) to March 31, 2008 was $137,535 and $0
respectively.





Note 12 Subsequent
Events





The
Company entered a distribution agreement in March 2009, with a third-party
granted the Company a perpetual royalty free license and exclusive right to sell
certain products owned by the third-party.  As consideration, the
Company will grant the third-party $1,000,000 of the Company’s common stock, and
2,000,000 common stock warrants at $.50 per share .  However, payment
of the common stock and warrants is contingent upon the Company increasing its
authorized shares, and the agreement becomes effective upon this
event.  As of March 31, 2009, the Company had not increased its
authorized shares, and the transaction has not been consummated as of this
date.
 
 Subsequent
to March 31, 2009, the Company granted certain common stock options and warrants
to various consultants, as well as common stock.  Related to these
agreements the Company granted 300,000 shares of common stock, as well as
325,000 common stock options and warrants at exercise prices ranging from $0.50
to $0.75 per share.  Additionally, the Company granted 150,000 common
stock warrants at $0.50 per share to a consultant (the warrants are payable in
monthly increments of 25,000 over six months).
 
 On May
18, 2009, the Company increased its authorized shares of common stock to
250,000,000 shares.
 
 In May
2009, the Company issued 90,000 shares of common stock in connection with the
conversion of debt totaling $45,000 ($.50/share).  There was no gain
or loss recorded upon conversion.
 
 During
the three months ended June 30, 2009. the Company received $425,000 from a third
party as a non-interest, unsecured, due on demand loan.  The third
party has indicated that these funds are to be used to purchase $425,000 of
common stock once terms have been approved.


33