UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





FORM 10-Q







x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended March 31, 2010o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
  Commission File No. 333-120490


B GREEN INNOVATIONS, INC.
 (Exact name of the Registrant as specified in Charter)
  New Jersey
20-1862731(State of Incorporation)
(I.R.S. Employer ID Number)750 Highway 34, Matawan, New Jersey
07747(Address of Principal Executive Offices)
(Zip Code)
  Registrant’s Telephone No. including Area Code: 732-441-7700


Securities registered under 12(b) of the Exchange Act:  None




Securities registered under Section 12(g) of the Exchange Act: None




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




Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Act).  Yes oNo 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).  YesoNo x




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

(Do not check if a smaller reporting company)
Smaller reporting company x


Indicate the number of shares outstanding of the issuer's common stock, as of the latest practical date: 605,609,870 shares of Class A Common stock, no par value as of May, 10 2011.





Table of Contents





B GREEN INNOVATIONS, INC


TABLE OF CONTENTS


Part I – Financial Information
PageItem 1.
Condensed Financial Statements (Unaudited):
1Condensed Balance Sheets – March 31, 2010 and December 31, 2009
1Condensed Statements of Operations - Three Months Ended March 31, 2010 and 2009
2Condensed Statements of Cash Flows - Three Months Ended March 31, 2010 and 2009
3Notes to Condensed Financial Statements
5Item 2.
Management’s Discussion and Analysis of Financial Condition and Result of Operations
22Item 4T.
Controls and Procedures
24Part II – Other InformationItem 5.
Other InformationItem 6.
Exhibits
25Signatures
26Index of Exhibits
27
  Table of Contents


Item 1.                      CONDENSED FINANCIAL STATEMENTS (Unaudited)
 B GREEN INNOVATIONS, INC.
 CONDENSED BALANCE SHEETS
   ASSETS

March 31,


December 31,2011


2010Current assets:Cash and cash equivalents

$
149,436


$
1,141,944Marketable securities, at fair value


900,000



-Accounts receivable


11,796



4,284Inventories


502



1,106Note receivable


21,500



60,000Prepaid expenses and other current assets


21,867



24,975Total current assets


1,105,101



1,232,309Property, plant and equipment, net


15,939



35,276Intangible assets, net of accumulated amortization


54,223



59,934Total assets

$
1,175,263


$
1,327,519LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)Current liabilities:Accounts payable and accrued expenses

$
711,834


$
699,554Due to related parties


523,315



480,004Deferred maintenance contracts


2,503



1,170Notes payable to related parties


3,003



3,003Total current liabilities


1,240,655



1,183,731Stockholders' equity (deficit):Preferred stock, $1.00 par value; authorized 1,000,000 shares; 10,000

shares  designated as follows;  990,000 available for further designationSeries A 3% Secured Preferred Stock; $1,000 stated value,

10,000 shares authorized; 1,606 shares issued and outstanding at

at March 31, 2011 and 2,663 shares issued and outstanding at

December 31, 2010


1,605,546



2,663,210Common stock:Class A – no par value; authorized 10,000,000,000 shares;

605,609,870 shares issued and 604,415,387 outstanding and 1,194,483

in escrow at March 31, 2011 and December 31, 2010


1,090,306



1,090,306Class B - $.01 par value; authorized 50,000,000 shares; 99,858 shares

issued and outstanding at March 31, 2011 and 115,025 issued and

outstanding at December 31, 2010


999



1,150Class C - $.01 par value; authorized 20,000,000

shares; no shares issued and outstanding


-



-Additional paid-in capital


9,864,634



8,888,090Accumulated deficit


(12,626,877
)


(12,498,968
)Total stockholders' equity (deficit)


(65,392
)


143,788Total liabilities and stockholders' equity (deficit)

$
1,175,263


$
1,327,519
  See accompanying notes to condensed consolidated financial statements
 1
 Table of Contents




B GREEN INNOVATIONS, INC.CONDENSED STATEMENTS OFOPERATIONS


(Unaudited)


Three Months EndedMarch 31, 2011


March 31, 2010Net sales

$
41,621


$
42,400Cost of sales


11,660



25,412Gross profit


29,961



16,988Operating expenses:Selling, general and administrative expenses


162,060



139,777Impairment of assets


19,582



-Total operating expenses


181,642



139,777Loss from operations


(151,681
)


