UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



Form 10-Q

(Mark One)



xQUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



For the quarterly period ended June 30, 2009



OR



oTRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



For the transition period from               to



COMMISSION FILE NUMBER 333-142076



IX ENERGY HOLDINGS, INC.

(Exact Name of small business issuer as specified in its charter)



|                                |  |                    
|------------------------------- |  | -------------------
|                                |  |                    
|Delaware                        |  | 36-4620445         
|(State or other jurisdiction of |  | (I.R.S. Employer   
|incorporation or organization)  |  | Identification No.)



711 Third Avenue, 12th floor, New York, New York 10017

(Address of principal executive offices) (Zip Code)



Issuers telephone Number: (212) 682-5068



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



Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o   No o



Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):



|                                              |  |                             
|--------------------------------------------- |  | ----------------------------
|                                              |  |                             
|Large accelerated filer o                     |  | Accelerated filer  o        
|                                              |  |                             
|Non-accelerated filer o                       |  | Smaller reporting company  x
|(Do not check if a smaller
reporting company) |  |                             



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



As of August 5, 2009 the issuer had 64,484,677 outstanding shares of Common Stock.



---



IX Energy Holdings, Inc. and Subsidiary

Form 10-Q

For the Six Months Ended June 30, 2009 (Consolidated) and 2008



TABLE OF CONTENTS





|           |                                                                                                             |      | 
|---------- | ----------------------------------------------------------------------------------------------------------- | ---- | 
|           |                                                                                                             |     
|           |                                                                                                             | Page
|           | PART I                                                                                                      |     
|Item 1.    | Financial Statements                                                                                       
|           |                                                                                                             |     
|           | Consolidated Balance Sheets as of June 30, 2009 (Unaudited) and December 31, 2008 (Audited)                 | 1   
|           | Consolidated Statements of Operations for the three and six months ended June 30, 2009 and 2008 (Unaudited) | 2   
|           | Consolidated Statement of Stockholders Equity for the six months ended June 30, 2009 (Unaudited)           | 3   
|           | Consolidated Statements of Cash Flows for the six months ended June 30, 2009 and 2008 (Unaudited)           | 4   
|           | Notes to the Consolidated Financials (Unaudited)                                                            | 5   
|           |                                                                                                             |     
|Item 2.    | Managements Discussion and Analysis of Financial Condition and Results of Operation                        | 17  
|Item 3.    | Quantitative and Qualitative Disclosures About Market Risk                                                  | 20  
|Item 4T    | Controls and Procedures                                                                                     | 20  
|           |                                                                                                             |     
|           | PART II                                                                                                     |     
|Item 1.    | Legal Proceedings                                                                                           | 20  
|Item 1A.   | Risk Factors                                                                                                | 20  
|Item 2.    | Unregistered Sales of Equity Securities and Use of Proceeds                                                 | 20  
|Item 3.    | Defaults Upon Senior Securities                                                                             | 20  
|Item 4.    | Submission of Matters to a Vote of Security Holders                                                         | 20  
|Item 5.    | Other Information                                                                                           | 20  
|Item 6.    | Exhibits                                                                                                    | 21  
|           |                                                                                                             |     
|           |                                                                                                            
|SIGNATURES | 22                                                                                                         







---

PART I.



ITEM 1. FINANCIAL INFORMATION



IX Energy Holdings, Inc. and Subsidiary
Consolidated Balance Sheets



|                                                                                              |               |  |                   | 
|--------------------------------------------------------------------------------------------- | ------------- |  | ----------------- | 
|                                                                                              | June 30, 2009 |  | December 31, 2008 | 
|                                                                                              | (Unaudited)   |  | (Audited)         | 
|Assets                                                                                       
|                                                                                              |               |  |                   | 
|Assets                                                                                        |               |  |                   | 
|Cash and cash equivalents                                                                     | $1,284,336    |  | $ 4,736,812       | 
|Accounts receivable                                                                           | 193,056       |  | 84,420            | 
|Costs and estimated earnings in excess of billings on uncompleted contracts                   | 22,095        |  | 6,974             | 
|Prepaid expenses                                                                              | 153,684       |  | 4,000             | 
|Total Current Assets                                                                          | 1,653,171     |  | 4,832,206         | 
|                                                                                              |               |  |                   | 
|Property and equipment, net of accumulated depreciation of $3,368 and $2,505 in 2009 and 2008 | 1,570,817     |  | 1,331,787         | 
|                                                                                              |               |  |                   | 
|Debt issue costs, net of accumulated amortization of $7,892 and $3,893 in 2009 and 2008       | 171           |  | 4,170             | 
|                                                                                              |               |  |                   | 
|Total Assets                                                                                  | $3,224,159    |  | $ 6,168,163       | 
|                                                                                              |               |  |                   | 
|Liabilities and Stockholders Equity                                                         
|                                                                                              |               |  |                   | 
|Liabilities                                                                                   |               |  |                   | 
|Accounts payable and accrued expenses                                                         | $307,385      |  | $ 525,994         | 
|Notes payable - related party                                                                 | 455,000       |  | 873,000           | 
|Notes payable - other                                                                         | 500,000       |  | 500,000           | 
|Accrued interest payable - related party                                                      | 104,325       |  | 76,217            | 
|Accrued interest payable - other                                                              | 24,468        |  | 12,071            | 
|Deferred revenue                                                                              | 887,595       |  | 2,683,833         | 
|Derivative liability - warrants                                                               | 916,544       |  | -                 | 
|Total Current Liabilities                                                                     | 3,195,317     |  | 4,671,115         | 
|                                                                                              |               |  |                   | 
|Stockholders Equity                                                                          |               |  |                   | 
|Common stock, $0.0001 par value, 100,000,000 shares authorized,                               |               |  |                   | 
|64,484,635 and 58,528,285 shares issued and outstanding                                       | 6,449         |  | 5,853             | 
|Additional paid in capital                                                                    | 8,466,469     |  | 2,962,960         | 
|Accumulated deficit                                                                           | (8,444,076)   |  | (1,471,765)       | 
|Total Stockholders Equity                                                                    | 28,842        |  | 1,497,048         | 
|                                                                                              |               |  |                   | 
|Total Liabilities and Stockholders Equity                                                    | $3,224,159    |  | $ 6,168,163       | 
|                                                                                              |               |  |                   | 







See accompanying notes to financial statements



1



---



IX Energy Holdings, Inc. and Subsidiary
Statements of Operations
(Unaudited)



|                                                        |                            |               |                          |                     |                |                     |             
|------------------------------------------------------- | -------------------------- | ------------- | ------------------------ | ------------------- | -------------- | ------------------- | ------------
|                                                        | For the Three Months Ended |               | For the Six Months Ended
|June 30, 2009                                           |                            | June 30, 2008 |                          | Ended June 30, 2009 |                | Ended June 30, 2008
|                                                        | (Consolidated)             |               |                          |                     | (Consolidated) |                     |             
|                                                        |                            |               |                          |                     |                |                     |             
|Revenues - solar panels                                 | $ 108,636                  |               | $ 4,598,767              |                     | $ 1,904,874    |                     | $ 4,598,767 
|Revenues - construction contracts                       | 10,002                     |               | 47,121                   |                     | 53,660         |                     | 68,660      
|Total revenues                                          | 118,638                    |               | 4,645,888                |                     | 1,958,534      |                     | 4,667,427   
|                                                        |                            |               |                          |                     |                |                     |             
|Cost of revenues - solar panels                         | 88,974                     |               | 4,488,205                |                     | 1,536,553      |                     | 4,488,205   
|Cost of revenues - construction contracts               | 18,157                     |               | 38,731                   |                     | 53,232         |                     | 69,230      
|Total cost of revenues                                  | 107,131                    |               | 4,526,936                |                     | 1,589,785      |                     | 4,557,435   
|                                                        |                            |               |                          |                     |                |                     |             
|Gross profit                                            | 11,507                     |               | 118,952                  |                     | 368,749        |                     | 109,992     
|                                                        |                            |               |                          |                     |                |                     |             
|General and administrative expenses                     | 1,186,323                  |               | 262,611                  |                     | 6,387,750      |                     | 347,843     
|                                                        |                            |               |                          |                     |                |                     |             
|Loss from operations                                    | (1,174,816)                |               | (143,659)                |                     | (6,019,001)    |                     | (237,851)   
|                                                        |                            |               |                          |                     |                |                     |             
|Other income (expense)                                  |                            |               |                          |                     |                |                     |             
|Interest income                                         | 6,409                      |               | 3,458                    |                     | 24,238         |                     | 3,458       
|Derivative expense                                      | -                          |               | -                        |                     | (1,422,917)    |                     | -           
|Change in fair value of derivative liability - warrants | 1,535,894                  |               | -                        |                     | 1,827,368      |                     | -           
|Interest expense                                        | (28,081)                   |               | (6,672)                  |                     | (61,004)       |                     | (13,343)    
|Letter of credit fee loan fee                           | -                          |               | (90,710)                 |                     | -              |                     | (90,710)    
|Total other income (expense)                            | 1,514,222                  |               | (93,924)                 |                     | 367,685        |                     | (100,595)   
|                                                        |                            |               |                          |                     |                |                     |             
|Net income (loss) before provision for income taxes     | $ 339,406                  |               | $  (237,583)             |                     | $  (5,651,316) |                     | $  (338,446)
|                                                        |                            |               |                          |                     |                |                     |             
|Provision for income taxes                              | -                          |               | -                        |                     | -              |                     | -           
|                                                        |                            |               |                          |                     |                |                     |             
|Net income (loss)                                       | $ 339,406                  |               | $  (237,583)             |                     | $  (5,651,316) |                     | $  (338,446)
|                                                        |                            |               |                          |                     |                |                     |             
|Net Income (Loss) per Share - Basic                     | $ 0.01                     |               | $  (0.01)                |                     | $  (0.09)      |                     | $  (0.01)   
|Net Income (Loss) per Share - Diluted                   | $ 0.01                     |               | $  (0.01)                |                     | $  (0.09)      |                     | $  (0.01)   
|                                                        |                            |               |                          |                     |                |                     |             
|Weighted Average Number of Shares Outstanding - Basic   | 63,987,485                 |               | 41,635,688               |                     | 62,539,483     |                     | 41,635,688  
|Weighted Average Number of Shares Outstanding - Diluted | 63,987,485                 |               | 41,635,688               |                     | 62,539,483     |                     | 41,635,688  
|                                                        |                            |               |                          |                     |                |                     |             
|                                                        |                            |               |                          |                     |                |                     |             









