----

----

| Onteco Corporation                             |
|------------------------------------------------|
| (Name of small business issuer in its charter) |

| Nevada                                                                                                         |   | 51-0668045                                |
|----------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------|
| (State or other jurisdiction of incorporation or organization)                                            |   | (I.R.S. Employer Identification No.) |
|  19495 Biscayne Blvd.Suite 411Aventura, Florida 33180 (Address of principal executive offices)  |
| (305) 932-9795(Issuer’s telephone number)                                                                |

| Securities registered pursuant to Section 12(b) of the Act: |   | Name of each exchange on which registered: |
|------------------------------------------------------------------|--------|--------------------------------------------|
| None                                                             |   |                                       |

|                                                       |
|------------------------------------------------------------|
| Securities registered pursuant to Section12(g) of the Act: |   |   |
| Common Stock, $0.001                                       |   |   |
| (Title of Class)                                           |   |   |

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

| Class                | Outstanding as of  August 15, 2011 |
|----------------------|----------------------------------------------|
| Common Stock, $0.001 | 253,058,765                                  |

----

----

----

| Part 1.                      | FINANCIAL INFORMATION                                                                       |   |   |   |
|---------------------------------------------|---------------------------------------------------------------------------------------------|--------|--------|--------|
|                                        |                                                                                        |   |   |   |
| Item 1.                                     | Financial Statements                                                                        |   |   | F-1    |   |
|                              |    Consolidated Balance Sheets                                               |   |   | F-2    |   |
|               |    Consolidated Statements of Operations                                     |   |   | F-3    |   |
|                                        |    Consolidated Statements of Cash Flows                                     |   |   | F-4    |   |
|                                        |    Notes to Consolidated Financial Statements                                |   |   | F-6    |   |
|                                        |                                                                                        |   |   |   |   |
| Item 2.                      | Management’s Discussion and Analysis of Financial Condition and Results of Operations |   |   | 3      |   |
|               |                                                                                        |   |   |   |   |
| Item 3.                      | Quantitative and Qualitative Disclosures About Market Risk                                  |   |   | 19     |   |
|               |                                                                                        |   |   |   |   |
| Item 4.                                     | Controls and Procedures                                                                     |   |   | 19     |   |
|                                        |                                                                                        |   |   |   |   |
| Part II.                                    | OTHER INFORMATION                                                                           |   |   | 22     |   |
|               |                                                                                        |   |   |   |   |
| Item 1.                      | Legal Proceedings                                                                           |   |   | 22     |   |
|               |                                                                                        |   |   |   |   |
| Item 1A.                                    | Risk Factors                                                                                |   |   | 22     |   |
|                                        |                                                                                        |   |   |   |   |
| Item 2.                           | Unregistered Sales of Equity Securities and Use of Proceeds                                 |   |   | 22     |   |
|                                        |                                                                                        |   |   |   |   |
| Item 3.                      | Defaults Upon Senior Securities                                                             |   |   | 23     |   |
|               |                                                                                        |   |   |   |   |
| Item 4.       | Reserved and Removed                                                                        |   |   | 23     |   |
|                                        |                                                                                        |   |   |   |   |
| Item 5.                           | Other Information                                                                           |   |   | 23     |   |
|               |                                                                                        |   |   |   |   |
| Item 6.            | Exhibits                                                                                    |   |   | 23     |   |

----

----

|                                                   |   | Index  |   |
|--------------------------------------------------------|--------|--------|--------|
|                                                   |   |   |   |
| Consolidated Balance Sheets                            |   |   | F-2    |   |
|                                                   |   |   |   |   |
| Consolidated Statements of Operations                  |   |   | F-3    |   |
|                                                   |   |   |   |   |
| Consolidated Statements of Cash Flows             |   |   | F-4    |   |
|                                                   |   |   |   |   |
| Consolidated Statements of Stockholders’ Deficit |   |   | F-6    |   |
|                                                   |   |   |   |   |
| Notes to the Consolidated Financial Statements         |   |   | F-9    |   |

----

|                                                                                                           |   | As of June 30, 2011(unaudited) |      |   | As of December 31, 2010(audited) |   |
|----------------------------------------------------------------------------------------------------------------|--------|--------------------------------|-----------|--------|---------------------------------------|--------|
| ASSETS                                                                                                         |   |
| CURRENT ASSETS                                                                                                 |   |                           |      |   |                                  |   |
|      Cash in Banks                                                                    |   | $                              | 86,845    |   |                                  | $      | 62,428 |   |
|      Due from NexPhase Lighting                                                       |   |                           | -         |   |                                  |   | 35,150 |   |
|      Project Development Costs                                                        |   |                           | -         |   |                                  |   | 27,600 |   |
|      Accounts Receivable                                                              |   |                           | 37,500    |   |                                  |   | - |   |
|      Shop Supplies                                                                    |   |                           | 7,500     |   |                                  |   | - |   |
|      Prepaid Expenses                                                                 |   |                           | 541       |   |                                  |   | - |   |
|                TOTAL CURRENT ASSETS |   |                           | 132,386   |   |                                  |   | 125,178 |   |
|                                                                                                           |   |                           |      |   |                                  |   |   |   |
| FIXED ASSETS                                                                                                   |   |                           |      |   |                                  |   |   |   |
|      Property and Equipment - Net                                                     |   |                           | 41,827    |   |                                  |   | - |   |
|                                                                                                           |   |                           |      |   |                                  |   |   |   |
|                TOTAL FIXED ASSETS   |   |                           | 41,827    |   |                                  |   | - |   |
|                                                                                                           |   |                           |      |   |                                  |   |   |   |
| OTHER ASSETS                                                                                                   |   |                           |      |   |                                  |   |   |   |
|      Security Deposits                                                                |   |                           | 11,709    |   |                                  |   | - |   |
|      Intellectual Property                                                            |   |                           | 2,988,607 |   |                                  |   | - |   |
|                                                                                                           |   |                           |      |   |                                  |   |   |   |
|                TOTAL OTHER ASSETS   |   |                           | 3,000,316 |   |                                  |   | - |   |
|                                                                                                           |   |                           |      |   |                                  |   |   |   |
|                TOTAL ASSETS         |   | $                              | 3,174,529 |   |                                  | $      | 125,178 |   |

| CURRENT LIABILITIES                                                                                                                                                                |   |   |                  |   |   |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-----------------------|--------|--------|--------|
|      Accounts Payable                                                                                                                                     |   | $      | 3,531                 |   |   | $      | 1,942 |   |
|      Accrued Interest                                                                                                                                     |   |   | 57,178                |   |   |   | - |   |
|      Accrued Employee Compensation                                                                                                                        |   |   | 398,000               |   |   |   | 308,000 |   |
|      Sales Tax Payable                                                                                                                                    |   |   | 2,678                 |   |   |   | - |   |
|      Notes Payable – Related Parties                                                                                                                |   |   | 718,799               |   |   |   | 224,855 |   |
|      Notes Payable – Third Parties                                                                                                                  |   |   | 289,590               |   |   |   | 57,100 |   |
|                                                                                                                                                                               |   |   |                  |   |   |   |   |   |
|                TOTAL CURRENT LIABILITIES                                                                |   |   | 1,469,776             |   |   |   | 591,897 |   |
|                                                                                                                                                                               |   |   |                  |   |   |   |   |   |
| OTHER LIABILITIES                                                                                                                                                                  |   |   | -                     |   |   |   | - |   |
|                                                                                                                                                                               |   |   |                  |   |   |   |   |   |
|                TOTAL LIABILITIES                                                                        |   |   | 1,469,776             |   |   |   | 591,897 |   |
|                                                                                                                                                                               |   |   |                  |   |   |   |   |   |
| STOCKHOLDERS’ DEFICIT                                                                                                                                                        |   |   |                  |   |   |   |   |   |
|      Preferred Stock, $0.001 Par Value: 100,000,000 Shares Authorized; Zero Shares Issued and Outstanding At December 31, 2010 and 2009, Respectively     |   |   |   -              |   |   |   |   - |   |
| Common Stock, $0.001 Par Values; 750,000,000 Shares & 75,000,000 Shares Authorized; 253,058,765 and 116,890,258 Issued and Outstanding at June 30, 2011 and 2010, Respectively |   |   |     253,303 |   |   |   |     116,890 |   |
|      Paid in Capital                                                                                                                                      |   |   | 2,875,720             |   |   |   | 194,132 |   |
|      Treasure Stock                                                                                                                                       |   |   | (61,000               | )      |   |   | - |   |
|      Accumulated Deficit                                                                                                                                  |   |   | (1,363,270            | )      |   |   | (777,741 | ) |
|                                                                                                                                                                               |   |   |                  |   |   |   |   |   |
|                TOTAL STOCKHOLDERS’ DEFICIT                                                        |   |   | 1,704,753             |   |   |   | (466,719 | ) |
|                                                                                                                                                                               |   |   |                  |   |   |   |   |   |
|                TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT                                        |   | $      | 3,174,529             |   |   | $      | 125,178 |   |

