UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549

_________



FORM 10-Q



|           |                                                                                   
|---------- | ----------------------------------------------------------------------------------
|(Mark One) |                                                                                   
|[ X ]      | Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 
|           |                                                                                   
|           | For the quarterly period ended March 31, 2011                                     
|           |                                                                                   
|[    ]     | Transition Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934
|           |                                                                                   
|           | For the transition period from  to                                                



Commission File Number: 0-13597

Organa Gardens International Inc.

(Exact name of small business issuer as specified in its charter)



Nevada

(State or other jurisdiction of incorporation or organization)



88-0195105(I.R.S. Employer Identification No.)





35 South Ocean Avenue,

Patchogue, New York,

11772

(Address of principal executive offices)



888-488-6882

(Issuers telephone number)



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



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







-1-



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 [ ]
(Do not check if a smaller reporting company) | Smaller reporting company [X]



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



APPLICABLE ONLY TO CORPORATE ISSUERS



On May 31, 2011 there were 44,296,467 shares outstanding of the issuers common stock.





|INDEX                                                                                                                                                                       | Page  
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------
|Part I. FINANCIAL INFORMATION                                                                                                                                               |       
|Item 1.   Financial Statements                                                                                                                                              |       
|Balance Sheet as of March 31, 2011 (Unaudited) and December 31, 2010                                                                                                        | 3     
|Statements of Operations (Unaudited) For the Three Months and Nine Months
        Ended March 31, 2011 and 2010, and the Period from January 1, 1996 through March 31, 2011 | 4     
|Statements of Cash Flows (Unaudited) For the Nine Months
        Ended March 31, 2011 and 2010, and the Period from January 1, 1996 through March 31, 2011                  | 5     
|Notes To Financial Statements (Unaudited)                                                                                                                                   | 6 - 16
|Item 2.   Management's Discussion and Analysis or Plan of Operation                                                                                                         | 16    
|Item 3.   Quantitative and Qualitative Disclosures About Market Risk                                                                                                        | 11    
|Item 4T. Controls and Procedures                                                                                                                                            | 11    
|Part II. OTHER INFORMATION                                                                                                                                                  |       
|Item 1.   Legal Proceedings                                                                                                                                                 | 12    
|Item 2.   Unregistered Sales of Equity Securities and Use of Proceeds                                                                                                       | 12    
|Item 3.   Defaults Upon Senior Securities                                                                                                                                   | 14    
|Item 4.   Submission of Matters to a Vote of Security Holders                                                                                                               | 14    
|Item 5.   Other Information                                                                                                                                                 | 14    
|Item 6.   Exhibits                                                                                                                                                          | 14    
|SIGNATURES                                                                                                                                                                  | 15    
|                                                                                                                                                                            |       











-2-









PART I -  FINANCIAL INFORMATION





Item 1. Financial Statements





ORGANA GARDENS INTERNATIONAL INC.

(A Development Stage Company)

BALANCE SHEETS

|                                                                                              |                            |                     |  |  | 
|--------------------------------------------------------------------------------------------- | -------------------------- | ------------------- |  |  | 
|                                                                                              | March 31,
2011
(unaudited) | December 31,
  2010
|ASSETS                                                                                       
|                                                                                              |                            |                    
|CURRENT ASSETS                                                                                |                            |                    
|Cash                                                                                          | $              44          | $               50 
|Taxes recoverable                                                                             | 1,541                      | 1,598              
|                                                                                              |                            |                    
|                                                                                              |                            |                    
|TOTAL CURRENT ASSETS                                                                          | 1,585                      | 1,648              
|                                                                                              |                            |                    
|AVAILABLE FOR SALE SECURITIES  related parties                                               | 47,519                     | 61,682             
|OIL AND GAS PROPERTIES,(full cost method of accounting unproven)                              | 3                          | 3                  
|                                                                                              |                            |                    
|TOTAL ASSETS                                                                                  | $      49,107              | $         63,333   
|                                                                                              |                            |                    
|LIABILITIES AND STOCKHOLDERS DEFICIT                                                         |                            |                    
|                                                                                              |                            |                    
|CURRENT LIABILITIES                                                                           |                            |                    
|Accounts payable and accrued liabilities                                                      | $      487,288             | $     486,715      
|Due to related parties                                                                        | 112,229                    | 88,590             
|                                                                                              |                            |                    
|TOTAL CURRENT LIABILITIES                                                                     | 599,517                    | 575,305            
|                                                                                              |                            |                    
|                                                                                              |                            |                    
|COMMITMENTS AND CONTINGENCIES                                                                 |                            |                    
|                                                                                              |                            |                    
|STOCKHOLDERS (DEFICIT)                                                                       |                            |                    
|Convertible Preferred:
-  Class A voting stock, $0.001 par value, 5,000,000 shares authorized | -                          | -                  
|-  Class B voting stock, $0.001 par value, 5,000,000 shares authorized                        | -                          | -                  
|Common stock, $0.001 par value, 200,000,000 shares authorized                                 |                            |                    
|41,951,466 (December 31, 2010  41,926,466) shares issued and outstanding                     | 41,951                     | 41,926             
|Additional paid-in capital                                                                    | 24,143,498                 | 24,143,398         
|Deferred compensation                                                                         | (6,238)                    | (6,128)            
|Deficit accumulated during the development stage                                              | (20,260,999)               | (20,236,709)       
|Deficit accumulated prior to the development stage                                            | (4,460,633)                | (4,460,633)        
|Accumulated other comprehensive (loss) income                                                 | (7,989)                    | 6,174              
|                                                                                              |                            |                    
|TOTAL STOCKHOLDERS(DEFICIT)                                                                  | (550,410)                  | (511,972)          
|                                                                                              |                            |                    
|TOTAL LIABILITIES AND STOCKHOLDERS (DEFICIT)                                                 | $       49,107             | $        63,333    



The accompanying notes are an integral part of these financial statements



3



ORGANA GARDENS INTERNATIONAL INC.

(A Development Stage Company)

STATEMENTS OF OPERATIONS

(Unaudited)



|                                                                   |  |                              |                                                  |                 |                    | 
|------------------------------------------------------------------ |  | ---------------------------- | ------------------------------------------------ | --------------- | ------------------ | 
|                                                                   |  | Three Months ended
March 31, | For the period from January 1, 1996 to
March 31,
|                                                                   |  |                              | 2011                                             | 2010            | 2011              
|                                                                   |  |                              |                                                  |                 |                   
|GENERAL AND ADMINSTRATIVE EXPENSES                                 |  |                              |                                                  |                 |                   
|Litigation settlement                                              |  |                              | $             -                                  | $             - | $        2,291,070
|Management and consulting fees                                     |  |                              | 624                                              | 374             | 4,870,196         
|Consulting fees  stock based compensation                         |  |                              | -                                                | -               | 1,919,869         
|Exploration costs                                                  |  |                              | -                                                | -               | 113,678           
|Loss on settlement of debt                                         |  |                              | -                                                | -               | 718,784           
|General and administrative                                         |  |                              | 19,907                                           | 22,881          | 2,775,526         
|Professional fees                                                  |  |                              | 3,759                                            | 8,061           | 1,158,117         
|Interest expense                                                   |  |                              | -                                                | -               | 98,282            
|Research and development costs                                     |  |                              | -                                                | 7,000           | 285,231           
|Software development costs                                         |  |                              | -                                                | -               | 737,300           
|                                                                   |  |                              |                                                  |                 |                   
|TOTAL GENERAL & ADMINISTRATIVE EXPENSES                            |  |                              | 24,290                                           | 38,316          | 4,968,053         
|                                                                   |  |                              |                                                  |                 |                   
|OTHER (INCOME ) EXPENSES                                           |  |                              |                                                  |                 |                   
|Interest, Royalty and Other Income                                 |  |                              | -                                                | -               | (82,138)          
|(Gain)/loss on sale of securities  related parties                |  |                              | -                                                | -               | (21,541)          
|Property option income                                             |  |                              | -                                                | -               | (130,000)         
|Write-down of securities  Legacy Wine & Spirits International Ltd |  |                              | -                                                | -               | 207,111           
|Write-down of securities  Golden Spirit Enterprises Ltd.          |  |                              | -                                                | -               | 12,859            
|Write-down of interest in  ACGT Corporation                        |  |                              | -                                                | -               | 1,406,000         
|Write-down of interest in oil and gas properties                   |  |                              | -                                                | -               | 3,815,655         
|Loss on Iceberg Drive Inn Investment                               |  |                              | -                                                | -               | 85,000            
|                                                                   |  |                              |                                                  |                 |                   
|TOTAL  OTHER (INCOME ) EXPENSES                                    |  |                              | -                                                | -               | 5,292,946         
|                                                                   |  |                              |                                                  |                 |                   
|Loss before Income Taxes                                           |  |                              | (24,290)                                         | (38,316)        | (20,260,999)      
|Income Tax Provision                                               |  |                              | -                                                | -               | -                 
|                                                                   |  |                              |                                                  |                 |                   
|                                                                   |  |                              |                                                  |                 |                   
|NET LOSS FOR THE PERIOD                                            |  |                              | $  (24,290)                                      | $   (38,316)    | $     (20,260,999)
|                                                                   |  |                              |                                                  |                
|BASIC AND DILUTED NET LOSS PER SHARE                               |  |                              | $     (0.00)                                     | $     (0.00)   
|                                                                   |  |                              |                                                  |                
|WEIGHTED AVERAGE COMMON                                            |  |                              |                                                  |                
|SHARES OUTSTANDING                                                 |  |                              | 41,947,855                                       | 31,528,744     



