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U.S. Securities and Exchange Commission
Washington, D.C. 20549

___________________

Form 10-Q

____________________



| | (Mark One) |                                                                                        
| | ---------- | ---------------------------------------------------------------------------------------
| | [X]        | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
| |            | For the quarterly period ended March 31, 2010                                          
| |            |                                                                                        
| | [  ]       | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act       
| |            | For the transition period from N/A to N/A                                              

____________________

Commission File No.  000-53144

____________________

ALGOIL, INC.





|NevadaState of Incorporation                                                                                                                                                                                                                                                                                                                                                           |                        | 26-1478549IRS Employer Identification No.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------- | -----------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                      
|20A Blukhera St., app.130Kharkov, Ukraine                                                                                                                                                                                                                                                                                                                                             
|Address of principal executive offices                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                      
|(480) 304-5624Issuer's telephone number                                                                                                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                                                                      
|Securities registered under Section 12(b) of the Exchange Act:
None                                                                                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                      
|Securities registered under Section 12(g) of the Exchange Act:Common Stock, $0.001 par value per share
(Title of Class)                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                                                                                                      
|Indicate by check mark whether the Registrant (1) has filed all reports required by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days:                                           
|Yes  [X]    No  [  ]                                                                                                                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                                                                                                                                      
|Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
|Yes  [  ]    No  [  ]                                                                                                                                                                                                                                                                                                                                                                 
|                                                                                                                                                                                                                                                                                                                                                                                      
|Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.                                                                                   
|Large accelerated filer [  ]                                                                                                                                                                                                                                                                                                                                                           | Accelerated filer [  ] | Non-accelerated filer [  ]               
|                                                                                                                                                                                                                                                                                                                                                                                      
|Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).                                                                                                                                                                                                                                                                      
|Yes  [X]    No  [  ]                                                                                                                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                                                                                                                                      
|Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.                                                                                                                                                                                                                                                         
|Class.Common stock, $0.001 par value                                                                                                                                                                                                                                                                                                                                                   |                        | Outstanding at May 12, 201015,225,000    
|                                                                                                                                                                                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                                                                                                      
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|                                                                                                                                                                                                                                                                                                                                                                                      



ALGOIL, INC.
INDEX TO FORM 10-Q FILING
FOR THE THREE MONTHS ENDED MARCH 31, 2010



TABLE OF CONTENTS





|                               |  |                                                                                   |  | PageNumbers
|------------------------------ |  | --------------------------------------------------------------------------------- |  | -----------
|PART I - FINANCIAL INFORMATION |  |                                                                                  
|Item 1.                        |  | Financial Statements (unaudited)                                                  |  |            
|                               |  | Balance Sheets                                                                    |  | 4          
|                               |  | Statements of Operations                                                          |  | 5          
|                               |  | Statements of Cash Flows                                                          |  | 6          
|                               |  | Notes to Financial Statements                                                     |  | 7          
|Item 2.                        |  | Management Discussion & Analysis of Financial Condition and Results of Operations |  | 11         
|Item 3                         |  | Quantitative and Qualitative Disclosures About Market Risk                        |  | 14         
|Item 4.                        |  | Controls and Procedures                                                           |  | 14         
|                               | 
|                               |  |                                                                                  
|PART II - OTHER INFORMATION    |  |                                                                                  
|                               |  |                                                                                  
|Item 1.                        |  | Legal Proceedings                                                                 |  | 15         
|Item 1A                        |  | Risk Factors                                                                      |  | 15         
|Item 2.                        |  | Unregistered Sales of Equity Securities and Use of Proceeds                       |  | 18         
|Item 3.                        |  | Defaults Upon Senior Securities                                                   |  | 18         
|Item 4.                        |  | Removed and Reserved                                                              |  | 18         
|Item 5.                        |  | Other information                                                                 |  | 18         
|Item 6.                        |  | Exhibits                                                                          |  | 18         
|                               |  |                                                                                   |  |            
|CERTIFICATIONS                 |  |                                                                                  
|                               |  | Exhibit 31 - Management Certification                                             |  | 20-21      
|                               |  | Exhibit 32 - Sarbanes-Oxley Act                                                   |  | 22-23      
|2                             
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PART I
FINANCIAL INFORMATION



Item 1.  Financial Statements and Notes to Interim Financial Statements

General

The accompanying reviewed interim financial statements have been prepared in accordance with the instructions to Form 10-Q.  Therefore, they do not include all information and footnotes necessary for a complete presentation of financial position, results of operations, cash flows, and stockholders' equity in conformity with generally accepted accounting principles.  Except as disclosed herein, there has been no material change in the information disclosed in the notes to the financial statements included in the Company's annual report on Form 10-K for the year ended December 31, 2009.  In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature.  Operating results for the three months ended March 31, 2010 are not necessarily indicative of the results that can be expected for the year ending.



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ALGOIL, INC.(A Development Stage Company)BALANCE SHEETS



|                                                                 |                                                                                                                                                             |   | March 31, 2010
(Unaudited) |          | December 31, 2009
|---------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------- | - | -------------------------- | -------- | -----------------
|                                                                 |                                                                                                                                                             |   |                            |          |                  
|                                                                 |                                                                                                                                                             |   |                            |          |                  
|                                                                 | ASSETS                                                                                                                                                      |   |                            |          |                  
|Current Assets                                                   |                                                                                                                                                             |   |                            |          |                  
|                                                                 | Cash                                                                                                                                                        |   | $                          | 10 947   |                  
|                                                                 | Due from related party                                                                                                                                      |   |                            | 5 000    |                  
|                                                                 |                                                                                                                                                             |   |                            |          |                  
|Total Assets                                                     |                                                                                                                                                             | $ | 15 947                     |          | $                
|                                                                 |                                                                                                                                                             |   |                            |          |                  
|                                                                 |                                                                                                                                                             |   |                            |          |                  
|                                                                 | LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                                                        |   |                            |          |                  
|Current liabilities                                              |                                                                                                                                                             |   |                            |          |                  
|                                                                 | Accounts Payable                                                                                                                                            |   | $                          | 4 970    |                  
|                                                                 | Due to relate party                                                                                                                                         |   |                            | 35 550   |                  
|                                                                 |                                                                                                                                                             |   |                            |          |                  
|Total Liabilities                                                |                                                                                                                                                             |   | 40 520                     |          |                  
|                                                                 |                                                                                                                                                             |   |                            |          |                  
|Stockholders' Equity (Deficit)                                   |                                                                                                                                                             |   |                            |          |                  
|                                                                 | Common Stock, 75,000,000shares authorized $ 0.001 par value, 15,225,000 and issued and outstanding as of March 31, 2010 and December 31, 2009, respectively |   |                            | 15 225   |                  
|                                                                 | Additional Paid in Capital                                                                                                                                  |   |                            | 46 275   |                  
|                                                                 | Deficit Accumulated During Development Stage                                                                                                                |   |                            | (86 073) |                  
|                                                                 |                                                                                                                                                             |   |                            |          |                  
|Total Stockholders' Equity (Deficit)                             |                                                                                                                                                             |   | (24 573)                   |          |                  
|                                                                 |                                                                                                                                                             |   |                            |          |                  
|Total liabilities and stockholders' equity (deficit)             |                                                                                                                                                             | $ | 15 947                     |          | $                
|                                                                 |                                                                                                                                                             |   |                            |          |                  
|                                                                 |                                                                                                                                                             |   |                            |          |                  
|                                                                 |                                                                                                                                                             |   |                            |          |                  
|                                                                
|The accompanying notes are an integral part of these statements.
|4                                                               
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ALGOIL, INC.(A Development Stage Company)STATEMENTS OF OPERATIONS(Unaudited)