----

|                                                                                                     |   |    ThreeMonths Ended06/30/2011(unaudited) |        |   |    ThreeMonths Ended06/30/2010(unaudited) |   |       |    SixMonths Ended06/30/2011(unaudited) |   |   |    SixMonths Ended06/30/2010(unaudited) |   |   | CumulativeResults FromInception12/31/2007Through06/30/2011(unaudited) |       |
|----------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------|-------------|--------|----------------------------------------------------------|--------|------------|--------------------------------------------------------|--------|--------|--------------------------------------------------------|--------|--------|-----------------------------------------------------------------------|------------|
|  REVENUE                                                                                            |   |                                                     |        |   |                                                     |   |       |                                                   |   |   |                                                   |   |   |                                                                  |       |
|      Total Revenue                                                              |   | $                                                        | 34,271      |   |                                                     | $      | -          |                                                   |   | $      | 79,437                                                 |   |   | $                                                                     | -          |   |   | $ | 79,437 |   |
|                                                                                                     |   |                                                     |        |   |                                                     |   |       |                                                   |   |   |                                                   |   |   |                                                                  |       |   |   |   |   |   |
| COSTS OF GOODS                                                                                           |   |                                                     |        |   |                                                     |   |       |                                                   |   |   |                                                   |   |   |                                                                  |       |   |   |   |   |   |
|      Total Costs of Goods                                                       |   |                                                     | 25,704      |   |                                                     |   | -          |                                                   |   |   | 36,010                                                 |   |   |                                                                  | -          |   |   |   | 36,010 |   |
|                                                                                                     |   |                                                     |        |   |                                                     |   |       |                                                   |   |   |                                                   |   |   |                                                                  |       |   |   |   |   |   |
| GROSS PROFIT                                                                                             |   |                                                     | 8,567       |   |                                                     |   | -          |                                                   |   |   | 43,427                                                 |   |   |                                                                  | -          |   |   |   | 43,427 |   |
|                                                                                                     |   |                                                     |        |   |                                                     |   |       |                                                   |   |   |                                                   |   |   |                                                                  |       |   |   |   |   |   |
| EXPENSES                                                                                                 |   |                                                     |        |   |                                                     |   |       |                                                   |   |   |                                                   |   |   |                                                                  |       |   |   |   |   |   |
|      General & Administrative                                               |   |                                                     | 21,760      |   |                                                     |   | 3,671      |                                                   |   |   | 52,058                                                 |   |   |                                                                  | 3,671      |   |   |   | 129,667 |   |
|      Investor Relations                                                         |   |                                                     | 63,834      |   |                                                     |   | -          |                                                   |   |   | -                                                      |   |   |                                                                  | -          |   |   |   | 118,012 |   |
|      Occupancy - Headquarters                                                   |   |                                                     | 19,161      |   |                                                     |   | -          |                                                   |   |   | 34,179                                                 |   |   |                                                                  | -          |   |   |   | 39,482 |   |
|      Officer Compensation                                                       |   |                                                     | 36,500      |   |                                                     |   | 45,000     |                                                   |   |   | 73,000                                                 |   |   |                                                                  | 240,000    |   |   |   | 78,000 |   |
|      Professional Fees                                                          |   |                                                     | 27,698      |   |                                                     |   | 225        |                                                   |   |   | 64,253                                                 |   |   |                                                                  | 11,175     |   |   |   | 104,205 |   |
|      Staff Compensation                                                         |   |                                                     | 104,920     |   |                                                     |   | -          |                                                   |   |   | 202,670                                                |   |   |                                                                  | -          |   |   |   | 547,670 |   |
|      Stock-Based Compensation                                                   |   |                                                     | -           |   |                                                     |   | -          |                                                   |   |   | 118,012                                                |   |   |                                                                  | -          |   |   |   | 290,055 |   |
| Total Expenses                                                                                           |   |                                                     | 273,873     |   |                                                     |   | 48,896     |                                                   |   |   | 544,172                                                |   |   |                                                                  | 254,846    |   |   |   | 1,307,091 |   |
|                                                                                                     |   |                                                     |        |   |                                                     |   |       |                                                   |   |   |                                                   |   |   |                                                                  |       |   |   |   |   |   |
|                OPERATING LOSS |   |                                                     | 265,306     |   |                                                     |   | 48,896     |                                                   |   |   | 500,745                                                |   |   |                                                                  | 254,846    |   |   |   | 1,263,664 |   |
|                                                                                                     |   |                                                     |        |   |                                                     |   |       |                                                   |   |   |                                                   |   |   |                                                                  |       |   |   |   |   |   |
| OTHER EXPENSES                                                                                           |   |                                                     |        |   |                                                     |   |       |                                                   |   |   |                                                   |   |   |                                                                  |       |   |   |   |   |   |
|      Depreciation Expense                                                       |   |                                                     | 2,521       |   |                                                     |   | -          |                                                   |   |   | 4,935                                                  |   |   |                                                                  | -          |   |   |   | 4,935 |   |
|      Gain/(Loss) on Disposition                                                 |   |                                                     | -           |   |                                                     |   | -          |                                                   |   |   | -                                                      |   |   |                                                                  | -          |   |   |   | 567 |   |
|      Interest Expense                                                           |   |                                                     | 25,956      |   |                                                     |   | -          |                                                   |   |   | 52,249                                                 |   |   |                                                                  | 9,755      |   |   |   | 65,504 |   |
|      Write-off – Project Development                                      |   |                                                     | 27,600      |   |                                                     |   | -          |                                                   |   |   | 27,600                                                 |   |   |                                                                  | -          |   |   |   | 27,600 |   |
|      Write-off Amount Due from Other                                            |   |                                                     | -           |   |                                                     |   | -          |                                                   |   |   | -                                                      |   |   |                                                                  | 1,000      |   |   |   | 1,000 |   |
| Total Other Expenses                                                                                     |   |                                                     | 56,077      |   |                                                     |   | -          |                                                   |   |   | 84,784                                                 |   |   |                                                                  | 10,755     |   |   |   | 99,606 |   |
|                                                                                                     |   |                                                     |        |   |                                                     |   |       |                                                   |   |   |                                                   |   |   |                                                                  |       |   |   |   |   |   |
| NET LOSS BEFORE PROVISION FOR INCOME TAXES                                                               |   |                                                     | 321,383     |   |                                                     |   | 48,896     |                                                   |   |   | 585,529                                                |   |   |                                                                  | 265,601    |   |   |   | 1,363,270 |   |
|                                                                                                     |   |                                                     |        |   |                                                     |   |       |                                                   |   |   |                                                   |   |   |                                                                  |       |   |   |   |   |   |
| PROVISION FOR INCOME TAXES                                                                               |   |                                                     | -           |   |                                                     |   | -          |                                                   |   |   | -                                                      |   |   |                                                                  | -          |   |   |   | - |   |
|                                                                                                     |   |                                                     |        |   |                                                     |   |       |                                                   |   |   |                                                   |   |   |                                                                  |       |   |   |   |   |   |
| NET LOSS                                                                                                 |   |                                                     | 321,383     |   |                                                     |   | 48,896     |                                                   |   |   | 585,529                                                |   |   | $                                                                     | 265,601    |   |   |   | 1,363,270 |   |
|                                                                                                     |   |                                                     |        |   |                                                     |   |       |                                                   |   |   |                                                   |   |   |                                                                  |       |   |   |   |   |   |
|                                                                                                     |   |                                                     |        |   |                                                     |   |       |                                                   |   |   |                                                   |   |   |                                                                  |       |   |   |   |   |   |
| Basic Loss Per Share                                                                                     |   | $                                                        | 0.00        |   |                                                     | $      | 0.00       |                                                   |   | $      | 0.00                                                   |   |   | $                                                                     | 0.01       |   |   | $ | 0.00 |   |
| Fully Diluted Loss Per Share                                                                             |   | $                                                        | 0.00        |   |                                                     | $      | 0.00       |                                                   |   | $      | 0.00                                                   |   |   | $                                                                     | 0.00       |   |   | $ | 0.00 |   |
|                                                                                                     |   |                                                     |        |   |                                                     |   |       |                                                   |   |   |                                                   |   |   |                                                                  |       |   |   |   |   |   |
| Weighted Average Number of Common Shares                                                                 |   |                                                     | 147,511,230 |   |                                                     |   | 25,075,632 |                                                   |   |   | 139,182,321                                            |   |   |                                                                  | 25,075,632 |   |   |   | 63,264,691 |   |
| Fully Diluted Weighted Average Number of Common Shares                                                   |   |                                                     | 147,511,230 |   |                                                     |   | 25,075,632 |                                                   |   |   | 139,182,321                                            |   |   |                                                                  | 25,075,632 |   |   |   | 63,264,691 |   |

----

|                                                                                                                    |   |   ThreeMonths Ended06/30/2011(unaudited) |     |   |   ThreeMonths Ended06/30/2010(unaudited) |   |    |   SixMonths Ended06/30/2011(unaudited) |   |   |   SixMonths Ended06/30/2010(unaudited) |   |   | CumulativeResults FromInception12/31/2007Through06/30/2011(unaudited) |     |
|-------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------|----------|--------|----------------------------------------------------|--------|---------|--------------------------------------------------|--------|--------|--------------------------------------------------|--------|--------|-----------------------------------------------------------------------|----------|
| CASH FLOWS FROM OPERATING ACTIVITIES                                                                                    |   |                                               |     |   |                                               |   |    |                                             |   |   |                                             |   |   |                                                                  |     |
|                                                                                                                    |   |                                               |     |   |                                               |   |    |                                             |   |   |                                             |   |   |                                                                  |     |
|      Net Loss                                                                                  |   | $                                                  | (321,383 | )      |                                               |   | (48,896 | )                                                |   | $      | (585,529                                         | )      |   |                                                                  | (265,601 | ) |   |   | (1,363,270 | ) |
|                                                                                                                    |   |                                               |     |   |                                               |   |    |                                             |   |   |                                             |   |   |                                                                  |     |   |   |   |   |   |
|      Adjustments to Reconcile Net Loss To Cash Provided (Used) by Operations                   |   |                                               |     |   |                                               |   |    |                                             |   |   |                                             |   |   |                                                                  |     |   |   |   |   |   |
|                                                                                                                    |   |                                               |     |   |                                               |   |    |                                             |   |   |                                             |   |   |                                                                  |     |   |   |   |   |   |
|      Stock-Based Compensation – Consolidated                                             |   |                                               | -        |   |                                               |   | -       |                                             |   |   | -                                                |   |   |                                                                  | -        |   |   |   | 295,605 |   |
|      Stock-Based Compensation – NexPhase                                                 |   |                                               | -        |   |                                               |   | -       |                                             |   |   | -                                                |   |   |                                                                  | -        |   |   |   | (5,550 | ) |
|      Write-off Amounts Due from Others                                                         |   |                                               | -        |   |                                               |   | -       |                                             |   |   | -                                                |   |   |                                                                  | 1,000    |   |   |   | - |   |
|      Disposition of Software                                                                   |   |                                               | -        |   |                                               |   | -       |                                             |   |   | -                                                |   |   |                                                                  | -        |   |   |   | 567 |   |
|      Depreciation                                                                              |   |                                               | 2,520    |   |                                               |   | -       |                                             |   |   | 4,935                                            |   |   |                                                                  | -        |   |   |   | 4,935 |   |
|                                                                                                                    |   |                                               |     |   |                                               |   |    |                                             |   |   |                                             |   |   |                                                                  |     |   |   |   |   |   |
|      Increase (Decrease) in  Operating                                               |   |                                               |     |   |                                               |   |    |                                             |   |   |                                             |   |   |                                                                  |     |   |   |   |   |   |
| Assets and Liabilities:                                                                                                 |   |                                               |     |   |                                               |   |    |                                             |   |   |                                             |   |   |                                                                  |     |   |   |   |   |   |
|                                                                                                                    |   |                                               |     |   |                                               |   |    |                                             |   |   |                                             |   |   |                                                                  |     |   |   |   |   |   |
|                Accounts Receivable           |   |                                               | (30,600  | )      |                                               |   | -       |                                             |   |   | (37,500                                          | )      |   |                                                                  | -        |   |   |   | (37,500 | ) |
|                Prepaid Insurance             |   |                                               | -        |   |                                               |   | -       |                                             |   |   | (541                                             | )      |   |                                                                  | -        |   |   |   | (541 | ) |
|                Due To Onteco                 |   |                                               | (20,000  | )      |                                               |   | -       |                                             |   |   | 242,254                                          |   |   |                                                                  | -        |   |   |   | 242,254 |   |
|                Due From NexPhase Lighting    |   |                                               | 12,500   |   |                                               |   | -       |                                             |   |   | (242,254                                         | )      |   |                                                                  | -        |   |   |   | (277,404 | ) |
|                Shop Supplies                 |   |                                               | (7,500   | )      |                                               |   | -       |                                             |   |   | (7,500                                           | )      |   |                                                                  | -        |   |   |   | (7,500 | ) |
|                Accounts Payable              |   |                                               | 3,032    |   |                                               |   | -       |                                             |   |   | 1,043                                            |   |   |                                                                  | -        |   |   |   | 2,984 |   |
|                Accrued Interest              |   |                                               | 25,455   |   |                                               |   | -       |                                             |   |   | 45,645                                           |   |   |                                                                  | -        |   |   |   | 45,645 |   |
|                Accrued Expenses              |   |                                               | -        |   |                                               |   | -       |                                             |   |   | -                                                |   |   |                                                                  | (59,000  | ) |   |   | - |   |
|                Sales Tax Payable             |   |                                               | -        |   |                                               |   | -       |                                             |   |   | 2,678                                            |   |   |                                                                  | -        |   |   |   | 2,678 |   |
|                Accrued Employee Compensation |   |                                               | 45,000   |   |                                               |   | 42,000  |                                             |   |   | 90,000                                           |   |   |                                                                  | 237,000  |   |   |   | 398,000 |   |
|                                                                                                                    |   |                                               |     |   |                                               |   |    |                                             |   |   |                                             |   |   |                                                                  |     |   |   |   |   |   |
| NET CASH USED BY OPERATIONS                                                                                             |   |                                               | (290,976 | )      |                                               |   | (6,896  | )                                                |   |   | (486,769                                         | )      |   |                                                                  | (86,601  | ) |   |   | (705,065 | ) |
|                                                                                                                    |   |                                               |     |   |                                               |   |    |                                             |   |   |                                             |   |   |                                                                  |     |   |   |   |   |   |
| CASH FLOWS USED ININVESTING ACTIVITIES                                                                                  |   |                                               |     |   |                                               |   |    |                                             |   |   |                                             |   |   |                                                                  |     |   |   |   |   |   |
|      Acquisition of Software                                                                   |   |                                               | -        |   |                                               |   | -       |                                             |   |   | -                                                |   |   |                                                                  | -        |   |   |   | (567 | ) |
|      Project Development Costs                                                                 |   |                                               | 27,600   |   |                                               |   | -       |                                             |   |   | 27,600                                           |   |   |                                                                  | (27,600  | ) |   |   | (27,600 | ) |
|      Write off Project Development                                                             |   |                                               | -        |   |                                               |   | -       |                                             |   |   | -                                                |   |   |                                                                  | -        |   |   |   | 27,600 |   |
|      Security Deposits                                                                         |   |                                               | -        |   |                                               |   | -       |                                             |   |   | (7,589                                           | )      |   |                                                                  | -        |   |   |   | (7,589 | ) |
|      Purchase of Office Equipment                                                              |   |                                               | (2,248   | )      |                                               |   | -       |                                             |   |   | (12,201                                          | )      |   |                                                                  | -        |   |   |   | (12,202 | ) |
|                                                                                                                    |   |                                               |     |   |                                               |   |    |                                             |   |   |                                             |   |   |                                                                  |     |   |   |   |   |   |
| NET CASH PROVIDED (USED) ININVESTING ACTIVITIES                                                                         |   |                                               | 25,352   |   |                                               |   | -       |                                             |   |   | 7,810                                            |   |   |                                                                  | (27,600  | ) |   |   | (20,358 | ) |