The accompanying notes are an integral part of these financial statements



4













ORGANA GARDENS INTERNATIONAL INC.

(A Development Stage Company)

STATEMENTS OF CASH FLOWS

(unaudited)

|                                                                            |                              |                                                  |                    | 
|--------------------------------------------------------------------------- | ---------------------------- | ------------------------------------------------ | ------------------ | 
|                                                                            | Three months ended
March 31, | For the period from January 1, 1996 to
March 31,
|                                                                            | 2011                         | 2010                                             | 2011              
|                                                                            |                              |                                                  |                   
|CASH FLOWS FROM OPERATING ACTIVITIES                                        |                              |                                                  |                   
|Net loss for the period                                                     | $    (24,290)                | $     (38,316)                                   | $     (20,260,999)
|Adjustments to reconcile net loss to net cash used in operating activities: |                              |                                                  |                   
|- fees and services paid for with common shares                             | 4,015                        | 3,266                                            | 3,445,740         
|- non cash research and development                                         | -                            | -                                                | 105,000           
|- other stock-based compensation                                            | -                            | -                                                | 1,919,468         
|- interest paid for with common shares                                      | -                            | -                                                | 80,872            
|- loss on settlement of debt                                                | -                            | -                                                | 718,784           
|- software development costs paid for with common shares                    | -                            | -                                                | 600,000           
|- non cash exploration costs                                                | -                            | -                                                | 110,000           
|- write-down of interest in oil and gas properties                          | -                            | -                                                | 2,970,718         
|- write-down of equities in Legacy Wine & Spirits                           | -                            | -                                                | 207,111           
|- write-down of equities in Golden Spirit Enterprises Ltd.                  | -                            | -                                                | 12,859            
|- write-down of interest in ACGT Corporation                                | -                            | -                                                | 2,250,937         
|- loss on Iceberg Drive Inn investment                                      | -                            | -                                                | 85,000            
|- (Gain)/loss on sale of securities held for resale  related parties       | -                            | -                                                | (21,816)          
|- non cash option income received in shares                                 | -                            | -                                                | (130,000)         
|- interest accrued on promissory notes receivable                           | -                            | -                                                | (63,136)          
|- other non-cash expenses                                                   | -                            | -                                                | 2,557,382         
|- net changes in working capital items                                      | 630                          | 23,000                                           | 329,489           
|                                                                            |                              |                                                  |                   
|CASH FLOWS USED IN OPERATING ACTIVITIES                                     | (19,645)                     | (12,050)                                         | (5,082,591)       
|                                                                            |                              |                                                  |                   
|CASH FLOWS FROM INVESTING ACTIVITIES                                        |                              |                                                  |                   
|Interest received on promissory notes receivable                            | -                            | -                                                | 63,136            
|Investment in Iceberg Acquisition Corporation                               | -                            | -                                                | (120,000)         
|Proceeds from sale of securities  related party                            | -                            | -                                                | 136,790           
|Interest in oil and gas properties, net of finders fees                     | -                            | -                                                | (1,522,804)       
|                                                                            |                              |                                                  |                   
|CASH FLOWS USED IN INVESTING ACTIVITIES                                     | -                            | -                                                | (1,442,878)       
|                                                                            |                              |                                                  |                   
|CASH FLOWS FROM FINANCING ACTIVITIES                                        |                              |                                                  |                   
|Net proceeds on sale of common stock                                        | -                            | -                                                | 5,098,325         
|Net advances (to) from related parties                                      | 19,639                       | 10,891                                           | 1,007,188         
|Advances receivable                                                         | -                            | -                                                | 420,000           
|                                                                            |                              |                                                  |                   
|CASH FLOWS PROVIDED BY FINANCING ACTIVITIES                                 | 19,639                       | 10,891                                           | 6,525,513         
|                                                                            |                              |                                                  |                   
|NET INCREASE (DECREASE) IN CASH                                             | (6)                          | (1,159)                                          | 44                
|                                                                            |                              |                                                  |                   
|CASH, BEGINNING OF PERIOD                                                   | 50                           | 1,592                                            | -                 
|                                                                            |                              |                                                  |                   
|CASH, END OF PERIOD                                                         | $          44                | $          433                                   | $       44        

Supplemental cash flow information (See Note 9)

The accompanying notes are an integral part of these financial statements





5

ORGANA GARDENS INTERNATIONAL INC.

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

March 31, 2011

(unaudited)





NOTE 1  NATURE OF OPERATIONS



The Company was incorporated as Venture Investments Inc. under the Laws of the State of Nevada on November 29, 1983.  The Company underwent a name change to Asdar Group on December 10, 1987, a name change to Precise Life Sciences Ltd. on April 30, 2002, a name change to Iceberg Brands Corporation on February 18, 2003, a name change to Avalon Gold Corporation on August 28, 2003, a name change to Avalon Energy Corporation on March 22, 2005, a name change to Shotgun Energy Corporation on September 25, 2007, and a name change to Organa Gardens International Inc. on February 26, 2009.  The Company was dormant from 1991 to 1996 and currently has no revenue generating operations.  In accordance with FASB ASC 915, Development Stage Enterprises, the Company was considered a development stage company since January 1, 1996 and as a result of changing its business focus to vertical hydroponic farming is still considered to be a development stage company. Expected operations will consist of growing fruits and vegetables using a rotary hydroponics vertical farming system designed with serviceability, ease-of-use and maximum harvest in mind.



GOING CONCERN



The financial statements have been prepared on the basis of a going concern which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.  The Company has not generated any revenues or completed development of any commercially acceptable products or services to date and has incurred losses of $24,721,632 since inception, and further significant losses are expected to be incurred in the exploration and development of its resource properties, should the company be able to finance or joint venture its resource property. Losses are expected in the development of the vertical hydroponic farming project as well. The Company will depend almost exclusively on outside capital through the issuance of common shares to finance ongoing operating losses and to fund the acquisition, exploration and development of its resource properties.  The ability of the Company to continue as a going concern is dependent on raising additional capital and ultimately on generating future profitable operations.  There can be no assurance that the Company will be able to raise the necessary funds when needed to finance its ongoing costs.  These factors raise substantial doubt about the ability of the Company to continue as a going concern.  The accompanying financial statements do not include any adjustments relative to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result from the outcome of this uncertainty.



