**UNITED STATES        SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, DC 20549**

**FORM 10-Q/A**

**x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.**

**For the quarterly period ended June 30, 2009**

OR

**[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.**

**For the transition period from to         **

Commission file number 814-00717

**UNITED ECOENERGY CORP.**

(Exact Name of Registrant as Specified in Its Charter)         

                                          NEVADA                                                                                                                                                                                                                                                                                                                                   84-1517723        (State or Other Jurisdiction of   Incorporation or        Organization)                                                                                                                                                                                                                                                        (I.R.S. EmployerIdentification No.)         

120 Wall Street, Suite 2401

New York, NY 10005

(Address of Principal Executive Offices) (Zip Code)

(646)-808-3094

(Registrant’s Telephone Number, Including Area Code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90        days.     

Yes [X ]     No [ ]

Indicate by check mark whether the Registrant is an accelerated filer (as defined by Rule 12b-2 of the Act).     

Yes [ ]     No [X ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     

Yes [ ]     No [X ]

The number of shares of the Registrant’s Common Stock, $0.001 par value, outstanding as of August 1, 2009, was 46,124,415 shares.

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TABLE OF CONTENTS

PAGE NO.

PART I. FINANCIAL INFORMATION

**Item 1. Financial Statements**

Balance Sheets as of June 30, 2009 and December 31,        2008                                                                                                                                                                                                                                                                                                                 F-1

Schedule of Investments as of June 30,        2009                                                                                                                                                                                                                                                                                                                                                 F-2

Statements of Operations for the Three-month periods ended June 30, 2009 and 2008                                                                                                                                                                                                                                                                                 F-3

Statements of Operations for the Six-month periods ended June 30, 2009 and        2008                                                                                                                                                                                                                                                                               F-4

Statements of Cash Flows for the Six-month periods ended June 30, 2009 and        2008                                                                                                                                                                                                                                                                              F-5

Notes to Financial        Statements                                                                                                                                                                                                                                                                                                                                                                         F-6

**Item 2. Management Discussion and Analysis of Financial Condition and Results of        Operations                                                                                                                                                                                                                                                      2**

**Item 3. Quantitative and Qualitative Disclosures about Market        Risk                                                                                                                                                                                                                                                                                                        7 **

**Item 4. Controls and Procedures                                                                                                                                                                                                                                                                                                                                                                              7**

PART II. OTHER INFORMATION     

**Item 1. Legal        Proceedings                                                                                                                                                                                                                                                                                                                                                                                   8**

**Item 2. Unregistered Sales of Equity Securities and Use of        Proceeds                                                                                                                                                                                                                                                                                                        8**

**Item 3. Defaults Upon Senior        Securities                                                                                                                                                                                                                                                                                                                                                          8**

**Item 4. Submission of Matters to a Vote of Security        Holders                                                                                                                                                                                                                                                                                                                        9**

Item 5. Other        Information                                                                                                                                                                                                                                                                                                                                                                                    9

Item 6. Exhibits and Reports on Form        8-K                                                                                                                                                                                                                                                                                                                                                         9

        Signatures                                                                                                                                                                                                                                                                                                                                                                                            9

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PART I. FINANCIAL INFORMATION

**Item 1. Financial Statements.**

UNITED ECOENERGY CORP.

BALANCE SHEETS

                                                                                                                                                                                                                                                                       June 30, 2009          December 31, 2008

                                                                                                                                                                                                                                                                       (unaudited)

                                                                                                                                                                                                                                                                       -------------------        -----------------------

Assets:

Cash and cash        equivalents                                                                                                                                                                                                                                                                                                      $              2,289          $                    383        Due from        affiliate                                                                                                                                                                                                                                                                                                                                        3,550                            3,550        Accrued interest        receivable                                                                                                                                                                                                                                                                                                                     3,291                             8,190

                                                                                                                                                                                                                                                                         --------------                  --------------

Total Current        Assets                                                                                                                                                                                                                                                                                                                                 9,130                          12,123

Other Assets:

Investments in Portfolio        Companies                                                                                                                                                                                                                                                                                                   710,500                        250,000

                                                                                                                                                                                                                                                                         --------------                  --------------

Total        Assets                                                                                                                                                                                                                                                                                                                               $          719,630           $            262,123

                                                                                                                                                                                                                                                                         ========                  ========

Liabilities and Stockholders’ Equity (Deficit)

Accounts        payable                                                                                                                                                                                                                                                                                                             $           141,883           $             25,698

Due to        affiliate                                                                                                                                                                                                                                                                                                                                 175,781                        175,781

**Notes payable to related        parties                                                                                                                                                                                                                                                                                                            65,000                           40,000**

Accrued interest payable to related        parties                                                                                                                                                                                                                                                                                 11,518                             9,542

Short term        loans                                                                                                                                                                                                                                                                                                                                 3,865                             3,865

Accrued interest        payable                                                                                                                                                                                                                                                                                                                 4,065                             3,891

Convertible        debenture                                                                                                                                                                                                                                                                                                                    25,000                                    -

                                                                                                                                                                                                                                                                       --------------                 ---------------

Total Current        Liabilities                                                                                                                                                                                                                                                                                                              427,112                         258,777

Long Term        Liabilities:                                                                                                                                                                                                                                                                                                                              -                                     -

                                                                                                                                                                                                                                                                --------------                        ---------------

Total        Liabilities                                                                                                                                                                                                                                                                                                                               427,112                                258,777

                                                                                                                                                                                                                                                                       --------------                 ---------------

Commitments and Contingencies: Note 9

Stockholders’ Equity (Deficit):        Common stock, par value $0.001 authorized 150,000,000 shares, issued and outstanding 45,965,231and 34,710,537 shares

at June 30, 2009 and December 31,        2008                                                                                                                                                                                                                                                                               45,965                                 34,710

Convertible preferred stock, par value $0.001, authorized 5,000,000 shares, issued no shares at June 30, 2009 and December 31,        2008                                                                                                                                     -                                    -

Additional paid-in        capital                                                                                                                                                                                                                                                                                                                 1,486,984                        690,839        Accumulated        deficit                                                                                                                                                                                                                                                                                                                  (1,240,431)                            (722,203)

                                                                                                                                                                                                                                                                                                                                                                    ---------------                ---------------

Total Stockholders’        Equity:                                                                                                                                                                                                                                                                                                         292,518                                   3,346

                                                                                                                                                                                                                                                                                                                                                                    ---------------                ---------------

Total Liabilities and Stockholders’        Equity:                                                                                                                                                                                                                                                                     $               719,630             $         262,123

                                                                                                                                                                                                                                                                                                                                                                    =========              =========

 

Net asset value per common        share                                                                                                                                                                                                                                                                                          $       0.00636             $         0.00010

                                                                                                                                                                                                                                                                                                                                                                    =========              =========

The accompanying notes are an integral part of these financial statements.

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                                                                                                                                              UNITED ECOENERGY CORP.

                                                                                                                                       SCHEDULE        OF INVESTMENTS (unaudited)

                                                                                                                                                  June 30, 2009

Portfolio                                                                                 Industry                                                               Amount                                  Cost                                                 Fair                                             % of

        Investments                                                                                                                                                  or        Number                                                                                       Value                                       Net assets

              -------------------                                                                ---------------                                                     --------------                             ---------------                                    -------------                                  --------------

City 24/7        LLC                                                                        Technology                                                         $      250,000                            $            250,000                            $            -                                                           -

Secured Note Receivable due May 31, 2009

SSC,        Inc.                                                                                       Automotive                                                          $     200,000                            $      200,000                            $        200,000                                              68.4

Secured Note Receivable

Epic Wound Care, Inc. Health                                                       Health                                                         $             10,500                            $        10,500                            $          10,500                                               3.6

Unsecured Loans Receivable

Epic Wound Care, Inc.                                                                   Health                                                                100,000                                   $      500,000                            $ 500,000                                           170.9

Common Stock

                                                                                                                                               -------------                              --------------                                  ----------

        Total                                                                                                                                                                                                               $             960,500                            $  710,500                                          242.9

                                                                                                                                              ========                              ========                                  ======

The accompanying notes are an integral part of these financial statements.

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UNITED ECOENERGY CORP.