|                                                                 |                                  |   | For the Three Months
Ended
March 31, 2010 |          | For the Three Months
Ended
March 31, 2009 |            | From Inception 
Sept 6, 2007 to 
March 31, 2010
|---------------------------------------------------------------- | -------------------------------- | - | ----------------------------------------- | -------- | ----------------------------------------- | ---------- | -----------------------------------------------
|                                                                 |                                  |   |                                           |          |                                           |            |                                                
|Revenue:                                                         |                                  |   |                                           |          |                                           |            |                                                
|                                                                 | Revenue                          |   | $                                         | -        |                                           | $          | -                                              
|                                                                 |                                  |   |                                           |          |                                           |            |                                                
|                                                                 | Total Revenue                    |   |                                           | -        |                                           |            | -                                              
|                                                                 |                                  |   |                                           |          |                                           |            |                                                
|                                                                 |                                  |   |                                           |          |                                           |            |                                                
|Expenses:                                                        |                                  |   |                                           |          |                                           |            |                                                
|                                                                 | General and Administrative       |   |                                           | 5 960    |                                           |            | 1 004                                          
|                                                                 | Consulting, Legal and Accounting |   |                                           | 5 800    |                                           |            | 4 500                                          
|                                                                 |                                  |   |                                           |          |                                           |            |                                                
|                                                                 | Total expenses                   |   |                                           | 11 760   |                                           |            | 5 504                                          
|                                                                 |                                  |   |                                           |          |                                           |            |                                                
|                                                                 |                                  |   |                                           |          |                                           |            |                                                
|                                                                 | Net loss                         |   | $                                         | (11 760) |                                           | $          | (5 504)                                        
|                                                                 |                                  |   |                                           |          |                                           |            |                                                
|                                                                 |                                  |   |                                           |          |                                           |            |                                                
|                                                                 |                                  |   |                                           |          |                                           |            |                                                
|                                                                 |                                  |   |                                           |          |                                           |            |                                                
|Basic and Diluted Earnings (Loss) per Common Share               |                                  | $ | 0.00                                      |          | $                                         | 0.00       |                                                
|                                                                 |                                  |   |                                           |          |                                           |            |                                                
|                                                                 |                                  |   |                                           |          |                                           |            |                                                
|                                                                 |                                  |   |                                           |          |                                           |            |                                                
|                                                                 |                                  |   |                                           |          |                                           |            |                                                
|Weighted Average Number of Common Shares                         |                                  |   | 15 225 000                                |          |                                           | 15 225 000 |                                                
|                                                                 |                                  |   |                                           |          |                                           |            |                                                
|                                                                 |                                  |   |                                           |          |                                           |            |                                                
|                                                                 |                                  |   |                                           |          |                                           |            |                                                
|                                                                
|The accompanying notes are an integral part of these statements.
|5                                                               
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ALGOIL, INC.(A Development Stage Company)STATEMENTS OF CASH FLOWS(Unaudited)



|                                                                 |                                                                                          | For the Three Months Ended
March 31, |        | From Inception
Sept 6, 2007
to March 31,
2010
|---------------------------------------------------------------- | ---------------------------------------------------------------------------------------- | ------------------------------------ | ------ | ---------------------------------------------
|
|
|                                                                 |                                                                                          |                                     
|2010                                                             |                                                                                          | 2009                                
|                                                                 |                                                                                          |                                      |        |                                              
|                                                                 |                                                                                          |                                      |        |                                              
|Operating Activities:                                            |                                                                                          |                                      |        |                                              
|                                                                 | Net income (loss)                                                                        |                                      | $      | (11 760)                                     
|                                                                 | Adjustments to reconcile net loss to net cash provide by (used in) operating activities: |                                      |        |                                              
|                                                                 | Stock issued for services                                                                |                                      |        | -                                            
|                                                                 | Accounts payable increase (decrease)                                                     |                                      |        | 2 700                                        
|                                                                 | Due from related party (increase) decrease                                               |                                      |        | (5 000)                                      
|                                                                 |                                                                                          |                                      |        |                                              
|                                                                 | Net cash provided by (used in) operating activities                                      |                                      |        | (14 060)                                     
|                                                                 |                                                                                          |                                      |        |                                              
|Investing Activities:                                            |                                                                                          |                                      |        |                                              
|                                                                 | Cash (used) in investing activities                                                      |                                      |        | -                                            
|                                                                 |                                                                                          |                                      |        |                                              
|                                                                 |                                                                                          |                                      |        |                                              
|Financing Activities:                                            |                                                                                          |                                      | -      |                                              
|                                                                 | Due to related party increase                                                            |                                      |        | 25 000                                       
|                                                                 | Proceeds from the sale of Stock                                                          |                                      |        | -                                            
|                                                                 |                                                                                          |                                      |        |                                              
|                                                                 | Net cash provided by (used in) financing activities                                      |                                      |        | 25 000                                       
|                                                                 |                                                                                          |                                      |        |                                              
|                                                                 |                                                                                          |                                      |        |                                              
|Net increase (decrease) in cash and cash equivalents             |                                                                                          |                                      | 10 940 |                                              
|                                                                 |                                                                                          |                                      |        |                                              
|Cash and cash equivalents at beginning of period                 |                                                                                          |                                      | 7      |                                              
|                                                                 |                                                                                          |                                      |        |                                              
|                                                                 |                                                                                          |                                      |        |                                              
|Cash and cash equivalents at end of period                       |                                                                                          |                                      | 10 947 |                                              
|                                                                 |                                                                                          |                                      |        |                                              
|                                                                 |                                                                                          |                                      |        |                                              
|                                                                 |                                                                                          |                                      |        |                                              
|                                                                 |                                                                                          |                                      |        |                                              
|Supplemental Information:                                        |                                                                                          |                                      |        |                                              
|                                                                 | Interest                                                                                 |                                      |        | -                                            
|                                                                 |                                                                                          |                                      |        |                                              
|                                                                 |                                                                                          |                                      |        |                                              
|                                                                 |                                                                                          |                                      |        |                                              
|                                                                 | Taxes                                                                                    |                                      |        | -                                            
|                                                                 |                                                                                          |                                      |        |                                              
|                                                                 |                                                                                          |                                      |        |                                              
|                                                                 |                                                                                          |                                      |        |                                              
|                                                                
|The accompanying notes are an integral part of these statements.
|6                                                               
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ALGOIL, INC.(A Development Stage Company)NOTES TO FINANCIAL STATEMENTS (Unaudited)March 31, 2010