----

|                                                                             |   |   ThreeMonths Ended06/30/2011(unaudited) |    |   |   ThreeMonths Ended06/30/2010(unaudited) |   |   |   SixMonths Ended06/30/2011(unaudited) |   |   |   SixMonths Ended06/30/2010(unaudited) |   |   | CumulativeResults FromInception12/31/2007Through06/30/2011(unaudited) |    |
|----------------------------------------------------------------------------------|--------|----------------------------------------------------|---------|--------|----------------------------------------------------|--------|--------|--------------------------------------------------|--------|--------|--------------------------------------------------|--------|--------|-----------------------------------------------------------------------|---------|
| CASH FLOWS FROM FINANCING ACTIVITIES                                             |   |                                               |    |   |                                               |   |   |                                             |   |   |                                             |   |   |                                                                  |    |
|      Sale of Common Stock                               |   |                                               | -       |   |                                               |   | -      |                                             |   |   | -                                                |   |   |                                                                  | -       |   |   |   | 5,567 |   |
|      Proceeds from Notes Payable                        |   |                                               | 179,050 |   |                                               |   | 15,000 |                                             |   |   | 431,434                                          |   |   |                                                                  | 122,305 |   |   |   | 611,108 |   |
|      Stock Issued to Acquire NexPhase                   |   |                                               | -       |   |                                               |   | -      |                                             |   |   | 2,700,000                                        |   |   |                                                                  | -       |   |   |   | 2,700,000 |   |
|      Conversion of Notes Payable                        |   |                                               | 117,860 |   |                                               |   | -      |                                             |   |   | 118,000                                          |   |   |                                                                  | -       |   |   |   | 136,716 |   |
|      Investment in Subsidiary - NexPhase                |   |                                               | -       |   |                                               |   | -      |                                             |   |   | (2,700,000                                       | )      |   |                                                                  | -       |   |   |   | (2,700,000 | ) |
|      Payments on Note Payable                           |   |                                               | -       |   |                                               |   | (2,750 | )                                                |   |   | -                                                |   |   |                                                                  | (2,750  | ) |   |   | (11,750 | ) |
|      Repurchase Stock – Treasure Stock            |   |                                               | -       |   |                                               |   | -      |                                             |   |   | (61,000                                          | )      |   |                                                                  | -       |   |   |   | (61,000 | ) |
|      Common Stock Issued – Consulting Agreement.  |   |                                               | -       |   |                                               |   | -      |                                             |   |   | -                                                |   |   |                                                                  | -       |   |   |   | 200,685 |   |
|      Common Stock Returned – Consulting Agreement |   |                                               | -       |   |                                               |   | -      |                                             |   |   | -                                                |   |   |                                                                  | -       |   |   |   | (84,000 | ) |
|                                                                             |   |                                               |    |   |                                               |   |   |                                             |   |   |                                             |   |   |                                                                  |    |   |   |   |   |   |
| NET CASH FROM INVESTING ACTIVITIES                                               |   |                                               | 296,910 |   |                                               |   | 12,250 |                                             |   |   | 488,434                                          |   |   |                                                                  | 119,555 |   |   |   | 797,326 |   |
|                                                                             |   |                                               |    |   |                                               |   |   |                                             |   |   |                                             |   |   |                                                                  |    |   |   |   |   |   |
| NET INCREASE (DECREASE) IN CASH                                                  |   |                                               | 31,286  |   |                                               |   | 5,354  |                                             |   |   | 9,475                                            |   |   |                                                                  | 5,354   |   |   |   | 71,903 |   |
|                                                                             |   |                                               |    |   |                                               |   |   |                                             |   |   |                                             |   |   |                                                                  |    |   |   |   |   |   |
| CASH AT BEGINNING OF PERIOD                                                      |   |                                               | 55,559  |   |                                               |   | -      |                                             |   |   | 77,370                                           |   |   |                                                                  | -       |   |   |   | 14,942 |   |
|                                                                             |   |                                               |    |   |                                               |   |   |                                             |   |   |                                             |   |   |                                                                  |    |   |   |   |   |   |
| CASH AT END OF PERIOD                                                            |   |                                               | 86,845  |   |                                               |   | 5,354  |                                             |   |   | 86,845                                           |   |   |                                                                  | 5,354   |   |   |   | 86,845 |   |
|                                                                             |   |                                               |    |   |                                               |   |   |                                             |   |   |                                             |   |   |                                                                  |    |   |   |   |   |   |
| SUPPLEMENTARY DISCLOSURE OF CASH FLOW INFORMATION                                |   |                                               |    |   |                                               |   |   |                                             |   |   |                                             |   |   |                                                                  |    |   |   |   |   |   |
|                                                                             |   |                                               |    |   |                                               |   |   |                                             |   |   |                                             |   |   |                                                                  |    |   |   |   |   |   |
|        Interest Paid                          |   |                                               | -       |   |                                               |   | -      |                                             |   |   | -                                                |   |   |                                                                  | -       |   |   |   | - |   |
|        Income Taxes Paid                      |   |                                               | -       |   |                                               |   | -      |                                             |   |   | -                                                |   |   |                                                                  | -       |   |   |   | - |   |
|        Stock-Based Compensation               |   |                                               | -       |   |                                               |   | -      |                                             |   |   | -                                                |   |   |                                                                  | -       |   |   | $ | 290,055 |   |

----

|                                                    |   | Common Stock |                 |   | Common Stock |   |          | AdditionalPaid In |   |   |           |   |   | Accumulated During the Development |     |   | Total Stockholders’ |   |
|---------------------------------------------------------|--------|--------------|----------------------|--------|--------------|--------|---------------|-------------------|--------|--------|----------------|--------|--------|------------------------------------|----------|--------|---------------------------|--------|
|                                                    |   | Shares       |                 |   | Amount       |   |          | Capital           |   |   | Treasury Stock |   |   | Stage                              |     |   | Deficit                   |   |
|                                                    |   |         |                 |   |         |   |          |              |   |   |           |   |   |                               |     |   |                      |   |
| Common Stock Issued Per Court Order Dec. 31, 2007       |   |         |    567,324 |   |         | $      |  567     |              |   | $      |  -        |   |   | $                                  |  -  |   |                      | $      |  - |   |   | $ |  567 |   |
|                                                    |   |         |                 |   |         |   |          |              |   |   |           |   |   |                               |     |   |                      |   |   |   |   |   |   |   |
| Net Loss for the Year Ended Dec. 31, 2007               |   |         | -                    |   |         |   | -             |              |   |   | -              |   |   |                               | -        |   |                      |   | (225 | ) |   |   | (225 | ) |
|                                                    |   |         |                 |   |         |   |          |              |   |   |           |   |   |                               |     |   |                      |   |   |   |   |   |   |   |
| Balance, Dec. 31, 2007                                  |   |         | 567,324              |   |         |   | 567           |              |   |   | -              |   |   |                               | -        |   |                      |   | (225 | ) |   |   | 342 |   |
|                                                    |   |         |                 |   |         |   |          |              |   |   |           |   |   |                               |     |   |                      |   |   |   |   |   |   |   |
| Common Stock Issued Per Court Order Jan. 15, 2008       |   |         |   1,000,000     |   |         |   |   1,000  |              |   |   |   -       |   |   |                               |   - |   |                      |   |   - |   |   |   |   1,000 |   |
|                                                    |   |         |                 |   |         |   |          |              |   |   |           |   |   |                               |     |   |                      |   |   |   |   |   |   |   |
| Common Stock Issued For Cash Feb. 4, 2008               |   |         | 4,000,000            |   |         |   | 4,000         |              |   |   | -              |   |   |                               | -        |   |                      |   | - |   |   |   | 4,000 |   |
|                                                    |   |         |                 |   |         |   |          |              |   |   |           |   |   |                               |     |   |                      |   |   |   |   |   |   |   |
| Net Loss for Year Ended Dec. 31, 2008                   |   |         | -                    |   |         |   | -             |              |   |   | -              |   |   |                               | -        |   |                      |   | (3,775 | ) |   |   | (3,775 | ) |
|                                                    |   |         |                 |   |         |   |          |              |   |   |           |   |   |                               |     |   |                      |   |   |   |   |   |   |   |
| Balance, Dec. 31, 2008                                  |   |         | 5,567,324            |   |         |   | 5,567         |              |   |   | -              |   |   |                               | -        |   |                      |   | (4,000 | ) |   |   | (3,775 | ) |
|                                                    |   |         |                 |   |         |   |          |              |   |   |           |   |   |                               |     |   |                      |   |   |   |   |   |   |   |
| Common Stock Issued For Warrants Sept. 22, 2009         |   |         |   28,571,429    |   |         |   |   28,571 |              |   |   | (28,571        | )      |   |                               |   - |   |                      |   |   - |   |   |   |   - |   |
|                                                    |   |         |                 |   |         |   |          |              |   |   |           |   |   |                               |     |   |                      |   |   |   |   |   |   |   |
| Common Stock Issued For Compensation Sept. 23, 2009     |   |         |   35,851,505    |   |         |   |   35,852 |              |   |   |   71,703  |   |   |                               |   - |   |                      |   |   - |   |   |   |   107,555 |   |
|                                                    |   |         |                 |   |         |   |          |              |   |   |           |   |   |                               |     |   |                      |   |   |   |   |   |   |   |
| Net Loss for the Year Ended Dec. 31, 2009               |   |         | -                    |   |         |   | -             |              |   |   | -              |   |   |                               | -        |   |                      |   | (172,122 | ) |   |   | (172,122 | ) |
|                                                    |   |         |                 |   |         |   |          |              |   |   |           |   |   |                               |     |   |                      |   |   |   |   |   |   |   |
| Balance, Dec. 31, 2009                                  |   |         | 69,990,258           |   |         |   | 69,990        |              |   |   | 43,132         |   |   |                               |     |   |                      |   | (176,122 | ) |   |   | (63,000 | ) |
|                                                    |   |         |                 |   |         |   |          |              |   |   |           |   |   |                               |     |   |                      |   |   |   |   |   |   |   |
| Common Stock Issued For Conversion of Note Oct. 7, 2010 |   |         |   14,400,000    |   |         |   |   14,400 |              |   |   |   1,000   |   |   |                               |   - |   |                      |   |   - |   |   |   |   15,400 |   |
|                                                    |   |         |                 |   |         |   |          |              |   |   |           |   |   |                               |     |   |                      |   |   |   |   |   |   |   |
| Common Stock Issued For Compensation Nov. 25, 2010      |   |         |   12,500,000    |   |         |   |   12,500 |              |   |   |   50,000  |   |   |                               |   - |   |                      |   |   - |   |   |   |   62,500 |   |
|                                                    |   |         |                 |   |         |   |          |              |   |   |           |   |   |                               |     |   |                      |   |   |   |   |   |   |   |
| Common Stock Issued For Consulting Agrmt. Dec. 1, 2010  |   |         |   4,000,000     |   |         |   |   4,000  |              |   |   |   20,000  |   |   |                               |   - |   |                      |   |   - |   |   |   |   24,000 |   |
|                                                    |   |         |                 |   |         |   |          |              |   |   |           |   |   |                               |     |   |                      |   |   |   |   |   |   |   |
| Common Stock Issued For Consulting Agrmt. Dec. 10 2010  |   |         |   16,000,000    |   |         |   |   16,000 |              |   |   |   80,000  |   |   |                               |   - |   |                      |   |   - |   |   |   |   96,000 |   |
|                                                    |   |         |                 |   |         |   |          |              |   |   |           |   |   |                               |     |   |                      |   |   |   |   |   |   |   |
| Net Loss for the Year Ended Dec. 31, 2010               |   |         | -                    |   |         |   | -             |              |   |   | -              |   |   |                               | -        |   |                      |   | (601,619 | ) |   |   | (601,619 | ) |
|                                                    |   |         |                 |   |         |   |          |              |   |   |           |   |   |                               |     |   |                      |   |   |   |   |   |   |   |
| Balance, Dec. 31, 2010                                  |   |         |  116,890,258    |   |         |   |  116,890 |              |   |   |  194,132  |   |   |                               |     |   |                      |   | (777,741 | ) |   |   | (466,719 | ) |