STATEMENTS OF OPERATIONS

                                                                                                                                                                                                                                                                                                    For the three months ended

                                                                                                                                                                                                        June 30, 2009     June 30, 2008

                                                                                                                                                                                                                                                (unaudited)       (unaudited)

                                                                                                                                                                                                                                               -----------------     ------------------

Investment income:

Interest        income                                                                                                                                                                                                                                                                                                           $          3,291       $                  -

Dividend        income                                                                                                                                                                                                                                                                                                                                   -                           -

Other        income                                                                                                                                                                                                                                                                                                                                         -                           -

                                                                                                                                                                                                                                                                 -----------------            -----------------

Total        income                                                                                                                                                                                                                                                                                                                                  3,291                           -

Operating expenses:

Investment advisory fees

Base        fee                                                                                                                                                                                                                                                                                                                                     -                            -

Incentive        fee                                                                                                                                                                                                                                                                                                                      -                            -

Capital gains        fee                                                                                                                                                                                                                                                                                                                -                            -

                                                                                                                                                                                                                                                                         ----------------    ------------------

Total investment advisory        fees                                                                                                                                                                                                                                                                                            -                            -

General and administrative:

Administrative        expenses                                                                                                                                                                                                                                                                               106,250                  18,750

Rent        expense                                                                                                                                                                                                                                                                                                              1,650                    1,650

Interest        expense                                                                                                                                                                                                                                                                                                         1,106                    2,425

Professional        expenses                                                                                                                                                                                                                                                                                             23,833                    5,583

Other        expenses                                                                                                                                                                                                                                                                                                         48,683                       467

                                                                                                                                                                                                                                                                                                                                          ----------------           ------------------

Total operating        costs                                                                                                                                                                                                                                                                                                 181,522                         28,875

                                                                                                                                                                                                                                                                    -----------------   ------------------

Net operating        loss                                                                                                                                                                                                                                                                                                     (178,231)                      (28,875)

                                                                                                                                                                                                                                                             -----------------   ------------------

Loss on impairment of        investment                                                                                                                                                                                                                                                                                (265,690)                          -

Net unrealized appreciation in        investments                                                                                                                                                                                                                                                                             -                            -

                                                                                                                                                                                                                                                                                                                                               -----------------    ------------------

Net decrease in stockholders’ equity resulting from        operations                                                                                                                                                                                                                 $          (443,921)     $         (28,875)

                                                                                                                                                                                                                                                     ==========    ==========

 

Basic and diluted net decrease in stockholder equity per common share resulting from        operations                                                                                                                                                           $     (0.0121)     $         (0.0009)

                                                                                                                                                                                                                                                                                                                                               ==========   ==========

Weighted number of common shares outstanding-basic and        diluted                                                                                                                                                                                                                 36,838,656           32,781,639

                                                                                                                                                                                               ==========   ==========

The accompanying notes are an integral part of these financial statements.

F-3

 

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UNITED ECOENERGY CORP.        STATEMENTS OF OPERATIONS

                                                                                                                                                                                                                                                                                                                                      For the six months ended

                                                                                                                                                                                                                      June 30, 2009      June 30, 2008

                                                                                                                                                                                                                              (unaudited)        (unaudited)                                                                                                                                                                                                                             ------------------     -----------------

Investment income:

Interest        income                                                                                                                                                                                                                                                                                                                $          3,291       $                  -

Dividend        income                                                                                                                                                                                                                                                                                                                          -                           -

Other        income                                                                                                                                                                                                                                                                                                                         -                                  -

                                                                                                                                                                                                                ---------------       ---------------

Total        income                                                                                                                                                                                                                                                                                                                                3,291                           -

Operating expenses:

Investment advisory fees

Base        fee                                                                                                                                                                                                                                                                                                                                   -                           -

Incentive        fee                                                                                                                                                                                                                                                                                                                    -                           -

Capital gains        fee                                                                                                                                                                                                                                                                                                              -                           -

                                                                                                                                                                                                          --------------              ---------------

Total investment advisory        fees                                                                                                                                                                                                                                                                                          -                           -

General and administrative:

Administrative        expenses                                                                                                                                                                                                                                                                                    185,000                 40,000

Rent        expense                                                                                                                                                                                                                                                                                                            3,600                   3,100

Interest        expense                                                                                                                                                                                                                                                                                                       2,150                   4,485

Professional        expenses                                                                                                                                                                                                                                                                                           23,833                   5,583

Other        expenses                                                                                                                                                                                                                                                                                                 8,746                           5,951

                                                                                                                                                                                                                                ---------------             ---------------

Total operating        costs                                                                                                                                                                                                                                                                                                      263,329                 59,119

                                                                                                                                                                                                                                       --------------       ---------------

Net operating        loss                                                                                                                                                                                                                                                                                                          (260,038)              (59,119)

                                                                                                                                                                                       --------------       ---------------

Loss on impairment of        investments                                                                                                                                                                                                                                                                             (258,190)                        -

Net unrealized appreciation in        investments                                                                                                                                                                                                                                                                                   -                          -

                                                                                                                                                                                                                                                                                                                                          --------------              ---------------

Net decrease in stockholders’ equity resulting from        operations                                                                                                                                                                                                                 $         (518,228)     $      (59,119)

                                                                                                                                                                                                                                ========              =========

 

Basic and diluted net decrease in stockholder’s equity per common share resulting from        operations                                                                                                                                                       $    (0.0145)     $      (0.0018)

                                                                                                                                                                                                                                       ========      =========

 

Weighted number of common shares outstanding-basic and        diluted                                                                                                                                                                                                               35,780,475        32,781,639

                                                                                                                                                                                                                                                                     =========     =========

The accompanying notes are an integral part of these financial statements.

F-4

 

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UNITED ECOENERGY CORP.

STATEMENT OF CASH FLOWS        FOR THE SIX MONTHS ENDED

June 30, 2009 and 2008        (unaudited)

                                                                                                                                                                                                                                                                             June 30, 2009      June 30, 2008

                                                                                                                                                                                                                                                                             (Unaudited)       (Unaudited)

                                                                                                                                                                                                                                                                               -----------------      -----------------

Cash flows from operating activities:

Net decrease in stockholders’ equity resulting from        operations                                                                                                                                                                                                                                          $     (518,228)     $     (59,119)

Adjustments to reconcile net decrease in stockholders’ equity resulting from operations to net cash used in operating activities:

Purchases of investments at        cost                                                                                                                                                                                                                                                                                      (210,500)                       -

Loss on portfolio        investment                                                                                                                                                                                                                                                                                                      258,190                        -                       

Increase in accrued interest        receivable                                                                                                                                                                                                                                                                                 (3,291)                              -

Increase in accounts        payable                                                                                                                                                                                                                                                                                                     116,185               17,779

Increase in amounts due to        affiliate                                                                                                                                                                                                                                                                                                      -                12,500

Decrease in amounts due from        affiliate                                                                                                                                                                                                                                                                                                -                   (600)

Increase in accrued interest        payable                                                                                                                                                                                                                                                                                                174                 1,056

Increase in interest payable to related        party                                                                                                                                                                                                                                                                                1,976                 3,429

                                                                                                                                                                                                                                                                              -------------       ------------

Net cash used in operating        activities                                                                                                                                                                                                                                                                                               (355,494)            (24,955)

 

Cash flows from financing activities:

Proceeds from short term loan                                                                                                                                                                                                                                                                                                             25,000               25,000

Proceeds from convertible        debenture                                                                                                                                                                                                                                                                                          25,000                        -

Proceeds from stock        issuance                                                                                                                                                                                                                                                                                                     307,400                       -

                                                                                                                                                                                                                                                              -------------             ------------

Net cash provided by financing        activities                                                                                                                                                                                                                                                                                        357,400               25,000

                                                                                                                                                                                                                                                                                                                                                                        -------------      -------------

Net increase (decrease) in        cash                                                                                                                                                                                                                                                                                                              1,906                     45

Cash, beginning of        period                                                                                                                                                                                                                                                                                                                   383                            31

                                                                                                                                                                                                                                                                       -------------      ------------

Cash, end of        period                                                                                                                                                                                                                                                                                                                      $          2,289        $           76

                                                                                                                                                                                                                                                                                ========      =======

 

Non-cash investing and financing transactions:

Stock issued for        investment                                                                                                                                                                                                                                                                                           $      500,000         $             -

                                                                                                                                                                                                                                                                         ========             =======

The accompanying notes are an integral part of these financial statements.

F-5

 

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**UNITED ECOENERGY CORP.**

**NOTES TO FINANCIAL STATEMENTS**

**June 30****, 2009****(unaudited)**

**Note 1. Organization and Interim Financial Statements**

United EcoEnergy Corp. (United EcoEnergy or the Company), a Nevada corporation,was organized in February, 1997 and is a closed-end investment companythatfiled an election to be treated as a business development company (BDC)        underthe Investment Company Act of 1940, (the 1940 Act) in February 2006.         