See accompanying notes to financial statements



2



---



IX Energy Holdings, Inc. and Subsidiary
Statements of Changes in Stockholders Equity
For the Six Months Ended June 30, 2009 (Unaudited) and December 31, 2008 (Audited)





|                                                                                                            |                                |     |                            |   |                     |           |                      |  |            
|----------------------------------------------------------------------------------------------------------- | ------------------------------ | --- | -------------------------- | - | ------------------- | --------- | -------------------- |  | -----------
|                                                                                                            | Common Stock,$0.0001 Par Value |     | Additional
Paid in Capital |   | Accumulated
Deficit |           | Stockholders'
Equity
|                                                                                                            | Shares                         |     | Amount                     |  
|                                                                                                            |                                |     |                            |   |                     |           |                      |  |            
|Balance, December 31, 2007                                                                                  | 41,635,688                     |     | $4,164                     |   | $220,728            |           | $(114,273)           |  | $110,619   
|                                                                                                            |                                |     |                            |   |                     |           |                      |  |            
|Common stock issued for loan fee - stockholders ($0.03/share)                                               | 4,332,818                      |     | 433                        |   | 128,576             |           | -                    |  | 129,009    
|                                                                                                            |                                |     |                            |   |                     |           |                      |  |            
|Common stock issued for consulting services - related parties ($0.17/share)                                 | 144,201                        |     | 14                         |   | 24,965              |           | -                    |  | 24,979     
|                                                                                                            |                                |     |                            |   |                     |           |                      |  |            
|Common stock issued for officer's compensation ($0.16/share)                                                | 40,578                         |     | 4                          |   | 6,663               |           | -                    |  | 6,667      
|                                                                                                            |                                |     |                            |   |                     |           |                      |  |            
|Forgiveness of amounts due from affiliate                                                                   | -                              |     | -                          |   | (44,325)            |           | -                    |  | (44,325)   
|                                                                                                            |                                |     |                            |   |                     |           |                      |  |            
|Deemed issuance in recapitalization                                                                         | 5,500,000                      |     | 550                        |   | (424)               |           | -                    |  | 126        
|                                                                                                            |                                |     |                            |   |                     |           |                      |  |            
|Common stock issued for cash in private placement ($0.40/share), net of warrants issued to placement agents | 6,875,000                      |     | 688                        |   | 2,609,312           |           | -                    |  | 2,610,000  
|                                                                                                            |                                |     |                            |   |                     |           |                      |  |            
|Warrants issued to placement agents for cash raised in private placement ($0.40/share)                      | -                              |     | -                          |   | 140,000             |           | -                    |  | 140,000    
|                                                                                                            |                                |     |                            |   |                     |           |                      |  |            
|Cash paid as direct offering costs                                                                          | -                              |     | -                          |   | (122,535)           |           | -                    |  | (122,535)  
|                                                                                                            |                                |     |                            |   |                     |           |                      |  |            
|Net loss for the year ended December 31, 2008                                                               | -                              |     | -                          |   | -                   |           | (1,357,492)          |  | (1,357,492)
|                                                                                                            |                                |     |                            |   |                     |           |                      |  |            
|Balance, December 31, 2008                                                                                  | 58,528,285                     |     | $5,853                     |   | $2,962,960          |           | $(1,471,765)         |  | $ 1,497,048
|                                                                                                            |                                |     |                            |   |                     |           |                      |  |            
|Common stock issued for cash in private placement ($0.40/share)                                             | 1,812,500                      |     | 181                        |   | 724,819             |           | -                    |  | 725,000    
|                                                                                                            |                                |     |                            |   |                     |           |                      |  |            
|Cash paid as direct offering costs                                                                          | -                              |     | -                          |   | (201,775)           |           | -                    |  | (201,775)  
|                                                                                                            |                                |     |                            |   |                     |           |                      |  |            
|Common stock issued for employee compensation ($1.31/share)                                                 | 2,806,310                      | 281 | 3,675,022                  | - |                     | 3,675,303
|                                                                                                            |                                |     |                            |   |                     |           |                      |  |            
|Common stock issued for third party services ($0.64/share)                                                  | 1,182,238                      | 118 | 754,356                    | - |                     | 754,474  
|                                                                                                            |                                |     |                            |   |                     |           |                      |  |            
|Common stock issued to settle accounts payable                                                              | 155,303                        |     | 16                         |   | 66,117              |           |                      |  | 66,133     
|                                                                                                            |                                |     |                            |   |                     |           |                      |  |            
|Recognition of stock based compensation - employees                                                         | -                              | -   | 461,195                    | - |                     | 461,195  
|                                                                                                            |                                |     |                            |   |                     |           |                      |  |            
|Recognition of stock based compensation - consultants                                                       | -                              | -   | 23,775                     | - |                     | 23,775   
|                                                                                                            |                                |     |                            |   |                     |           |                      |  |            
|Derivative adjustment for warrants                                                                          | -                              |     | -                          |   | -                   |           | (1,320,995)          |  | (1,320,995)
|                                                                                                            |                                |     |                            |   |                     |           |                      |  |            
|Net loss for the six months ended June 30, 2009                                                             | -                              |     | -                          |   | -                   |           | (5,651,316)          |  | (5,651,316)
|                                                                                                            |                                |     |                            |   |                     |           |                      |  |            
|Balance, June 30, 2009                                                                                      | 64,484,636                     |     | $6,449                     |   | $  8,466,469        |           | $(8,444,076)         |  | $28,842    
|                                                                                                            |                                |     |                            |   |                     |           |                      |  |            





See accompanying notes to financial statements





3



---



IX Energy Holdings, Inc. and Subsidiary
Statements of Cash Flows
(Unaudited)





|                                                                            |                                        |  |                                       
|--------------------------------------------------------------------------- | -------------------------------------- |  | --------------------------------------
|                                                                            | For the Six Months
Ended June 30, 2009 |  | For the Six Months
Ended June 30, 2008
|                                                                            | (Consolidated)                         |  |                                       
|                                                                            |                                        |  |                                       
|CASH FLOWS FROM OPERATING ACTIVITIES:                                       |                                        |  |                                       
|Net loss                                                                    | $(5,651,316)                           |  | $(338,446)                            
|Adjustments to reconcile net loss to net cash used in operating activities: |                                        |  |                                       
|Depreciation                                                                | 4,370                                  |  | -                                     
|Amortization of debt issue costs                                            | 3,999                                  |  | -                                     
|Amortization of prepaid future services                                     | 11,750                                 |  |                                       
|Loss on settlement of accounts payable                                      | 5,412                                  |  | -                                     
|Loss on sale of fixed asset                                                 | 10,493                                 |  | -                                     
|Derivative expense                                                          | 1,422,917                              |  | -                                     
|Change in fair value of derivative liability- warrants                      | (1,827,368)                            |  | -                                     
|Stock issued for services - employee                                        | 3,675,303                              |  |                                       
|Stock issued for services - consultant                                      | 707,474                                |  | -                                     
|Recognition of stock based compensation - employees                         | 461,195                                |  | -                                     
|Recognition of stock based compensation - consultants                       | 23,775                                 |  | -                                     
|Stock issued for loan fee                                                   | -                                      |  | 120,946                               
|Stock issued for consulting services - related party                        | -                                      |  | 2,479                                 
|Changes in operating assets and liabilities:                                |                                        |  |                                       
|(Increase) Decrease in:                                                     |                                        |  |                                       
|Accounts receivable                                                         | (108,636)                              |  | (21,110)                              
|Cost & estimated earnings in excess of billings on uncompleted contracts    | (15,121)                               |  | 57,340                                
|Prepaid expenses                                                            | (114,434)                              |  | (1,050,000)                           
|Increase (Decrease) in:                                                     |                                        |  |                                       
|Accounts payable and accrued expenses                                       | (157,888)                              |  | 107,513                               
|Accrued interest payable - related party                                    | 28,108                                 |  | 13,344                                
|Accrued interest payable - other                                            | 12,397                                 |  | -                                     
|Due from related party                                                      | -                                      |  | (42,823)                              
|Estimated losses on uncompleted contracts                                   | -                                      |  | (20,172)                              
|Billings in excess of estimated costs and earnings                          | -                                      |  | 6,800,000                             
|Deferred revenue                                                            | (1,796,238)                            |  | -                                     
|Net Cash Provided by (Used in) Operating Activities                         | (3,303,808)                            |  | 5,629,071                             
|                                                                            |                                        |  |                                       
|CASH FLOWS FROM INVESTING ACTIVITIES:                                       |                                        |  |                                       
|Proceeds from sale of fixed asset                                           | 13,000                                 |  | -                                     
|Purchase of property and equipment                                          | (266,893)                              |  | -                                     
|Net Cash Used in Investing Activities                                       | (253,893)                              |  | -                                     
|                                                                            |                                        |  |                                       
|CASH FLOWS FROM FINANCING ACTIVITIES:                                       |                                        |  |                                       
|Repayment of notes payable - related party                                  | (418,000)                              |  | -                                     
|Proceeds from issuance of common stock - related party                      | -                                      |  | -                                     
|Proceeds from common stock issued for cash in private placement             | 725,000                                |  | -                                     
|Cash paid as direct offering costs                                          | (201,775)                              |  | -                                     
|Proceeds from issuance of notes payable - related party                     | -                                      |  | 38,252                                
|Net Cash Provided By Financing Activities                                   | 105,225                                |  | 38,252                                
|                                                                            |                                        |  |                                       
|Net Increase (Decrease) in Cash and Cash Equivalents                        | (3,452,476)                            |  | 5,667,323                             
|                                                                            |                                        |  |                                       
|Cash and Cash Equivalents - Beginning of Period                             | 4,736,812                              |  | 176,160                               
|                                                                            |                                        |  |                                       
|Cash and Cash Equivalents - End of Period                                   | $1,284,336                             |  | $5,843,483                            
|                                                                            |                                        |  |                                       
|SUPPLEMENTARY CASH FLOW INFORMATION:                                        |                                        |  |                                       
|Cash Paid During the Period for:                                            |                                        |  |                                       
|Income taxes                                                                | $-                                     |  | $-                                    
|Interest                                                                    | $17,036                                |  | $-                                    
|                                                                            |                                        |  |                                       
|SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:    
|Stock issued for future services                                            | $155,100                               |  | $-                                    
|Stock issued to settle accounts payable                                     | $66,133                                |  | $-                                    
|                                                                            |                                        |  |                                       



See accompanying notes to financial statements



4



---

IX Energy Holdings, Inc. and Subsidiary

Notes to Consolidated Financial Statements

June 30, 2009

(Unaudited)





Note 1 Basis of Presentation



The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the United States Securities and Exchange Commission for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. It is management's opinion, however, that all material adjustments (consisting of normal recurring adjustments) have been made which are necessary for a fair financial statement presentation. The results for the interim period are not necessarily indicative of the results to be expected for the full year.



The unaudited interim financial statements should be read in conjunction with the Companys Form 10-K, which contains the audited financial statements and notes thereto, together with Managements Discussion and Analysis, for the years ended December 31, 2008 and 2007.  The interim results for the period ended June 30, 2009 are not necessarily indicative of the results for the full fiscal year.



On December 30, 2008, the Company executed a reverse acquisition with a public shell company (See Note 9).  The accompanying financial statements are consolidated as of June 30, 2009.  The financial statements for the three and six months ended June 30, 2008, consist solely of IX Energy, Inc., the accounting acquirer and are not consolidated.