----

| Common Stock Issued For Acquisition of Subsidiary –NexPhase,Feb. 14, 2011 |   |   |      67,500,000 |   |   |   |     67,500 |   |   |   |     2,632,500 |   |   |   |     - |   |   |   |     - |   |   |   |     2,700,000 |   |
|---------------------------------------------------------------------------------|--------|--------|--------------------------------|--------|--------|--------|----------------------|--------|--------|--------|-------------------------|--------|--------|--------|-----------------|--------|--------|--------|-----------------|--------|--------|--------|-------------------------|--------|
|                                                                            |   |   |                           |   |   |   |                 |   |   |   |                    |   |   |   |            |   |   |   |            |   |   |   |                    |   |
| Common Stock Issued For Conversion of Note, Feb. 25, 2011                       |   |   |   1,315,790               |   |   |   |   1,316         |   |   |   |   -                |   |   |   |   -        |   |   |   |   -        |   |   |   |   1,316            |   |
|                                                                            |   |   |                           |   |   |   |                 |   |   |   |                    |   |   |   |            |   |   |   |            |   |   |   |                    |   |
| Common Stock Issued For Conversion of Note. Mar. 10,2011                        |   |   |   4,000,000               |   |   |   |   4,000         |   |   |   |   -                |   |   |   |   -        |   |   |   |   -        |   |   |   |   4,000            |   |
|                                                                            |   |   |                           |   |   |   |                 |   |   |   |                    |   |   |   |            |   |   |   |            |   |   |   |                    |   |
| Common Stock Issued For Consulting ServicesMarch 15, 2011                       |   |   |     1,666,667        |   |   |   |     1,667  |   |   |   |     23,333    |   |   |   |     - |   |   |   |     - |   |   |   |     25,000    |   |
|                                                                            |   |   |                           |   |   |   |                 |   |   |   |                    |   |   |   |            |   |   |   |            |   |   |   |                    |   |
| Common Stock Issued For Consulting ServicesMarch 17, 2011                       |   |   |     100,000          |   |   |   |     100    |   |   |   |     1,250     |   |   |   |     - |   |   |   |     - |   |   |   |     1,350     |   |
|                                                                            |   |   |                           |   |   |   |                 |   |   |   |                    |   |   |   |            |   |   |   |            |   |   |   |                    |   |
| Common Stock Issued For Conversion of Note, Mar. 23, 2011                       |   |   |   2,032,521               |   |   |   |   2,033         |   |   |   |   10,467           |   |   |   |   -        |   |   |   |   -        |   |   |   |   12,500           |   |
|                                                                            |   |   |                           |   |   |   |                 |   |   |   |                    |   |   |   |            |   |   |   |            |   |   |   |                    |   |
| Common Stock Issued For Consulting ServicesMarch 23, 2011                       |   |   |     1,000,000        |   |   |   |     1,000  |   |   |   |     11,300    |   |   |   |     - |   |   |   |     - |   |   |   |     12,300    |   |
|                                                                            |   |   |                           |   |   |   |                 |   |   |   |                    |   |   |   |            |   |   |   |            |   |   |   |                    |   |
| Common Stock Issued For Consulting ServicesMarch 23, 2011                       |   |   |     1,250,000        |   |   |   |     1,250  |   |   |   |     14,125    |   |   |   |     - |   |   |   |     - |   |   |   |     15,375    |   |
|                                                                            |   |   |                           |   |   |   |                 |   |   |   |                    |   |   |   |            |   |   |   |            |   |   |   |                    |   |
| Common Stock Issued For Consulting ServicesMarch 23, 2011                       |   |   |     1,000,000        |   |   |   |     1,000  |   |   |   |     11,300    |   |   |   |     - |   |   |   |     - |   |   |   |     12,300    |   |
|                                                                            |   |   |                           |   |   |   |                 |   |   |   |                    |   |   |   |            |   |   |   |            |   |   |   |                    |   |
| Common Stock Cancelled For Consulting ServicesMarch 31, 2011                    |   |   | (14,000,000                    | )      |   |   | (14,000              | )      |   |   | (70,000                 | )      |   |   | -               |   |   |   |     - |   |   |   | (84,000                 | )      |
|                                                                            |   |   |                           |   |   |   |                 |   |   |   |                    |   |   |   |            |   |   |   |            |   |   |   |                    |   |
| Common Stock Re-Purchased By NexPhase InvestorsMarch 31, 2011                   |   |   | (244,000                       | )      |   |   |     -      |   |   |   |     -         |   |   |   | (61,000         | )      |   |   |     - |   |   |   | (61,000                 | )      |
|                                                                            |   |   |                           |   |   |   |                 |   |   |   |                    |   |   |   |            |   |   |   |            |   |   |   |                    |   |
| Net Loss for the Quarter Ended March 31, 2011                                   |   |   |  - -                 |   |   |   |   -             |   |   |   |   -                |   |   |   |   -        |   |   |   | (264,146        | )      |   |   | (264,146                | )      |
|                                                                            |   |   |                           |   |   |   |                 |   |   |   |                    |   |   |   |            |   |   |   |            |   |   |   |                    |   |
| Balance, March 31, 2011                                                         |   |   |  182,511,236              |   |   |   | 182,756              |   |   |   | 2,828,407               |   |   |   | (61,000         | )      |   |   | (1,041,887      | )      |   |   | 1,908,276               |   |

----

| Common Stock Issued For Consulting Agrmt.April 5, 2011    |   |   |   1,200,000  |   |   |   |   1,200  |   |   |   |   6,960  |   |   |   |   - |   |   |   |   -   |   |   |   |   8,160  |   |
|-----------------------------------------------------------|--------|--------|-------------------|--------|--------|--------|---------------|--------|--------|--------|---------------|--------|--------|--------|----------|--------|--------|--------|------------|--------|--------|--------|---------------|--------|
|                                                      |   |   |              |   |   |   |          |   |   |   |          |   |   |   |     |   |   |   |       |   |   |   |          |   |
| Common Stock Issued For Conversion of Note April 7, 2011  |   |   |   9,500,000  |   |   |   |   9,500  |   |   |   |   -      |   |   |   |   - |   |   |   |   -   |   |   |   |   9,500  |   |
|                                                      |   |   |              |   |   |   |          |   |   |   |          |   |   |   |     |   |   |   |       |   |   |   |          |   |
| Common Stock Issued For Conversion of Note April 7, 2011  |   |   |   9,000,000  |   |   |   |   9,000  |   |   |   |   9,000  |   |   |   |   - |   |   |   |   -   |   |   |   |   18,000 |   |
|                                                      |   |   |              |   |   |   |          |   |   |   |          |   |   |   |     |   |   |   |       |   |   |   |          |   |
| Common Stock Issued For Conversion of Note April 13, 2011 |   |   |   1,875,000  |   |   |   |   1,875  |   |   |   |   5,625  |   |   |   |   - |   |   |   |   -   |   |   |   |   7,500  |   |
|                                                      |   |   |              |   |   |   |          |   |   |   |          |   |   |   |     |   |   |   |       |   |   |   |          |   |
| Common Stock Issued For Conversion of Note May 4, 2011    |   |   |   5,000,000  |   |   |   |   5,000  |   |   |   |   -      |   |   |   |   - |   |   |   |   -   |   |   |   |   5,000  |   |
|                                                      |   |   |              |   |   |   |          |   |   |   |          |   |   |   |     |   |   |   |       |   |   |   |          |   |
| Common Stock Issued For Consulting Agrmt.May 23, 2011     |   |   |   1,000,000  |   |   |   |   1,000  |   |   |   |   -      |   |   |   |   - |   |   |   |   -   |   |   |   |   1,000  |   |
|                                                      |   |   |              |   |   |   |          |   |   |   |          |   |   |   |     |   |   |   |       |   |   |   |          |   |
| Common Stock Issued For Conversion of Note May 23, 2011   |   |   |   10,500,000 |   |   |   |   10,500 |   |   |   |   -      |   |   |   |   - |   |   |   |   -   |   |   |   |   10,500 |   |
|                                                      |   |   |              |   |   |   |          |   |   |   |          |   |   |   |     |   |   |   |       |   |   |   |          |   |
| Common Stock Issued For Conversion of Note May 26, 2011   |   |   |   3,076,924  |   |   |   |   3,077  |   |   |   |   6,923  |   |   |   |   - |   |   |   |   -   |   |   |   |   10,000 |   |
|                                                      |   |   |              |   |   |   |          |   |   |   |          |   |   |   |     |   |   |   |       |   |   |   |          |   |
| Common Stock Issued For Consulting Services June 7, 2011  |   |   |   2,000,000  |   |   |   |   2,000  |   |   |   |   3,200  |   |   |   |   - |   |   |   |   -   |   |   |   |   5,200  |   |
|                                                      |   |   |              |   |   |   |          |   |   |   |          |   |   |   |     |   |   |   |       |   |   |   |          |   |
| Common Stock Issued For Conversion of Note June 10, 2011  |   |   |   11,000,000 |   |   |   |   11,000 |   |   |   |   -      |   |   |   |   - |   |   |   |   -   |   |   |   |   11,000 |   |
|                                                      |   |   |              |   |   |   |          |   |   |   |          |   |   |   |     |   |   |   |       |   |   |   |          |   |
| Common Stock Issued For Conversion of Note June 20, 2011  |   |   |   12,000,000 |   |   |   |   12,000 |   |   |   |   -      |   |   |   |   - |   |   |   |   -   |   |   |   |   12,000 |   |
|                                                      |   |   |              |   |   |   |          |   |   |   |          |   |   |   |     |   |   |   |       |   |   |   |          |   |
| Common Stock Issued For Conversion of Note June 21, 2011  |   |   |   4,395,605  |   |   |   |   4,395  |   |   |   |   15,605 |   |   |   |   - |   |   |   |   -   |   |   |   |   20,000 |   |
|                                                      |   |   |              |   |   |   |          |   |   |   |          |   |   |   |     |   |   |   |       |   |   |   |          |   |
| Net Loss for the Quarter Ended,June 30, 2011              |   |   |   -          |   |   |   |   -      |   |   |   |   -      |   |   |   |   - |   |   |   | (321,383   | )      |   |   | (321,383      | )      |
|                                                      |   |   |              |   |   |   |          |   |   |   |          |   |   |   |     |   |   |   |       |   |   |   |          |   |
| Balance, June 30, 2011                                    |   |   | 253,058,765       |   |   | $      | 253,303       |   |   | $      | 22,875,720    |   |   | $      | (61,000  | )      |   | $      | (1,363,270 | )      |   | $      | 1,704,753     |   |