NOTE 2  BASIS OF PRESENTATION



The unaudited interim financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Regulation S-X Article 8 Financial Statements of Smaller Reporting Companies as promulgated by the Securities and Exchange Commission ("SEC").  Accordingly, these financial statements do not include all of the disclosures required by generally accepted accounting principles for complete financial statements.  These unaudited interim financial statements should be read in conjunction with the audited financial statements for the period ended December 31, 2010 indexed in Form 10-K.  In the opinion of management, the unaudited interim financial statements furnished herein include all adjustments, all of which are of a normal recurring nature, necessary for a fair statement of the results for the interim period presented.



The preparation of financial statements in accordance with generally accepted accounting principles requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and the reported amounts of revenues and expenses during the reporting period.  Uncertainties with respect to such estimates and assumptions are inherent in the preparation of the Company's financial statements; accordingly, it is possible that the actual results could differ from these estimates and assumptions that could have a material effect on the reported amounts of the Company's financial position and results of operations.



Operating results for the three month period ended March 31, 2011 are not necessarily indicative of the results that may be expected for the year ending December 31, 2011.







6



ORGANA GARDENS INTERNATIONAL INC.

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

March 31, 2011

(unaudited)









Stock-Based Compensation



The Company accounts for all compensation related to stock, options or warrants using a fair value based method whereby compensation cost is measured at the grant date based on the value of the award and is recognized over the service period, which is usually the vesting period. The Company uses the Black-Scholes pricing model to calculate the fair value of options and warrants issued to both employees and non-employees. Stock issued for compensation is valued using the market price of the stock on the date of the related agreement.



Recent Accounting Pronouncements



In January 2010, the FASB issued ASU No. 2010-06 regarding fair value measurements and disclosures and improvement in the disclosure about fair value measurements.  This ASU requires additional disclosures regarding significant transfers in and out of Levels 1 and 2 of fair value measurements, including a description of the reasons for the transfers.  Further, this ASU requires additional disclosures for the activity in Level 3 fair value measurements, requiring presentation of information about purchases, sales, issuances, and settlements in the reconciliation for fair value measurements.  This ASU is effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years.  We are currently evaluating the impact of this ASU, however, we do not expect the adoption of this ASU to have a material impact on our consolidated financial statements.



In July 2010, the FASB issued ASU No. 2010-20, Receivables (Topic 310):  Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses.  The ASU amends FASB Accounting Standards Codification Topic 310, Receivables, to improve the disclosures that an entity provides about the credit quality of its financing receivables and the related allowance for credit losses.  As a result of these amendments, an entity is required to disaggregate, by portfolio segment or class of financing receivables, certain existing disclosures and provide certain new disclosures about its financing receivables and related allowance for credit losses.  This ASU is effective for interim and annual reporting periods ending on or after December 15, 2010.  The adoption of this standard may require additional disclosures, but we do not expect the adoption to have a material effect on our consolidated financial statements.



On December 21, 2010, the FASB issued Accounting Standards Update (ASU) 2010-29, which impacts any public entity that enters into business combinations that are material on an individual or aggregate basis. The guidance specifies that if a public entity presents comparative financial statements, the entity should disclose revenues and earnings of the combined entity as though the business combination(s) that occurred during the year had occurred at the beginning of the prior annual period when preparing the pro forma financial information for both the current and prior reporting periods. The guidance also requires that pro forma disclosures be accompanied by a narrative description regarding the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in reported pro forma revenues and earnings. This guidance is effective for business combinations consummated in periods beginning after December 15, 2010.  We do not believe the adoption of this guidance will have a material impact on our Consolidated Financial Statements.



NOTE 3  AVAILABLE-FOR-SALE SECURITIES  RELATED PARTIES



Golden Spirit



During 2004, the Company received 111,111 restricted Rule 144 shares of Golden Spirit Enterprises Ltd. (Golden Spirit), a public company with directors and significant shareholders in common.  The restricted shares were received as non-refundable consideration pursuant to agreements with Golden Spirit dated November 10, 2004 and December 10, 2004 to acquire certain mineral property interests from the Company.  These agreements were subsequently terminated.



Effective December 31, 2004 the Company recorded, as other comprehensive loss for the year, a $10,000 unrealized loss in the carrying value of its shares of Golden Spirit.  During the years ended December 31, 2005 and 2006 the Company recorded additional unrealized losses in the carrying value of its shares of Golden Spirit totalling $90,000 and $8,889 respectively, which were recorded as other comprehensive loss for those years.  During the year ended December 31, 2007, the Company sold 2,500 shares resulting in a realized gain of $165 and recorded an additional unrealized loss of $473 in 2007. During the year ended December 31, 2008, the Company sold 10,000 shares resulting in a realized loss of $800 and recorded an additional unrealized







7

ORGANA GARDENS INTERNATIONAL INC.

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

March 31, 2011

(unaudited)





NOTE 3  AVAILABLE-FOR-SALE SECURITIES  RELATED PARTIES(cont)



loss of $15,026 to December 31, 2008. As a result, the carrying value of the available for sale shares of Golden Spirit is $2,712 as at December 31, 2008.



During the year ended December 31, 2009, the Company recorded an unrealized gain of $1,232. As a result, the carrying value of the available for sale shares of Golden Spirit is $3,945 as at December 31, 2009.



During the year ended December 31, 2010, the Company sold Nil Golden Spirit shares and recorded an unrealized gain of $11,774. As a result, the carrying value of the available for sale shares of Golden Spirit is $2,860 as at December 31, 2010. Effective December 31, 2010, the Company recorded a $12,859 write-down of its investment in Golden due to an other-than-temporary decline in the value of the shares.



During the three month period ended March 31, 2011, the Company sold Nil Golden Spirit shares and recorded an additional unrealized gain of $542 to March 31, 2011. As a result, the carrying value of the available for sale shares of Golden Spirit is $3,402 as at March 31, 2011.



Legacy



During 2003 the Company settled an outstanding debt receivable of $122,988 from Legacy Mining Ltd. (Legacy) for the issue of 1,229,880 restricted shares of Legacy representing a then 9.8% interest in Legacy. During 2004, the Company wrote this investment down to $1 because management determined that it was not recoverable within a reasonable period of time. Effective December 31, 2007, the Company recorded, as other comprehensive income for the year, a $604,440 unrealized gain in the carrying value of its shares of Legacy.



During the year ended December 31, 2008, the Company sold 150,000 Legacy shares resulting in a realized gain of $26,100 and recorded an additional unrealized gain of $270,562 to December 31, 2008. As a result, the carrying value of the available for sale shares of Legacy was $885,502 as at December 31, 2008.



During the year ended December 31, 2009, the Company sold 30,985 Legacy shares resulting in a realized loss of $2,987 (net of commissions of $595) and recorded an additional unrealized loss of $797,161 to December 31, 2009. As a result, the carrying value of the available for sale shares of Legacy is $ 62,934 as at December 31, 2009.



During the year ended December 31, 2010, the Company the Company received 2,627,440 restricted shares of Legacy valued to $131,372 pursuant to a debt settlement and sold Nil Legacy shares. The Company recorded an unrealized gain in the carrying value of its available-for-sale securities totaling $35,021, which was recorded as other comprehensive income (loss). As a result, the carrying value of the available for sale shares of Legacy is $58,822 as at December 31, 2010. Effective December 31, 2010, the Company recorded a $78,823 write-down of its investment in Legacy due to an other-than-temporary decline in the value of the shares.



During the three month period ended March 31, 2011, the Company sold Nil Legacy shares and recorded an additional unrealized loss of $14,705 to March 31, 2011. As a result, the carrying value of the available for sale shares of Legacy is $44,117 as at March 31, 2011.



Available for sale securities  related parties include the following:

|                                                                |                 |               
|--------------------------------------------------------------- | --------------- | --------------
|                                                                | March 31,       | December 31,  
|                                                                | 2011            | 2010          
|                                                                |                 |               
|3,676,335  (2010-3,676,335) shares of Legacy Wine & Spirits     | $        44,117 | $       58,822
|98,612  (2010- 98,612) shares of Golden Spirit Enterprises Ltd. | 3,402           | 2,860         
|                                                                |                 |               
|                                                                | $        47,519 | $       61,682







8

ORGANA GARDENS INTERNATIONAL INC.