Note 2 Organization, Nature of Operations and Summary of Significant Accounting Policies



Nature of operations



IX Energy Holdings, Inc.  (IX Energy or the Company) was incorporated on March 3, 2006 under the laws of the State of Delaware. The Company is a renewable energy company primarily focused on solar power project development and integration.  In an effort to become a vertically integrated solar products and services company that manufactures, designs, markets and installs its own solar power systems, the Company plans to manufacture solar modules that will be marketed primarily to federal military and civilian agencies.



On March 25, 2009, the Company incorporated IX Geo, LLC (IX Geo) under the laws of Delaware as a wholly owned subsidiary of IX Energy.



On March 25, 2009, the Company formed IX Legatus6, LLC under the laws of Delaware as a wholly owned subsidiary of IX Energy.  On July 21, 2009, the Company changed the name of IX Legatus6, LLC to IX Energy Solutions, LLC (IX Solutions).



As of June 30, 2009, neither of these subsidiaries was operational.



Going Concern

As reflected in the accompanying financial statements, the Company has a net loss of $5,651,316 and net cash used in operations of $3,303,808 for the six months ended June 30, 2009; and had a working capital deficit of $1,542,146 and an accumulated deficit of $8,444,076 at June 30, 2009.



The ability of the Company to continue its operations is dependent on managements plans, which include the raising of capital through debt and/or equity markets with some additional funding from other traditional financing sources, including term notes, until such time that funds provided by operations are sufficient to fund working capital requirements.



The Company believes its current available cash, along with anticipated revenues, may be insufficient to meet its cash needs for the near future. There can be no assurance that financing will be available in amounts or terms acceptable to the Company, if at all. The Company may require additional funding to finance the growth of its current and expected future operations, as well as to achieve its strategic objectives. The Company believes that the further implementation of its business plan will provide future positive cash flows.



Use of estimates

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



Risks and uncertainties



The Company operates in an industry that is subject to intense competition and rapid technological change, and is in a state of fluctuation as a result of the global credit crisis.  The Company's operations are subject to significant risk and uncertainties including financial, operational, technological, and regulatory risks including the potential risk of business failure.



Principles of consolidation



The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. All significant intercompany balances and transactions have been eliminated in consolidation.



Cash and cash equivalents



For purposes of the statement of cash flows, the Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents.



The Company minimizes its credit risk associated with cash by periodically evaluating the credit quality of its primary financial institution. The balance at times may exceed federally insured limits. At June 30, 2009 and December 31, 2008, the balance exceeded the federally insured limit by $943,327 and $4,249,256, respectively.



Accounts receivable and concentrations

Accounts receivable represents trade obligations from customers that are subject to normal trade collection terms, without discounts, however, in certain cases we are entitled to rebates upon the completion of certain jobs post installation. The Company periodically evaluates the collectability of its accounts receivable and considers the need to adjust an allowance for doubtful accounts based upon historical collection experience and specific customer information. Actual amounts could vary from the recorded estimates. We have determined that as of June 30, 2009 and December 31, 2008, respectively, no allowance was required.



At June 30, 2009 and December 31, 2008, respectively, the Company had a concentration of accounts receivable from two customers totaling 44% and 56%, and one customer totaling 100%, respectively.





5



---

IX Energy Holdings, Inc. and Subsidiary

Notes to Consolidated Financial Statements

June 30, 2009

(Unaudited)



Property and equipment



Property and equipment are stated at cost. Maintenance and repairs are charged to operations as incurred. Betterments or renewals are capitalized when incurred. Depreciation is provided using the straight line method over the estimated useful lives of the asset.



Long lived assets



Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. There were no impairment charges taken during the period ended June 30, 2009 and the year ended December 31, 2008, respectively.



Basic and diluted loss per share



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



The Company has common stock equivalents consisting of :



|                                                     |           
|---------------------------------------------------- | ----------
|Stock options                                        | 4,901,132 
|Stock warrants                                       | 9,377,500 
|Total potential dilutive securities at June 30, 2009 | 14,278,632



Since the three months ending June 30, 2009 resulted in income, these potentially dilutive shares, consisting of outstanding options and warrants, have been included in the computation of diluted earnings per share and the weighted average shares outstanding, except where the result would be anti-dilutive.  The average market price for the three months ended June 30, 2009 was less than the exercise price, so the basic and diluted earnings per share computation was the same.  For the six months ended June 30, 2009, these common stock equivalents are not included in the diluted loss per share computation since the inclusion of such common stock equivalents would be anti-dilutive due to the Companys net loss during the period.   There were no outstanding common stock equivalents at June 30, 2008.



As a result of the stock dividend and reverse acquisition and recapitalization (see Notes 8 and 9), all share and per share amounts were retroactively restated.



Fair value of financial instruments

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



The carrying amount reported in the balance sheet for accounts receivable, costs and estimated earnings in excess of billings on uncompleted contracts, prepaid expenses, accounts payable and accrued expenses, notes payable  related party, notes payable  other, accrued interest payable  related party and accrued interest payable  other, deferred revenue and derivative liability  warrants, approximates its fair market value based on the short-term maturity of these instruments.



Derivative financial instruments



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



Once determined, derivative liabilities are adjusted to reflect fair value at each reporting period end, with any increase or decrease in the fair value being recorded in results of operations as an adjustment to fair value of derivatives. In addition, the fair value of freestanding derivative instruments such as warrants, are also valued using the Black-Scholes option-pricing model. In assessing the nature of a financial instrument as freestanding, the Company has applied the guidance pursuant to EITF No.s 00-19. Finally, the Company has applied the related guidance in EITF No.s 00-19-2 and 05-4 as well as SFAS No. 5 when determining the existence of liquidated damage provisions. At June 30, 2009, the Company had various derivative instruments.



Revenue recognition

The Company follows the guidance of the Securities and Exchange Commissions Staff Accounting Bulletin No. 104 for revenue recognition and records revenue when all of the following have occurred: (1) persuasive evidence of an arrangement exists, (2) the product is delivered and installed, (3) the sales price to the customer is fixed or determinable, and (4) collectability of the related customer receivable is reasonably assured.



The Company has two methods of revenue recognition:



(1) Energy product reseller

The Company purchases product from suppliers and resells them to third parties.  The Company records the revenue from the buyer and related cost paid to the suppliers on these types of arrangements.





Periodically, the Company enters into similar arrangements wherein the Company had no installation responsibility and no further obligation after delivery was made to the customers.  Payments from the customers are received in advance of delivery of solar panels and are treated as deferred revenue.  Payments are then made to the suppliers and cost of materials is recorded.  A pro-rata portion of the deferred revenue from the customers is recognized as shipments are made.



6



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IX Energy Holdings, Inc. and Subsidiary

Notes to Consolidated Financial Statements

June 30, 2009

(Unaudited)





Revenues from these arrangements are recognized upon shipment from the supplier to these third parties.  In addition, the Company has reviewed EITF No. 99-19 to ascertain the relevance of gross versus net reporting. Upon the Companys review of this guidance, as well as SAB No. 104, the Company has determined that it is subject to gross reporting as it bears the risk of physical loss of inventory in each of these arrangements, takes title to the inventory, is the primary obligor in the arrangements, establishes the pricing with customers, has discretion in the selection of suppliers, determines product specifications with customers and suppliers and it has credit risk on all sales.



For the six months ended June 30, 2009, the Company had a concentration of sales with one customer totaling 92%. For the six months ended June 30, 2008, the Company had a concentration with one customer of 99%.



(2) Percentage of completion



Revenue from construction contracts are reported under the percentage-of-completion method for financial statement purposes.  The estimated revenue for each contract reflected in the financial statements represent that percentage of estimated total revenue that costs incurred to date bear to estimated total costs, based on the Companys current estimates.  With respect to contracts that extend over one or more accounting periods, revisions in costs and revenue estimates during the course of the work are reflected in the period the revisions become known.  When current estimates of total contract costs indicate a loss, provision is made for the entire estimated loss.



The asset, Costs and estimated earnings in excess of billings on uncompleted contracts, represents revenues recognized in excess of amounts billed.  The liability, Estimated earnings on uncompleted contracts, represents billings in excess of revenues recognized.



Billing practices for these projects are governed by the contract terms of each project based upon actual costs incurred, achievement of milestones, or pre-agreed schedules. Billings do not necessarily correlate with revenue recognized under the percentage-of-completion method of accounting.  With the exception of claims and change orders that are in the process of being negotiated with customers, unbilled work is usually billed during normal billing processes following achievement of the contractual requirements.



Cost of sales



Cost of sales, including contract costs represents costs directly related to the purchasing and installation of the Companys solar panel products. Primary costs include direct materials and labor costs and those indirect costs related to contract performance, such as indirect labor, supplies, tools, repairs and depreciation costs.



Shipping and handling costs



Shipping and handling costs associated with inbound freight are included in cost of sales. Amounts billed to customers for shipping and handling is recorded as revenue.  For the three and six months ended June 30, 2009 and 2008, respectively, the Company had no such revenues or expenses.



Stock-based compensation

All share-based payments to employees will be recorded and expensed in the statement of operations as applicable under SFAS No. 123R, Share-Based Payment.



SFAS No. 123R requires the measurement and recognition of compensation expense for all share-based payment awards made to employees and directors including grants of employee stock options based on estimated fair values.  The Company has used the Black-Scholes option-pricing model to estimate grant date fair value for all option grants.



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



7



---

IX Energy Holdings, Inc. and Subsidiary

Notes to Consolidated Financial Statements

June 30, 2009

(Unaudited)



Non-employee stock based compensation



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



Segment information



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



Income Taxes

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



The Company adopted the provisions of FASB Interpretation No. 48; Accounting for Uncertainty in Income Taxes-An Interpretation of FASB Statement No. 109 (FIN 48).  FIN 48 contains a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not, that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount, which is more than 50% likely of being realized upon ultimate settlement. The Company considers many factors when evaluating and estimating the Companys tax positions and tax benefits, which may require periodic adjustments. At June 30, 2009 and December 31, 2008, the Company did not record any liabilities for uncertain tax positions.



Recent accounting pronouncements

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



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



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



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



In May 2009, the FASB issued SFAS No. 165 Subsequent Events (SFAS 165). SFAS 165 establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. SFAS 165 sets forth (1) The period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements, (2) The circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements and (3) The disclosures that an entity should make about events or transactions that occurred after the balance sheet date. SFAS 165 is effective for interim or annual financial periods ending after June 15, 2009. The Company is evaluating the impact the adoption of SFAS 165 will have on its financial statemen





ts.



In June 2009, the FASB issued SFAS No. 166
Accounting for Transfers of Financial Assetsan amendment of FASB
Statement No. 140 (SFAS 166). SFAS 166 improves the relevance,
representational faithfulness, and comparability of the information that a
reporting entity provides in its financial statements about a transfer of
financial assets; the effects of a transfer on its financial position, financial
performance,
and cash flows; and a transferors continuing involvement, if any, in
transferred financial assets. SFAS 166 is effective as of the beginning of each
reporting entitys first annual reporting period that begins after November
15, 2009, for interim periods within that first annual reporting period and for
interim and annual reporting periods thereafter. The Company is evaluating the
impact the adoption of SFAS 166 will have on its financial statements.