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| 1.   | Nature of Operations and Continuance of Business Onteco Corporation and Subsidiary ("the Company") was organized under the laws of the State of Nevada on December 31, 2007. The Company is a Developmental Stage Company, as defined by ASC 915-10 “Accounting and Reporting by Development Stage Enterprises”. The Company was established as part of the implementation of the Chapter 11 plan of reorganization of Arrin Systems, Inc. ("Arrin").  Arrin filed for Chapter 11 Bankruptcy in April 2007 in the U.S. Bankruptcy Court for the Southern District of California.  Arrin’s plan of reorganization was confirmed by the Court on December 12, 2007 and became effective on December 30, 2007.  The plan of reorganization provided for the establishment of the Issuer and the sale to the Issuer of Arrin’s proprietary software (used in the employee background screening industry) in exchange for 567,324 shares of InfoSpi’s common stock which were distributed to Arrin’s general unsecured creditors.  The Company has been in the development stage since its formation and has realized minor revenues from its planned operations.Management believes the Company lacks the resources to effectively market its services on its own and is therefore engaged in a search for a merger or acquisition partner with the resources to either develop this business or enter another line of business which will bring value to the Issuer's shareholders.These financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business.  The Company has generated minor revenues since inception and has never paid any dividends and is unlikely to pay dividends or generate earnings in the immediate or foreseeable future.  At June 30, 2011 the Company has limited cash resources and will likely require new financing, either through issuing shares or debt, to continue the development of its business.  Management intends to offer additional common stock; however, there can be no assurance that management will be successful in raising the funds necessary to maintain operations, or that a self-supporting level of operations will ever be achieved. The likely outcome of these future events is indeterminable. The continuation of the Company as a going concern is dependent upon the ability of the Company to determine the existence of economically recoverable reserves in its resource properties, confirmation of the Company’s interests in the underlying properties, obtain necessary financing and then profitable operations.  As of June 30, 2011, the Company has generated minor revenues and has accumulated losses of $1,424,026 since inception.  These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern.Acquisition of NexPhase Lighting |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Effective on February 14, 2011, the Board of Directors of Onteco Corporation and Subsidiary, a Nevada corporation the (“Company”), approved and authorized the execution of a definitive agreement dated February  14, 2011 (the “Agreement”) among the Company, NexPhase Lighting, Inc., a privately held Florida corporation (“NexPhase”)., and the shareholders of NexPhase (the “NexPhase Shareholders”). In accordance with the terms and provisions of the Agreement: (i) the Company acquired from the NexPhase Shareholders an aggregate 55,622,000 shares of common stock of NexPhase representing the total issued and outstanding shares of NexPhase; (ii) in exchange thereof, the Company issued to the NexPhase Shareholders an aggregate 67,500,000 shares of its restricted common stock generally in proportion to the equity holdings of the NexPhase Shareholders; (iii) NexPhase transferred and assigned to the Company all existing material contracts including those related to distribution, licensing and marketing and those dealing with the grant of rights for the use of any and all intellectual property; (iv) the Company assumed all other assets of NexPhase, including licenses, royalty rights, equipment, product designs, marketing and sale materials, logos, trademarks, copyrights and website; and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (v) the Company further assumed all liabilities of NexPhase, including all trade and debt obligations.  Therefore, as of the date of this Current Report, NexPhase has become the wholly-owned subsidiary of the Company.NexPhase is in the business of designing, developing, manufacturing and marketing a high quality and high efficiency full line of LED intelligent lighting fixtures and control systems for commercial applications and projects involving both new construction and retrofits (the “LED Lighting Fixtures”). In its planned manufacturing, NexPhase will use the highest quality products in the manufacture of its LED Lighting Fixtures in order to provide its customers with an approximate six-year or 50,000 hour warranty on its fixtures. It will utilize Cree and other leading manufacturer LEDs and photo-metrics and thermal management in the manufacture of all LED Lighting Fixtures, and management believe that the resultant NexPhase LED Lighting Fixtures produced will be of the highest quality and highest reliability of any lighting products. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | NexPhase Lighting - Material Contract We received an order on March 16, 2011 to supply over 800 units of our 5-watt MR16 and 15 watt PAR38 lamped LED product to the 1060 Brickell Avenue Condominium Association. The products have been on trial at the two tower facility since July 2010 and January 2011, the board of directors of the condominium association approved the first phase of LED adoption in the buildings. The 5-watt MR16 product is primarily used in the interior of the building and will be deployed throughout the lobby and residential areas. It will be replacing 10-watt halogen lamps. The 15-watt PAR 38 product will be used mainly in the exterior entrance area and will be replacing 100-watt halogen lamps. Management believes that the first phase of the LED retrofit project is projected to save the association about $4,000 monthly in electricity costs with a full payback in approximately one year. We received our first sales channel order for multiple units of our LED 100 watt High Bay fixture for warehouse use from a large south-Florida based retailer. In this installation, we will replace 400-watt conventional light source fixtures with the 100-watt LED technology. Management believes that the LED fixtures will provide the warehouse significant energy savings while also providing much greater life hours and better delivered light. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | NexPhase Lighting - Ingredient Branding and Trademark License Agreement On March 3, 2011, we entered into an ingredient branding and trademark license agreement (the “Branding and License Agreement”) with Cree, Inc. (“Cree”), which is a market-leading innovator of lighting class LEDs. In accordance with the terms and provisions of the Branding and License Agreement, Cree will provide to us their MX-6 LEDs for use in our troffer. We believe that the MX-6 provides better color consistency and higher reliability than incumbent solutions. The MX-6 delivers higher lumen output without having to compromise between light output and efficacy. We will also be able to display the Cree logo on our website, marketing materials and packaging. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | NexPhase Lighting - Patent On February 10, 2011, we have filed a U.S. patent application. The patent is a utility patent that covers our intelligent solution and was filed with the United States Patent, Trademark and Copyright Office. When we believe it is appropriate and cost effective, we intend to make corresponding international, regional or national filings to pursue patent protection in other parts of the world. In some cases, we rely on confidentiality agreements and trade secret protections to protect our proprietary technology. In addition, we license and have cross-licensing arrangements with respect to third-party technologies that are incorporated into some elements of our design activities, products and manufacturing processes. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | NexPhase Lighting – Intellectual Property Appraisal On February 22, 2011, we received an intellectual property appraisal services reports (the “Appraisal Services Report”) from Pellegrino & Associates LLC (“Pellegrino”). The Appraisal Services Report was commissioned by us regarding the value of the new patent pending NexPhase intellectual property, which is estimated at approximately $17,200,000.  The key points contained in the Appraisal Services Report are as follows: The valuation model indicates the fair market value of the intellectual property at a 90% confidence level is between $6,820,229 and $41,109,593, with a mean value of $19,710,311 and a median value of $17,216,091. Pellegrino used the statistical median as its expected value, as it removes the impact of improbable outliers. Therefore, it is the opinion of Pellegrino, based upon a reasonable degree of probability within the valuation profession, that the fair market value of the intellectual property is $17,216,091 using the income approach to value. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2.   | Summary of Significant Accounting Policies |
|----------------|--------------------------------------------|

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----

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| 1.   | A lack of  observable market price because of the minimal volume of shares that had been traded on any independent market since inception of the Company, |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2.   | The volatility of  the market price due to the limited marketability of the shares, |
|----------------|-----------------------------------------------------------------------------------------------|

| 3.   | The number of shares being issued compared to the number of shares of common stock outstanding prior to the stock issuance, |
|----------------|-----------------------------------------------------------------------------------------------------------------------------|

| 4.   | The unregistered status of the shares which limits the marketability of the shares, |
|----------------|-------------------------------------------------------------------------------------|

| 5.   | The fact that issuance of the shares may not change who is in control of the Company, and |
|----------------|-------------------------------------------------------------------------------------------|

| 6.   | The estimated value of the services provided. |
|----------------|-----------------------------------------------|

| 3.   | Project Development Cost |
|----------------|--------------------------|

----

| 4.   | Notes Payable – Related Parties – Onteco |
|----------------|------------------------------------------------------|

|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | 2010   |                                            |   | 2009   |   |
|---------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-------------------------------------------------|--------|--------|--------|
|  ● | On February 10, 2010 the Company entered into a convertible promissory note with a web designer for services rendered in the amount of $3,150. Terms include bonus interest of $315, the note is payable on demand and has no stated interest rate or due date. On January 3, 2011 the parties amended the terms and conditions of the promissory note as follows: The “Note Conversion Price” shall be adjusted from $0.03 to the par value    of the common stock, or $0.001 per share representing 3,465,000 unregistered common shares. No payments have been made on this note. On February 25, 2011 a portion of the note in the amount of $1,316 was converted to Common Stock. |   |   |             2,149 |   |   |   |             - |   |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   |                                            |   |   |   |   |   |
|  ● | On August 9, 2010 the Company entered into a convertible promissory note with an investment firm in the amount of $5,000. Terms include simple interest at ten percent (10.0%), the note is due on August 9, 2011 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note.                                                                                                                                                                                                                          |   |   |     5,000                             |   |   |   |     - |   |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   |                                            |   |   |   |   |   |
|  ● | On August 25, 2010 the Company entered into a convertible promissory note with an investment firm in the amount of $4,000. Terms include simple interest at ten percent (10.0%), the note is due on August 25, 2011 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note.                                                                                                                                                                                                                        |   |   |     4,000                             |   |   |   |     - |   |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   |                                            |   |   |   |   |   |
|  ● | On September 2, 2010 the Company entered into a convertible promissory note with an investment firm in the amount of $20,000. Terms include simple interest at ten percent (10.0%), the note is due on September 2, 2011 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note.                                                                                                                                                                                                                   |   |   |     20,000                            |   |   |   |     - |   |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   |                                            |   |   |   |   |   |
|  ● | On October 13, 2010 the Company entered into a convertible promissory note with an investment firm in the amount of $3,000. Terms include simple interest at ten percent (10.0%), the note is due on October 13, 2011 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note.                                                                                                                                                                                                                      |   |   |     3,000                             |   |   |   |     - |   |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   |                                            |   |   |   |   |   |
|  ● | On November 4, 2010 the Company entered into a convertible promissory note with an investment firm in the amount of $19,600. Terms include simple interest at ten percent (10.0%), the note is due on November 4, 2011 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note.                                                                                                                                                                                                                     |   |   |     19,600                            |   |   |   |     - |   |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   |                                            |   |   |   |   |   |

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|  ● | On November 8, 2010 the Company entered into a convertible promissory note with an investment firm in the amount of $5,500. Terms include simple interest at ten percent (10.0%), the note is due on November 8, 2011 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note.                                                                                                        |   |   |     5,500         |   |   |   |     -               |   |
|---------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-----------------------------|--------|--------|--------|-------------------------------|--------|
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |                        |   |   |   |                          |   |
|  ● | On November 30, 2010 the Company entered into a convertible promissory note with an investment firm in the amount of $9,300. Terms include bonus interest of $930, the note is payable on demand and has no stated interest rate or due date and is convertible at a rate of $0.001 per share or 9,300,000 unregistered common shares. No payments have been made on this note.                                                                                                                                                                                                                                    |   |   |   9,300                |   |   |   |   -                      |   |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |                        |   |   |   |                          |   |
|  ● | On December 15, 2010 the Company entered into a convertible promissory note with an investment firm in the amount of $15,500. Terms include simple interest at ten percent (10.0%), the note is due on December 15, 2011 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note.                                                                                                     |   |   |     15,500        |   |   |   |     -               |   |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |                        |   |   |   |                          |   |
|  ● | On December 23, 2010 the Company entered into a convertible promissory note with an investment firm in the amount of $100,000. Terms include simple interest at ten percent (10.0%), the note is due on December 23, 2011 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note.                                                                                                    |   |   |     100,000       |   |   |   |     -               |   |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |                        |   |   |   |                          |   |
|  ● | On January 10, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $1,000. Terms include simple interest at ten percent (10.0%), the note is due on January 10, 2012 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note.                                                                                                        |   |   |     1,000         |   |   |   |     -               |   |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |                        |   |   |   |                          |   |
|  ● | On February 23, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $21,600. Terms include simple interest at ten percent (10.0%), the note is due on February 23, 2012 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note.                                                                                                     |   |   |     21,600        |   |   |   |     -               |   |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |                        |   |   |   |                          |   |
|  ● | On March 1, 2011 the Company entered into a convertible promissory note assigned from NexPhase in the amount of $60,000. Terms include simple interest at ten percent (10.0%), the note is due on March 1, 2012 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note. As of June 30, 2011, a portion of the note in the amount of $29,000 has been converted to Common Stock. |   |   |       31,000 |   |   |   |         - |   |