As a BDC, the Company is subject to the filing requirements of the SecuritiesExchange Act of 1934 and has elected to be subject to Sections 55 to 65 ofthe 1940 Act, which apply only to BDCs. The Company is not a registeredinvestment company under the 1940 Act, however, and is not required to filethe semi-annual and annual reports required to be filed by registeredinvestment companies under Section 30 of the 1940 Act. As a BDC, theCompany also is not eligible to file its periodic reports under the 1934 Actas a small business        issuer. As a BDC, the Company also is subject to thefinancial reporting requirements of Regulation S-X issued by the SEC.The original focus of the Company was primarily on investments in alternativeenergy companies, including bio-fuel companies. Changes in the alternativeenergy market and the inability to locate or close on suitable        portfolioinvestments in this market lead the Company to rethink its market focus,a process which is ongoing. At June 30, 2009, the Company had no netassets invested in alternative energy companies and a total of $710,500invested in other portfolio companies, as short term interest bearingloans and        ownership of all of the outstanding stock of one company.

The accompanying financial statements are unaudited and have been prepared inaccordance with accounting principles generally accepted in the United States of America for interim financial information and the instructions to Form10-Q, including Regulation S-X.        Accordingly, certain information and footnotedisclosures normally included in audited financial statements prepared inaccordance with accounting principles generally accepted in the United States of America have been omitted pursuant to such rules and regulations. Thesefinancial statements should be read in conjunction with the audited financialstatements that were included in the Form 10-K filed by the Company for theyear ended December 31, 2008. As a BDC, and therefore as a non-registeredinvestment company, the Company is subject to the normal financial reportingrules of Regulation S-X, as adopted by the SEC, in accordance with RegulationS-X        5.01. The accompanying financial reports have been prepared in accordancewith the requirements of Regulation S-X, as explained and interpreted in theAudit and Accounting Guide for Investment Companies of the American Instituteof Certified Public Accountants (May 1, 2009)(the Audit Guide).

Operating results for the interim periods presented are not necessarilyindicative of the results to be expected for a full year.

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UNITED ECOENERGY CORP.

**NOTES TO FINANCIAL STATEMENTS**

June 30, 2009(unaudited)

**Note 2. Significant Accounting Policies**

The preparation of financial statements in conformity with accounting principlesgenerally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported        amounts of income and expenses during the reported period. Changes in the economic environment, financial markets and any other parameters used in determining these estimates could cause actual results to differ, and those differences could be material.

The following are significant accounting policies consistently applied by theCompany and are based on Chapter 7 of the Audit Guide, as modified by AppendixA:

Investments:

|  | (a)      | Securitiestransactions are recorded on a trade-date basis. |
|--|-----------------------------------|------------------------------------------------------------|

|  | (b)      | Valuation: |
|--|-----------------------------------|------------|

(1) Investments for which market quotations are readily available are valued atsuch market quotations.

(2) Short-term investments which mature in 60 days or less, such as U.S.Treasury bills, are valued at amortized cost, which approximates market value.The amortized cost method involves valuing a security at its cost on the dateof        purchase and thereafter assuming a constant amortization to maturity of thedifference between the principal amount due at maturity and cost. Short-termsecurities which mature in more than 60 days are valued at current marketquotations by an independent pricing service or at the mean between the bid andask prices obtained from at least        two brokers or dealers (if available, orotherwise by a principal market maker or a primary market dealer). Investmentsin money market mutual funds are valued at their net asset value as of theclose of business on the day of valuation.

(3) It is expected that most of the investments in the Company’s portfoliowill not have readily available market values. Debt and equity securitieswhose market prices are not readily available are valued at fair value, withthe assistance of an independent valuation service where the board of directorsconsiders that advisable, using a valuation policy and a consistently appliedvaluation process which is under the direction of our board of directors.The factors that may be taken into account in fairly valuing investmentsinclude,        as relevant, the portfolio company’sability to make payments, itsestimated earnings and projected discounted cash flows, the nature andrealizable value of any collateral, the financial environment in which theportfolio company operates, comparisons to securities of similar publiclytraded companies and other relevant factors. Due to        the inherent uncertaintyof determining the fair value of investments that do not have a readilyavailable market value, the fair value of these investments may differsignificantly from the values that would have been used had a ready marketexisted for such investments, and any such differences could be material.

F-7

 

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**UNITED ECOENERGY CORP.**

**NOTES TO FINANCIAL STATEMENTS**

**June 30, 2009        (unaudited)**

**Note 2. Significant Accounting Policies (continued)**

As part of the fair valuation process, the Audit Committee of the Companywill review the preliminary evaluations prepared by our investment advisorengaged by the Board of Directors, as well as management’s valuationrecommendations and the recommendations of the Investment Committee.Management and United EcoEnergy Corp. (“the Investment Advisor”)will respond to the preliminary evaluation to reflect comments provided by the Audit Committee. The Audit Committee will review the final valuation report and management’s valuation recommendations and make a recommendation to the Board of Directors based on its analysis of the methodologies employed and the various valuationfactors as well as factors that the Investment Advisor and management maynot have included in their evaluation processes. The Board of Directorsthen will evaluate the Audit Committee recommendations and undertake asimilar analysis to determine the fair value of each investment inthe portfolio in good        faith.        (c) Realized gains or losses on the sale of investments are calculated usingthe specific identification method.        (d) Interest income, adjusted for amortization of premium and accretion ofdiscount, is recorded on an accrual basis.        (e) Dividend income is recorded on the ex-dividend date.        (f) Loan origination, facility, commitment, consent and other advance feesreceived by us on loan agreements or other investments are accreted intoincome over the term of the loan.        Federal and State Income Taxes:        The Company has not elected to be treated as, and is not, a regulatedinvestment company and does not presently intend to comply with therequirements of the Internal Revenue Code of 1986 (the Code), applicableto regulated investment companies. A regulated investment companyas defined in Code Section852(b)(5)(B)isrequired to distribute at least 90% of its investment company taxableincome to shareholders, which the Company does not expect to do for theforeseeable future. Therefore, the Company must make appropriate provisionfor income taxes in accordance with SFAS        109, Accounting for Income Taxes,using the liability method, which requires the recognition of deferred assetsand liabilities for the expected future tax consequences of temporarydifferences between carry amounts and tax basis of assets and liabilities. At June 30, 2009, the Company has approximately $1,240,432of net operating loss        carry-forwards available to affect future taxable income and has established a valuation allowance equal to the tax benefit of the net operating loss carry-forwards as realization of the asset is not assured.

The Company applies the provisions of FASB, Interpretation No.48, or FIN 48,“Accounting for Uncertainty in Income Taxes – an Interpretation of FASBStatement 109.”FIN 48        prescribes a recognition threshold and a measurementattribute for the financial statement recognition and 

F-8

 

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**UNITED ECOENERGY CORP.**

**NOTES TO FINANCIAL STATEMENTS**

**June 30, 2009        (unaudited)**

**Note 2. Significant Accounting Policies (continued)**

measurement of taxpositions taken or expected to be taken in a tax return. For those benefitsto be recognized, a tax position must be more likely than not to be sustainedupon examination by taxing authorities. The amount recognized        is measured asthe largest amount of benefit that has a greater than 50% likelihood of beingrealized upon ultimate settlement.