NOTE 1.  GENERAL ORGANIZATION AND BUSINESS



Algoil, Inc. (the "Company") was organized in the State of Nevada on September 6, 2007.  The Company is based in Kharkov, Ukraine.



On September 24, 2009, the Company changed name from Powergae, Inc. to Algoil, Inc.



The Company is in its development stage and will construct and operate bio-diesel production facilities and market bio-diesel through existing petroleum manufacturers and distributors.  The source of the Company's production of bio-diesel is algae grown in unique bioreactors allowing for algae growth under less than ideal natural light or heat and therefore a secure supply of bio-diesel.  The Company expects that its development of production and distribution technologies will secure its position as a leader in the rapidly growing alternative fuel market.



The Company provides its own Research and Development in algae growth and bio-diesel production technologies in collaboration with leading authorities in the Ukraine.



NOTE 2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES



The relevant accounting policies and procedures are listed below.



Accounting Basis



The statements were prepared following generally accepted accounting principles of the United States of America consistently applied.  The Company uses a December 31 year end.



Use of Estimates



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



Cash and Cash Equivalents



Cash and cash equivalents include all short-term liquid investments that are readily convertible to know amounts of cash and have original maturities of three months or less. As of March 31, 2010 there were no cash equivalents.



Earnings per Share



The basic earnings (loss) per share is calculated by dividing the Company's net income available to common shareholders by the weighted average number of common shares during the year. The diluted earnings (loss) per share is calculated by dividing the Company's net income (loss) available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity.



Because the Company does not have any potentially dilutive securities, the accompanying presentation is only of basic loss per share. Diluted earnings (loss) per share are the same as basic earnings (loss) per share due to the lack of dilutive items in the Company



Dividends



The Company has not yet adopted any policy regarding payment of dividends. No dividends have been paid during the periods shown.



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Stock Based Compensation

We follow ASC 718-10, "Stock Compensation", which addresses the accounting for transactions in which an entity exchanges its equity instruments for goods or services, with a primary focus on transactions in which an entity obtains employee services in share-based payment transactions. ASC 718-10 is a revision to SFAS No. 123, "Accounting for Stock-Based Compensation," and supersedes Accounting Principles Board ("APB") Opinion No. 25, "Accounting for Stock Issued to Employees," and its related implementation guidance. ASC 718-10 requires measurement of the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). Incremental compensation costs arising from subsequent modifications of awards after the grant date must be recognized. The Company has not adopted a stock option plan and has not granted any stock options. The Company granted stock awards, at par value, to its officers, directors and advisors for services rendered in its formation. Accordingly, stock-based compensation has been recorded to date.



Income Taxes



The provision for income taxes is the total of the current taxes payable and the net of the change in the deferred income taxes. Provision is made for the deferred income taxes where differences exist between the period in which transactions affect current taxable income and the period in which they enter into the determination of net income in the financial statements.



Development Stage Enterprise



The Company's financial statements are prepared pursuant to the provisions of Topic 26, "Accounting for Development Stage Enterprises," as it devotes substantially all of its efforts to acquiring and exploring mining interests that will eventually provide sufficient net profits to sustain the Company's existence. Until such interests are engaged in major commercial production, the Company will continue to prepare its financial statements and related disclosures in accordance with entities in the development stage.



NOTE 3.  GOING CONCERN



The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred net losses from inception to March 31, 2010 of $86,073.



Losses are expected to continue for the immediate future. In addition, the Company's cash flow requirements have been met by the generation of capital through private placements of the Company's common stock and loans.  Assurance cannot be given that this source of financing will continue to be available to the Company and demand for the Company's equity instruments will be sufficient to meet its capital needs. However; the company is in process of following through with its business plan with sufficient capital at present to meet its business plan.



The financial statements do not include any adjustments relating to the recoverability and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company's continuation as a going concern is dependent upon its ability to generate sufficient cash flow to meet it's obligations on a timely basis, to retain its current financing, to obtain additional financing, and ultimately to generate revenues.



NOTE 4.  PROVISION FOR INCOME TAXES



The Company follows the liability method of accounting for income taxes in accordance with Statements of Financial Accounting Standards FASB ASC 740, "Accounting for Income Taxes." Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax balances. Deferred tax assets and liabilities are measured using enacted or substantially enacted tax rates expected to apply to the taxable income in the years in which those differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the date of enactment or substantive enactment.



NOTE 5.  NOTE RECEIVABLE



The non-interest bearing note receivable in the amount $5,000 was issued in March 2010 and matures in the year 2011.



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NOTE 6.  RELATED PARTY TRANSACTION



As of December 31, 2010, the Company has concluded a Personal Loan Agreement with its CEO. The loan is in the amount of $10,550 and is for administrative purposes.



On March 17, 2010 the company took a loan in the amount $25,000.  As of March 31, 2010 the loan is in the amount of $35,550. The amount due to the related party is unsecured and non interest-bearing.