----

|  ● | On March 2, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $6,000. Terms include simple interest at ten percent (10.0%), the note is due on March 2, 2012 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note.                                                                                                               |   |   |   6,000                       |   |   |   |     -               |   |
|---------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|------------------------------------|--------|--------|--------|-------------------------------|--------|
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |   |                               |   |   |   |                          |   |
|  ● | On March 8, 2011 the Company entered into a convertible promissory note assigned from NexPhase in the amount of $105,000. Terms include simple interest at ten percent (10.0%), the note is due on March 8, 2012 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note. As of June 30, 2011, a portion of the note in the amount of $90,500 has been converted to Common Stock. |   |   |         14,500 |   |   |   |         - |   |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |   |                               |   |   |   |                          |   |
|  ● | On March 10, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $3,000. Terms include simple interest at ten percent (10.0%), the note is due on March 10, 2012 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note.                                                                                                             |   |   |     3,000                |   |   |   |     -               |   |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |   |                               |   |   |   |                          |   |
|  ● | On March 31, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $5,500. Terms include simple interest at ten percent (10.0%), the note is due on March 31, 2012 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note.                                                                                                             |   |   |     5,500                |   |   |   |     -               |   |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |   |                               |   |   |   |                          |   |
|  ● | On March 31, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $6,500. Terms include simple interest at ten percent (10.0%), the note is due on March 31, 2012 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note.                                                                                                             |   |   |     6,500                |   |   |   |     -               |   |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |   |                               |   |   |   |                          |   |
|  ● | On April 11, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $3,000. Terms include simple interest at ten percent (10.0%), the note is due on April 11, 2012 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note.                                                                                                             |   |   |     3,000                |   |   |   |     -               |   |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |   |                               |   |   |   |                          |   |
|  ● | On April 14, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $17,500. Terms include simple interest at ten percent (10.0%), the note is due on April 14, 2012 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note.                                                                                                            |   |   |   17,500                      |   |   |   |   -                      |   |

----

|  ● | On April 18, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $1,000. Terms include simple interest at ten percent (10.0%), the note is due on April 18, 2012 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note. |   |   |   1,000  |   |   |   |   - |   |
|---------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------------|--------|--------|--------|----------|--------|
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |          |   |   |   |     |   |
|  ● | On April 18, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $2,000. Terms include simple interest at ten percent (10.0%), the note is due on April 18, 2012 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note. |   |   |   2,000  |   |   |   |   - |   |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |          |   |   |   |     |   |
|  ● | On April 21, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $5,000. Terms include simple interest at ten percent (10.0%), the note is due on April 21, 2012 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note. |   |   |   5,000  |   |   |   |   - |   |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |          |   |   |   |     |   |
|  ● | On April 27, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $2,500. Terms include simple interest at ten percent (10.0%), the note is due on April 27, 2012 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note. |   |   |   2,500  |   |   |   |   - |   |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |          |   |   |   |     |   |
|  ● | On April 28, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $2,500. Terms include simple interest at ten percent (10.0%), the note is due on April 28, 2012 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note. |   |   |   2,500  |   |   |   |   - |   |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |          |   |   |   |     |   |
|  ● | On May 16, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $15,000. Terms include simple interest at ten percent (10.0%), the note is due on May 16, 2012 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note.    |   |   |   15,000 |   |   |   |   - |   |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |          |   |   |   |     |   |
|  ● | On June 1, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $3,000. Terms include simple interest at ten percent (10.0%), the note is due on June 1, 2012 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note.     |   |   |   3,000  |   |   |   |   - |   |

----

|  ● | On June 10, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $3,000. Terms include simple interest at ten percent (10.0%), the note is due on June 10, 2012 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note. |   |   |   3,000  |   |   |   |   - |   |
|---------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------------|--------|--------|--------|----------|--------|
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |   |          |   |   |   |     |   |
|  ● | On June 20, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $6,500. Terms include simple interest at ten percent (10.0%), the note is due on June 20, 2012 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note. |   |   |   6,500  |   |   |   |   - |   |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |   |          |   |   |   |     |   |
|  ● | On June 24, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $2,000. Terms include simple interest at ten percent (10.0%), the note is due on June 24, 2012 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note. |   |   |   2,000  |   |   |   |   - |   |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |   |          |   |   |   |     |   |
|  ● | On March 31, 2011 the Company entered into a stock repurchase agreement with a NexPhase investor to repurchase 55,000 shares of Common Stock acquired in the NexPhase acquisition. Terms include principal in the amount of $27,500 and premium interest of ten percent (10.0%) ($2,750), the note is due on June 30, 2012.  On June 23, 2011, a payment in the amount of $2,750 was made on this note.                                                                                     |   |   |   24,750 |   |   |   |   - |   |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |   |          |   |   |   |     |   |
|  ● | On March 31, 2011 the Company entered into a stock repurchase agreement with a NexPhase investor to repurchase 11,000 shares of Common Stock acquired in the NexPhase acquisition. Terms include principal in the amount of $5,500 and premium interest of ten percent (10.0%) ($550), the note is due on June 30, 2012.  No payments have been made on this note.                                                                                                                          |   |   |  5,500   |   |   |   |   - |   |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |   |          |   |   |   |     |   |
|  ● | On March 31, 2011 the Company entered into a stock repurchase agreement with a NexPhase investor to repurchase 13,200 shares of Common Stock acquired in the NexPhase acquisition. Terms include principal in the amount of $6,600 and premium interest of ten percent (10.0%) ($660), the note is due on June 30, 2012.  No payments have been made on this note.                                                                                                                          |   |   |  6,600   |   |   |   |   - |   |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |   |          |   |   |   |     |   |
|  ● | On March 31, 2011the Company entered into a stock repurchase agreement with a NexPhase investor to repurchase 11,000 shares of Common Stock acquired in the NexPhase acquisition. Terms include principal in the amount of $5,500 and premium interest of ten percent (10.0%) ($550), the note is due on June 30, 2012.  No payments have been made on this note.                                                                                                                           |   |   |   5,500  |   |   |   |   - |   |

|  ●                                           | On March 31, 2011 the Company entered into a stock repurchase agreement with a NexPhase investor to repurchase 40,000 shares of Common Stock acquired in the NexPhase acquisition. Terms include principal in the amount of $20,000 and premium interest of ten percent (10.0%) ($2000), the note is due on June 30, 2012.  On June 21 2011, a payment in the amount of $2,200 was made on this note. |   |    |   19,800 |   |   |   |   - |   |
|---------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------|---------------|--------|--------|--------|----------|--------|
|                                                    |                                                                                                                                                                                                                                                                                                                                                                                                            |   |    |          |   |   |   |     |   |
| Subtotal Notes Payable – Related Parties - Onteco |                                                                                                                                                                                                                                                                                                                                                                                                            |   | 398,299 |          |   |   | -      |     |

----

|  ● | On June 21, 2010 the Company entered into a convertible promissory note with an investment firm in the amount of $105,000. Terms include simple interest at ten percent (12.0%), the note is due on June 21, 2011 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note. On March 8, 2011, the Note was assigned to Onteco. As of June 30, 2011,  through a series of common stock conversions, the remaining balance of the note is $14,500. |   |   |         - |   |   |   |         - |   |
|---------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-------------------------------|--------|--------|--------|-------------------------------|--------|
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |   |                          |   |   |   |                          |   |
|  ● | On August 4, 2010 the Company entered into a convertible promissory note with an investment firm in the amount of $60,000. Terms include simple interest at ten percent (12.0%), the note is due on August 4, 2011 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note. On March 1, 2011, the Note was assigned to Onteco. Through June 30, 2011, a portion of the note in the amount of $29,000 has been converted to Common Stock.             |   |   |       -        |   |   |   |       -        |   |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |   |                          |   |   |   |                          |   |
|  ● | On November 1, 2010 the Company entered into a convertible promissory note with an investment firm in the amount of $70,000. Terms include simple interest at ten percent (12.0%), the note is due on November 1, 2011 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note.                                                                                                                                                                                |   |   |   70,000                 |   |   |   |   -                      |   |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |   |                          |   |   |   |                          |   |
|  ● | On December 1, 2010 the Company entered into a convertible promissory note with an investment firm in the amount of $10,000. Terms include simple interest at ten percent (12.0%), the note is due on December 1, 2011 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note.                                                                                                                                                                                |   |   |   10,000                 |   |   |   |   -                      |   |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |   |                          |   |   |   |                          |   |
|  ● | On December 8, 2010 the Company entered into a convertible promissory note with an investment firm in the amount of $40,000. Terms include simple interest at ten percent (12.0%), the note is due on December 8, 2011 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note.                                                                                                                                                                                |   |   | 40,000                        |   |   |   | -                             |   |

----

|  ● | On December 23, 2010 the Company entered into a convertible promissory note with an investment firm in the amount of $10,000. Terms include simple interest at ten percent (12.0%), the note is due on December 23, 2011 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note. |   |   |   10,000 |   |   |   |   - |   |
|---------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------------|--------|--------|--------|----------|--------|
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |   |          |   |   |   |     |   |
|  ● | On January 10, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $15,000. Terms include simple interest at ten percent (12.0%), the note is due on January 10, 2012 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note.   |   |   |   15,000 |   |   |   |   - |   |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |   |          |   |   |   |     |   |
|  ● | On February 7, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $10,000. Terms include simple interest at ten percent (12.0%), the note is due on February 7, 2012 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note.   |   |   |   10,000 |   |   |   |   - |   |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |   |          |   |   |   |     |   |
|  ● | On February 11, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $12,000. Terms include simple interest at ten percent (12.0%), the note is due on February 11, 2012 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note. |   |   |   12,000 |   |   |   |   - |   |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |   |          |   |   |   |     |   |
|  ● | On March 2, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $12,500. Terms include simple interest at ten percent (12.0%), the note is due on March 2, 2012 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note.         |   |   |   12,500 |   |   |   |   - |   |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |   |          |   |   |   |     |   |
|  ● | On March 11, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $20,000. Terms include simple interest at ten percent (12.0%), the note is due on March 11, 2012 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note.       |   |   |   20,000 |   |   |   |   - |   |

----

|  ●                                                   | On May 9, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $10,000. Terms include simple interest at ten percent (12.0%), the note is due on May 9, 2012 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note.     |   |    |   10,000 |   |   |   |   - |   |
|-----------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------|---------------|--------|--------|--------|----------|--------|
|                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |    |          |   |   |   |     |   |
|  ●                                                   | On May 24, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $30,000. Terms include simple interest at ten percent (12.0%), the note is due on May 24, 2012 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note.   |   |    |   30,000 |   |   |   |   - |   |
|                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |    |          |   |   |   |     |   |
|  ●                                                   | On June 1, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $15,000. Terms include simple interest at ten percent (12.0%), the note is due on June 1, 2012 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note.   |   |    |   15,000 |   |   |   |   - |   |
|                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |    |          |   |   |   |     |   |
|  ●                                                   | On June 20, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $16,000. Terms include simple interest at ten percent (12.0%), the note is due on June 20, 2012 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note. |   |    | 16,000        |   |   |   |   - |   |
|                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |    |          |   |   |   |     |   |
|  ●                                                   | On June 23, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $50,000. Terms include simple interest at ten percent (12.0%), the note is due on June 23, 2012 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note. |   |    |   50,000 |   |   |   |   - |   |
|                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |    |          |   |   |   |     |   |
| Subtotal Notes Payable – Related Parties – NexPhase |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | 320,500 |          |   |   | -      |     |
|                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |    |          |   |   |   |     |   |
| Total Notes Payable – Related Parties                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | $      | 718,799 |          |   | $      | -      |     |