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

March 31, 2011

(unaudited)









NOTE 4  OIL AND GAS PROPERTIES



Oil and gas properties include the following:

|                                                                       |                        |                      
|---------------------------------------------------------------------- | ---------------------- | ---------------------
|                                                                       |                        |                      
|                                                                       | March 31,              | December 31,         
|                                                                       | 2011                   | 2010                 
|                                                                       |                        |                      
|Acquisition and exploration costs, unproved, not subject to depletion. | $                    3 | $                   3
|                                                                       |                        |                      



The Company's oil and gas activities are currently conducted in the United States. The following costs were incurred in oil and gas acquisition and exploration activities:



Harvester Property, California, USA:



The Company owns a 2% royalty interest carried at a nominal value of $1 due to the uncertainty of realization.



LAK Ranch Oil Project, Wyoming, USA:



The Company owns a 0.7% gross overriding royalty interest on 6,360 acres of oil and natural gas rights located in the Powder River Basin of eastern Wyoming carried at a nominal value of $1 due to the uncertainty of realization.



Uinta Basin Property, Utah:



On October 26, 2004, the Company entered into a Letter of Intent with Pioneer Oil and Gas (Pioneer), whereby the Company could acquire an undivided Eighty-Five Percent (85%) working interest and an undivided Sixty-Eight (68%) net revenue interest in 13,189 acres located in Wasatch County, Utah, known as the Uinta Basin.  The Company paid Pioneer a deposit of $50,000 for the exclusive right to enter into a Participation Agreement with Pioneer on or before January 18, 2005.



On January 18, 2005, the Company entered into the Participation Agreement with Pioneer as described above.  The total consideration paid to Pioneer, including the $50,000 deposit described above, was $706,279.  In addition, the Company issued 1,200,000 restricted common shares valued at $264,000 on February 7, 2005 as finders fees to certain third parties who were responsible for tabling the Uinta Basin Overpressured Gas Project to the Company.  The Company also committed to paying a 1.5% gross royalty on all revenue received by it from the Uinta Basin Project.



The Company was seeking joint venture drilling partners during 2008 in order to meet its 2010 drilling commitment. The Company was unable to secure a joint venture drilling partner or raise any capital to satisfy an approximate $12,000,000 drilling cost for a 15,000 ft. initial well. Due to this inability to find funding, the Uinta property was being carried at a nominal value of $1 due to the uncertainty of realization. During the year ended December 31, 2009, the Company re-conveyed its interest in the Uinta property to its original owner, Pioneer Oil and Gas.



NOTE 5  ACQUISITION



On March 6, 2009, the Company signed an agreement to acquire all of the assets of Organa Gardens Inc.(OGI), a Nevada Corporation in the business of hydroponics vertical farming. These assets include, but are not limited to all proprietary designs, engineering, technology, business models, plans and intellectual properties pertaining to the Organa Garden System-Discovery (OGS-D) and the Organa Garden System-Enterprise (OGS-E). Both the OGS-D and OGS-E are a rotary hydroponics vertical farming system designed with serviceability, ease-of-use and maximum harvest in mind. Both models are modular, allowing them to be expanded by stacking them. Its specially designed waterwheel technology allows the fully automated system to recycle and reuse 95% of the water used while requiring a negligible amount of energy to run.





10

ORGANA GARDENS INTERNATIONAL INC.

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

March 31, 2011

(unaudited)





NOTE 5  ACQUISITION (cont.)



The Company will issue up to 25,000,000 Rule 144 shares of its common stock to OGI, to be held in trust and released based on the following terms and gross revenue requirements:



(a) Release of 10,000,000 shares of the Company upon signing this Agreement.

(b) Release of 5,000,000 shares of the Company upon attaining $1,000,000 US in gross revenue.

c) Release of 5,000,000 shares of the Company upon attaining $2,500,000 US in gross revenue.

(d) Release of 5,000,000 shares of the Company upon attaining $4,000,000 US in gross revenue.



None of these shares have been issued to date and the agreement has not yet been finalized.



The Company will raise up to $500,000 US to market and fulfill the required obligations of OGI as outlined in the supplemental agreement(s) to follow. The Company and Organa Gardens Inc.agree to allow the shares to sit in trust for a period of 5 years in order for OGI to meet its sales goals. Should the requirements not be met in all or part, then all of the remaining shares will be returned back to the treasury of the Company.



On June 9, 2009, the Registrant signed an amended agreement to acquire all of the assets of Organa Gardens Inc., a Nevada Corporation in the business of hydroponics vertical farming. These assets include but are not limited to all proprietary designs, engineering, technology, business models, plans and intellectual properties pertaining to the Organa Garden System-Discovery (OGS-D) and the Organa Garden System-Enterprise (OGS-E).



Under the terms of the acquisition, the Company issued 3,500,000 restricted 144 shares to Organa Gardens Inc.and/or its nominees (issued) and render a cash commitment of up to $250,000 to complete the final steps of taking the OGS-D and OGS-E to market. This agreement replaces the agreement dated March 9, 2009.

11



All research and development costs are expensed as incurred and include costs of consultants who conduct research and development on behalf of the Company. For the year ended December 31, 2009, the Company incurred $278,231 in research and development costs. During the three months ended March 31, 2011 $Nil was incurred in research and development. (2010 - $7,000).



NOTE 6  DEFERRED COMPENSATION



On August 15, 2007, the Company entered into an agreement with Palisades Financial Ltd., (Palisades) a private company owned by a significant shareholder of the Company, for a four year term, whereby Palisades will provide investor relations services to the Company (valued at $32,000) in exchange for 133,333 restricted shares of the Companys common stock. Palisades will provide services such as researching, editing and generating a company profile, relaying the Companys business perspectives and distribution of corporate updates, including press releases.



On November 18, 2009 the Company entered into an agreement with Compte de Sierge Accomodative Corp. (Compte), a private company controlled by a significant shareholder, with an eighteen month term, whereby Compte provides investor relations services to the Company specific to the hydroponic vertical farming project (valued at $7,600) in exchange for 500,000 restricted shares of the Companys common stock.



The Company amortizes the costs of these services over the respective terms of the contracts.  During the three months ended March 31, 2011 and 2010, the Company recorded amortization of deferred compensation totaling $3,890.  As of March 31, 2011 the unamortized portion of the deferred compensation totaled $6,238. (December 31, 2010 - $6,128).







12



ORGANA GARDENS INTERNATIONAL INC.

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

March 31, 2011

(unaudited)





NOTE 7- STOCKHOLDERS EQUITY



On February 20, 2009, a majority of the Companys shareholders entitled to vote on such matters approved a change of the Companys name to Organa Gardens International Inc.  On February 26, 2009, a Certificate of Amendment to its Articles of Incorporation was filed with the State of Nevada changing the Companys name to Organa Gardens International Inc. The Company also took the necessary steps to change its trading symbol and CUSIP Number whereby the CUSIP Number has changed from 825358 10 4 to 68618Y 10 6. Effective at the opening of business on April 7, 2009, the trading symbol changed from SGNE to OGNG.  The name change did not involve any change in the issued or authorized capital of the Company.



(1) 2011 Stock Transactions



During the three months ended March 31, 2011, the Company issued 25,000 restricted common shares valued at $125 to a new director for his services.



(2) 2010 Stock Transactions



During the three months ended March 31, 2010, the Company issued a total of 1,205,000 common shares pursuant to the exercise of options under the Companys 2009 Stock Incentive and Option Plan at $0.01 per share to satisfy debt to related parties in the amount of $12,050.