Value of Financial Instruments        The carrying amounts reported in the balance sheet as of June 30, 2009 for cash and cash equivalents, due from affiliate, accrued interest receivable, accounts payable, due to affiliate, short term loans, and accrued interest payable approximate fair value because of the immediate or short-term maturity of these financial instruments. It was not practical to estimate the fair value of the convertible debt due to the nature of these items. These        estimates would be based on the carrying amounts, maturities, effective interest rates and volatility of the Company’s stock. The Company does not believe it is practical due to the significant volatility of the Company’s stock.        Fair value estimates are made at a specific point in time, based on the terms of the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantlyaffect these estimates.        The Company adopted SFAS 157 on January 1, 2008. This statement establishes a framework for measuring fair value, and expands disclosures about fair value measurements. SFAS 157 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels as follows:

a)     Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access as of the measurement date. Financial assets and liabilities utilizing Level 1 inputs include active exchange-traded securities and exchange-based derivatives.

b)     Level 2 - inputs other than quoted prices included within Level 1 that are directly observable for the asset or liability or indirectly observable through corroboration with observable market data. Financial assets and liabilities utilizing Level 2 inputs include fixed income securities, non-exchange-based        derivatives, mutual funds, and fair-value hedges.

c)     Level 3 - unobservable inputs for the asset or liability only used when there is little, if any, market activity for the asset or liability at the measurement date. Financial assets and liabilities utilizing Level 3 inputs include infrequently-traded, non-exchange-based derivatives and commingled investment        funds, and are measured using present value pricing models

F-9

 

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**UNITED ECOENERGY CORP.**

**NOTES TO FINANCIAL STATEMENTS**

**June 30, 2009        (unaudited)**

**Note 2. Significant Accounting Policies (continued)**

Dividends and Distributions:        Dividends and distributions to common stockholders will be recorded on theex-dividend date. The amount, if any, to be paid as a dividend will beapproved by the board of directors each quarter and will be generally basedupon management’estimates of our earnings for the quarter and our investmentneeds. Net realized capital gains, if any, will be reviewed at leastannually as part of any distribution determination.

Consolidation:        As an investment company, the Company will only consolidate subsidiaries whichare also investment companies. At June 30, 2009, the Company did not haveany consolidated subsidiaries.

Managerial Assistance        As a business development company, we will offer, and provide upon request,managerial assistance to certain of our portfolio companies. This assistancecould involve, among other things, monitoring the operations of our portfoliocompanies, participating in board and management meetings, consulting withand advising officers of portfolio        companies and providing otherorganizational and financial guidance. The Company expects to receive feeincome for providing these services from each portfolio company.        Custodial Agreements        Rule 17f-1(c) issued under the Investment Company Act of 1940 provides that if aregistered investment company placesor maintainsany of its investmentsecurities in the custody of a member of a national securities exchange, then itmay do so only pursuant to a written contract approved by its Board of        Directorsand containing certain required provisions. The Company, as a BDC, is not aregistered investment company and in any event has no securities placed ormaintained with such a member. Therefore, the Company does not have and has notfiled, such an agreement with the SEC. In the event it does place any of itsinvestment securities in the custody of a member of a national securitiesexchange, it will then prepare and enter into the required written agreement.        Fidelity Bond        Rule 17g-1 issued under the Investment Company Act of 1940 provides that aregistered investment company must provide and maintain a fidelity bond againstlarceny or embezzlement by each officer or employee of the company who may haveaccess to securities or funds of the company, directly or indirectly. TheCompany, as a BDC, is not a        registered investment company and in any event hashad no securities and minimal cash through most of its tenure as a BDC, andtherefore has notobtaineda fidelity bond. On August 7, 2009 the Company secured a fidelity bond and will undertake any related filings shortly.

F-10

 

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**UNITED ECOENERGY CORP.**

**NOTES TO FINANCIAL STATEMENTS**

**June 30, 2009        (unaudited)**

**Note 2. Significant Accounting Policies (continued)**

Recent Accounting Pronouncements:        In May 2009, the FASB issued FAS 165, “Subsequent Events”. This pronouncement establishes standards for accounting for and disclosing subsequent events (events which occur after the balance sheet date but before financial statements are issued or are available to be issued). FAS 165 requires and entity to disclose the date subsequent events were evaluated and whether that evaluation took place on the date financial statements were issued or were available to be issued. It is        effective for interim and annual periods ending after June 15, 2009. The adoption of FAS 165 did not have a material impact on the Company’s financial condition or results of operation.

In June 2009, the FASB issued FAS 166, “Accounting for Transfers of Financial Assets”an amendment of FAS 140. FAS 140 is intended to improve the relevance, representational faithfulness, and comparability of the information that a reporting entity provides in its financial statements about a        transfer of financial assets: the effects of a transfer on its financial position, financial performance , and cash flows: and a transferor’s continuing involvement, if any, in transferred financial assets. This statement must be applied as of the beginning of each reporting entity’s first annual reporting period that begins after November 15, 2009. The Company does not expect the adoption of FAS 166 to have an impact on the Company’s results of operations, financial        condition or cash flows.

In June 2009, the FASB issued FAS 167, “Amendments to FASB Interpretation No. 46(R)”. FAS 167 is intended to (1) address the effects on certain provisions of FASB Interpretation No. 46 (revised December 2003), *Consolidation of Variable Interest        Entities*, as a result of the elimination of the qualifying special-purpose entity concept in FAS 166, and (2) constituent concerns about the application of certain key provisions of Interpretation 46(R), including those in which the accounting and disclosures under the Interpretation do not always provided timely and useful information about an enterprise’s involvement in a variable interest entity. This statement must be applied as of the        beginning of each reporting entity’s first annual reporting period that begins after November 15, 2009. The Company does not expect the adoption of FAS 167 to have an impact on the Company’s results of operations, financial condition or cash flows.

In June 2009, the FASB issued FAS 168, “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles”. FAS 168 will become the source of authoritative U.S. generally accepted accounting principles (GAAP) recognized by the FASB to be applied by nongovernmental entities. Rules and        interpretive releases of the Securities and Exchange Commission (SEC) under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. On the effective date of this Statement, the Codification will supersede all then-existing non-SEC accounting and reporting standards. All other non-grandfathered non-SEC accounting literature not included in the Codification will become non-authoritative. This statement is effective for financial statements issued        for interim and annual 

        F-11  

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**UNITED ECOENERGY CORP.**

**NOTES TO FINANCIAL STATEMENTS**

**June 30, 2009        (unaudited)**

**Note 2. Significant Accounting Policies (continued)**

periods ending after September 15, 2009.The Company does not expect the adoption of FAS 168 to have an impact on the Company’s results of operations, financial condition or cash flows.Reclassifications

Certain amounts reflected in the accompanying financial statements for the year ended December 31, 2008 and the three and six month periods ended June 30, 2008 have been reclassified from that previously reported, in order to conform to current year classifications.

**Note 3. Portfolio Investments**

As required by the 1940 Act, we classify our investments by level ofcontrol. As defined in the 1940 Act, control investments are those where thereis the ability or power to exercise a controlling influence over the managementor        policies of a company. Control is generally viewed to exist when acompany or individual owns 25% or more of the voting securities of an investeecompany. Affiliated investments and affiliated companies are defined by alesser degree of influence and are deemed to exist through ownership of anamount greater than 5% but less than 25% of the        voting securities of theinvestee company. The Company currently has onecontrolled or affiliatedinvestment represented by its ownership of 100 percent of Epic Wound Care, Inc.In September, 2008 and October, 2008, the Company entered into two short-termsecured promissory notes totaling $250,000 with City 24/7, LLC, with which ithad previously entered into a portfolio investment agreement. Due to changes inthe economic outlook generally and for the Internet industry in particular, theCompany determined that the planned portfolio investment was no longerwarranted, and terminated the investment. The two secured promissory notesremained outstanding and matured on December31, 2008, at which time the Companybegan discussions with City 24/7, LLC for the repayment of the secured notesplus accrued interest, or the transfer of the assets securing the notes to theCompany. Those discussions have continued, the maturity dates wereextended to May 31, 2009and, as of June 30, 2009, have resulted in a meeting with apotential new investor in City 24/7, LLC, which wouldresult in the payment ofthe notes in full, including accrued interest. Despitethese discussions, theInvestment Committee of the Board of Directors of the Company has concluded,after a review of the situation, that an impairment loss for these notes iswarranted at June        30, 2009. Accordingly, animpairment loss has been recorded, in the full principal amount of $250,000 plus all accrued interest at June 30,2009. Subsequently, the Company has agreed to convert its outstanding liability into a ten percent ownership interest in City 24/7, LLC, but no change in the June 30, 2009 valuation of the investment has been made, pending future operating results of City 24/7, LLC.In August 2008, the Company entered into an investment term sheet with Shelby Super Cars, Inc.(“SSC”), the developer of the Ultimate Aero super car for an investment in the company and the right to obtain up to 35 percent of the ownership of Shelby.The term sheet was reduced to an investment agreement in May 2009and was announced in        a press release on May 28, 2009. During May and June 2009, the Company advanced a total of $200,000 of the initial cash 

 

F-12

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**UNITED ECOENERGY CORP.**

**NOTES TO FINANCIAL STATEMENTS**

**June 30, 2009        (unaudited)**

**Note 3. Portfolio Investments(continued)**

investment of $250,000, to SSC, which amount was secured by security agreementon an Ultimate Aero, which has a retail asking price of almost $1 million or more. InJuly 2009, SSC indicated it mayattempt to renege on its investment        agreement, andwas unable to repay the $200,000 advance. The Company is exploring its legaloptions, but has not determined that the investment in SSC should be impaired, because of the existing security agreement. 