In June 2009, the FASB issued SFAS No. 167
Amendments to FASB Interpretation No. 46(R) (SFAS 167).
SFAS 167 improves financial reporting by enterprises involved with variable
interest entities and to address (1) the effects on certain provisions of FASB
Interpretation No. 46 (revised December 2003), Consolidation of Variable
Interest Entities, as a result of the elimination of the qualifying
special-purpose entity concept in SFAS 166 and (2) constituent concerns about
the application of certain key provisions of Interpretation 46(R), including
those in which the accounting and disclosures under the Interpretation do not
always provide timely and useful information about an enterprises
involvement in a variable interest entity. SFAS 167 is effective as of the
beginning of each reporting entitys first annual reporting period that
begins after November 15, 2009, for interim periods within that first annual
reporting period, and for interim and annual reporting periods thereafter. The
Company is evaluating the impact the adoption of SFAS 167 will have on its
financial statements.



In June 2009, the FASB issued SFAS No. 168 The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principlesa replacement of FASB Statement No. 162. The FASB Accounting Standards Codification (Codification) will be the single source of authoritative nongovernmental U.S. generally accepted accounting principles. Rules and interpretive releases of the SEC under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. SFAS 168 is effective for interim and annual periods ending after September 15, 2009. All existing accounting standards are superseded as described in SFAS 168. All other accounting literature not included in the Codification is non-authoritative. The Company is evaluating the impact the adoption of SFAS 168 will have on its financial statements.



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



Note 3 Construction Contracts

Information with respect to uncompleted contracts is summarized below for the periods ended June 30, 2009 and December 31, 2008:



8



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IX Energy Holdings, Inc. and Subsidiary

Notes to Consolidated Financial Statements

June 30, 2009

(Unaudited)



|                                                                                                                                |   |               |  |   |                  
|------------------------------------------------------------------------------------------------------------------------------- | - | ------------- |  | - | -----------------
|                                                                                                                                |   | June 30,
2009 |  |   | December 31,
2008
|                                                                                                                                |   |               |  |   |                  
|Actual costs incurred on uncompleted contracts                                                                                  | $ | 139,088       |  | $ | 415,320          
|                                                                                                                                |   |               |  |   |                  
|Estimated profit (losses)                                                                                                       |   | 65,168        |  |   | (10,124)         
|                                                                                                                                |   |               |  |   |                  
|                                                                                                                                |   | 204,256       |  |   | 405,196          
|                                                                                                                                |   |               |  |   |                  
|Less: progress billings to date                                                                                                 |   | (182,161)     |  |   | (398,222)        
|                                                                                                                                |   |               |  |   |                  
|                                                                                                                                | $ | 22,095        |  | $ | 6,974            
|                                                                                                                                |   |               |  |   |                  
|These amounts are included in the accompanying June 30, 2009 and December 31, 2008 balance sheets under the following captions: |   |               |  |   |                  
|                                                                                                                                |   |               |  |   |                  
|Costs and estimated earnings in excess of billings on uncompleted contracts                                                     | $ | 22,095        |  | $ | 6,974            
|                                                                                                                                |   |               |  |   |                  
|Estimated losses on uncompleted contracts                                                                                       |   | -             |  |   | -                
|                                                                                                                                |   |               |  |   |                  
|                                                                                                                                | $ | 22,095        |  | $ | 6,974            







In June 2008, the Company entered into an agreement with Federal Prison Industries, Inc. ("UNICOR"), under which UNICOR provided the labor for assembly and production of solar panels to the Company, and the Company sold the solar panels to Federal, civilian and military government customers of both the Company and this customer.  The agreement has a term of five years.



Under the UNICOR contract, the Company is obligated to perform sales under two separate sales and marketing programs:



●  IX shall actively market to and solicit customers, prepare customer proposals and aid customers in obtaining project financing while UNICOR assembles and produces solar panels and fabricates and assembles the product.  Pricing is $0.55 per watt for panel fabrication plus the price of photovoltaic cells that will be added to the price per unit.

●  IX may act as a sales agent for UNICOR.  UNICOR may identify potential customers and refer them to IX.  In this program, IX and UNICOR may work together to prepare customer proposals and to aid customers in obtaining project financing.  Since UNICOR will sell directly to customers in this program, pricing is such that UNICOR will pay a service fee of 25% of the net earnings on the project to IX when payment is received from customers.



In June 2008, the Company received $6,800,000 from UNICOR for the supply of solar cells.  This amount was initially recorded as deferred revenue.  Shipment of these solar cells began in October 2008. For the six months ended June 30, 2009 and 2008, the Company has recognized revenue based on completion of shipments under this agreement of $1,796,238 and $0, respectively.



In June 2008, the Company entered into an agreement, under which a supplier provides the labor for the assembly and production of solar panels to the Company, and the Company sells the solar panels to a third party. The agreement has a term of one year.  In July and September 2008, the Company received $1,897,335 from this customer for the shipment of solar panels.  This amount was initially recorded as deferred revenue. For the six months ended June 30, 2009 and 2008, the Company recognized $0 and $0 of revenue, respectively.  The balance of $887,595, remains in deferred revenue and is expected to be earned in 2009.



Note 4 Affiliate Charge to Equity



For the six months ended June 30, 2008, a Company related to the Companys Chief Executive Officer collected certain funds on contracts entered into by the Company.  The affiliated entity did not have the ability to repay these funds that the Company was entitled to.  As a result, the Company recorded a charge to additional paid in capital of $42,823 to reflect the uncollectible receivable from this related party.



Note 5 Property and Equipment



At June 30, 2009 and December 31, 2008, property and equipment consists of the following:

|                               |               |                   |   |                        |  |         
|------------------------------ | ------------- | ----------------- | - | ---------------------- |  | --------
|                               | June 30, 2009 | December 31, 2008 |   | Estimated Useful Lives
|                               |               |                   |   |                        |  |         
|Solar Panel Equipment          | $             | 1,550,000         | $ | 1,300,000              |  | 20 years
|                               |               |                   |   |                        |  |         
|Automobiles                    |               | -                 |   | 26,999                 |  | 5 years 
|                               |               |                   |   |                        |  |         
|Computers and Office Equipment |               | 24,185            |   | 7,293                  |  | 3 years 
|                               |               |                   |   |                        |  |         
|                               |               | 1,574,185         |   | 1,334,292              |  |         
|                               |               |                   |   |                        |  |         
|Less: Accumulated Depreciation |               | (3,368)           |   | (2,505)                |  |         
|                               |               |                   |   |                        |  |         
|Property and Equipment, Net    | $             | 1,570,817         | $ | 1,331,787              |  |         





9



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IX Energy Holdings, Inc. and Subsidiary

Notes to Consolidated Financial Statements

June 30, 2009

(Unaudited)



The solar panel equipment, purchased for $1,550,000, was not in service at June 30, 2009 as the Company is currently looking for suitable manufacturing warehouse space to install the equipment to manufacture its own solar panels.  The Company expects to place this asset in service by the end of fiscal year 2009.



Note 6 Guarantee Letter of Credit

On May 27, 2008 the Company entered in to a standby letter of credit with a bank for $1,600,000.  The letter of credit acts as a performance bond, with a customer being the beneficiary, if the Company defaults on their monthly delivery agreement. The Companys Chief Executive Officer has provided a personal guarantee of $800,000 on behalf of the Company for the letter of credit.  In exchange for the personal guarantee, the Company issued 2,031,030 shares of the Companys common stock, having a fair value of $60,473 ($0.03/share) based upon the then recent cash offering price.  The letter of credit expired in August 2008.  However, the bank extended the letter of credit until August 7, 2009.  The letter of credit was released in February 2009, as the Company fulfilled its obligation under the terms of its government contract with UNICOR.



On June 30, 2008, two third party shareholders also provided personal guarantees, of $400,000 each, for the letter of credit.  In exchange for the personal guarantee, the Company issued 1,015,494 shares of the Companys common stock to each stockholder, having a total fair value of $60,473 ($0.03/share), based upon the recent cash offering price to third parties.



Note 7 Loans, Notes and Accrued Interest Payable

(A) Notes Payable & Accrued Interest Payable  Related Party

On November 1, 2007 and December 30, 2007, respectively,
the Company issued notes payable of $3,000 and $220,000, respectively to the
same stockholder. The notes bear interest at 12%, are unsecured, have a default
interest rate of 24% and are due 3 business days after the Company receives the
cash proceeds from certain solar panel installation jobs.  The Company
completed 2 of the 3 solar panel installations in 2008.  However, the
stockholder extended the repayment date of the notes to March 31, 2009.  On
April 1, 2009, the Company repaid principal of $3,000 and $110,000 of notes
payable due to this related party stockholder.  On that date, the Company
also repaid interest of $16,500 related to the $3,000 and $110,000 notes on the
same date in full settlement of all interest amounts due on those notes.
 On May 13, 2009, the Company repaid principal of $55,000 on the remaining
note payable due to this related party stockholder.  The balance due on
these notes as of June 30, 2009 is principal totaling $55,000 and accrued
interest totaling $18,950.



On July 21, 2008, the Company issued a note payable, of $900,000, to an affiliate of a stockholder. The note bears interest at 18%, is unsecured, has a default interest rate of 24% and is due 3 business days after the Company receives the cash proceeds from a solar panel installation job that is expected to be completed by the second quarter of 2009. In January 2009, the Company repaid an additional $250,000 of principal.  The balance due on this note as of June 30, 2009 is principal totaling $400,000 and accrued interest totaling $85,375.



Total principal due on these related party notes at June 30, 2009 is $455,000, and related accrued interest was $104,325.



(B) Notes Payable - Other, Conversion to Equity & Accrued Interest Payable - Other



In July 2008, the Company entered into eight promissory note agreements for aggregate principal totaling $500,000 with various third parties. The notes bear interest at 5%, and the principal and interest is due and payable on the earlier of July 1, 2009 or when the Company completes the sale of any debt securities, common stock or common stock equivalents in a single transaction or series of related transactions resulting in gross proceeds of $3,500,000.  As of August 12, 2009, the Company has not repaid the balance and the notes are in default and are subject to a late fee of 18% per annum, accruing on a daily basis.  The Company is currently in negotiation with the noteholders to cure the default or to obtain an extension for repayment.



In July 2008, the Company entered into a Securities Purchase agreement with all eight of the note holders listed above.  The Company issued a total of 270,800 shares to the note holders in connection with these promissory notes. The number of shares each note holder received was in direct proportion to the amount of their promissory notes.  The fair value of the common shares are valued at $8,063 ($0.03/share) based upon the then recent cash offering price. This amount is treated as a debt issue cost and is being amortized to interest expense over the life of the underlying promissory notes.



As of June 30, 2009 and 2008, the Company recorded amortization of debt issue costs to interest expense of $7,892 and $0, respectively.



At June 30, 2009 and 2008, the Company reflected notes payable  other of $500,000 and $500,000, respectively and related accrued interest payable of $24,468 and $0, respectively.