NOTE 7.  STOCKHOLDERS EQUITY



The Company is authorized 75,000,000 common shares with a $0.001 par value. As of March 31, 2010, 15,225,000 shares were issued and outstanding.



On December 15, 2007, the Company issued 10,000,000 shares of common stock at the par value of $0.001 per share to Andrew Kovalenko the CEO and a Founder of the Algoil, Inc.



On December 15, 2007, the Company issued 2,000,000 shares of common stock at the par value of $0.001 per share to Dmitriy V. Dobroshtan the CTO and a Founder of the Algoil, Inc.



On December 15, 2007, the Company issued 1,625,000 restricted shares of common stock for $32,500 cash or $0.02 per share.



On January 30, 2008, the Company issued 1,500,000 restricted shares of common stock for $15,000 cash or $0.01 per share.



On May 2, 2008, the Company issued 100,000 restricted shares of common stock for $2,000 cash or $0.02 per share.



NOTE 8.  THE EFFECT OF RECENTLY ISSUED ACCOUNTING STANDARDS



Recent Accounting Pronouncements



Recent accounting pronouncements that the Company has adopted or that will be required to adopt in the future are summarized below.



In October 2009, the FASB issued Accounting Standards Update No. 2009-13 ("ASU 2009-13") "Revenue Recognition (ASC 605), Multiple-Deliverable Revenue Arrangements a consensus of the FASB Emerging Issues Task Force ("EITF"). This ASU provides amendments to the criteria in FASB ASC 605-25 for separating consideration in multiple-deliverable arrangements. ASU 2009-13 changes existing rules regarding recognition of revenue in multiple deliverable arrangements and expands ongoing disclosures about the significant judgments used in applying its guidance. It will be effective for revenue arrangements entered into or materially modified in the fiscal year beginning on or after June 15, 2010. Early adoption is permitted on a prospective or retrospective basis. We are currently evaluating the impact of ASU 2009-13 on our financial statements.



In June 2009, the FASB issued FASB ASC 820-10, "Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly." This ASC provides additional guidance for estimating fair value in accordance with FASB ASC 820-10, when the volume and level of activity for the asset or liability have significantly decreased. This ASC also includes guidance on identifying circumstances that indicate a transaction is not orderly. This ASC is effective for interim and annual reporting periods that ended after June 15, 2009. The ASC does not require disclosures for earlier periods presented for comparative purposes at initial adoption. In periods after initial adoption, this ASC requires comparative disclosures only for periods ending after initial adoption. The adoption of FASB ASC 820-10 did not have a material impact on our financial statements.



On July 1, 2009, the Company adopted updates issued by the Financial Accounting Standards Board (FASB) to the authoritative hierarchy of GAAP. These changes establish the FASB Accounting Standards CodificationTM (ASC) as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with GAAP. 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. The FASB will no longer issue new standards in the form of Statements, FASB Staff Positions, or Emerging Issues Task Force Abstracts; instead the FASB will issue Accounting Standards Updates. Accounting Standards Updates will not be authoritative in their own right as they will only serve to update the Codification. These changes and the Codification itself do not change GAAP. Other than the manner in which new accounting guidance is referenced, the adoption of these changes had no impact on the Financial Statements.



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In May 2009, FASB issued ASC 855, Subsequent Events, which establishes general standards of for the evaluation, recognition and disclosure of events and transactions that occur after the balance sheet date. Although there is new terminology, the standard is based on the same principles as those that currently exist in the auditing standards. The standard, which includes a new required disclosure of the date through which an entity has evaluated subsequent events, is effective for interim or annual periods ending after June 15, 2009.  The adoption of ASC 855 did not have a material effect on the Company's financial statements.

In January 2010, the Financial Accounting Standards Board ("FASB") issued guidance to amend the disclosure requirements related to recurring and nonrecurring fair value measurements. The guidance requires new disclosures on the transfers of assets and liabilities between Level 1 (quoted prices in active market for identical assets or liabilities) and Level 2 (significant other observable inputs) of the fair value measurement hierarchy, including the reasons and the timing of the transfers. Additionally, the guidance requires a roll forward of activities on purchases, sales, issuance, and settlements of the assets and liabilities measured using significant unobservable inputs (Level 3 fair value measurements). The guidance became effective for us with the reporting period beginning January 1, 2010, except for the disclosure on the roll forward activities for Level 3 fair value measurements, which will become effective for us with the reporting period beginning July 1, 2011. Other than requiring additional disclosures, adoption of this new guidance did not have a material impact on our financial statements.



On February 24, 2010, the FASB issued guidance in the "Subsequent Events" topic of the FASC to provide updates including: (1) requiring the company to evaluate subsequent events through the date in which the financial statements are issued; (2) amending the glossary of the "Subsequent Events" topic to include the definition of "SEC filer" and exclude the definition of "Public entity"; and (3) eliminating the requirement to disclose the date through which subsequent events have been evaluated. This guidance was prospectively effective upon issuance. The adoption of this guidance did not impact the Company's results of operations of financial condition.



The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.



NOTE 9.  SUBSEQUENT EVENT



The Company has evaluated subsequent events through the date the financial statements were issued and filed with the Securities and Exchange Commission. The Company has determined that there were no such events that warrant disclosure or recognition in the financial statements.



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In this Quarterly Report on Form 10-Q, "Company," "our company," "us," and "our" refer to Algoil, Inc. unless the context requires otherwise.



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



Management's Discussion and Analysis contains various "forward looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, regarding future events or the future financial performance of the Company that involve risks and uncertainties. Certain statements included in this Form 10-Q, including, without limitation, statements related to anticipated cash flow sources and uses, and words including but not limited to "anticipates", "believes", "plans", "expects", "future" and similar statements or expressions, identify forward looking statements. Any forward-looking statements herein are subject to certain risks and uncertainties in the Company's business, including but not limited to, reliance on key customers and competition in its markets, market demand, product performance, technological developments, maintenance of relationships with key suppliers, difficulties of hiring or retaining key personnel and any changes in current accounting rules, all of which may be beyond the control of the Company. The Company adopted at management's discretion, the most conservative recognition of revenue based on the most astringent guidelines of the SEC in terms of recognition of software licenses and recurring revenue. Management will elect additional changes to revenue recognition to comply with the most conservative SEC recognition on a forward going accrual basis as the model is replicated with other similar markets (i.e. SBDC). The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth therein.