----

|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | 2010   |          |   | 2009   |   |
|---------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------------|--------|--------|--------|
|  ● | On January 17, 2010 the Company entered into a convertible promissory note with an advisory firm for services rendered in the amount of $59,000. Terms include bonus interest of $5,900, the note is payable on demand and has no stated interest rate or due date and is convertible at a rate of $0.03 per share or 1,771667 unregistered common shares. Total payments of $11,750 have been made on this note.                                                                                      |   | $      | 53,150        |   |   | $      | - |   |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |   |          |   |   |   |   |   |
|  ● | On February 10, 2010 the Company entered into a convertible promissory note with a project consultant for services rendered in the amount of $7,800. Terms include bonus interest of $780, the note is payable on demand and has no stated interest rate or due date and is convertible at a rate of $0.03 per share or 286,000 unregistered common shares. No payments have been made on this note.                                                                                                   |   |   |   8,580  |   |   |   |   - |   |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |   |          |   |   |   |   |   |
|  ● | On February 10, 2010 the Company entered into a convertible promissory note with an engineering firm for services rendered in the amount of $27,600. Terms include bonus interest of $2,760, the note is payable on demand and has no stated interest rate or due date and is convertible at a rate of $0.03 per share or 1,012,000 unregistered common shares. No payments have been made on this note.                                                                                               |   |   | 30,360        |   |   |   |   - |   |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |   |          |   |   |   |   |   |
|  ● | On June 7, 2010 the Company entered into a convertible promissory note with an investor in the amount of $10,000. The note is payable on demand and has no stated interest rate or due date and is convertible at a rate of $0.03 per share or 333,333 unregistered common shares. No payments have been made on this note.                                                                                                                                                                            |   |   | 10,000        |   |   |   | - |   |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |   |          |   |   |   |   |   |
|  ● | On July 19, 2010 the Company entered into a convertible promissory note with an investor in the amount of $2,500. The note is payable on demand and has no stated interest rate or due date and is convertible at a rate of $0.03 per share or 83,333 unregistered common shares. No payments have been made on this note.                                                                                                                                                                             |   |   | 2,500         |   |   |   | - |   |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |   |          |   |   |   |   |   |
|  ● | On March 1, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $57,000. Terms include simple interest at ten percent (10.0%), the note is due on March 1, 2012 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note. |   |   |   57,000 |   |   |   | - |   |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |   |          |   |   |   |   |   |
|  ● | On March 1, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $25,000. Terms include simple interest at ten percent (10.0%), the note is due on March 1, 2012 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note. |   |   |   25,000 |   |   |   |   - |   |

----

|  ●                                        | On May 9, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $53,000. Terms include simple interest at ten percent (10.0%), the note is due on May 9, 2012 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note.     |   |    |   53,000 |   |   |   |   - |   |
|------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------|---------------|--------|--------|--------|----------|--------|
|                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |    |          |   |   |   |     |   |
|  ●                                        | On June 30, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $50,000. Terms include simple interest at ten percent (10.0%), the note is due on June 30, 2012 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note. |   |    |   50,000 |   |   |   |   - |   |
|                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |    |          |   |   |   |     |   |
| Total - Notes Payable – Third Parties - Onteco |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | $      | 289,590 |          |   |   | -      |     |

| 6.   | Executive Compensation Agreement On January 8, 2010, the Company entered an Executive Employment Agreement effective January 11, 2010 with its Chief Executive Officer. Terms of the agreement include an inception bonus of $150,000 and monthly payments of $15,000. The agreement expires on December 31, 2013. During the three months and six months ended June 30, 2011 and 2010, the Company recorded executive compensation expenses to the Company's chief executive officer; $45,000 and $45,000 respectively. During the year ended December 31, 2010, the Company paid $22,000 resulting in an accrued employee compensation liability of $398,000. On November 25, 2010, effective with the change in control, the chief executive officer resigned. The executive compensation agreement remains in effect through December 31, 2013. |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 7.   | Executive Office Lease On January 1, 2011, we entered into a three-year office building lease for our corporate headquarters located in Aventura, Florida. The lease terms include: (i) monthly rent commencing on February 1, 2011 in the amount of $3,794.35 plus sales tax; (ii) triple-net provisions; and (iii) our responsibility for the cost of build-out and partitioning of the space. |
|----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 8.   | Stockholders’ Deficit and Common Stock |
|----------------|----------------------------------------------|

| ·   | On June 15, 2010, our Board of Directors and shareholders holding a majority of the total issued and outstanding shares of common stock pursuant to written consents in lieu of a meeting approved an amendment to our Articles of Incorporation to increase the authorized capital (the “2010 Amendment”). The 2010 Amendment was filed with the Nevada Secretary of State on July 22, 2010 increasing our authorized capital from 75,000,000 shares of common stock to 350,000,000 shares of common stock, par value $0.001, and 100,000,000 shares of preferred stock, par value $0.001.  As of June 30, 2011 and June 30, 2010, there were a total of 182,511,236 and 69,990,258 common shares issued and outstanding, respectively. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The Company’s first and second stock issuances took place pursuant to the Plan of Reorganization confirmed by the Bankruptcy Court:  On December 12, 2007, the Court ordered the distribution of shares in Onteco Corporation and Subsidiary to all general unsecured creditors of Arrin Systems, Inc.  ("Arrin"), with these creditors to receive one share in InfoSpi for each $2.94 of Arrin’s debt which they held. These creditors received an aggregate of 567,324 shares in the Company on December 31, 2007. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | On February 4, 2008 the Company issued a total of 4,000,000 shares of common stock to an Officer and Director in exchange for $4,000 in cash to be used as operating capital for the Company.  The shares were issued at a price of $0.001 per share, which is their par value. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The Court also ordered the distribution of shares and warrants in Onteco Corporation and Subsidiary to all administrative creditors of Arrin, with these creditors to receive one share and five warrants in InfoSpi for each $0.10 of Arrin's administrative debt which they held. On January 15, 2008, these creditors received an aggregate of 1,000,000 common shares in the Company and 5,000,000 warrants. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | On November 13, 2009 and effective September 22, 2009, our Board of Directors pursuant to unanimous written consent acknowledged the warrants and authorized the exchange of 5,000,000 warrants and issuance of an aggregate 28,571,429 shares of our common stock at a per share price of $0.001 (par value). |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | On October 28, 2009 and effective September 23, 2009, our Board of Directors pursuant to unanimous written consent authorized the issuance of an aggregate 35,851,505 shares of restricted common stock at $0.003 per share in exchange for prior services rendered including, but not limited to, introduction to potential funding arrangements and various strategic partners. Factors considered by the Board in determining the fair value of the 35,851,515 shares of common stock included: |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 1.   | A lack of  observable market price because of the minimal volume of shares that had been traded on any independent market since inception of the Company, |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2.   | The large number of shares being issued compared to the number of shares of common stock outstanding prior to the stock issuance, |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------|

| 3.   | The Company’s issuance of  28,571,429 shares for 5,000,000 warrants converted to common stock effective September 22,2009 at an issuance price of $0.001 per share, |
|----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.   | The unregistered status of the shares which limits the marketability of the shares, |
|----------------|-------------------------------------------------------------------------------------|

| 5.   | The fact that issuance of these shares does not change who is in control of the Company, and |
|----------------|----------------------------------------------------------------------------------------------|

| 6.   | The estimated value of the services provided. |
|----------------|-----------------------------------------------|

----

| ·   | On October 7, 2010, the Board of Directors approved the issuance of 14,400,000 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated July 19, 2010 in the amount of $14,000 plus bonus interest. In accordance with the terms of the note, the shares were issued at $0.001 per share. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Effective on November 25, 2010, in accordance with the appointment of Dror Svorai as our sole executive officer, President/Chief Executive Officer, Secretary, Treasurer/Chief Financial Officer, and our sole director, we issued an aggregate 12,500,000 shares of restricted common stock to Svorai at $0.001 per share. The Board of Directors evaluated certain factors regarding the issuance including, but not limited to, the following: (i) the 12,5000,000 shares of common stock are restricted and cannot be resold except under the parameters of Rule 144; (ii) the opportunity for successful new business operations for us based upon the engagement of Svorai and the opportunities and business contacts provided to us through his engagement; and (iii) our inability to monetarily compensate Dror Svorai and recognition of his current and continuous dedication and long-term loyalty to us. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | On December 1, 2010, we entered into an agreement (the “FIS Agreement”) with Financial Insights & Solutions Inc. (“FIS”). In accordance with the terms and provisions of the FIS Agreement: (i) FIS shall provide consulting services to us in the form of a senior administrator support for business transactions and coordination of outside legal and accounting services and other corporation matters and general business counsel relating to our overall business; (ii) we shall pay FIS an hourly rate of $175.00 for performance of such services; and (iii) issue to FIS 4,000,000 shares of our restricted common stock. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | On December 10, 2010, we entered into a consulting agreement (the “CEC Consulting Agreement”) with Corporate Excellence Consulting LLC (“CEC”). In accordance with the terms and provisions of the CEC Consulting Agreement: (i) CEC shall perform such services in connection with business development and marketing and growth capital funding; and (ii) we shall issue to CEC 16,000,000 shares of our restricted common stock. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | On January 18, 2011, our Board of Directors and shareholders holding a majority of the total issued and outstanding shares of common stock pursuant to written consents in lieu of a meeting approved a further amendment to our Articles of Incorporation to increase the authorized capital (the “2011 Amendment”). The 2011 Amendment was filed with the Nevada Secretary of State on January 19, 2011 increasing our authorized capital from 350,000,000 shares of common stock to 750,000,000 shares of common stock, par value $0.001, and 100,000,000 shares of preferred stock, par value $0.001. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| ·   | Effective on February 14, 2011, the Board of Directors of ONTECO CORPORATION and Subsidiary, a Nevada corporation the (“Company”), approved and authorized the execution of a definitive agreement dated February  14, 2011 (the “Agreement”) among the Company, NexPhase Lighting, Inc., a privately held Florida corporation (“NexPhase”)., and the shareholders of NexPhase (the “NexPhase Shareholders”). In accordance with the terms and provisions of the Agreement: (i) the Company acquired from the NexPhase Shareholders an aggregate 55,622,000 shares of common stock of NexPhase representing the total issued and outstanding shares of NexPhase; (ii) in exchange thereof, the Company issued to the NexPhase Shareholders an aggregate 67,500,000 shares of its restricted common stock generally in proportion to the equity holdings of the NexPhase Shareholders; (iii) NexPhase transferred and assigned to the Company all existing material contracts including those related to distribution, licensing and marketing and those dealing with the grant of rights for the use of any and all intellectual property; (iv) the Company assumed all other assets of NexPhase, including licenses, royalty rights, equipment, product designs, marketing and sale materials, logos, trademarks, copyrights and website; and (v) the Company further assumed all liabilities of NexPhase, including all trade and debt obligations. Therefore, as of the date of this Current Report, NexPhase has become the wholly-owned subsidiary of the Company. The parties agreed to value the transaction as follows: value based on the patent appraisal and other corporate asset and on-going operations of $18,000,000; agreed discount to value based on the cost to “perfect” the patent and need for additional capital funding to maintain the on-going operations of the subsidiary $17,400,000; agreed value of the transaction: $600,000; agreed number of shares issued 67,500,000. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | On March 29, 2011, we filed a Certificate of Amendment with the Nevada Secretary of State in order to change our name from “InfoSpi Inc.” to “Onteco Corporation” (the “Name Change”). The Name Change was effective with the Nevada Secretary of State on March 29, 2001 when the Certificate of Amendment was filed. The Name Change was approved by our Board of Directors pursuant to written conent resolutions dated March 15, 2011 and further approved by certain shareholders holding a majority of our total issued and outstanding shares of common stock pursuant to written consent resolutions dated March 16, 2011. We filed the appropriate documentation with FINRA in order to effectuate the Name Change in the OTC Markets. The Name Change was effected on the OTC Markets April 11, 2011. Our new cusip number is 683311104.Therefore, as of the date of this Report, our trading symbol is “ONTC”. Our management deemed it appropriate to change our name to Onteco Corporation in furtherance of and to better reflect the nature of our new business operations. On June 30, 2011 the Company entered into a stock repurchase agreement with a NexPhase investor to repurchase shares of Common Stock acquired in the NexPhase acquisition. Terms include principal and premium interest of ten percent (10.0%), the note is due on June 30, 2012. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 9.   | Income Taxes |
|----------------|--------------|