Note 8 Stockholders Equity

(A) Share Issuances

On February 5, 2009, the Company issued 2,646,310 shares of common stock to employees for services rendered, having a fair value of $3,440,203 ($1.30/share), based upon the quoted closing trading price.



On February 5, 2009, the Company issued 26,738 shares of common stock to a consultant for services rendered, having a fair value of $34,760 ($1.30/share), based upon the quoted closing trading price.



10



---

IX Energy Holdings, Inc. and Subsidiary

Notes to Consolidated Financial Statements

June 30, 2009

(Unaudited)



On February 12, 2009, the Company issued 150,000 shares of common stock to an employee for services rendered, having a fair value of $225,000 ($1.50/share), based upon the quoted closing trading price.



On February 27, 2009, the Company issued 500,000 shares of common stock to a consultant for services rendered, having a fair value of $505,000 ($1.01/share), based upon the quoted closing trading price.



On March 9, 2009, the Company issued 10,000 shares of common stock to an employee for services rendered, having a fair value of $10,100 ($1.01/share), based upon the quoted closing trading price.



On May 26, 2009, the Company issued 135,303 shares of common stock to a consultant for services rendered in full settlement of amounts due of $54,121 ($0.40/share), based upon the price per share paid by investors in the private placement as agreed upon by the Company and the consultant (See Note 8(D)).  In connection with this issuance, the Company recorded a loss on settlement of accounts payable of $5,412.



On May 26, 2009, the Company issued 20,000 shares of common stock to a consultant for services rendered as payment for past services due to this consultant.  The shares have a fair value of $6,600 ($0.33/share), based upon the quoted closing trading price.



On May 26, 2009, the Company issued 22,500 shares of common stock to a consultant for services rendered pursuant to an agreement dated February 16, 2009.  The shares have a fair value of $7,425 ($0.33/share), based upon the quoted closing trading price.  In addition, the Company issued 3,000 shares of common stock to this same consultant as payment towards unpaid amounts, having a fair value of $990 ($0.33/share), based upon the quoted closing trading price.



On May 26, 2009, the Company issued 470,000 shares of common stock to a consultant for services rendered pursuant to an agreement dated April 1, 2009 in settlement of $50,000.  The fair value of the stock issuance was $155,100 ($0.33/share), based upon the quoted closing trading price.  The Company recorded an additional expense for stock issued for services of $108,100. The balance of $47,000 has been capitalized as a prepaid asset that is being amortized ratably through March 31, 2010.  The Company is also required to issue an additional 30,000 shares of common stock by September 30, 2009 for services to be provided.



Pursuant to an amended agreement dated May 26, 2009 with a consultant to provide legal services, on May 26, 2009, the Company issued 100,000 shares of common stock, having a fair value of $33,000 ($0.33/share), based upon the quoted closing trading price.



On May 29, 2009, the Company issued 10,000 shares of common stock to a consultant for services pursuant to an agreement on the same date, having a fair value of $3,200 ($0.32/share), based upon the quoted closing trading price.  On June 29, 2009, the Company issued an additional 50,000 shares of common stock, having a fair value of $3,200 ($0.30/share), based upon the quoted closing trading price.



(B) Stock Dividend



In January 2009, the Company effected a stock dividend.  Each stockholder of record as of January 12, 2009 received 1.75 shares of common stock for each share of common stock they owned.



(C) 2009 Stock Option Plan



On February 17, 2009, the Company adopted the 2009 Incentive Stock Plan (the Plan). The total number of shares of stock which may be purchased or granted directly by options, stock awards or restricted stock purchase offers, or purchased indirectly through exercise of options granted under the Plan shall not exceed 12,000,000.



The Plan indicates that the exercise price of an award is equivalent to the market value of the Companys common stock on the grant date.



On March 23, 2009, the Company entered into a one-year agreement with a consultant to provide services.  In addition to monthly fees of $5,000 (See Note 8(A)), the Company will issue stock options in the amount of 5,000 per month, vesting immediately upon the date of grant of each issuance.  On May 12, 2009, the Company granted 15,000 options to this individual for April through June 2009, having a fair value of $4,295.  The Black-Scholes assumptions used are as follows:

|                        |        
|----------------------- | -------
|                        |        
|Exercise price          | $0.44  
|Expected dividends      | 0%     
|Expected volatility     | 82.16% 
|Risk fee interest rate  | 1.03%  
|Expected life of option | 5 years
|Expected forfeitures    | 0%     



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

|                                                                                     |  |  |  |         |           |                                 |  |   |      | 
|------------------------------------------------------------------------------------ |  |  |  | ------- | --------- | ------------------------------- |  | - | ---- | 
|                                                                                     |  |  |  | Options |           | Weighted
Average
Exercise
Price
|Outstanding  December 31, 2007                                                      |  |  |  |         |           |                                 |  |   |      | 
|Granted                                                                              |  |  |  |         |          |                                 |  | $ |     | 
|Exercised                                                                            |  |  |  |         |          |                                 |  | $ |     | 
|Forfeited                                                                            |  |  |  |         |          |                                 |  | $ |     | 
|Outstanding  December 31, 2008                                                      |  |  |  |         |          |                                 |  | $ |     | 
|Granted                                                                              |  |  |  |         | 4,901,132 |                                 |  | $ | 0.46 | 
|Exercised                                                                            |  |  |  |         |          |                                 |  | $ |     | 
|Forfeited                                                                            |  |  |  |         |          |                                 |  | $ |     | 
|Outstanding  June 30, 2009                                                          |  |  |  |         | 4,901,132 |                                 |  | $ | 0.46 | 
|Exercisable  June 30, 2009                                                          |  |  |  |         | 1,428,577 |                                 |  | $ | 0.49 | 
|Weighted average fair value of options granted during the period ended
June 30, 2009 |  |  |  | $       | 1,384,164 |                                 |  | $ | 0.28 | 
|Weighted average fair value of options exercisable at June 30, 2009                  |  |  |  | $       | 396,225   |                                 |  | $ | 0.28 | 



11



---

IX Energy Holdings, Inc. and Subsidiary

Notes to Consolidated Financial Statements

June 30, 2009

(Unaudited)



|                        |                     |  |  |                    |  |                                                        |  |                                 |  | 
|----------------------- | ------------------- |  |  | ------------------ |  | ------------------------------------------------------ |  | ------------------------------- |  | 
|                        | Options Outstanding | 
|Range of
exercise price |                     |  |  | Number
Outstanding |  | Weighted
Average
Remaining
Contractual
Life (in years) |  | Weighted
Average
Exercise
Price |  | 
|$0.44 - $0.50           |                     |  |  | 4,901,132          |  | 4.84 years                                             |  | $0.46                           |  | 



|                        |                     |  |  |                    |  |                                                        |  |                                 |  | 
|----------------------- | ------------------- |  |  | ------------------ |  | ------------------------------------------------------ |  | ------------------------------- |  | 
|                        | Options Exercisable | 
|Range of
exercise price |                     |  |  | Number
Exercisable |  | Weighted
Average
Remaining
Contractual
Life (in years) |  | Weighted
Average
Exercise
Price |  | 
|$0.44 - $0.50           |                     |  |  | 1,428,577          |  | 4.82 years                                             |  | $0.49                           |  | 



At June 30, 2009, the total intrinsic value of options outstanding and exercisable was $0.



For the three and six months ended June 30, 2009, the Company recognized stock based compensation of $176,936 and $461,195, respectively (See Note 10(B) for additional issuances to employees).





The following summarizes the activity of the Companys stock options that have not vested for the six months ended June 30, 2009:



|                                |  |  |  |         |            |                                        |  |   |      | 
|------------------------------- |  |  |  | ------- | ---------- | -------------------------------------- |  | - | ---- | 
|                                |  |  |  | Options |            | Weighted
Average
Grant Date
Fair Value
|Outstanding  December 31, 2007 |  |  |  |         |            |                                        |  |   |      | 
|Granted                         |  |  |  |         |           |                                        |  |   |     | 
|Vested                          |  |  |  |         |           |                                        |  |   |     | 
|Cancelled or forfeited          |  |  |  |         |           |                                        |  |   |     | 
|Outstanding  December 31, 2008 |  |  |  |         |           |                                        |  |   |     | 
|Granted                         |  |  |  |         | 4,901,132  |                                        |  | $ | 0.28 | 
|Vested                          |  |  |  |         | (1,428,577 | )                                      |  |   | 0.28 | 
|Cancelled or forfeited          |  |  |  |         |           |                                        |  |   |     | 
|Outstanding  June 30, 2009     |  |  |  |         | 3,472,555  |                                        |  | $ | 0.28 | 



12



---

IX Energy Holdings, Inc. and Subsidiary

Notes to Consolidated Financial Statements

June 30, 2009

(Unaudited)



Total unrecognized share-based compensation expense from non-vested stock options at June 30, 2009 was $987,938, which is expected to be recognized over a weighted average period of approximately of 1.68 years.

(D) Private Placement and Registration Rights Agreement

During the six months ended June 30, 2009, the Company sold 7.25 units at $100,000 per unit.  Each unit consisted of 250,000 shares of common stock and a detachable three-year warrant to purchase 250,000 shares of common stock for an exercise price of $.50 per share.  Gross proceeds for these additional units were $725,000 and the Company paid direct offering costs of $201,775.  As a result of the offering, the Company issued an additional 1,812,500 shares of common stock and 1,952,500 warrants, inclusive of 140,000 warrants paid to a placement agent as a direct offering cost.  The total warrants of 490,000 that were paid as a direct offering cost have a net effect of zero on the statement of equity and had a fair value of $48,975 (See Note 8(F) for additional detail).



The Company also granted the investors registration rights
for the common stock and common stock underlying the warrants.  The Company
can be assessed liquidated damages, as defined in the agreement, for the failure
to file a registration statement within 180 days from the termination from the
offering as well as to have the registration statement declared effective. The
termination date was February 25, 2009. Penalties will be assessed at 1% per
month, payable in cash, for every 30 day period under which the Company is in
default under the terms of the registration rights agreement, up to a maximum of
10%. In assessing the likelihood and amount of possible liability for liquidated
damages, the Company considered the guidance of EITF No.s 00-19-2 and
05-04 as well as SFAS No. 5.  The Company has concluded that it believes it
will satisfy the conditions of registration in the time required pursuant to the
registration rights agreement. The Company will not record a registration rights
liability in connection with this offering.



(E) Consulting Agreements

On March 20, 2009, the Company entered into a one-year agreement with a consultant to provide investor relation services.  In addition to monthly fees of $5,500, the Company issued a five-year warrant to purchase 200,000 shares of common stock, having a fair value of $69,708.



The Black-Scholes assumptions used are as follows:



|                         |        
|------------------------ | -------
|                         |        
|Exercise price           | $0.55  
|Expected dividends       | 0%     
|Expected volatility      | 78.88% 
|Risk fee interest rate   | 1.23%  
|Expected life of warrant | 5 years
|Expected forfeitures     | 0%     



At June 30, 2009, the Company had recognized $19,479 of expense related to this agreement.