(3) 2011 Stock Options



The Companys stock option activity is as follows:

|                            |                   |                                 |                                                         
|--------------------------- | ----------------- | ------------------------------- | --------------------------------------------------------
|                            |                   |                                 |                                                         
|                            | Number of options | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life
  (in years)
|Balance, December 31, 2007  | -                 | -                               | -                                                       
|Granted during 2008         | 419,300           | 0.11                            | 5.00                                                    
|Exercised during 2008       | (419,300)         | 0.11                            |                                                         
|Balance, December 31, 2008  | -                 | -                               | -                                                       
|Granted during the period   | 8,498,000         | 0.03                            |                                                         
|Exercised during the period | (8,498,000)       | 0.03                            |                                                         
|Balance, December 31, 2009  | -                 | -                               | -                                                       
|Granted during 2010         | 9,361,033         | 0.03                            |                                                         
|Exercised during 2010       | (9,361,033)       | 0.03                            |                                                         
|                            |                   |                                 |                                                         
|Balance, December 31, 2010  | -                 | -                               | -                                                       
|Granted during the period   | -                 | 0.03                            |                                                         
|Exercised during the period | -                 | 0.03                            |                                                         
|                            |                   |                                 |                                                         
|Balance, March 31, 2011     | -                 | -                               | -                                                       









13

ORGANA GARDENS INTERNATIONAL INC.

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

March 31, 2011

(unaudited)







NOTE 7- STOCKHOLDERS EQUITY (cont.)



As of March 31, 2011, there were no stock options available for grant under the Companys 2006 Stock Incentive and Option Plan.



As of March 31, 2011, there were no stock options available for grant under the Companys 2007 Stock Incentive and Option Plan.



As of March 31, 2011, there were 2,345,000 stock options available for grant under the Companys two 2009 Stock Incentive and Option Plan.



(4) 2010 Stock Options



During the three months ended March 31, 2010, 1,205,000 stock options were granted by the Company, which were immediately exercised. Accordingly, no compensation expense was recorded.



The Companys stock option activity is as follows:

|                            |                   |                                 |                                                             
|--------------------------- | ----------------- | ------------------------------- | ------------------------------------------------------------
|                            |                   |                                 |                                                             
|                            | Number of options | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life
      (in years)
|Balance, December 31, 2007  | -                 | -                               | -                                                           
|Granted during 2008         | 419,300           | 0.11                            | 5.00                                                        
|Exercised during 2008       | (419,300)         | 0.11                            |                                                             
|Balance, December 31, 2008  | -                 | -                               | -                                                           
|Granted during the period   | 8,498,000         | 0.03                            |                                                             
|Exercised during the period | (8,498,000)       | 0.03                            |                                                             
|Balance, December 31, 2009  | -                 | -                               | -                                                           
|Granted during the period   | 1,205,000         | 0.03                            |                                                             
|Exercised during the period | (1,205,000)       | 0.03                            |                                                             
|                            |                   |                                 |                                                             
|Balance, March 31, 2010     | -                 | -                               | -                                                           





(b)   As of March 31, 2010, there were 1,333,333 stock options available for grant under the Companys 2006 Stock Incentive and Option Plan.



(c)   As of March 31, 2010, there were 120,700 stock options available for grant under the Companys 2007 Stock Incentive and Option Plan.



(d)   As of March 31, 2010, there were 8,872,000 stock options available for grant under the Companys two 2009 Stock Incentive and Option Plan.







14



ORGANA GARDENS INTERNATIONAL INC.

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

March 31, 2011

(unaudited)





NOTE 8  RELATED PARTY TRANSACTIONS



During the three months ended March 31, 2011, the Company incurred $1,625 (2010 -$1,460) in management fees to directors. As at March 31, 2010 the Company owes $9,000 in management fees.



During the three months ended March 31, 2011 the Company incurred $8,349 (2010 - $7,767) in rent and office expenses to a private company controlled by a shareholder.



During the three months ended March 31, 2011, two companies controlled by significant shareholders earned $3,266 (2010 - $3,266) pursuant to prepaid services agreements.





The following amounts are due to related parties at:

|                         |                 |                  
|------------------------ | --------------- | -----------------
|                         |                 |                  
|                         | March 31,
2011  | December 31,
2010
|                         |                 |                  
|Director                 | $         9,000 | $         9,000  
|Significant shareholders | 103,229         | 79,590           
|                         |                 |                  
|                         | $       112,229 | $       88,590   



NOTE 9  SUPPLEMENTAL CASH FLOW INFORMATION

|                                 |                              |                    
|-------------------------------- | ---------------------------- | -------------------
|                                 |                              |                    
|                                 | Three months
ended March 31,
|                                 | 2011                         | 2010               
|Cash paid during the period for: |                              |                    
|Interest                         | $                 -          | $                 -
|Income taxes                     | $                 -          | $                 -

During the three months ended March 31, 2011, the Company issued 25,000 restricted common shares valued at $125 to a new director for his services.



The Company paid no cash for interest and income taxes for the three months ended March 31, 2011 and 2010.



15

NOTE 10  COMMITMENTS AND CONTINGENCIES



On February 21, 2002, the Company issued 350,000 shares valued at $119,000 to Empire Sterling Corporation for services to be rendered with respect to the acquisition of ACGT Corporation (ACGT).  The shares were to be held in trust and not sold until all necessary financing was in place to complete the ACGT acquisition. Empire Sterling Corporation breached the trust agreement and the Company placed a stop transfer on these shares and requested they be returned to the Company. Empire Sterling Corporation failed to return the share certificate and as such, the Company commenced court proceedings against the principals of Empire Sterling Corporation. The Company argued for an interim injunction against all parties and was successful. On May 9, 2002, the Court ordered Empire Sterling Corporation to deposit the shares with the Court pending judicial disposition.  The Company continued to file legal process claiming ownership of the shares and breach of trust inter alia. The Company was successful and has now applied to have the share certificates released and subsequently cancelled. As of March 31, 2011, the Company is still in the process of having the certificates released.









ORGANA GARDENS INTERNATIONAL INC.

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

March 31, 2011

(unaudited)





NOTE 10  COMMITMENTS AND CONTINGENCIES(cont.)



In February, 2008, the Company received a demand notice from CGG Veritas for failure to pay an outstanding balance of $317,380 pursuant to a Master Agreement and Job Supplement for the Shotgun Draw 2D Seismic Program in Utah. In accordance with Section 15.3 of the Master Agreement and Job Supplement dated March 21, 2007, CGG has demanded payment by April 25, 2008. If CGG Veritas is forced to proceed with litigation of this matter, it will seek reimbursement of its attorneys fees and expenses related to the litigation. The Company is currently examining various alternatives to resolve this matter. CGG Veritas has not proceeded with litigation as of March 31, 2011.



As of August 1, 2010, the Company has leased 1250 sq. ft of office space from Holm Investments Ltd. at $2,500 per month for a period of 3 years.



NOTE 13  SUBSEQUENT EVENTS



Subsequent to March 31, 2011, Company issued 2,345,000 common shares with a value of $39,950 for satisfaction of debt to related parties in the amount of $33,000 and for satisfaction of consulting services in the amount of $6,950.



16



Item 2. Managements Discussion and Analysis or Plan of Operation.



The following should be read in conjunction with our financial statements and the related notes that appear elsewhere in this quarterly report. The discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements.



Our Company, Organa Gardens International Inc., was formed under the laws of the State of Nevada on November 29, 1983 under the name Venture Group, Inc. On February 11, 1986, an amendment to the Articles of Incorporation was filed changing the corporate name to Asdar Corporation. On December 10, 1987, another amendment to the Articles of Incorporation was filed changing the corporate name to Asdar Group.  On February 18, 2001, Asdar Group filed a Certificate of Reinstatement with the Secretary of State of Nevada. On April 30, 2002, another amendment to the Articles of Incorporation was filed changing the corporate name to Precise Life Sciences Ltd. Additional amendments to the Articles of Incorporation were filed changing the corporate name as follows:





|February 18, 2003  | - | Iceberg Brands Corporation       
|------------------ | - | ---------------------------------
|August 28, 2003    | - | Avalon Gold Corporation          
|March 22, 2005     | - | Avalon Energy Corporation        
|September 25, 2007 | - | Shotgun Energy Corporation       
|April 7, 2009      | - | Organa Gardens International Inc.





17





Our Company holds (1) an undivided Eighty-Five Percent (85%) working interest and an undivided Sixty-Eight (68%) net revenue interest in 13,189 acres located in Wasatch County, Utah, known as the "Uinta Basin" and (2) a 0.7% gross overriding royalty interest on 6,360 acres of oil and natural gas rights located in the Powder River Basin of eastern Wyoming.