In June 2009, the Company closed on the acquisition of the intellectual property of Epic Wound Care, LLC, through a wholly-owned portfolio investment company, Epic Wound Care, Inc. Epic Wound Care, LLC had contracted to acquire the intellectual property to manufacture and distribute aninnovative gauze to        serve the wound care market. The acquisition of the Epic intellectual propertywas closed in exchange for the issuance of 10 million shares of the Company’s common stock and with another20 million shares to beheld in escrow by the Company pending satisfaction of certain performance targets by Epic over the next 18 months. If the performance targets are not met, then all        except 5 million shares of the 20 million shares in escrow will be canceled by the Company. The escrow shares are not reported as issuedbecause the Company controls the voting of the shares, and will not be considered as issued until and unless the contingencies are met. The 10 million shares issued at closing to the sellers have been valued at $500,000, based on a prior, third partyoffer to purchase the        intellectual property for more than $1 million made by the current distributor prior to the acquisition by the Company, and isreported at that value in the financial statements included in this report.

**Note 4. Related Party Agreements and Transactions**

Investment Advisory Agreement        The Company entered into an investment advisory agreement with United EcoEnergy Advisors, LLC (the Investment Advisor) in March 2006 under which the investment advisor, subject to the overall supervision of the board of directors of the Company, agreed toprovide investment advisory services to the Company.

A majority of the membership interests in the investment advisor was and is owned by Patrick Donelan and Adam Mayblum, who are also together the majority owners of the common stock of the Company, either directly or indirectly through their ownership of Enterprise Partners, LLC. Mr.Mayblum also serves as a        director of the Company.

The investmentadvisory agreementwas submitted to the shareholders for approval and was approved by the shareholders at the Annual Meeting of shareholders in June 2006. The investment advisory agreement had an initial term of two years, but was subject to annual review        and approval by the Board of Directors of the Company as required by the Investment Company Act of 1940. The Board reviewed and approved the continuation of the agreement in May 2007, and also agreed to extend the initial two year term for an additional two years, to June 30, 2010, subject again to the required annual review and approval of the Agreement by the Board of Directors. The Agreement was reviewed in June 2008 by the Board of Directors and the Board

 

F-13

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**UNITED ECOENERGY CORP.**

**NOTES TO FINANCIAL STATEMENTS**

**June 30, 2009        (unaudited)**

**Note 4. Related Party Agreements and Transactions (Continued)**

approved a new Investment Advisory Agreement, but no shareholder action has been taken on the proposed amended agreement. Consideration of renewal or modification of the investment advisoryagreement is under discussion between the Board of Directors and the Investment Advisor, andif approved, will be submitted for approval of the shareholders at the next Annual meeting, expected to be held in September, 2009.

No investment advisory fees have been accrued for the quarter ended June 30, 2009.

AdministrationAgreement

On September 1, 2008, the Company entered into anAdministrationAgreement withEnterprise Administration, LLC, under which the latter provides administrativeservices to the Company, either        directly or through sub-administration agreements. Enterprise Administration, LLC is owned by Mr.Mayblum and Mr.Donelan. Under the terms of the Agreement, all managementandadministration,and related operating needs are provided by Enterprise Administration, LLC to the Company, and the CompanyreimbursesEnterprise Management, LLC for the actual costs of theservices on a monthly basis.Enterprise Administration, LLC billed the Company for administrative services inthe amount of $26,250 for April, Mayand June, 2009, a total of $78,750, all of which is included in accounts payable at June 30, 2009. The amounts chargedby Enterprise Administration, LLC was made up of the following administrative services:

  Provider                                                                    Service                                                                                                Amount

------------                                     ------------------------------------------------                                    ------------------------------       

FSR, Inc.                                        Chairman and CEO services ofKelly T.        Hickel                                         $              5,000        CF Consulting, LLC                       Consulting principal financialofficer and corporate counselservices            $              6,250

Tower 1 Consultants                      Services of Adam Mayblum, asDirector of Business Development,

                                                                               Patrick Donelan as Director of Corporate        Finance                                      $           15,000

                                                -----------

                                     $            26,250

Enterprise Administration, LLC does not generate any net revenues from the Administration Agreement. Subsequent to June 30, 2009, the Company has entered into an agreement with Enterprise Administration, LLC to cancel the Administration Agreement as well as the amounts due by the Company under that Agreement. This agreement will be reduced to        writing and all accrued amounts due under the Agreement will then be cancelled.Mr.Mayblum and Mr.Donelan, who own Enterprise Administration, LLC, also arethe equal owners of United EcoEnergy Advisors, LLC, theInvestment Advisor, andof Enterprise Partners, LLC,        which owns 6,515,760 shares of thecommon stock. Mr.Mayblum and Mr.Donelan also each own or 

F-14

 

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**UNITED ECOENERGY CORP.**

**NOTES TO FINANCIAL STATEMENTS**

**June 30, 2009        (unaudited)**

**Note 4. Related Party Agreements and Transactions (Continued)**

control 7,321,270 shares of the Company’s common stock. Collectively, Mr.Mayblum, Mr.Donelan and Enterprise partners, LLC own or control 21,158,300 shares of thecommon stock, representing 60.9 percent of theoutstanding shares.

Roadrunner Capital Group, LLC is a New Jersey limited liability company.Chris Messalas is the sole managing member of Roadrunner and is deemedto have the right to direct the voting and dispositive control over thecommon stock that        Roadrunner owns. Pursuant to an Option Agreement with AdamMayblum, Patrick Donelan and Enterprise Partners, LLC, Roadrunner has theright to purchase up to an additional 5,915,760 shares of common stock at an exercise price of $.00079 per share, but Roadrunner is restricted fromexercising that portion of the Option, which when added to the sum beneficially owned, (as such        term is defined under Section 13(d) and Rule13d-3 of the Securities Exchange Act of 1934, as amended, (the 1934 Act)),by Roadrunner and its affiliates, would exceed 9.5% of the number of shares of Common Stock outstanding on the date of exercise, as determined in accordance with Rule 13d-1(j) of the 1934 Act. The options if not exercised, expire at 5:00 p.m. Eastern Time on June 1, 2010.        Leaddog Capital, L.P. is a Delaware limited partnership. Chris Messalas is the Chief Executive Officer, President and a Director of Leaddog Capital Partners, Inc. which is the general partner of Leaddog Capital, L.P., and therefore, Mr.Messalas is deemed to have the right to direct the votingand dispositive control over the common stock in the Company thatLeaddog Capital,        L.P. owns. Adam Mayblum, Patrick Donelan and EnterprisePartners, LLC entered into an Option Agreement dated December 11, 2007, forthe sale of up to 2,000,000 shares of UEEC Common Stock to Leaddog CapitalL.P. at an exercise price of $0.00079 per share. Leaddog Capital L.P. exercised its option to purchase all 2,000,000 shares of common stockin July, 2009.Adam Mayblum, Patrick Donelan and Enterprise Partners, LLC also haveentered into an Option Agreement dated December 11, 2007, for the sale of upto 2,500,000 shares of common stock held by them to Albert Wardi at anexercise price of $0.00079 per share. Mr.Wardi has exercised his option inpart and has received 1,500,000 shares of UEEC Common Stock. Mr.Wardi is aregistered representative and currently holds FINRA Series 7, 24 and 63licenses that are registered with Carlton Capital, Inc. Chris Messalas isthe Chief Executive        Officer, President and sole Director of The CarltonCompanies, Inc., which is the parent company of Carlton Capital, Inc.

Managerial Assistance        As a business development company, we will offer, and provide upon request,managerial assistance to certain of our portfolio companies. This assistancecould involve monitoring the operations of our portfolio companies,participating in board and management meetings, consulting with and advisingofficers of portfolio companies and providing        other organizational andfinancial guidance. The Company expects to receive fee income for providingthese services.

F-15

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**UNITED ECOENERGY CORP.**

**NOTES TO FINANCIAL STATEMENTS**

**June 30, 2009        (unaudited)**

**Note 4. Related Party Agreements and Transactions (Continued)**

Amounts Due To and From Affiliates

Amounts due from affiliate totaling $3,550 at June 30, 2009and December 31, 2008, represent short-term, non-interest bearing advances to an affiliated company. The amounts due to affiliate of $175,781 at June 30, 2009and December31, 2008,represent funds advanced to and expenses paid by Enterprise Partners, LLC forthe Company in prior years.