Forward-looking statements involve risks, uncertainties and other factors, which may cause our actual results, performance or achievements to be materially different from those expressed or implied by such forward-looking statements. Factors and risks that could affect our results and achievements and cause them to materially differ from those contained in the forward-looking statements include those identified in the section titled "Risk Factors" in the Company's Annual Report on Form 10-SB for the year ended September 30, 2006, as well as other factors that we are currently unable to identify or quantify, but that may exist in the future.



In addition, the foregoing factors may affect generally our business, results of operations and financial position. Forward-looking statements speak only as of the date the statement was made. We do not undertake and specifically decline any obligation to update any forward-looking statements.



Management's Discussion and Analysis contains various "forward looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, regarding future events or the future financial performance of the Company that involve risks and uncertainties. Certain statements included in this S-1, including, without limitation, statements related to anticipated cash flow sources and uses, and words including but not limited to "anticipates", "believes", "plans", "expects", "future" and similar statements or expressions, identify forward looking statements. Any forward-looking statements herein are subject to certain risks and uncertainties in the Company's business, including but not limited to, reliance on key customers and competition in its markets, market demand, product performance, technological developments, maintenance of relationships with key suppliers, difficulties of hiring or retaining key personnel and any changes in current accounting rules, all of which may be beyond the control of the Company. Management will elect additional changes to revenue recognition to comply with the most conservative SEC recognition on a forward going accrual basis as the model is replicated with other similar markets (i.e. SBDC). The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth therein.



Management's Discussion and Analysis of Results of Financial Condition and Results of Operations ("MD&A") should be read in conjunction with the financial statements included herein.



Algoil, Inc. was incorporated in Nevada on September 6, 2007 under the name Powergae, Inc. with the purpose of profitably constructing and operating biodiesel production facilities, establishing them in strategic locations, and selling the biodiesel through existing petroleum manufacturers and distributors. On September 24, 2009, we changed our name to Algoil, Inc. The central concept of our company is making the production of biodiesel independent of its traditional sources such as soy bean, rape, sunflower seed or palm oil. The oil consumed by our biodiesel plants will be produced from algae grown in special bioreactors. The use of bioreactors will secure adequate supply of oil even under insufficient lighting or heating. To achieve our objectives, we plan to use commercial equipment sourced from the leading world suppliers. This modern, highly efficient equipment will allow the production of biodiesel fully confirming to American and European quality standards. We have not generated any revenue from operations.



Our in-house Research and development program provides ongoing refinements for existing production technologies. We have an active collaboration with the Institute of Biology of the Southern Seas of the National Academy of Sciences of Ukraine, the foremost authority in the field of algae farming.



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Our team consists of specialists working in the field of biodiesel production as economic, technical and marketing consultants. Our experience includes design and construction of biodiesel production facilities with annual output from 20 to 100 thousands of gallons. We started our business with a vision of improved production technology and streamlined distribution of biodiesel in the rapidly growing alternative fuel market.



BUSINESS MODEL





|1. | Creating a network of algal oil production plants in the vicinity of large biodiesel consumers such as Metropolitan Statistical Areas (MSAs) or Metropolitan Statistical Areas (CMSAs), etc. by entering into agreements with existing CO2 mass producers such as breweries, waste water treatment centers, power plants, and similar facilities that tend to be concentrated in the same areas. The algae growing plants should be located very close to CO2 sources to significantly reduce the transportation cost of main raw materials to our plants. Additional revenue can be derived from carbon dioxide sequestration and processing of industrial and domestic effluents to reduce organic residues.
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|2. | The first stage of the project involves construction of a pilot Algae production Plant. The equipment cost for such a facility is estimated to be $850,000 with an additional allowance of $150,000 for site preparation. The plant will have annual capacity of 93 000 gallons of algal oil per year, thus generating annual revenue of approximately $1,435,000 resulting from the sales of both algal oil and press cake. At the later stages of the project, the pilot plant will be used as a R&D facility. The subsequent production plants will have annual capacities of up to 30 million gallons of biodiesel.                                                                                       
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|   | We held preliminary discussions with several CO2 mass producers in the United States to place our pilot plant. A final plant placement decision will take about 6 months. Management believes that average delivery time from manufacturer of the plant equipment is about 6-12 months. Construction of a plant will take about 6 months. Ordering equipment for the plant will be placed right after receipt of the investments.                                                                                                                                                                                                                                                                             
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|   | Thus, the total time from the start of the financing to the launch of production estimated at 1.5 to 2 years.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
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|3. | At the first stage we plan to convert the produced algal oil to biodiesel using tolling agreements with existing biodiesel plants (whereby we provide algal oil to the Biodiesel Plant to process into biodiesel, and pay a fixed price per gallon for such processing). Such processing fee per gallon would be significantly lower than the wholesale price: typically, the processing fee is comparable to the difference between the price of biodiesel and the cost of feedstock oil.) Using tolling agreements will reduce investment requirements and mitigate risk.                                                                                                                                   
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|4. | Concluding agreements with existing petroleum distributors that will give the distributor the preferential right to use our product in their respective distribution area. The product that is sold to the end consumer is usually B20, a blend of 20% biodiesel and 80% petroleum diesel.                                                                                                                                                                                                                                                                                                                                                                                                                    



PLAN OF OPERATION



We plan to raise additional funds through joint venture partnerships, project debt financings or through future sales of our common stock, until such time as our revenues are sufficient to meet our cost structure, and ultimately achieve profitable operations. There is no assurance that we will be successful in raising additional capital or achieving profitable operations. Our financial statements do not include any adjustments that might result from the outcome of these uncertainties. We will need financing within 12 months to execute our business plan.



We have not developed our own proprietary technology.



Our business will encompass development activities culminating in the construction and long-term operation of biofuel production biorefineries. As such, we are currently in the development-stage of finding suitable locations and deploying project opportunities for converting cellulose fractions of municipal solid waste and other opportunistic feedstock into biofuel fuels.



For the next 12 months, our Plan of Operations is as follows:



We plan to access the diesel fuel market by placing our Algae production Plants in Metropolitan Statistical Areas (MSAs) or Metropolitan Statistical Areas (CMSAs). We believe that there are currently 261 MSAs and 19 CMSAs in the United States. These have a minimum population of 250,000 residents, with some, such as New York, Los Angeles and Chicago, having substantially more.