Our Company has undertaken a new project in 2009. Organa Gardens International Inc. has a vertical hydroponics farming system built to make the most efficient use of light, energy, water, land, temperature and production cycle while growing the highest quality and healthiest plants in an optimum, consistent environment unaffected by weather. The Organa Garden Systems (OGS) provide a means for food production andconsumption change to global environmental and ecological sustainability through vertical hydroponics rotary farming.There are two OGS models; the Discovery (OGS-D) and the Enterprise (OGS-E)

Both the OGS-D and OGS-E are rotary hydroponics vertical farming systems designed with serviceability, ease-of-use and maximum harvest in mind. Both models are modular, allowing them to be expanded by stacking them. Its specially designed waterwheel technology allows the fully automated system to recycle and reuse 95% of the water used while requiring a negligible amount of energy to run.

The Discovery is a strong, low cost ABS plastic model for the home gardener and the Enterprise is a powder-coated steel version for the commercial grower. Both models are modular and can be expanded by stacking them."The more you stack the more you grow"

Both the OGS-D and OGS-E are rotary hydroponics vertical farming systems designed with serviceability, ease-of-use and maximum harvest in mind. Both models are modular, allowing them to be expanded by stacking them. Its specially designed waterwheel technology allows the fully automated system to recycle and reuse 95% of the water used while requiring a negligible amount of energy to run.







18



Benefits of the Organa Garden Systems:- Fresh, nutritious and abundant produce all year-round
- Localized year-round farming possible, eliminating costly transportation, 
  spoilage and pollution.
- Reduces the use of pesticides and preservatives.

- Urban renewal and sustainable community building.
- Energy and water conservation.

- More frequent harvest.
- Fully automated and easy to operate.

- Business opportunity for the entrepreneurial businessman or established farmer



On March 6, 2009, the Company signed an agreement to acquire all of the assets of Organa Gardens Inc.(OGI), a Nevada Corporation in the business of hydroponics vertical farming. These assets include, but are not limited to all proprietary designs, engineering, technology, business models, plans and intellectual properties pertaining to the Organa Garden System-Discovery (OGS-D) and the Organa Garden System-Enterprise (OGS-E). Both the OGS-D and OGS-E are a rotary hydroponics vertical farming system designed with serviceability, ease-of-use and maximum harvest in mind. Both models are modular, allowing them to be expanded by stacking them. Its specially designed waterwheel technology allows the fully automated system to recycle and reuse 95% of the water used while requiring a negligible amount of energy to run.

The Company was to issue up to 25,000,000 Rule 144 shares of its common stock to OGI, to be held in trust and released based on the following terms and gross revenue requirements:



(a) Release of 10,000,000 shares of the Company upon signing this Agreement.

(b) Release of 5,000,000 shares of the Company upon attaining $1,000,000 US in gross revenue.

(c) Release of 5,000,000 shares of the Company upon attaining $2,500,000 US in gross revenue.

(d) Release of 5,000,000 shares of the Company upon attaining $4,000,000 US in gross revenue.



The Company was to raise up to $500,000 US to market and fulfill the required obligations of OGI as outlined in the supplemental agreement(s) to follow. The Company and Organa Gardens Inc. agree to allow the shares to sit in trust for a period of 5 years in order for OGI to meet its sales goals. Should the requirements not be met in all or part, then all of the remaining shares will be returned back to the treasury of the Company.



However, On June 9, 2009, the Registrant signed an amended agreement to acquire all of the assets of Organa Gardens Inc., a Nevada Corporation in the business of hydroponics vertical farming. These assets include but are not limited to all proprietary designs, engineering, technology, business models, plans and intellectual properties pertaining to the Organa Garden System-Discovery (OGS-D) and the Organa Garden System-Enterprise (OGS-E).



Under the terms of the acquisition, the Registrant will issue 3,500,000 restricted 144 shares to Organa Gardens Inc. and/or its nominees (issued) and render a cash commitment of up to $250,000 to complete the final steps of taking the OGS-D and OGS-E to market. This agreement replaces the agreement dated March 9, 2009.



All research and development costs are expensed as incurred and include costs of consultants who conduct research and development on behalf of the Company. For the three months ended March 31, 2011, the Company incurred $Nil in research and development costs. (2010  $7,000)







19



Currently, the Company continues the process of applying for a world-wide patent for its vertical hydroponic farming system, Organa Gardens System - Enterprise (OGS-E). The management of Organa Gardens is in the final steps of determining the types of materials that will be used to mass produce the OGS-E units economically so that the units can be sold and used affordably by the general population who would like to grow their own food organically and efficiently.



Further, The Company continues its discussions with a China-based company to manufacture and distribute the Company's Organa Garden Systems-Enterprise (OGS-E) Initial marketing emphasis will target second tier cities such as Chengdu and Tianjin in central and northern China where farming is seasonal. The recent explosive growth of the Chinese organic produce sector is a big advantage, having increased tenfold between 1999 and 2004 and has since continued to be aggressively promoted and supported by the Chinese government. Organa Garden's growing wheel will enable the tier two cities to grow organic foods without the risks of pesticides, crops pest, and soil-borne diseases while reaping the rewards of higher yields and seasonal extension of crop growth. Organa Gardens will allow China to grow organic foods on a smaller scale to accommodate variable demands while being cost and energy efficient

Our Oil and Gas Properties



1. The Wyoming Property.



The Company owns a 0.7% gross overriding royalty interest on 6,360 acres of oil and natural gas rights located in the Powder River Basin of eastern Wyoming carried at a nominal value of $1 due to the uncertainty of realization.



Derek Oil and Gas Corporation, a public company and the operator, now holds a 95% working interest in the LAK Ranch project and is the project operator. The LAK Ranch Project is a strong fit for Derek's corporate focus of using enhanced oil recovery (EOR) techniques to develop new production from reservoirs in North America. Derek and its partner, SEC Oil and Gas Partnership are confident in the ability of Derek's management to drive this project forward as promptly as possible in 2007.



Based on Shotguns ongoing agreement with respect to the LAK Ranch,  if Derek sells any or all of its interest in the LAK Ranch Property, it will pay to Shotgun, subject to adjustments, 7.5% of the net sales proceeds on the first USD $7,500,000 and 1% on any balance over and above USD$7,500,000.



The Company has received $Nil in oil royalties for the three months ended March 31, 2011

(2010 - $Nil).



2. The California Property.



The Company owns a 2% royalty interest in the Harvester Property carried at a nominal value of $1 due to the uncertainty of realization.



3. The Utah Property.



On October 26, 2004, the Company entered into a Letter of Intent with Pioneer Oil and Gas (Pioneer), whereby the Company could acquire an undivided Eighty-Five Percent (85%) working interest and an undivided Sixty-Eight (68%) net revenue interest in 13,189 acres located in Wasatch County, Utah, known as the Uinta Basin.  The Company paid Pioneer a deposit of $50,000 for the exclusive right to enter into a Participation Agreement with Pioneer on or before January 18, 2005.







20



On January 18, 2005, the Company entered into the Participation Agreement with Pioneer as described above.  The total consideration paid to Pioneer, including the $50,000 deposit described above, was $706,279.  In addition, the Company issued 1,200,000 restricted common shares valued at $264,000 on February 7, 2005 as finders fees to certain third parties who were responsible for tabling the Uinta Basin Overpressured Gas Project to the Company.  The Company also committed to paying a 1.5% gross royalty on all revenue received by it from the Uinta Basin Project.



The Company was seeking joint venture drilling partners during 2008 in order to meet its 2010 drilling commitment. The Company was unable to secure a joint venture drilling partner or raise any capital to satisfy an approximate $12,000,000 drilling cost for a 15,000 ft. initial well. Due to this inability to find funding, the Uinta property was being carried at a nominal value of $1 due to the uncertainty of realization. During the year ended December 31, 2009, the Company re-conveyed its interest in the Uinta property to its original owner, Pioneer Oil and Gas.



Available for Sale Securities  related parties.