**Note 5.     Stockholders’Equity.**

The Company issued a total of 11,254,694 common shares during the quarter ended June 30, 2009. A total of 1,254,694 shares were issued for cash consideration of $307,400, or $0.245 per share, and 10 million shares were issued for the acquisition of the intellectual property of Epic Wound Care, LLC in Epic Wound Care, Inc. as a portfolio        company. The acquisition of the Epic intellectual property was closed in exchange for the issuance of 10 million shares of the Company’s common stock and with another 20 million shares to be held in escrow by the Company pending satisfaction of certain performance targets by Epic over the next 18 months. If the performance targets are not met, then all except 5 million shares of the 20 million shares in escrow will be canceled by the Company. The escrow shares are not reported as        issued because the Company controls the voting of the shares, and will not be considered as issued until and unless the contingencies are met. The 10 million shares issued at closing to the sellers have been valued at $500,000, based on a prior, arm’s length offer to purchase the intellectual property for more than $1 million made by the current distributor prior to the acquisition by the Company, and is reported at that value in the financialstatements.

**Note 6****. Financial Highlights**

Financial Highlights        The following is a schedule of financial highlights for the threemonths endedJune 30, 2009and for the twelve months ended December 31, 2008:

 

                                                             CHANGES IN NET ASSET VALUE

                                                                         For        the                       For the

                                                      sixmonths         twelve months

                                                        ended                                ended

                                              June 30, 2009    December 31, 2008

                              ----------------- -----------------------

Net asset value atbeginning of period        (1)                                                              $     0.00007              $     (0.00832)

Proceeds from common        stock                                                                                            0.01757                0.01639

Net investment income(loss)                                                                                             (0.00007)             (0.00024)

Loss on impairment of        investment                                                                                      (0.00562)                          -

Operating        costs                                                                                                          (0.00573)                     (0.00821)

                                                             -------------                 --------------

Net asset value, end of period (2)                                                                                $     0.00636       $      0.00010

 

F-16

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**UNITED ECOENERGY CORP.**

**NOTES TO FINANCIAL STATEMENTS**

**June 30, 2009**

**(unaudited)**     

**Note 6****. Financial Highlights****(continued)**

(1) Financial highlights as of June 30, 2009and December 31, 2008arebased on 45,965,231 and 34,710,537 common shares outstanding, respectively.

(2) Total return based on net asset value is based upon the change in netasset value per share between the opening and ending net asset values pershare in each period. The total return is not annualized.

**Note 7.     Other Matters**

On February 1, 2007, the Company borrowed the sum of $50,000 from an existingminority shareholder for a six month term with interest due at maturity at therate of 9 percent per year. The Company also issued a warrant to purchase 8,000shares of common stock at an exercise price of $0.40 per share for a period oftwo years. In September, 2008, a total of $30,000 was paid in principal onthis note, and an additional $5,000 was paid on November 12, 2008, leaving aprincipal balance of $15,000 due at June 30, 2009. Atotal of $8,032ininterest has accrued on the loan as ofJune 30, 2009. The warrant has expired.The maturity date on the note has been extended to September30, 2009.

On February 22, 2008, the Company borrowed $25,000 from Leaddog Capital, LPand issued its promissory note payable on the earlier of the date that anadditional $350,000 in capital is raised for the Company or October 22, 2008.The        note carries interest at 10 percent. Leaddog Capital also received 100,000shares of common stock, issued on April 1, 2008, as a placement fee. The maturity date on the note has been extended to August 31, 2009. A total of $3,486 in interest has accrued on this note as of June 30, 2009.

On March 27, 2007, the Company borrowed the sum of $30,000, $15,000 each fromtwo unrelated parties for a six month term with interest due at maturity at therate of 9 percent per year. The Company also issued a warrant to purchase 3,000shares of common stock to each of the parties at an exercise price of $0.40 pershare for a period of two years. In September, 2008, the Company paid a total of$8,368 in principal on each note, and an additional $4,700 was paid on each noteon November 12, 2008, leaving a principal balance of $1,933 due on each note atJune 30, 2009.A total of $2,032in interest has been accrued on each of the two loans as ofJune 30, 2009.The warrants have expired. The maturity date on the notes has been extended to September30, 2009. The borrowed funds were used as generalworking capital for the Company.

On June 30, 2009, the Company borrowed $25,000 from Leaddog Capital, LPin exchange for a short term note payable bearing interest at 12 percent.

**Note 8. Going Concern**

The accompanying financial statements have been prepared assuming that theCompany will continue as a going concern. The Company’s financial positionand operating results raise substantial doubt about the Company’s abilityto continue as a going concern, as reflected by the accumulated deficit of$1,240,431and recurring net losses. The ability of the Company to continue asa going concern is dependent upon acquiring suitable portfolio investments andobtaining additional capital and financing. Management’s plan in this        regardis to acquire portfolio investment operating entities and secure financingand operating capital. The financial statements do not include anyadjustments that might be necessary if the Company is unable to continue as agoing concern.

As part of the acquisition of the intellectual property related to the wound care products from Epic Wound Care, LLC, the Company agreed to issue 20 million common shares in escrow, retaining the voting rights on the shares, pending the satisfaction of contingent performance provisions of the acquisition agreement.

If the performance targets are not met, then all except 5 million shares of the 20 million shares in escrow will be canceled by the Company. The escrow shares are not reported as issued because the Company controls the voting of the shares, and will not be considered as issued until and unless the contingencies are met.

F-17

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**Item 2. Management Discussion and Analysis of Financial Condition and Resultsof Operations.**

FORWARD LOOKING STATEMENTS          

This quarterly report on Form 10-Q contains forward-looking statements thatinvolve risks and uncertainties, as well as assumptions that, if they nevermaterialize or prove incorrect, could cause the results of the Company todiffer        materially from those expressed or implied by such forward-lookingstatements. All statements other than statements of historical fact arestatements that could be deemed forward-looking statements, including anyprojections of revenue, expenses, earnings or losses from operations orinvestments, or other financial items; any statements of        the plans, strategiesand objectives of management for future operations; any statements ofexpectation or belief; and any statements of assumptions underlying any ofthe foregoing. The risks, uncertainties and assumptions referred to aboveinclude risks that are described from time to time in our Securities andExchange Commission, or the SEC, reports filed before this report.

The forward-looking statements included in this quarterly reportrepresent our estimates as of the date of this quarterly report. Wespecifically disclaim any obligation to update these forward-lookingstatements in the future. Some        of the statements in this quarterly reportconstitute forward-looking statements, which relate to future events or ourfuture performance or financial condition. Such forward-looking statementscontained in this quarterly report involve risks and uncertainties.We use words such as anticipates, believes, expects, future, intends andsimilar expressions to identify forward-looking statements. Our actual resultscould differ materially from those projected in the forward-looking statementsfor any reason. We caution you that forward-looking statements of this typeare subject to uncertainties and risks, many of which cannot be predicted orquantified.

The following analysis of our financial condition and results of operationsshould be read in conjunction with our financial statements and the relatednotes thereto contained elsewhere in this Form 10-Q, as well as the riskfactors        included in our Form 10-K filed for the year ended December 31, 2008.

Overview

We wereincorporated under the Nevada General Corporation Law in February 1997as MNS Eagle Equity Group III, Inc., and werea development stage companythrough the end of 2005, and until wechanged ourbusiness model with theelection to be treated as a business development company on February 28, 2006.On February 21, 2006, wechanged ourcorporate name to United EcoEnergy Corp.,to reflect ournew business model and plan by the filing of an amendment to itsArticles of Incorporation with the State of Nevada on February 21, 2006.In January, 2007, our common shares were admitted for quotation on the OTCBulletin Board under the symbol UEEC.

We have elected to be treated as a business development company under the 1940Act. Accordingly, we are required to comply with certain regulatoryrequirements. For instance, we generally have to invest at least 70% of ourtotal        assets in qualifying assets, including securities of private or thinlytraded public U.S. companies, cash, cash equivalents, U.S. governmentsecurities and high-quality debt investments that mature in one year or less.As of June 30, 2009, we have made portfolio investments in a short term secured loan to City 24/7, LLCand in the        acquisition of the intellectual property of Epic Wound Care, LLC, through Epic Wound Care, Inc.During 2007 and 2008,we had entered into investment agreements to acquire a controlling interest inseveral companies, on the recommendation of our investment adviser and with theapproval of our Investment Committee. In both cases, the results        of duediligence investigation of the companies resulted in the abandonment of bothinvestments in 2008, despite the considerable time and effort devoted to theacquisitions.