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Main stages of the project:





|· | First Stage (first 24 months). Site location for the first Algae production Plant according to the aforementioned requirements. Concluding agreements with CO2 suppliers and biodiesel distributors.
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|· | Second stage: Strategic planning based on the experience obtained from the deployment of the pilot Algae production Plant:                                                                          
|· | Improving the algae farming and processing technologies,                                                                                                                                            
|· | Starting production of additional algae-based products,                                                                                                                                             
|· | Deployment of Algae production and Biodiesel Plant network.                                                                                                                                         
|· | The second stage will require additional capitalization to provide working capital and marketing funds to support our expanding operations.                                                         



RECENT DEVELOPMENTS



We have an agreement with the Institute of the Biology of the Southern Seas (IBSS) from Ukraine on joint "algae industrial growing" research project. Currently, we selected the engineering staff for conducting our Research and Development project.



Major ongoing Tasks:





|· | seeking for business partners,                          
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|· | seeking for investors,                                  
|· | choose the right location for our pilot plant placement.

RESULTS OF OPERATIONS

Substantial positive and negative fluctuations can occur in our business due to a variety of factors, including variations in the economy, and the abilities to raise capital. As a result, net income and revenues in a particular period may not be representative of full year results and may vary significantly in this early stage of our operations. In addition results of operations, which may fluctuate in the future, may be materially affected by many factors of a national and international nature, including economic and market conditions, currency values, inflation, the availability of capital, the level of volatility of interest rates, the valuation of security positions and investments and legislative and regulatory developments. Our results of operations also may be materially affected by competitive factors and our ability to attract and retain highly skilled individuals.

Results of Operations for the three months ended March 31, 2010 and 2009

We had zero revenues for the three months ended March 31, 2010 and 2009.

Operating Expenses for the three months ended March 31, 2010 and 2009

We had operating expenses of $11,760 and 5,504 for the three months ended March 31, 2010 and 2009. For three months ended March 31, 2010, these expenses consisted of General and Administrative expenses $5,960 and Professional expenses $5,800.  For three months ended March 31, 2009, the expense consisted of General and Administrative expense $1,004 and Professional expense $4,500. The General and Administrative expenses increased $4,956 in the three months ended march 31, 2010 due to the increase in expenditure in consultant fee and contractor fee.



For the period from September 6, 2007 to March 31, 2010, we recorded a net loss of $86,073. We incurred operating expense of $86,073 and these expenses consisted of General and Administrative expenses $30,273 and Professional expenses $55,800.



LIQUIDITY AND CAPITAL RESOURCES

We believe the proceeds from private placements and the reserves will generate sufficient cash in assisting with the operating needs of our company. Our management is continuing to inquire into new investments to provide for further research and development capital and assisting further acquisitions over the next twelve months.



Historically, we have funded our operations through financing activities consisting primarily of private placements of debt and equity securities with existing shareholders and outside investors. Our principal use of funds has been for the further development of our Biorefinery Projects, for capital expenditures and general corporate expenses.



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OFF-BALANCE SHEET ARRANGEMENTS



We have not entered into any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources and would be considered material to investors. Certain officers and directors of the Company have provided personal guarantees to our various lenders as required for the extension of credit to the Company.



ACCOUNTING POLICIES SUBJECT TO ESTIMATION AND JUDGMENT



Management's Discussion and Analysis of Financial Condition and Results of Operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. When preparing our financial statements, we make estimates and judgments that affect the reported amounts on our balance sheets and income statements, and our related disclosure about contingent assets and liabilities. We continually evaluate our estimates, including those related to revenue, allowance for doubtful accounts, reserves for income taxes, and litigation. We base our estimates on historical experience and on various other assumptions, which we believe to be reasonable in order to form the basis for making judgments about the carrying values of assets and liabilities that are not readily ascertained from other sources. Actual results may deviate from these estimates if alternative assumptions or condition are used.



ADDITIONAL INFORMATION



We file reports and other materials with the Securities and Exchange Commission.  These documents may be inspected and copied at the Commission's Public Reference Room at 450 Fifth Street, N.W., Washington, D.C., 20549.  You can obtain information on the operation of the Public Reference Room by calling the Commission at 1-800-SEC-0330.  You can also get copies of documents that the Company files with the Commission through the Commission's Internet site at www.sec.gov.



ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK



We do not hold any derivative instruments and do not engage in any hedging activities.



ITEM 4.  CONTROLS AND PROCEDURES



a) Evaluation of Disclosure Controls and Procedures



Our Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures as of the end of the period covered by this report were effective such that the information required to be disclosed by us in reports filed under the Securities Exchange Act of 1934 is (i) recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms and (ii) accumulated and communicated to the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding disclosure. A controls system cannot provide absolute assurance, however, that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.



Our Chief Executive Officer and Chief Financial Officer are responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Our 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 accounting principles generally accepted in the United States.



Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives. Furthermore, smaller reporting companies face additional limitations. Smaller reporting companies employ fewer individuals and find it difficult to properly segregate duties. Often, one or two individuals control every aspect of the Company's operation and are in a position to override any system of internal control. Additionally, smaller reporting companies tend to utilize general accounting software packages that lack a rigorous set of software controls.



Our Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of the Company's internal control over financial reporting as of March 31, 2010. In making this assessment, our Chief Executive Officer and Chief Financial Officer used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control -- Integrated Framework. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of March 31, 2010, our internal control over financial reporting was effective.



b) Changes in Internal Control over Financial Reporting.

During the Quarter ended March 31, 2010, there was no change in our internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.



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PART II
OTHER INFORMATION



ITEM 1.  LEGAL PROCEEDINGS



The Company is not a party to any litigation and, to its knowledge, no action, suit or proceeding has been threatened against the Company except with threatened litigation in regard to unpaid debt obligations, and one employee claiming unlawful termination. No actions regarding the unpaid debt have been initiated as of this date.   The Company also believes that the wrongful termination suit has no merit.  There are no material proceedings to which any director, officer or affiliate of the Company or security holder is a party adverse to the Company or has a material interest adverse to the Company.



ITEM 1A.  Risk Factors



You should carefully consider the following risk factors together with the other information contained in this Interim Report on Form 10-Q, and in prior reports pursuant to the Securities Exchange Act of 1934, as amended and the Securities Act of 1933, as amended.  If any of the risks factors actually occur, our business, financial condition or results of operations could be materially adversely affected. In such cases, the trading price of our common stock could decline. We believe there are no changes that constitute material changes from the risk factors previously disclosed in the prior reports pursuant to the Securities Exchange Act of 1934, as amended and the Securities Act of 1933 and include or reiterate the following risk factors:



WE WILL BE A "SHELL" COMPANY AND OUR SHARES WILL SUBJECT TO RESTRICTIONS ON RESALE.