Golden Spirit



During 2004, the Company received 111,111 restricted Rule 144 shares of Golden Spirit Enterprises Ltd. (Golden Spirit), a public company with directors and significant shareholders in common.  The restricted shares were received as non-refundable consideration pursuant to agreements with Golden Spirit dated November 10, 2004 and December 10, 2004 to acquire certain mineral property interests from the Company.  These agreements were subsequently terminated.



Effective December 31, 2004 the Company recorded, as other comprehensive loss for the year, a $10,000 unrealized loss in the carrying value of its shares of Golden Spirit.  During the years ended December 31, 2005 and 2006 the Company recorded additional unrealized losses in the carrying value of its shares of Golden Spirit totalling $90,000 and $8,889 respectively, which were recorded as other comprehensive loss for those years.  During the year ended December 31, 2007, the Company sold 2,500 shares resulting in a realized gain of $165 and recorded an additional unrealized loss of $473 in 2007. During the year ended December 31, 2008, the Company sold 10,000 shares resulting in a realized loss of $800 and recorded an additional unrealized loss of $15,026 to December 31, 2008. As a result, the carrying value of the available for sale shares of Golden Spirit is $2,712 as at December 31, 2008.



During the year ended December 31, 2009, the Company recorded an unrealized gain of $1,232. As a result, the carrying value of the available for sale shares of Golden Spirit is $3,945 as at December 31, 2009.



During the year ended December 31, 2010, the Company sold Nil Golden Spirit shares and recorded an unrealized gain of $11,774. As a result, the carrying value of the available for sale shares of Golden Spirit is $2,860 as at December 31, 2010. Effective December 31, 2010, the Company recorded a $12,859 write-down of its investment in Golden due to an other-than-temporary decline in the value of the shares.



During the three month period ended March 31, 2011, the Company sold Nil Golden Spirit shares and recorded an additional unrealized gain of $542 to March 31, 2011. As a result, the carrying value of the available for sale shares of Golden Spirit is $3,402 as at March 31, 2011.



Legacy



During 2003 the Company settled an outstanding debt receivable of $122,988 from Legacy Mining Ltd. (Legacy) for the issue of 1,229,880 restricted shares of Legacy representing a then 9.8% interest in





21



Legacy. During 2004, the Company wrote this investment down to $1 because management determined that it was not recoverable within a reasonable period of time. Effective December 31, 2007, the Company recorded, as other comprehensive income for the year, a $604,440 unrealized gain in the carrying value of its shares of Legacy.



During the year ended December 31, 2008, the Company sold 150,000 Legacy shares resulting in a realized gain of $26,100 and recorded an additional unrealized gain of $270,562 to December 31, 2008. As a result, the carrying value of the available for sale shares of Legacy was $885,502 as at December 31, 2008.



During the year ended December 31, 2009, the Company sold 30,985 Legacy shares resulting in a realized loss of $2,987 (net of commissions of $595) and recorded an additional unrealized loss of $797,161 to December 31, 2009. As a result, the carrying value of the available for sale shares of Legacy is $ 62,934 as at December 31, 2009.



During the year ended December 31, 2010, the Company the Company received 2,627,440 restricted shares of Legacy valued to $131,372 pursuant to a debt settlement and sold Nil Legacy shares. The Company recorded an unrealized gain in the carrying value of its available-for-sale securities totaling $35,021, which was recorded as other comprehensive income (loss). As a result, the carrying value of the available for sale shares of Legacy is $58,822 as at December 31, 2010. Effective December 31, 2010, the Company recorded a $78,823 write-down of its investment in Legacy due to an other-than-temporary decline in the value of the shares.



During the three month period ended March 31, 2011, the Company sold Nil Legacy shares and recorded an additional unrealized loss of $14,705 to March 31, 2011. As a result, the carrying value of the available for sale shares of Legacy is $44,117 as at March 31, 2011.



Available for sale securities  related parties include the following:

|                                                                |                 |               
|--------------------------------------------------------------- | --------------- | --------------
|                                                                | March 31,       | December 31,  
|                                                                | 2011            | 2010          
|                                                                |                 |               
|3,676,335  (2010-3,676,335) shares of Legacy Wine & Spirits     | $        44,117 | $       58,822
|98,612  (2010- 98,612) shares of Golden Spirit Enterprises Ltd. | 3,402           | 2,860         
|                                                                |                 |               
|                                                                | $        47,519 | $       61,682



Liquidity and Capital Resources.



At March 31, 2011, we had total assets of $49,107 including cash of $44 and taxes recoverable of $1,541.  We have $3 invested in oil and gas properties, which is represented by $1 for 13,189 acres of gas leases located in Utah, $1 for an oil and gas interest located in Wyoming and $1 for an oil and gas interest located in San Joaquin, California.  We have available for sale securities with a fair value of $47,519 as at March 31, 2011. As of December 31, 2010, we had total assets of $63,333. The decrease in assets is primarily due to a decrease in the fair value of available for sale securities.



At March 31, 2011, we had current liabilities of $599,517, which was represented by accounts payable and accrued liabilities of $487,288 and $112,229 due to related parties.  As of December 31, 2010 we had current liabilities of $575,305. The slight increase in liabilities was a result of an increase in related party payables.  At March 31, 2011, we had a working capital deficiency of $597,932 (December 31, 2010 - $573,657).







22



We do not believe that our current cash resources will be able to maintain our current operations for an extended period of time.  We will be required to raise additional funds or arrange for additional financing over the next 12 months to adhere to our development schedule.  No assurance can be given, however, that we will have access to additional cash in the future, or that funds will be available on acceptable terms to satisfy our working capital requirements. If we are not able to arrange for additional funding or if our officers, directors and shareholders stop advancing funds to us, we may be forced to make other arrangements for financing such as loans or entering into strategic alliances. We have not identified any alternative sources of financing.



Results of Operations



We have not yet realized any revenue from operations to date. Loss from operations for the three month period ended March 31, 2011 was $24,290 (2010 - $38,316). This decrease in loss was due to the incurrence of fewer expenditures in research and development costs and fewer general and administrative expenses.



From inception to March 31, 2011 our Company has incurred cumulative net losses of $24,721,632 resulting primarily from the write-down of $3,815,655 in its interests in oil and gas properties, write-down of $1,406,000 in its interest in ACGT Corporation, write-down of equities in Legacy Wine & Spirits International Ltd. of $207,111,  write-down of equities in Golden Spirit Enterprises Ltd. of $12,859 and also as a result of selling, general and administrative expenses including a litigation settlement of $2,291,070; management and consulting fees of $6,790,065, office and general expenses of $2,775,526; professional fees of $1,158,117; interest expense of $98,282, software development costs of $737,300 and research and development costs of $285,231. In addition, we received $130,000 in property option income as a recorded value of certain restricted shares in Golden Spirit Enterprises Ltd. (See Item 2, Utah property), $82,138 in interest and royalty income and a gain on the sale of securities  related parties of $21,541.



The cash and equivalents constitute our present internal sources of liquidity.



Because we are not generating any significant revenues, our only external source of liquidity is the sale of our capital stock and any advances from officers, directors or shareholders.



Our Plan of Operation for the Next Twelve Months



We do anticipate that we will need to raise additional capital within the next 12 months in order to continue as a going concern. Organa Gardens International Inc. does not anticipate any significant exploration costs within the next 12 months, nor does the Organa Gardens International Inc. anticipate that it will lease or purchase any significant equipment within the next 12 months. Organa Gardens International Inc. does not anticipate a significant change in the number of its employees within the next 12 months. However, Organa Gardens International Inc. will be required to raise $250,000 for the hydroponic vertical farming project  See above.





Off-Balance Sheet Arrangements



Our company has not entered into any off balance sheet arrangements.



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Item 3. Quantitative and Qualitative Disclosures About Market Risk



As of March 31, 2011, we had cash in the amount of $44. We have not generated any revenues since inception and have incurred a net loss of $24,721,632 from our re-entry into development stage on January 1, 1996 to March 31, 2011. Our current operating funds are insufficient to cover an environmental study and permitting and preparation costs to initiate drilling of a gas well. It will have to obtain funds through entering into arrangements with collaborative partners or others to accomplish these expenditures. However, we do not have any specific plans for raising the required funds. There is no assurance that we will be able to raise sufficient funding from the sale of our common stock to fund our anticipated exploration expenditures.