(F) Warrants & Derivative Liability



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



|                                |  |  |  |          |           |                                 |  |   |      | 
|------------------------------- |  |  |  | -------- | --------- | ------------------------------- |  | - | ---- | 
|                                |  |  |  | Warrants |           | Weighted
Average
Exercise
Price
|Outstanding  December 31, 2007 |  |  |  |          |          |                                 |  | $ |     | 
|Granted                         |  |  |  |          | 7,225,000 |                                 |  | $ | 0.50 | 
|Exercised                       |  |  |  |          |          |                                 |  | $ |     | 
|Forfeited                       |  |  |  |          |          |                                 |  | $ |     | 
|Outstanding  December 31, 2008 |  |  |  |          | 7,225,000 |                                 |  | $ | 0.50 | 
|Granted                         |  |  |  |          | 2,152,500 |                                 |  | $ | 0.50 | 
|Exercised                       |  |  |  |          |          |                                 |  | $ |     | 
|Forfeited                       |  |  |  |          |          |                                 |  | $ |     | 
|Outstanding  June 30, 2009     |  |  |  |          | 9,377,500 |                                 |  | $ | 0.50 | 
|ExercisableJune 30, 2009       |  |  |  |          | 9,377,500 |                                 |  | $ | 0.50 | 



13



---

IX Energy Holdings, Inc. and Subsidiary

Notes to Consolidated Financial Statements

June 30, 2009

(Unaudited)



|                        |  |  |                      |                    |  |                                                        |                      |                                 |  |                    |  |                                 |  |  |  | 
|----------------------- |  |  | -------------------- | ------------------ |  | ------------------------------------------------------ | -------------------- | ------------------------------- |  | ------------------ |  | ------------------------------- |  |  |  | 
|                        |  |  | Warrants Outstanding |                    |  |                                                        | Warrants Exercisable |                                
|Range of
Exercise Price |  |  |                      | Number
Outstanding |  | Weighted Average
Remaining
Contractual
Life (in years) |                      | Weighted Average
Exercise Price |  | Number
Exercisable |  | Weighted Average
Exercise price
|$0.50                   |  |  |                      | 9,377,500          |  | 2.69 years                                             |                      | $0.50                           |  | 9,377,500          |  | $0.50                          



Fair Value and Assessment of Derivative Financial Instruments under EITF 07-5



The Company had two offerings of equity based financing.  The first was on December 30, 2008, and the second was on February 25, 2009.



As a result of the offering on December 30, 2008, the Company issued 7,225,000 warrants, inclusive of 350,000 warrants paid to a placement agent as a direct offering cost.  The warrants have a 3 year term. The exercise price is $0.50.  The warrants paid as a direct offering cost have a net effect of zero on the statement of equity and had a fair value of $63,993 at December 31, 2008.



During  the two year anniversary from the issuance date, if the Company issues or grants any shares of common stock or any warrants or other convertible securities pursuant to which shares of common stock may be acquired at a per share price less than $0.50 (subject to certain customary exceptions, including where shares are issued in connection with employment arrangements or business combinations in which a portion of the consideration may be payable in shares or convertible securities with a business in substantially the same line of business as the Company), then the exercise price of the Warrants shall be reduced to the Lower Price. Finally, should the Company fail to achieve at least $17.5 million of consolidated gross revenue within one year of the final closing of the Private Placement, the exercise price shall be reduced to $0.01 per share.   The private placement closed on February 25, 2009.



If at any time following the one year anniversary of the reverse merger (See Note 1) there is no effective registration statement registering the resale of the shares of common stock underlying the Warrants, the holders of the Warrants have the right to exercise the Warrants by means of a cashless exercise.



In connection with the adoption of EITF 07-05, Determining Whether an Instrument (or Embedded Feature) Is Indexed to an Entitys Own Stock, (EITF 07-05) on January 1, 2009, the Company determined that the embedded conversion feature in the warrants is not indexed to the Companys own stock and, therefore, is an embedded derivative financial liability (the Embedded Derivative), which requires bifurcation and to be separately accounted for pursuant to Statement of Financial Accounting Standards No. 133, Accounting for Derivative Instruments and Hedging Activities. The Company, due to both provisions, concluded that neither embedded feature (ratchet down of exercise price or contingent revenue) is indexed to its own stock.



The Company measured the fair value of these warrants using a Black-Scholes valuation model based upon the date in which EITF 07-5, if effective, would have established a commitment date since these warrants were not indexed to the Companys own stock. As a result of the application of EITF 07-5, the fair value of the 7,225,000 warrants was determined to be $1,320,995 based upon the following management assumptions:



|                                  |       
|--------------------------------- | ------
|Exercise price                    | $0.50 
|Expected dividends                | 0%    
|Expected volatility               | 78.88%
|Risk fee interest rate            | 0.94% 
|Expected life of warrant in years | 3.00  
|Expected forfeitures              | 0%    



The fair value of these warrants was charged to accumulated deficit on January 1, 2009, as a cumulative adjustment due to a change in accounting principle.



On February 25, 2009, the date of the closing of the second offering, the Company granted 1,952,500 warrants, having a fair value of $1,422,917. The warrants have a 3 year term. The exercise price is $0.50.  These warrants were inclusive of 140,000 warrants paid to a placement agent as a direct offering cost.  The warrants paid as a direct offering cost have a net effect of zero on the statement of equity and had a fair value of $102,027 at February 25, 2009.  As a result of the application of EITF 07-5, the fair value of these warrants was determined to be $1,422,917 based upon the following management assumptions:



|                                  |       
|--------------------------------- | ------
|Exercise price                    | $0.50 
|Expected dividends                | 0%    
|Expected volatility               | 80.91%
|Risk fee interest rate            | 1.49% 
|Expected life of warrant in years | 3.00  
|Expected forfeitures              | 0%    



The fair value of these warrants was recorded on February 25, 2009 as derivative expense.



Mark to Market



At June 30, 2009, the Company re-measured these warrants and recorded a fair value of $916,544.  As a result of the remeasurement, the Company recorded a change in fair value associated with these warrants as income totaling $1,535,894 and $1,827,638 for the three and six months ended June 30, 2009. The following management assumptions were considered:



|                                  |            
|--------------------------------- | -----------
|Exercise price                    | $0.50      
|Expected dividends                | 0%         
|Expected volatility               | 83.21%     
|Risk fee interest rate            | 1.64%      
|Expected life of warrant in years | 2.50  2.66
|Expected forfeitures              | 0%         



Note 9 Reverse Acquisition and Recapitalization

On December 30, 2008, Yoo, Inc. (Yoo), a then shell corporation, merged with IX Energy, and IX Energy became the surviving corporation. This transaction was accounted for as a reverse acquisition. Yoo did not have any operations and majority-voting control was transferred to IX Energy.  The transaction also required a recapitalization of IX Energy. Since IX Energy acquired a controlling voting interest, it was deemed the accounting acquirer, while Yoo was deemed the legal acquirer. The historical financial statements of the Company are those of IX Energy and of the consolidated entities from the date of merger and subsequent.



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



Pursuant to the Merger, Yoos majority stockholders cancelled 4,000,000 shares of common stock and the Company concurrently issued 46,153,284 shares of common stock to IX Energy.  Upon the closing of the reverse acquisition, IX Energy stockholders held 89% of the issued and outstanding shares of common stock at the date of the transaction. Yoo retained 5,500,000 shares of common stock upon the closing of the reverse acquisition.



Note 10 Commitments and Contingencies

(A)  Litigations, claims and assessments



From time to time, the Company may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm its business.



A complaint was filed in the Supreme Court of the State of New York by a vendor seeking to recover the sum of $101,820, plus costs and disbursements. The Company believes this complaint is without merit.  As of June 30, 2009, the Company has accrued $29,900 based on actual invoices received from this vendor.



The Company in turn filed an arbitration before the Joint Committee on Fee Disputes and Conciliation in dispute of attorneys fees against the above-referenced vendor to recover fees of $40,000.  The case is currently in progress and the outcome is undeterminable.



A complaint was filed in the Supreme Court of the State of New York by the holder of a promissory note seeking a summary judgment for repayment of the noteholders $150,000 original investment plus interest.  The Company has recorded $7,192 of interest on this note while this case is in progress.



14



---

IX Energy Holdings, Inc. and Subsidiary

Notes to Consolidated Financial Statements

June 30, 2009

(Unaudited)



(B)  Employment agreements

(1) CEO

On May 1, 2008, the Company entered into a two-year employment agreement with an individual to serve as the Companys CEO and Chairman of the Board. The agreement provides for an annual salary of $225,000 and $80,000 to be paid as a bonus for services rendered prior to this agreement.  The individual is also eligible for a multi-year grant of the Companys non-qualified options that will be equal to 6% of the total common shares outstanding after the reverse merger.



On March 19, 2009, the Company granted 1,033,066 stock options to this individual, having a fair value of $284,259.  These options vested upon grant and were immediately expensed.  The Company expensed the full amount of the fair value to stock option expense on the date of grant.   The Black-Scholes assumptions used are as follows:

|                        |        
|----------------------- | -------
|                        |        
|Exercise price          | $0.50  
|Expected dividends      | 0%     
|Expected volatility     | 78.88% 
|Risk fee interest rate  | 0.98%  
|Expected life of option | 5 years
|Expected forfeitures    | 0%     



On May 12, 2009, the Company granted the 2nd one-third of total options due to this individual in the amount of 1,033,066 options, having a fair value of $288,073.



|                        |        
|----------------------- | -------
|Exercise price          | $0.48  
|Expected dividends      | 0%     
|Expected volatility     | 82.16% 
|Risk fee interest rate  | 1.03%  
|Expected life of option | 5 years
|Expected forfeitures    | 0%     



(2)  President

On February 12, 2009, the Company entered into a three-year employment agreement with an individual to serve as President of the Company. The agreement provides for an annual salary of $200,000 plus eligibility for an annual bonus.  In February 2009, the Company paid $25,000 as s sign-on bonus.  The Company agreed to issue 150,000 shares of common stock as additional compensation, having a fair value of $225,000 ($1.50/share) based upon the closing price on the date of the employment agreement (See Note 8(A)).  The individual will also be granted 2,500,000 of the Companys non-qualified options vesting quarterly.  Under the terms of the plan, these stock options are subject to board approval.



On May 12, 2009, the Company granted 2,500,000 options to this individual, having a fair value of $715,900.  The Black-Scholes assumptions used are as follows:



|                        |        
|----------------------- | -------
|                        |        
|Exercise price          | $0.44  
|Expected dividends      | 0%     
|Expected volatility     | 82.16% 
|Risk fee interest rate  | 1.03%  
|Expected life of option | 5 years
|Expected forfeitures    | 0%     



(3)  Senior Vice President  Government Sales



On March 2, 2009, the Company entered into a two-year employment agreement with an individual as Senior Vice President - Government Sales.  The agreement provides for an annual salary of $100,000 plus entitlement to an annual bonus based upon the Companys performance during each year of employment.  The individual will also be granted 120,000 of the Companys non-qualified options vesting bi-annually.  Under the terms of the plan, these stock options are subject to board approval.