As we currently have nominal operations and our assets consist of cash, and/or cash equivalents, we will be deemed a "shell company" as defined in Rule 12b-2 of the Securities Exchange Act of 1934. Accordingly, until we are no longer a "shell company," we will file a Form 10 level disclosure, and continue to be a reporting company pursuant to the Securities Exchange Act of 1934, as amended, and for twelve months, shareholders holding restricted, non-registered shares will not be able to use the exemptions provided under Rule 144 for the resale of their shares of common stock. Preclusion from any prospective investor using the exemptions provided by Rule 144 may be more difficult for us to sell equity securities or equity-related securities in the future to investors that require a shorter period before liquidity or may require us to expend limited funds to register their shares for resale in a future prospectus.



VOLATILITY IN OUR COMMON SHARE PRICE MAY SUBJECT US TO SECURITIES LITIGATION, THEREBY DIVERTING OUR RESOURCES THAT MAY HAVE A MATERIAL EFFECT ON OUR PROFITABILITY AND RESULTS OF OPERATIONS.



As discussed in the preceding risk factors, the market for our common shares is characterized by significant price volatility when compared to seasoned issuers, and we expect that our share price will continue to be more volatile than a seasoned issuer for the indefinite future. In the past, plaintiffs have often initiated securities class action litigation against a company following periods of volatility in the market price of its securities. We may in the future be the target of similar litigation. Securities litigation could result in substantial costs and liabilities and could divert management's attention and resources.



WE WILL INCUR INCREASED COSTS AS A RESULT OF BEING A PUBLIC COMPANY, WHICH COULD AFFECT OUR PROFITABILITY AND OPERATING RESULTS.



The Sarbanes-Oxley Act of 2002 and the new rules subsequently implemented by the Securities and Exchange Commissions, the Nasdaq National Market and the Public Company Accounting Oversight Board have imposed various new requirements on public companies, including requiring changes in corporate governance practices. We expect these rules and regulations to increase our legal and financial compliance costs and to make some activities more time-consuming and costly. We expect to spend between $50,000 to $100,000 in legal and accounting expenses annually to comply with Sarbanes-Oxley. These costs could affect profitability and our results of operations. The cost of these activities will be paid out of this offering.



OUR BUSINESS PLAN CALLS FOR EXTENSIVE AMOUNTS OF FUNDING TO CONSTRUCT AND OPERATE OUR BIOREFINERY PROJECTS AND WE MAY NOT BE ABLE TO OBTAIN SUCH FUNDING WHICH COULD ADVERSELY AFFECT OUR BUSINESS, OPERATIONS AND FINANCIAL CONDITION.



We will be relying on additional financing and funding from such sources as The Energy Policy Act grants and loan guarantee programs. We are currently in discussions with potential sources of financing but no definitive agreements are in place. If we cannot achieve the requisite financing or complete the projects as anticipated, this could adversely affect our business, the results of our operations, prospects and financial condition.



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OUR ALGAE-TO-BIOFUEL TECHNOLOGIES ARE UNPROVEN ON A LARGE-SCALE COMMERCIAL BASIS AND PERFORMANCE COULD FAIL TO MEET PROJECTIONS, WHICH COULD RENDER US WORTHLESS.



While production of biofuel from corn, sugars and starches is a mature technology, newer technologies for production of biofuel from Algae have not been built at large commercial scales The technologies being pursued by us for biofuel production from algae have not been demonstrated on a commercial scale. All of the tests conducted to date by us with respect to our technologies have been performed on limited quantities of algae, and we cannot assure you that the same or similar results could be obtained at competitive costs on a large-scale commercial basis. We have never utilized these technologies under the conditions or in the volumes that will be required to be profitable and cannot predict all of the difficulties that may arise. It is possible that the technologies, when used, may require further research, development, design and testing prior to larger-scale commercialization, if that is possible. Accordingly, we cannot assure you that these technologies will perform successfully on a large-scale commercial basis or at all.



THE COMPANY CURRENTLY RELIES UPON TRADE SECRET LAWS TO PROTECT PROPRIETARY RIGHTS IN ITS TECHNOLOGIES.



Despite the precautions, under trade secret laws, it may be possible for a third party to copy or otherwise obtain and use the Company's biofuel technology without authorization. In addition, the laws of various countries in which the Company's biofuel may be sold may not protect the Company's intellectual property rights to the same extent as the laws of the United States. Because the biofuel industry is characterized by rapid technological change, the Company believes that factors such as the technological and creative skills of its personnel, new biofuel product developments, frequent biofuel product enhancements, and recognition are more important to establishing and maintaining a technology leadership position than the various legal protections of its technology. There can be no assurance that the Company's competitors will not independently develop technologies that are substantially equivalent or superior to the Company's technology. There can also be no assurance that the measures taken by the Company to protect its proprietary rights will be adequate to prevent misappropriation of the technology or independent development by others of similar technology.



INFRINGEMENT CLAIMS REGARDING OUR INTELLECTUAL PROPERTY MAY HARM OUR BUSINESS.



The technology may unintentionally infringe upon the intellectual property rights of others despite our best efforts to ensure that this does not occur. It is therefore possible that others will bring lawsuits against us claiming that we have infringed on their rights. Such lawsuits could be expensive to defend and cause us to stop publishing certain games or require us to license the proprietary rights of third parties.



OUR SUCCESS DEPENDS UPON OUR CHAIRMAN AND CHIEF EXECUTIVE OFFICER, MR. KOVALENKO AND OUR CHIEF TECHNOLOGY OFFICER , MR. DOBROSHTAN.



We believe that our success will depend to a significant extent upon the efforts and abilities of (i) Mr. Kovalenko, our Chairman and Chief Executive Officer, due to his contacts in the biodiesel and algae production industries and his overall insight into our business, and (ii) Mr. Dobroshtan, our Chief Technology Officer for his technical and engineering expertise, including his familiarity with technology behind biodiesel industry. Our failure to retain Mr. Kovalenko or Mr. Dobroshtan, or to attract and retain additional qualified personnel, could adversely affect our operations. We do not currently carry key-man life insurance on any of our officers.