In September 2008 and October 2008, weentered into two short-term secured promissory notes totaling $250,000 with City 24/7, LLC, with which wehad previously entered into a portfolio investment agreement. Due to changes inthe        economic outlook generally and for the internet industry in particular, wedetermined that the planned portfolio investment was no longer warranted, andterminated the investment. The two secured promissory notes remainedoutstanding and matured on December 31, 2008, at which time the Company begandiscussions with City 24/7, LLC for the        repayment of the secured notes plus accrued interest, or the transfer of the assets securing the notes to theCompany. Those discussions have continued, the maturity dates was extended to May 31, 2009 and have resulted in a meeting with a potential new investor in City 24/7, LLC, which wouldresult in the payment of the notes in full, including accrued interest. Subsequently, we have agreed with City 24/7, LLC to        convert the principal and all accrued interest on the loans into a ten percent ownership interest in City 24/7, LLC. However, despitethese later discussionsand agreement, the Investment Committee of ourBoard of Directors has concluded, after a review of the situation, that an impairment loss for these notes is warranted at June 30, 2009for the full amount of the principal and interest due on the notes.

In September 2008, we entered into an investment term sheetwith Shelby Super Cars, Inc.(SSC),of Richland, Washington, the manufacturer and developer of the Shelby super car known as the Ultimate Aero. The Ultimate Aero is an 1183        horsepower extreme performance car which holds the land speed record as the world’s fastest production car. SSC, Inc. also has developed the Ultimate Aero EV, a 100 percent green supercar, which is expected to capture the world record as the fastest electric car. In May, 2009, we signeda final investment agreement to close on the initial portfolio investment in SSC, Inc.and advanced a total of $200,000 (of        an agreed $250,000) as the initial cash investment, secured by a security agreement pledgingan Ultimate Aero valued at almost $1 millionas security. In July and August 2009, SSC has indicated it mayattempt to renege on the investment agreement, a matter which is currently under review and discussion with our legal counsel. No impairment loss has been taken for the $200,000        advanced to SSC since it is secured by a security agreement.

In June 2009, weclosed on the acquisition of the intellectual property and assets of Epic Wound Care, LLC, through a wholly-owned portfolio investment company, Epic Wound Care, Inc. Epic Wound Care, LLC had contracted to acquire the intellectual property to manufacture and distribute an innovative gauze to        serve the wound care market. The acquisition of the Epic intellectual property was closed in exchange for the issuance of 10 million shares of the Company’s common stock and with another 20 million shares to be held in escrow by the Company pending satisfaction of certain performance targets by Epic over the next 18 months. If the performance targets are not met, then all except 5 million shares of the 20 million shares in escrow will be canceled by the Company. The escrow shares        are not reported as issued because the Company controls the voting of the shares, and will not be considered as issued until and unless the contingencies are met. The 10 million shares issued at closing to the sellers have been valued at $500,000, based on a prior, arm’s length offer to purchase the intellectual property for more than $1 million made by the current distributor prior to the acquisition by the Company, and is reported at that value in the financial statements        included in this report.

Operating Activities

As of June 30, 2009, our operating activities have involved identifyingsuitable portfolio investments, negotiating investment terms, entering intoinvestment agreements and undertaking due diligence. We also completedadditional fund        raising activities to support our portfolio investmentactivities and closed on the acquisition ofthe intellectual property relating to the wound care product through Epic Wound Care, Inc.The Investment Committee of ourBoard of Directors metin August, 2009to        consider each of the separate portfolio investments and their valuations as of June 30, 2009, based on a valuation report from ourinvestment advisor. After considering the companies, their operations, business model and other relevant factors, ourInvestment Committee approved the valuation recommendationsof ourinvestment advisor for        approval by the Audit Committee of ourBoard of Directors. The Audit Committee than approved the impairment loss of the investment in City 24/7, LLC in the full amount of the principal on the two promissory notes, $250,00, plus all accrued interest, although we later agreedwith City 24/7 to convert the amount due into an ownership in thatcompany.

Critical Accounting Policies

In determining the fair value of our investments, the Audit Committee mayconsider valuations from an independent valuation firm, from our InvestmentCommittee and from management, as well as other appropriate indicators ofthe value        of our portfolio, in its discretion.

Results of Operations

For the quarter ended June 30, 2009, we incurred administrativeexpenses of$106,250rent expense of $1,650, interest of $1,106, professional fees of $23,833 and other expenses totaling $48,683, compared to consulting expenses of        $18,750, rent expenses of $1,650, interest of $2,425, professional expenses of $5,583and other expenses of $467for the quarter ended June 30, 2008. Our total expenses were $181,522and $28,875, respectively for the quarters ended June 30, 2009and 2008. We had $3,291of investment income (interest) for        the quarter ended June 30,2009. We also reported an investment loss of $265,690from the impairment loss with respect to the investment in City 24/7, LLC, made up of principal of $250,000 and interest accrued to March 31,2009 of $15,690.

For the six months ended June 30, 2009, we incurred administrative expenses of$185,000,rent expense of $3,600, interest of $2,150, professional fees of $23,833 and other expenses totaling $48,746, compared to consulting expenses of $40,000, rent expenses of $3,100,        interest of $4,485, professional expenses of $5,583 and other expenses of $5,951for the quarter ended June 30, 2008. Our total expenses were $263,329and $59,119, respectively for the six monthsended June 30, 2009 and 2008. We had $3,291 of investment income (interest) for the six monthsended June 30, 2009.

Financial Highlights

Financial highlights of the Company for the period ending June 30, 2009are included in Footnote 6 to our Financial Statements.

Investment Activity

There were no additional portfolio investments made during the three monthsended June 30, 2009other than as noted above.

Investment Income

We expect to generate revenue in the form of interest income on the debtsecurities that we own, dividend income on any common or preferred stock thatwe own, and capital gains or losses on any debt or equity securities that weacquire in portfolio companies and subsequently sell. Our investments, if inthe form of debt securities, will typically have a term of one to ten yearsand bear interest at a fixed or floating rate. To the extent achievable, wewill seek to collateralize our investments by obtaining security interests inour        portfolio companies assets. We also may acquire minority or majority equityinterests in our portfolio companies, which may pay cash or in-kind dividendson a recurring or otherwise negotiated basis. In addition, we may generaterevenue in other forms including commitment, origination, structuring or duediligence fees, and possibly        consultation fees. Any such fees generated inconnection with our investments will be recognized as earned. We accrued$3,291in investment income during the quarter ended June 30, 2009.

Operating Expenses

Operating expenses for the quarter ended June 30, 2009are brokendown as follows:

Administrationexpenses          $               78,750

Rent                                                                 1,650

Interest                                                                        1,106

Bank fees                                                      277

Consulting                                                27,500

Insurance                                                   2,169

Marketing                                                  2,250

Offering expenses                                    33,990

Professional fees                                      23,833

Transfer agent                                            6,720

Other expenses                                          3,277

---------

Total operating expense                       $              181,522

On September 1, 2008, weentered into an Administration Agreement withEnterprise Administration, LLC, under which the latter provides administrativeservices to us, either directly or through sub-administration agreements. Enterprise        Administration, LLC is owned by Mr.Mayblum and Mr.Donelan. Underthe terms of the Agreement, all management and administration, and relatedoperating needs are provided by Enterprise Administration, LLC to the Company, and wereimburses Enterprise Management, LLC for the actual costs of the services on        a monthly basis.

Enterprise Administration, LLC billed usfor administrative services in theamount of $26,250 for April, Mayand June, 2009, a total of $78,750, allof which is included in accounts payable at June        30, 2009.

Net Investment Income, Net Unrealized Appreciation and Net Increase inStockholders’Equity Resulting from Operations

Our net investment loss totaled $265,690for the quarter ended June 30,2009compared to $0for the quarter ended June 30, 2008and $0for the year ended December 31, 2008. Net decrease in stockholders’equitytotaled $443,921for the quarter ended June 30, 2009compared to $28,875for the quarter ended June 30, 2008.