Item 4T Controls and Procedures.

Our management carried out an evaluation with the participation of our Chief Executive Officer who serves as our principal executive officer and principal financial and accounting officer, required by Rule 13a-15 of the Securities Exchange Act of 1934 (the Exchange Act) of the effectiveness of our disclosure controls and procedures as defined in Rule 13a-15(e) under the Exchange Act.

Based on this evaluation, our Chief Executive Officer and principal financial and accounting officer concluded that as of the end of the period covered by this report, our disclosure controls and procedures were not effective such that the information relating to our company required to be disclosed in our SEC reports (i) is recorded processed, summarized and reported within the time periods specified in SEC rules and forms and (ii) is accumulated and communicated to our management to allow timely decisions regarding required disclosures. Our management concluded that our disclosure controls and procedures were not effective as described in more detail below. A material weakness is a control deficiency, or combination of control deficiencies, that result in more than a remote likelihood that a material misstatement of our annual or interim financial statements would not be prevented or detected.

The specific weakness identified by our management was a lack of a timely review by corporate management. The weakness is principally due to lack of working capital to retain the legal, accounting and external audit services, which are integral to the Companys process for timely disclosure and financial reporting. This deficiency resulted in the delinquent filing of our quarterly report on Form 10-Q for the quarterly period ended March 31, 2011.

This quarterly report does not include a report of managements assessment regarding internal control over financial reporting or an attestation report of our registered public accounting firm due to a transition period established by rules of the Securities and Exchange Commission for newly public companies.

PART II - OTHER INFORMATION



ITEM 1. Legal Proceedings



1. On February 21, 2002, the Company issued 350,000 shares valued at $119,000 to Empire Sterling Corporation for services to be rendered with respect to the acquisition of ACGT Corporation.  The shares were to be held in trust and not sold until all necessary financing was in place to complete the ACGT acquisition. Empire Sterling Corporation breached the trust agreement and the Company placed a stop transfer on these shares and requested they be returned to the Company. Empire Sterling Corporation failed to return the share certificate and as such, the Company commenced court proceedings against the principals of Empire Sterling Corporation. The Company argued for an interim injunction against all parties and





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was successful. On May 9, 2002, the Court ordered Empire Sterling Corporation to deposit the shares with the Court pending judicial disposition.  The Company continued to file legal process claiming ownership of the shares and breach of trust inter alia. The Company was successful and has now applied to have the share certificate released and subsequently cancelled.  As of March 31, 2011, the Company is still in the legal process of having the certificate released.
In February, 2008, the Company received a demand notice from CGG Veritas for failure to pay an outstanding balance of $317,380 pursuant to a Master Agreement and Job Supplement for the Shotgun Draw 2D Seismic Program in Utah. In accordance with Section 15.3 of the Master Agreement and Job Supplement dated March 21, 2007, CGG has demanded payment by April 25, 2008. If CGG Veritas is forced to proceed with litigation of this matter, it will seek reimbursement of its attorneys fees and expenses related to the litigation. The Company is currently examining various alternatives to resolve this matter. CGG Veritas has not proceeded with litigation as of March 31, 2011.



ITEM 1A. Risk Factors



Not Applicable



ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds



(1) 2011 Stock Transactions

During the three months ended March 31, 2011, the Company issued 25,000 restricted common shares valued at $125 to a new director for his services.

(2) 2010 Stock Transactions



During the three months ended March 31, 2010, the Company issued a total of 1,205,000 common shares pursuant to the exercise of options under the Companys 2009 Stock Incentive and Option Plan at $0.01 per share to satisfy debt to related parties in the amount of $12,050.



(3) 2011 Stock Options



The Companys stock option activity is as follows:

|                            |                   |                                 |                                                         
|--------------------------- | ----------------- | ------------------------------- | --------------------------------------------------------
|                            |                   |                                 |                                                         
|                            | Number of options | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life
  (in years)
|Balance, December 31, 2007  | -                 | -                               | -                                                       
|Granted during 2008         | 419,300           | 0.11                            | 5.00                                                    
|Exercised during 2008       | (419,300)         | 0.11                            |                                                         
|Balance, December 31, 2008  | -                 | -                               | -                                                       
|Granted during the period   | 8,498,000         | 0.03                            |                                                         
|Exercised during the period | (8,498,000)       | 0.03                            |                                                         
|Balance, December 31, 2009  | -                 | -                               | -                                                       
|Granted during 2010         | 9,361,033         | 0.03                            |                                                         
|Exercised during 2010       | (9,361,033)       | 0.03                            |                                                         
|                            |                   |                                 |                                                         
|Balance, December 31, 2010  | -                 | -                               | -                                                       
|Granted during the period   | -                 | 0.03                            |                                                         
|Exercised during the period | -                 | 0.03                            |                                                         
|                            |                   |                                 |                                                         
|Balance, March 31, 2011     | -                 | -                               | -                                                       





| |  |  | 
| |  |  | 

As of March 31, 2011, there were no stock options available for grant under the Companys 2006 Stock Incentive and Option Plan.



As of March 31, 2011, there were no stock options available for grant under the Companys 2007 Stock Incentive and Option Plan.



As of March 31, 2011, there were 2,345,000 stock options available for grant under the Companys two 2009 Stock Incentive and Option Plan.





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(4) 2010 Stock Options



During the three months ended March 31, 2010, 1,205,000 stock options were granted by the Company, which were immediately exercised. Accordingly, no compensation expense was recorded.



The Companys stock option activity is as follows:

|                            |                   |                                 |                                                         
|--------------------------- | ----------------- | ------------------------------- | --------------------------------------------------------
|                            |                   |                                 |                                                         
|                            | Number of options | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life
  (in years)
|Balance, December 31, 2007  | -                 | -                               | -                                                       
|Granted during 2008         | 419,300           | 0.11                            | 5.00                                                    
|Exercised during 2008       | (419,300)         | 0.11                            |                                                         
|Balance, December 31, 2008  | -                 | -                               | -                                                       
|Granted during the period   | 8,498,000         | 0.03                            |                                                         
|Exercised during the period | (8,498,000)       | 0.03                            |                                                         
|Balance, December 31, 2009  | -                 | -                               | -                                                       
|Granted during the period   | 1,205,000         | 0.03                            |                                                         
|Exercised during the period | (1,205,000)       | 0.03                            |                                                         
|                            |                   |                                 |                                                         
|Balance, March 31, 2010     | -                 | -                               | -                                                       



(a)   As of March 31, 2010, there were 1,333,333 stock options available for grant under the Companys 2006 Stock Incentive and Option Plan.



(b)   As of March 31, 2010, there were 120,700 stock options available for grant under the Companys 2007 Stock Incentive and Option Plan.



(c)   As of March 31, 2010, there were 8,872,000 stock options available for grant under the Companys two 2009 Stock Incentive and Option Plan.



ITEM 3.  Defaults Upon Senior Securities



None.



ITEM 4. Submission of Matters to Vote of Security Holders



None.



ITEM 5.  Other Information



None







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ITEM 6. EXHIBITS



Exhibit 31.1 - Section 906 Certification of Periodic Report of the Chief Executive Officer.



Exhibit 31.2 - Section 906 Certification of Periodic Report of the Chief Financial Officer.



Exhibit 32.1 - Section 302 Certification of Periodic Report of the Chief Executive Officer.



Exhibit 32.2 - Section 302 Certification of Periodic Report of the Chief Financial Officer.







SIGNATURES



Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



|                    |                                  
|------------------- | ---------------------------------
|                    |                                  
|                    | ORGANA GARDENS INTERNATIONAL INC.
|                    |                                  
|                    |                                  
|Date: June 23, 2011 | By:   /s/ Matt Kelly             
|                    | Matt Kelly                       
|                    | Secretary. Treasurer and C.F.O.  
|                    |                                  
|Date: June 23, 2011 | By:   /s/ Jaclyn Cruz            
|                    | Jaclyn Cruz                      
|                    | President and C.E.O              





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