FAILURE TO ACHIEVE AND MAINTAIN EFFECTIVE INTERNAL CONTROLS IN ACCORDANCE WITH SECTION 404 OF THE SARBANES-OXLEY ACT COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR BUSINESS AND OPERATING RESULTS.



It may be time consuming, difficult and costly for us to develop and implement the additional internal controls, processes and reporting procedures required by the Sarbanes-Oxley Act. We may need to hire additional financial reporting, internal auditing and other finance staff in order to develop and implement appropriate additional internal controls, processes and reporting procedures. If we are unable to comply with these requirements of the Sarbanes-Oxley Act, we may not be able to obtain the independent accountant certifications that the Sarbanes-Oxley Act requires of publicly traded companies.



If we fail to comply in a timely manner with the requirements of Section 404 of the Sarbanes-Oxley Act regarding internal control over financial reporting or to remedy any material weaknesses in our internal controls that we may identify, such failure could result in material misstatements in our financial statements, cause investors to lose confidence in our reported financial information and have a negative effect on the trading price of our common stock.



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Pursuant to Section 404 of the Sarbanes-Oxley Act and current SEC regulations, beginning with our annual report on Form 10-K for our fiscal period ending December 31, 2007, we will be required to prepare assessments regarding internal controls over financial reporting and beginning with our annual report on Form 10-K for our fiscal period ending December 31, 2008, furnish a report by our management on our internal control over financial reporting. We have begun the process of documenting and testing our internal control procedures in order to satisfy these requirements, which is likely to result in increased general and administrative expenses and may shift management time and attention from revenue-generating activities to compliance activities. While our management is expending significant resources in an effort to complete this important project, there can be no assurance that we will be able to achieve our objective on a timely basis. There also can be no assurance that our auditors will be able to issue an unqualified opinion on management's assessment of the effectiveness of our internal control over financial reporting. Failure to achieve and maintain an effective internal control environment or complete our Section 404 certifications could have a material adverse effect on our stock price.



In addition, in connection with our on-going assessment of the effectiveness of our internal control over financial reporting, we may discover "material weaknesses" in our internal controls as defined in standards established by the Public Company Accounting Oversight Board, or the PCAOB. A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected. The PCAOB defines "significant deficiency" as a deficiency that results in more than a remote likelihood that a misstatement of the financial statements that is more than inconsequential will not be prevented or detected.



In the event that a material weakness is identified, we will employ qualified personnel and adopt and implement policies and procedures to address any material weaknesses that we identify. However, the process of designing and implementing effective internal controls is a continuous effort that requires us to anticipate and react to changes in our business and the economic and regulatory environments and to expend significant resources to maintain a system of internal controls that is adequate to satisfy our reporting obligations as a public company. We cannot assure you that the measures we will take will remediate any material weaknesses that we may identify or that we will implement and maintain adequate controls over our financial process and reporting in the future.



Any failure to complete our assessment of our internal control over financial reporting, to remediate any material weaknesses that we may identify or to implement new or improved controls, or difficulties encountered in their implementation, could harm our operating results, cause us to fail to meet our reporting obligations or result in material misstatements in our financial statements. Any such failure could also adversely affect the results of the periodic management evaluations of our internal controls and, in the case of a failure to remediate any material weaknesses that we may identify, would adversely affect the annual auditor attestation reports regarding the effectiveness of our internal control over financial reporting that are required under Section 404 of the Sarbanes-Oxley Act. Inadequate internal controls could also cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our common stock.



CERTAIN NEVADA CORPORATION LAW PROVISIONS COULD PREVENT A POTENTIAL TAKEOVER, WHICH COULD ADVERSELY AFFECT THE MARKET PRICE OF OUR COMMON STOCK.



We are incorporated in the State of Nevada. Certain provisions of Nevada corporation law could adversely affect the market price of our common stock. Because Nevada corporation law requires board approval of a transaction involving a change in our control, it would be more difficult for someone to acquire control of us. Nevada corporate law also discourages proxy contests making it more difficult for you and other shareholders to elect directors other than the candidate or candidates nominated by our board of directors.



SHOULD ONE OR MORE OF THE FOREGOING RISKS OR UNCERTAINTIES MATERIALIZE, OR SHOULD THE UNDERLYING ASSUMPTIONS PROVE INCORRECT, ACTUAL RESULTS MAY DIFFER SIGNIFICANTLY FROM THOSE ANTICIPATED, BELIEVED, ESTIMATED, EXPECTED, INTENDED OR PLANNED



Special Note Regarding Forward-Looking Statements



This filing contains forward-looking statements about our business, financial condition and prospects that reflect our management's assumptions and good faith beliefs based on information currently available. We can give no assurance that the expectations indicated by such forward-looking statements will be realized. If any of our assumptions should prove incorrect, or if any of the risks and uncertainties underlying such expectations should materialize, our actual results may differ materially from those indicated by the forward-looking statements.



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The key factors that are not within our control and that may have a direct bearing on operating results include, but are not limited to, acceptance of our proposed services and the products we expect to market, our ability to establish a customer base, managements' ability to raise capital in the future, the retention of key employees and changes in the regulation of our industry.



There may be other risks and circumstances that management may be unable to predict. When used in this filing, words such as, "believes," "expects," "intends," "plans," "anticipates," "estimates" and similar expressions are intended to identify and qualify forward-looking statements, although there may be certain forward-looking statements not accompanied by such expressions.



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



On January 30, 2008, the Company issued 1,500,000 restricted shares of common stock for $15,000 cash or $0.01 per share.



On May 2, 2008, the Company issued 100,000 restricted shares of common stock for $2,000 cash or $0.02 per share.



There were no other changes in securities and small business issuer purchase of equity securities during the period ended March 31, 2010.



ITEM 3.  DEFAULTS UPON SENIOR SECURITIES



There were no defaults upon senior securities during the period ended March 31, 2010.



ITEM 4.  REMOVED AND RESERVED



ITEM 5.  OTHER INFORMATION



There is no information with respect to which information is not otherwise called for by this form.



ITEM 6.  EXHIBITS



|31.1 | Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act 
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|31.2 | Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act.
|32.1 | Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act.
|32.2 | Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act.
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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934 the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.





|Date:  May 17, 2010 |  | By:  /s/ Andrew Kovalenko                                                                         
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|                    |  | Andrew Kovalenko                                                                                  
|                    |  | Chairman, President Chief Executive Officer
(Principle Executive Officer), Chief Financial Officer