Financial Condition, Liquidity and Capital Resources

On February 1, 2007, the Company borrowed the sum of $50,000 from an existingminority shareholder for a six month term with interest due at maturity at therate of 9 percent per year. The Company also issued a warrant to purchase 8,000shares of common stock at an exercise price of $0.40 per share for a period oftwo years. In September, 2008, a total of $30,000 was paid in principal onthis note, and an additional $5,000 was paid on November 12, 2008, leaving aprincipal balance of $15,000 due at June 30, 2009. A total of $8,032 ininterest        has accrued on the loan as of June 30, 2009. The warrant has expired.The maturity date on the note has been extended to September 30, 2009.

On March 27, 2007, the Company borrowed the sum of $30,000, $15,000 each fromtwo unrelated parties for a six month term with interest due at maturity at therate of 9 percent per year. The Company also issued a warrant to purchase 3,000shares of common stock to each of the parties at an exercise price of $0.40 pershare for a period of two years. In September, 2008, the Company paid a total of$8,368 in principal on each note, and an additional $4,700 was paid on each noteon November 12, 2008, leaving a principal balance of $1,933 due on each note atJune 30, 2009.

A total of $2,032 in interest has been accrued on each of the two loans as ofJune 30, 2009. The warrants have expired. The maturity date on the notes has been extended to September 30, 2009. The borrowed funds were used as generalworking capital for the        Company.

On February 22, 2008, the Company borrowed $25,000 from Leaddog Capital, LPand issued its promissory note payable on the earlier of the date that anadditional $350,000 in capital is raised for the Company or October 22, 2008. The note carries interest at 10 percent.        Leaddog Capital also received 100,000shares of common stock, issued on April 1, 2008, as a placement fee. The maturity date on the note has been extended to August 31, 2009. A total of $3,385 in interest has accrued on this note as of June 30, 2009.

On June 30, 2009, the Company borrowed $25,000 from Leaddog Capital, LPin exchange for a short term note payable bearing interest at 12 percent.

We filed a Form 1-E notice and offering circular with the SEC on November 24, 2008,which became effective ten calendar days later, to raise additional capital for ourportfolio investment activities. Under Regulation E, a business development company can offer and sell        up to $5,000,000 in value of its stock in any consecutive, rolling 12 month period so long as the provisions of Regulation E are met. A total of $304,700 was raised under this 1-E offering at a price of $0.245 per shareduring the six month period through June 30, 2009.The funds were used as working capital and for the investment in Shelby Super Cars.

By letter dated April 10, 2009, the SEC advised usthat it had reviewed the 1-Efiling and related documents filed in November, 2008, and raised a number of comments and requested changes to the offering and offering documents, as well as previously filed periodic        reports filed by uson Forms 10-Q and 10-K. Weresponded to the Staff comments by letter dated August 21, 2009.

We generated no cash flows from operations during 2008and the current year todate through June 30, 2009. In the future, we may fund a portion of ourinvestments through borrowings from banks, issuances of senior securities orsecondary offerings of equity, including further exempt offerings. We may alsosecuritize a portion of our investments in mezzanine or senior secured loansor other assets. Our primary use of funds will be investments in portfoliocompanies.

Risk Factors

In addition to the other information set forth in this report, you shouldcarefully consider the factors discussed in Part I, Item 1A. Risk Factors inour Annual Report on Form 10-K for the year ended December 31, 2008, whichcould        materially affect our business, financial condition or future results.

The risks described in our Annual Report on Form 10-K are not the onlyrisks facing our Company. Additional risks and uncertainties not currentlyknown to us or that we currently deem to be immaterial also may materiallyadversely        affect our business, financial condition and/or operating results.

**Item 3. Quantitative and Qualitative Disclosures about Market Risk.**

We are subject to financial market risks, including changes in interest rates,equity price risk and some of the loans in our portfolio may have floatingrates in the future. We may hedge against interest rate fluctuations by usingstandard hedging instruments such as futures, options and forward contractssubject to the requirements of the 1940 Act. While hedging activities mayinsulate us against adverse changes in interest rates, they may also limit ourability to participate in the benefits of higher interest rates with respectto our        portfolio of investments. During the six months ended June 30, 2009and the twelve months ended December 31, 2008, we did not engage in any hedgingactivities.

**Item 4. Controls and Procedures.**

As of the end of the period covered by this report, the Company carried out anevaluation, under the supervision and with the participation of our management,including our Chief Executive Officer and Chairman of the Audit Committee, of the effectiveness of the design        and operation of our disclosure controls andprocedures (as defined in Rule 13a-15 of the Securities Exchange Act of 1934).

Based on that evaluation, as of June 30, 2009, wehave concluded that our current disclosure controls and procedures are effective in timely alerting them to material information relating to the Company that is required to be disclosed by the Company in the reports it files or submits under the Securities        Exchange Act of 1934.

Internal Control Over Financial Reporting

Our management, under the supervision and with the participation of our ChiefExecutive and Financial Officer,is responsible for establishing and maintaining adequate internal control over financial reporting, as such responsibility is defined in Rule 13a-15(f) of the        Securities Exchange Act of 1934, and for performing an assessment of the effectiveness of internal control of financial reporting. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Our internal control over financial reporting includes those policies and procedures        that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of        the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of assets that could have a material effect on the financial statements.        Internal control over financial reporting cannot provide absolute assurance ofachieving financial reporting objectives because of its inherent limitations.Internal control over financial reporting is a process that involves humandiligence and compliance and is subject to lapses in judgment and breakdownsresulting from human failures.        Internal control over financial reporting alsocan be circumvented by collusion or improper management override. Because ofsuch limitations, there is a risk that material misstatements may not beprevented or detected on a timely basis by internal control over financialreporting. However, these inherent limitations are known features of        thefinancial reporting process. Therefore, it is possible to design into theprocess safeguards to reduce, though not eliminate, this risk.There have been no changes in our internal controls over financial reportingthat occurred during the three and six months ended June 30, 2009that havematerially affected, or are reasonably likely to materially affect, ourinternal control over financial reporting.

PART II. OTHER INFORMATION

**Item 1. Legal Proceedings.**

We arenot a defendant in any legal action arising out of our activities. We arenot aware of any other material pending legal proceeding, and no such materialproceedings are known to be contemplated, to which we are a party or of        whichany of our property is subject.

**Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.**

We sold nocommon shares during the quarter endedJune 30, 2009in unregistered offerings, except for the 10 million shares of common stock issued in the acquisition of the intellectual property of Epic Wound Care, LLC, which were        issued in restricted form under the exemption for private offerings of stock under Section 4(2) of the Securities Act of 1933. We sold a total of 1,254,694 shares under the Regulation E offering for total consideration of $307,400.

**Item 3. Defaults Upon Senior Securities.**

Not Applicable.

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

None.

**Item 5. Other Information.**

By letter dated April 10, 2009, the SEC advised usthat it had reviewed our1-Efiling and related documents filed in November, 2008, and raised a number ofcomments and requested changes to the        offering and offering documents, as wellas previously filed periodic reports filed by uson Forms 10-Q and 10-K. We responded to this Staff comment letter by letter dated August 21, 2009.

On August 3, 2009 the Company began a review of its existing investment advisory agreement with United EcoEnergy Advisors, LLC in order to determine its suitability for our intended operations and activities.

On August 11, 2009, we entered into an agreement with City 24/7, LLC under which we will convert the outstanding principal and interest due under the existing notes in the total principal amount of $250,000 to a 10 percent membership interest in City 24/7.

On August 11, 2009, Mr.Winston Willis was appointed Chief Compliance Officer of the Company. Mr.Willis is currently a director and officer of another public company.

On August 11, 2009 the Company terminated the existing Administration Agreement with Enterprise Administration, LLC. and will also reverse the accruals of outstanding administration fees.

On August 12, 2009, Greenbaum, Rowe, Smith & Davis, LLP was retained as SEC counsel to the Company.

**Item 6. Exhibits**

Exhibit     Description of Exhibit

10.0     Agreement and Plan of Acquisition between United EcoEnergy Corp.and Epic Wound Care, LLC dated May 19, 2009

   10.1     InvestmentAgreement with Shelby Super Cars, Inc.

      31     Certification of Chief Executive and Financial Officer Pursuant toRule 13a-14(a)/15d-14(a)

  32     Certification of Chief Executive and Financial Officer Pursuant toSection 906 of the Sarbanes-Oxley Act of 2002, 18U.S.C. 1350

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of1934, the Registrant has duly caused this report to be signed onits behalf by the undersigned thereunto duly authorized.

_/s/__Kelly T.        Hickel                                        September 9, 2009

Kelly T. Hickel        Chief Executive and Financial Officer

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