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|                                 |   |   3 Months EndedJune 30, 2011 |     |   |   6 Months EndedJune 30, 2011 |   |     | Period From Inception onDec. 31, 2007ThroughJune 30, 2011 |   |
|--------------------------------------|--------|-----------------------------------------|----------|--------|-----------------------------------------|--------|----------|-----------------------------------------------------------|--------|
|                                 |   |                                    |     |   |                                    |   |     |                                                      |   |
| Net Operating Losses Carried Forward |   | $                                       | 321,383  |   |                                    | $      | 585,529  |                                                      |   | $ | 1,363,270 |   |
| Statutory Tax Rate                   |   |                                    | 37.6     | %      |                                    |   | 37.6     | %                                                         |   |   | 37.6 | % |
| Effective Tax Rate                   |   |                                    | -        |   |                                    |   |     |                                                      |   |   | - |   |
| Deferred Tax Asset                   |   | $                                       | 121,000  |   |                                    |   | 220,000  |                                                      |   | $ | 513,000 |   |
| Valuation Allowance                  |   | $                                       | (121,000 | )      |                                    |   | (220,000 | )                                                         |   | $ | (513,000 | ) |
|                                 |   |                                    |     |   |                                    |   |     |                                                      |   |   |   |   |
| Net Deferred Tax Asset               |   | $                                       | -        |   |                                    | $      |     |                                                      |   | $ | - |   |

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| 10.   | Related Party Transactions |
|-----------------|----------------------------|

| 11.   | Commitments and Contingencies |
|-----------------|-------------------------------|

| 12.   | Consulting Agreement |
|-----------------|----------------------|

| 13.   | Subsequent Events |
|-----------------|-------------------|

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| STATEMENT OF OPERATIONS                                        |   | Six Month Periods Ended June 30, 2011 and June 30, 2010 |         |   | For the Period from December 29, 2003 (inception) to June 30, 2011 |   |
|----------------------------------------------------------------|--------|---------------------------------------------------------|--------------|--------|--------------------------------------------------------------------|--------|
|                                                           |   |                                                    |         |   |                                                               |   |   |   |   |
| Revenue                                                        |   | $                                                       | 79,437       |   |                                                               | $      | -0- |   |   | $ | 79,437 |   |
| Cost of Goods Sold                                             |   |                                                    | 36,010       |   |                                                               |   | -0- |   |   |   | 36,010 |   |
| Gross Profit                                                   |   |                                                    | 43,427       |   |                                                               |   | -0- |   |   |   | 43,427 |   |
|                                                           |   |                                                    |         |   |                                                               |   |   |   |   |   |   |   |
| Expenses                                                       |   |                                                    |         |   |                                                               |   |   |   |   |   |   |   |
| General and administrative expenses                            |   |                                                    | 52,058       |   |                                                               |   | 3,671 |   |   |   | 129,667 |   |
| Stock-Based Compensation                                       |   |                                                    | 118,012      |   |                                                               |   | -0- |   |   |   | 290,055 |   |
| Investor Relations                                             |   |                                                    | -0-          |   |                                                               |   | -0- |   |   |   | 39,482 |   |
| Occupancy-Headquarters                                         |   |                                                    | 34,179       |   |                                                               |   | -0- |   |   |   | 39,482 |   |
| Officer Compensation                                           |   |                                                    | 73,000       |   |                                                               |   | 240,000 |   |   |   | 78,000 |   |
| Professional Fees                                              |   |                                                    | 64,253       |   |                                                               |   | 11,175 |   |   |   | 104,205 |   |
| Staff Compensation                                             |   |                                                    | 202,670      |   |                                                               |   | -0- |   |   |   | 547,670 |   |
| Total Expenses                                                 |   |                                                    | 544,172      |   |                                                               |   | 254,846 |   |   |   | 1,263,664 |   |
|                                                           |   |                                                    |         |   |                                                               |   |   |   |   |   |   |   |
| Operating Income (Loss)                                        |   |                                                    | (500,745     | )      |                                                               |   | (254,846 | ) |   |   | (1,263,664 | ) |
|                                                           |   |                                                    |         |   |                                                               |   |   |   |   |   |   |   |
| Other Expenses                                                 |   |                                                    |         |   |                                                               |   |   |   |   |   |   |   |
|      Loss on Disposition              |   | $                                                       | -0-          |   |                                                               | $      | -0- |   |   | $ | 567 |   |
|      Write-off Amount Due from Others |   |                                                    | -0-          |   |                                                               |   | 1,000 |   |   |   | 1,000 |   |
|      Depreciation Expense             |   |                                                    | 4,935        |   |                                                               |   | -0- |   |   |   | 4,935 |   |
|      Interest Expense                 |   |                                                    | 52,249       |   |                                                               |   | 9,755 |   |   |   | 65,504 |   |
|                                                           |   |                                                    |         |   |                                                               |   |   |   |   |   |   |   |
|      Write-off Project Development    |   |                                                    | 27,600       |   |                                                               |   | -0- |   |   |   | 27,600 |   |
| Total Other Expenses                                           |   |                                                    | 145,539      |   |                                                               |   | 10,755 |   |   |   | 160,362 |   |
|                                                           |   |                                                    |         |   |                                                               |   |   |   |   |   |   |   |
| Net Income (Loss)                                              |   |                                                    | (585,529     | )      |                                                               |   | (265,601 | ) |   |   | (1,363,270 | ) |
|                                                           |   |                                                    |         |   |                                                               |   |   |   |   |   |   |   |
|                                                           |   |                                                    | June 30,2011 |   |                                                               |   | December 31, 2010 |   |   |   |   |   |
| Total Assets                                                   |   | $                                                       | 3,174,529    |   |                                                               | $      | 125,178 |   |   |   |   |   |
| Total Liabilities                                              |   |                                                    | 1,469,776    |   |                                                               |   | 591,897 |   |   |   |   |   |
| Total Stockholders’ Equity (Deficit)                     |   |                                                    | 1,704,753    |   |                                                               |   | (466,719 | ) |   |   |   |   |

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| (a)   | The new public accounting firm Randall N. Drake, CPA, P.A. has been engaged to review and or audit our restated financial statements beginning with the quarterly report for period ended September 30, 2009. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | The firm engaged an accounting facilitator to assist with: (a) compiling and maintaining our financial records; (b) assisting the bookkeeping staff with proper recording of transactions; (c) maintaining permanent accounting records and proper backup procedures; and (d) providing continuous monitoring of accounting functions throughout the company. In addition, the facilitator will perform a risk assessment which identifies and analyzes the relevant risks management should address in order to achievement of its objectives. The facilitator will also assist with the preparation of written policies and procedures that will help ensure management directives are carried out. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c)   | Our President/Chief Executive Officer is serving as the point of communication between us and the audit firm. Communication between our President/Chief Executive Officer and the audit firm’s engagement partner has been established to ensure that the audit is aware of management’s intent and actions. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| ITEM 6. EXHIBITS |
|------------------|

| EXHIBIT NO. |   | DOCUMENT |
|-------------|--------|----------|
|        |   |     |
|        | 3.1    |     | Articles of Incorporation (1) |
|        | 3.1.2  |     | Certificate of Amendment as filed with the Nevada Secretary of State on July 22, 2010. (2) |
|        | 3.1.3  |     | Certificate of Amendment (2) as filed with the Nevada Secretary of State on January 19,, 2011 (3) . |
|        | 3.2    |     | Bylaws (1) |
|        | 10.1   |     | Share Exchange Agreement between InfoSpi Inc., NexPhase Lighting Inc. and the shareholders of NexPhase Lighting Inc. dated February 14, 2011. (4) |
|        | 10.2   |     | Letter of Intent dated January 20, 2011 between InfoSpi Inc. and NexPhase Lighting Inc. (5) |
|        | 16. 1  |     | Letter from Cornell, Beale and Leigh, LLC dated December 14, 2010. (6) |
|        | 16.2   |     | Letter from Randall N. Drake, CPA, dated January 5, 2011 regarding confirmation of Section 4.02(b)(3). (7) |
|        | 31.1   |     | Certification of Chief Executive Officer Pursuant to  Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act |
|        | 31.2   |     | Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act |
|        | 32.1   |     | Certification of Chief Executive Officer and Chief  Financial Officer Under Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act |

| 101.INS   ** | XBRL Instance Document                                 |
|-----------------------------|--------------------------------------------------------|
|                        |                                                   |
| 101.SCH **             | XBRL Taxonomy Extension Schema Document                |
|                        |                                                   |
| 101.CAL **             | XBRL Taxonomy Extension Calculation Linkbase Document  |
|                        |                                                   |
| 101.DEF **             | XBRL Taxonomy Extension Definition Linkbase Document   |
|                        |                                                   |
| 101.LAB **             | XBRL Taxonomy Extension Label Linkbase Document        |
|                        |                                                   |
| 101.PRE **             | XBRL Taxonomy Extension Presentation Linkbase Document |

| (1)  | Incorporated by reference from the Registration Statement on Form 10 filed with the Securities and Exchange Commission on February 28, 2008. |
|-----------|----------------------------------------------------------------------------------------------------------------------------------------------|

| (2)  | Incorporated by reference from the Current Report on Form 8-K filed with the Securities and Exchange Commission on December 6, 2010. |
|-----------|--------------------------------------------------------------------------------------------------------------------------------------|

| (3)  | Incorporated by reference from the Current Report on Form 8-K filed with the Securities and Exchange Commission on April 4 , 2011. |
|-----------|------------------------------------------------------------------------------------------------------------------------------------|

| (4)  | Incorporated by reference from the Current Report on Form 8-K filed with the Securities and Exchange Commission on February 22 , 2011. |
|-----------|----------------------------------------------------------------------------------------------------------------------------------------|

| (5)  | Incorporated by reference from the Current Report on Form 8-K filed with the Securities and Exchange Commission on January 24, 2011. |
|-----------|--------------------------------------------------------------------------------------------------------------------------------------|

| (6)  | Incorporated by reference from the Current Report on Form 8-K filed with the    Securities and Exchange Commission on December 14, 2010. |
|-----------|---------------------------------------------------------------------------------------------------------------------------------------------------------|

| (7)  | Incorporated by reference from the Current Report on Form 8-K filed with the Securities and Exchange Commission on January 5, 2011. |
|-----------|-------------------------------------------------------------------------------------------------------------------------------------|

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|                   | ONTECO CORPORATION |                    |
|------------------------|--------------------|-------------------------|
|                   |               |                    |   |
| Dated: August 22, 2011 | By:                |  /s/ Dror Svorai   |   |
|                   |               | Dror Svorai,            |   |
|                   |               | Chief Executive Officer |   |
|                   |               |                    |   |
| Dated: August 22, 2011 | By:                |  /s/ Dror Svorai   |   |
|                   |               | Dror Svorai             |   |
|                   |               | Chief Financial Officer |   |
|                   |               |                    |   |

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