15



---

IX Energy Holdings, Inc. and Subsidiary

Notes to Consolidated Financial Statements

June 30, 2009

(Unaudited)



On May 12, 2009, the Company granted 120,000 options to this individual, having a fair value of $34,363.  The Black-Scholes assumptions used are as follows:



|                        |        
|----------------------- | -------
|                        |        
|Exercise price          | $0.44  
|Expected dividends      | 0%     
|Expected volatility     | 82.16% 
|Risk fee interest rate  | 1.03%  
|Expected life of option | 5 years
|Expected forfeitures    | 0%     



In July 2009, this individual was terminated.  As of June 30, 2009, none of the options were vested.

(4)  Vice President  Finance

On March 9, 2009, the Company entered into a two-year employment agreement with an individual as Vice President - Finance.  The agreement provides for an annual salary of $87,000 plus entitlement to an annual bonus based upon the Companys performance during each year of employment.  The Company agreed to issue 10,000 shares of common stock as additional compensation, having a fair value of $10,100 ($1.01/share) based upon the closing price on the date of the employment agreement.  The individual will be granted 200,000 of the Companys non-qualified options vesting bi-annually.  Under the terms of the plan, these stock options are subject to board approval.



On May 12, 2009, the Company granted 200,000 options to this individual, having a fair value of $57,272.  The Black-Scholes assumptions used are as follows:



|                        |        
|----------------------- | -------
|                        |        
|Exercise price          | $0.44  
|Expected dividends      | 0%     
|Expected volatility     | 82.16% 
|Risk fee interest rate  | 1.03%  
|Expected life of option | 5 years
|Expected forfeitures    | 0%     



Note 11 Subsequent Events

The Company has evaluated for subsequent events between the balance sheet date of June 30, 2009 and August 19, 2009, the date the financial statements were issued.



2009 Stock Option Plan



On July 6, 2009, the Company granted 100,000 options due to an employee pursuant to an employment agreement dated May 25, 2009, having a fair value of $15,136.  The Black-Scholes assumptions used are as follows:

|                        |         | 
|----------------------- | ------- | 
|                       
|Exercise price          | $0.23  
|Expected dividends      | 0%     
|Expected volatility     | 83.21% 
|Risk fee interest rate  | 1.18%  
|Expected life of option | 5 years
|Expected forfeitures    | 0%     



On July 6, 2009, the Company also granted 100,000 options due to a consultant to provide legal services pursuant to an amended consulting agreement dated May 26, 2009, having a fair value of $15,136.  The Black-Scholes assumptions used are as follows:

|                        |         | 
|----------------------- | ------- | 
|                       
|Exercise price          | $0.23  
|Expected dividends      | 0%     
|Expected volatility     | 83.21% 
|Risk fee interest rate  | 1.18%  
|Expected life of option | 5 years
|Expected forfeitures    | 0%     





16



---

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



Forward-Looking Statements



The information in this report contains forward-looking statements. All statements other than statements of historical fact made in this report are forward looking. In particular, the statements herein regarding industry prospects and future results of operations or financial position are forward-looking statements. These forward-looking statements can be identified by the use of words such as believes, estimates, could, possibly, probably, anticipates, projects, expects, may, will, or should or other variations or similar words. No assurances can be given that the future results anticipated by the forward-looking statements will be achieved. Forward-looking statements reflect managements current expectations and are inherently uncertain. Our actual results may differ significantly from managements expectations.



The following discussion and analysis should be read in conjunction with our financial statements, included herewith. This discussion should not be construed to imply that the results discussed herein will necessarily continue into the future, or that any conclusion reached herein will necessarily be indicative of actual operating results in the future. Such discussion represents only the best present assessment of our management.



Recent Events



Prior to December 30, 2008, we were a development stage company that sought to market and sell a natural energy drink derived from coconut water to distributors of soft drinks in Israel.  On December 30, 2008, we completed a reverse merger, pursuant to which we merged with and into a private company, IX Energy, with IX Energy being the surviving company. In connection with this reverse merger, we discontinued our former business and succeeded to the business of IX Energy as our sole line of business. Since IX Energy acquired a controlling voting interest, it was deemed the accounting acquirer, while we were deemed the legal acquirer. The historical financial statements of the Company are those of IX Energy and of the consolidated entities from the date of merger and subsequent.  All costs associated with the reverse merger were expensed as incurred.



Overview



IX Energy was incorporated in the State of Delaware on March 3, 2006 for the purpose of designing, manufacturing and installing high-performance solar electric power technologies. Historically, our operations have principally involved the integration and installation of solar power systems manufactured by third parties. However, in an effort to become a vertically integrated solar products and services company that manufactures, designs, markets and installs its own solar power systems, we have recently entered into an agreement to manufacture solar modules that will be marketed primarily to federal military and civilian agencies.



Three Ended June 30, 2009 Compared to Three Months Ended June 30, 2008



Revenues. During the three months ended June 30, 2009, we recorded revenues of $118,638 as compared to $4,645,888 for the three months ended June 30, 2008.  A decrease of $4,490,131 was related to a few resale transactions for solar panels in the three months of 2008 that did not occur in the three months of 2009.  The remaining decrease of $37,119 was related to our construction in progress contracts as we completed more projects in 2008 than in 2009.



Cost of Sales. During the three months ended June 30, 2009, we recorded cost of sales of $107,131 as compared to cost of sales of $4,526,936 for the three months ended June 30, 2008.  A decrease of $4,399,231 was related to the cost of purchasing solar panels for resale in 2008 that did not occur in 2009. The remaining decrease of $20,574 of cost of sales is related to our completion and ongoing construction in progress contracts.



Our margin on the resale of solar panels was approximately 18% for the three months ended June 30, 2009 as compared to 19% for the three months ended June 30, 2008. We expect our margins to increase going forward as we now have a more stable arrangement with our suppliers.



Our margin on our construction in progress contracts for the three months ended June 30, 2009 was approximately (82%) as compared to 18% for the three months ended June 30, 2008.



Operating Expenses. During the three months ended June 30, 2009, we recorded operating expenses of $1,186,323, as compared to operating expenses of $262,611 for the three months ended June 30, 2008, representing an increase of $923,712. This increase in operating expenses was primarily made up of approximately $163,000 for increased hiring in 2009 for our management and administrative staff, approximately $276,000 related to legal, consulting and accounting expenses, approximately $181,000 related to stock option expense, $108,000 related to a loss on sale of a fixed asset, and approximately $70,000 related to common stock issued for services.



Loss from Operations. During the three months ended June 30, 2009, we recorded an operating loss of $1,174,816, as compared to an operating loss of $143,659 for the three months ended June 30, 2008, representing an increase of $1,031,157. This increase in loss from operations was primarily due to increased operation expenses by $923,712 that was partially offset by our gross profit in 2009.



Provision for Income Taxes. We did not recognize any provisions for income taxes during the three months ended June 30, 2009 and 2008 due to our net losses during these periods and the valuation allowances on the resulting deferred tax assets.



Six Months Ended June 30, 2009 Compared to Six Months Ended June 30, 2008



Revenues. During the six months ended June 30, 2009, we recorded revenues of $1,958,534 as compared to $4,667,427 revenue for the six months ended June 30, 2008.  A decrease of $2,671,774 was related to a few resale transactions for solar panels in the first six months of 2008 that did not occur in the first six months of 2009.  The remaining decrease of $37,119 was related to our construction in progress contracts as we completed more projects in 2008 than in 2009.



Cost of Sales. During the six months ended June 30, 2009, we recorded cost of sales of $1,589,785 as compared to cost of sales of $4,557,435 for the six months ended June 30, 2008. $2,951,652 of the decrease was related to solar panels. The remaining decrease of $15,998 of cost of sales is related to our completion and ongoing construction in progress contracts.



Our margin on the resale of solar panels was approximately 19% for the six months ended June 30, 2009 as compared to 2% for the six months ended June 30, 2008. We expect our margins to increase going forward as we now have a more stable arrangement with our suppliers.



Our margin on our construction in progress contracts for the six months ended June 30, 2009 was approximately 1% as compared to (1%) for the six months ended June 30, 2008. We believe that our margin in 2009 is representative of our contracts going forward.



Operating Expenses. During the six months ended June 30, 2009, we recorded operating expenses of $6,387,750, as compared to operating expenses of $347,843 for the six months ended June 30, 2008, representing an increase of $6,039,907. This increase in operating expenses was primarily made up of approximately $344,000 for increased hiring in 2008 for our management and administrative staff, approximately $560,000 related to legal, consulting and accounting expenses, approximately $465,000 related to stock option expense, approximately $3,765,000 related to common stock issued for employee compensation, and approximately $610,000 related to common stock issued for services and $108,000 related to a loss on sale of a fixed asset.



Loss from Operations. During the six months ended June 30, 2009, we recorded an operating loss of $6,019,001, as compared to an operating loss of $237,851 for the six months ended June 30, 2008, representing an increase of $5,781,150. This increase in loss from operations was primarily due to increased operation expenses by $6,039,907 that was partially offset by our gross profit in 2009.



Provision for Income Taxes. We did not recognize any provisions for income taxes during the six months ended June 30, 2009 or 2008 due to our net losses during these periods and the valuation allowances on the resulting deferred tax assets.





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Liquidity and Capital Resources



We have historically met our liquidity requirements from a variety of sources, including the sale of equity and debt securities to related parties and institutional investors. Based on our strategy and the anticipated growth in our business, we believe that our liquidity needs will increase. The amount of such increase will depend on many factors, including building out our management team, the costs associated with the fulfillment of our projects, whether we upgrade our technology, and the amount of inventory required for our expanding business.



Although we recently raised an aggregate of $3.475 million in a private placement, our ultimate success depends upon our ability to raise additional capital. There can be no assurance that additional funds will be available when needed from any source or, if available, will be available on terms that are acceptable to us.



We will need to raise a minimum of $3 million for us to execute our business plan in the short term. If we do not raise this additional our business will be substantially impaired.



We may be required to pursue sources of additional capital through various means, including joint venture projects and debt or equity financings. Future financings through equity investments are likely to be dilutive to existing stockholders.



Our ability to obtain needed financing may be impaired by such factors as the capital markets, both generally and specifically in the renewable energy industry, and the fact that we are not profitable, which could impact the availability or cost of future financings. If the amount of capital we are able to raise from financing activities, together with our revenues from operations, is not sufficient to satisfy our capital needs, even to the extent that we reduce our operations accordingly, we may be required to cease operations.



Cash and Cash Equivalents.



As of June 30, 2009, we had cash and cash equivalents of $1,284,336, as compared to cash and cash equivalents of $4,736,812 as of December 31, 2008.



Net Cash Provided By Operating Activities.

Net cash used in operating activities totaled $3,303,808
for the six months ended June 30, 2009, as compared to cash provided by of
$5,629,071 for the six months ended June 30, 2008. This increase was primarily
due to net loss of $5,651,316, decreases in deferred revenue of $1,796,238
(deferred revenue decreased as we received payment in the prior period and
shipped to the customer in the quarter ended March 31, 2009), a decrease in
accounts payable and accrued expenses of $157,888 (as the company sought ways to
cut expenses and pay off old unpaid balances), a change in fair value of
derivative liability based upon revaluation at June 30, 2009 of $1,827,368, an
increase in accounts receivable of $108,636 and an increase in prepaid expenses
of $114,434. This was partially offset by derivative expense related to warrants
issued on the private placement of $1,422,917, issuance of common stock for
consulting services of $707,474, common stock issued to employees for services
rendered of $3,675,302, and employee stock-based compensation related to stock
options of $461,195.



Net Cash Used in Investing Activities



Net cash used in investing activities totaled $253,893 during the six months ended June 30, 2009, as compared to net cash used in investing activities of $0 during the six months ended June 30, 2008. Cash used in investing activities during the six months ended June 30, 2009 was comprised of purchases of property and equipment for $266,893 and proceeds from the sale of a fixed asset for $13,000.



Net Cash Provided By Financing Activities



Net cash provided by financing activities totaled $105,225 during the six months ended June 30, 2009, as compared to net cash provided by financing activities of $38,252 during the six months ended June 30, 2008. The proceeds for the six months ended June 30, 2009 were derived from proceeds from common stock for cash in a private placement totaling $725,000.  This was partially offset by repayment of notes payable of $418,000 to a related party and cash paid as direct offering costs of $201,775 related to the proceeds raised in the private placement. For the six months ended June 30, 2008, our cash provided by financing activities was comprised of $38,252 proceeds from issuance of notes payable from related party.



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Going Concern

As reflected in the accompanying financial statements, the Company has a net loss of $5,651,316 and net cash used in operations of $3,308,808 for the six months ended June 30, 2009; and had a working capital deficit of $1,542,146, and an accumulated deficit of $8,444,076 at June 30, 2009.



The ability of the Company to continue its operations is dependent on managements plans, which include the raising of $3 million capital through debt and/or equity markets with some additional funding from other traditional financing sources, including term notes, until such time that funds provided by operations are sufficient to fund working capital requirements.





Critical Accounting Policies and Estimates



We have identified the policies below as critical to our business operations and the understanding of our results of operations. The impact and any associated risks related to these policies on our business operations are disclosed throughout this section where such policies affect our reported and expected financial results. Our preparation of our financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of our financial statements, and the reported amounts of revenues and expenses during the reporting period. There can be no assurance that actual results will not differ from those estimates.



Managements discussion and analysis of our financial
condition and results of operations are based upon our consolidated financial
statements, which have been prepared in accordance with accounting principles
generally accepted in the United States of America. We review the accounting
policies used by us in reporting our financial results on a regular basis. The
preparation of these financial statements requires us to make estimates and
judgments that affect the reported amounts of assets, liabilities, revenues and
expenses and related disclosure of contingent assets and liabilities. On an
ongoing basis, we evaluate our estimates. We base our estimates on historical
experience and on various other assumptions that are believed to be reasonable
under the circumstances, the results of which form the basis for making
judgments about the carrying value of assets and liabilities that are not
readily apparent from other sources. Results may differ from these estimates due
to actual outcomes being different from those on which we based our assumptions.
These estimates and judgments are reviewed by management on an ongoing basis and
at the end of each quarter prior to the public release of our financial
results.



Our critical accounting policies and estimates, which
require the most significant management estimates and judgment in determining
amounts reported in our consolidated financial statements included elsewhere in
this Annual Report on Form 10-K are as follows:



Accounts Receivable.Accounts receivable represents
trade obligations from customers that are subject to normal trade collection
terms, without discounts. However, in certain cases we are entitled to rebates
upon the completion of certain jobs post installation. For percentage of
completion installation projects, the amounts are rebates and they are factored
into the total estimated contract price when doing percentage of completion to
recognize revenue on each project. At the completion of a solar instillation
project we record a receivable from the electric company. The Company
periodically evaluates the collectability of its accounts receivable and
considers the need to adjust an allowance for doubtful accounts based upon
historical collection experience and specific customer information. Actual
amounts could vary from the recorded estimates. We have determined that as of
June 30, 2009 and December 31, 2008 no allowance was required.



At June 30, 2009 and December 31, 2008, the Company had a concentration of accounts receivable from two customers and one customer totaling 100%.  For the six months ended June 30, 2009, the Company had a concentration of sales with four customers totaling 100%. For the year ended December 31, 2008, the Company had a concentration of sales with four customers totaling 100%.



Revenue Recognition. We follow the guidance of the Securities and Exchange Commission's Staff Accounting Bulletin ("SAB") No. 104, "Revenue Recognition" ("SAB 104") for revenue recognition and we record revenue when all of the following have occurred: (1) persuasive evidence of an arrangement exists, (2) the product is delivered and installed, (3) the sales price to the customer is fixed or determinable and (4) collectability of the related customer receivable is reasonably assured. We have two methods of revenue recognition. For our construction contracts, we record revenues based upon the use of the percentage of completion method. For certain energy products that we resell to third parties, we record revenue based upon the shipment date. The Company has two methods of revenue recognition:



(1)

Energy product reseller



The Company purchases product from suppliers and resells
them to third parties. The Company records the revenue from the buyer and
related cost paid to the suppliers on these types of arrangements. In 2008, the
Company entered into similar arrangements wherein the Company had no
installation responsibility and no further obligation after delivery was made to
the customers. Payments from the customers are received in advance of delivery
of solar panels and are treated as deferred revenue. Payments are then made to
the suppliers and cost of materials is recorded. A pro-rata portion of the
deferred revenue from the customers is recognized as shipments are made.



Revenues from these arrangements are recognized upon
shipment from the supplier to these third parties. In addition, the Company has
reviewed EITF No. 99-19 to ascertain the relevance of gross versus net
reporting. Upon the Companys review of this guidance, as well as SAB No.
104, the Company has determined that it is subject to gross reporting as it
bears the risk of physical loss of inventory in each of these arrangements,
takes title to the inventory, is the primary obligor in the arrangements,
establishes the pricing with customers, has discretion in the selection of
suppliers, determines product specifications with customers and suppliers and it
has credit risk on all sales.



(2)

Percentage of completion



Revenue from construction contracts are reported under the
percentage-of-completion method for financial statement purposes. The estimated
revenue for each contract reflected in the financial statements represent that
percentage of estimated total revenue that costs incurred to date bear to
estimated total costs, based on the Companys current estimates. With
respect to contracts that extend over one or more accounting periods, revisions
in costs and revenue estimates during the course of the work are reflected in
the period the revisions become known. When current estimates of total contract
costs indicate a loss, provision is made for the entire estimated loss.



The asset, Costs and estimated earnings in excess
of billings on uncompleted contracts,represents revenues recognized
in excess of amounts billed. The liability, Estimated earnings on
uncompleted contracts,represents billings in excess of revenues
recognized. Billing practices for these projects are governed by the
contract terms of each project based upon actual costs incurred, achievement of
milestones, or pre-agreed schedules. Billings do not necessarily correlate with
revenue recognized under the percentage-of-completion method of accounting.
With the exception of claims and change orders that are in
the process of being negotiated with customers, unbilled work is usually billed
during normal billing processes following achievement of the contractual
requirements.



Share-Based Compensation.We follow Statement of
Financial Accounting Standards (SFAS) No. 123R (revised 2004),
Share-Based Payment, (SFAS 123R) which requires the
measurement and recognition of compensation expense for all share-based payment
awards made to employees and directors including grants of employee stock
options based on estimated fair values. We have used the Black-Scholes option
pricing model to estimate grant date fair value for all option grants. The
assumptions we use in calculating the fair value of share-based payment awards
represent managements best estimates, but these estimates involve inherent
uncertainties and the application of management judgment. As such, as we use
different assumptions based on a change in factors, our stock-based compensation
expense could be materially different in the future.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.



N/A



ITEM 4T. CONTROLS AND PROCEDURES.



Evaluation of Disclosure
Controls and Procedures . Under the supervision and with the participation
of our management, including our President, Chief Financial Officer and
Secretary, we evaluated the effectiveness of the design and operation of our
disclosure controls and procedures (as defined in Rule 13a-15(e) and
15d-15(e) under the Securities Exchange Act of 1934 (the Exchange
Act)) as of the end of the period covered by this report. Based upon that
evaluation, our President, Chief Financial Officer and Secretary concluded that
our disclosure controls and procedures as of the end of the period covered by
this report were effective such that the information required to be disclosed by
us in reports filed under the Securities Exchange Act of 1934 is
(i) recorded, processed, summarized and reported within the time periods
specified in the SECs rules and forms and (ii) accumulated and
communicated to our management to allow timely decisions regarding disclosure. A
controls system cannot provide absolute assurance, however, that the objectives
of the controls system are met, and no evaluation of controls can provide
absolute assurance that all control issues and instances of fraud, if any,
within a company have been detected.



Changes in Internal Control Over Financial Reporting. During the most recent quarter ended June 30, 2009, there has been no change in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) ) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.



PART II



ITEM 1. LEGAL PROCEEDINGS.



From time to time, the Company may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm its business.



A complaint was filed in the Supreme Court of the State of New York by a vendor seeking to recover the sum of $101,820, plus costs and disbursements. The Company believes this complaint is without merit.  As of June 30, 2009, the Company has accrued $29,900 based on actual invoices received from this vendor.



A complaint was filed in the Supreme Court of the State of New York by the holder of a promissory note seeking a summary judgment for repayment of the noteholders $150,000 original investment plus interest.  The Company believes this complaint is without merit.





ITEM 1A. RISK FACTORS.



N/A



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



During the six months ended June 30, 2009, we issued and sold 1,812,500 shares of common stock for proceeds of $725,000.  The Company also paid $201,775 in cash for direct offering costs.  In addition, we issued 526,738 shares of common stock to consultants for services rendered in the amount of $539,759. In connection with the issuance of such shares, we relied on the exemption from registration provided by Section 4(2) of the Securities Act of 1933, as amended.



ITEM 3. DEFAULTS UPON SENIOR SECURITIES.



None



ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.



None



ITEM 5. OTHER INFORMATION.



None



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ITEM 6. EXHIBITS.





|               |  |                                                                                                                                                                             
|-------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|               |  |                                                                                                                                                                             
|Exhibit
Number |  | Description of Exhibit                                                                                                                                                      
|               |  |                                                                                                                                                                             
|31.1           |  | Certifications required by Rule 13a-14, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                               
|32.1           |  | Certification of Chief Executive Officer and Principal Accounting Officer pursuant to 18 U.S.C.§ 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.





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SIGNATURES



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





|                |                                                               | 
|--------------- | ------------------------------------------------------------- | 
|                |                                                               | 
|                | IX ENERGY HOLDINGS, INC.                                     
|               
|                | /s/ Steven Hoffmann                                          
|August 19, 2009 | Steven Hoffmann                                              
|                | Chief Executive Officer, Chief Financial Officer and Director
|                |                                                               | 



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