(122,789
)Other income (expense):Interest income


1,002



821Interest expense


(3,730
)


(2,953
)Other income


26,500



247,491Gain from extinguishment of derivative


-



1,636,695(Loss) gain on valuation of derivative


-



(382,128
)Total other income (expense)


23,772



1,499,926Income (loss) from operations before

provision for income taxes


(127,909
)


1,377,137Provision for income taxes


-



-Net income (loss)

$
(127,909
)

$
1,377,137Basic income (loss) per common share

$
(0.00
)

$
0.00Diluted income (loss) per common share

$
(0.00
)

$
0.00Weighted average shares outstandingBasic


604,415,387



599,115,387Diluted


604,415,387



3,563,817,753





See accompanying notes to condensed consolidated financial statements




2
 Table of Contents




B GREEN INNOVATIONS, INC.CONDENSED STATEMENTS OFCASH FLOWS(Unaudited)Three Months EndedCash flows from operating activities:

March 31, 2011                                March 31,2010Net income (loss)

$
(127,909
)

$
1,377,137Adjustments to reconcile net gain (loss) to net

cash used in operating activities:Depreciation and amortization


5,466



2,723Impairment of assets


19,582



-Loss on valuation of derivative


-



328,128Gain on extinguishment of derivative liability


-



(1,636,695
)Changes in assets and liabilities:Increase in accounts receivable


(7,512
)


(4,058
)Decrease in inventories


604



-Decrease (increase) in prepaid expenses


3,108



(15,822
)Increase in notes receivable


(26,500
)


-Increase in accounts payable and accrued liabilities


12,280



22,488Increase in amounts due to related parties


42,207



4,147Increase (decrease) in deferred maintenance contracts


1,333



(1,212
)Net cash (used in) provided by operating activities


(77,341
)


130,836Cash flows from investing activities:Purchases of marketable securities


(900,000
)


-Net cash used in investing activities


(900,000
)


-Cash flows from financing activities:Repurchase of Class B Common Stock


(15,167
)


-Net proceeds from sale of Series A Preferred Stock


-



1,100,000Net cash (used in) provided by financing activities


(15,167
)


1,100,000Net increase (decrease) in cash and cash equivalents


(992,508
)


1,230,836Cash and cash equivalents at beginning of period


1,141,944



190,350Cash and cash equivalents at end of period

$
149,436


$
1,421,186During the period, cash was paid for the following:Taxes paid

$
-


$
-Interest paid

$
-


$
-


See accompanying notes to condensed financial statements




3
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B GREEN INNOVATIONS, INC.CONDENSED STATEMENTS OF CASH FLOWS (Continued)(Unaudited)




Supplemental Schedule of Non-Cash Financing Activities:




For the Three Months Ended March 31, 2011:




a)The Company converted $66,104 of the principal amount and accrued interest of the iVoice Note Receivable, dated April 30, 2010 for redemption of 1,057.664 shares of B Green Innovations Series A 3% Preferred Stock in accordance with the terms of the Promissory Note.




For the Three Months Ended March 31 2010:




a) The Company issued 119 shares of Series A Preferred Stock in exchange for $118,766 Convertible Promissory Notes to iVoice, Inc.






See accompanying notes to condensed financial statements




4
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 B GREEN INNOVATIONS, INC.


NOTES TO CONDENSED FINANCIAL STATEMENTS


March 31, 2011 and 2010




Note 1      Background




B Green Innovations, Inc., a Matawan, New Jersey-based corporation, (OTC Bulletin Board: BGNN), formerly iVoice Technology, Inc., (“B Green Innovations” or the “Company”) was incorporated under the laws of New Jersey on November 10, 2004 as a wholly owned subsidiary of iVoice, Inc. (“iVoice”).




In May 2008, the Company formed B Green Innovations, Inc. (“B Green”), a wholly-owned subsidiary, and has agreed to invest up to $500,000 in B Green, to commercialize its “green” technology platforms.




On November 17, 2009, pursuant to an Agreement and Plan of Merger (the “Merger Agreement”), B Green Innovations, Inc., a wholly owned subsidiary of iVoice Technology, Inc. (the “Company”), merged into iVoice Technology, Inc.




On July 28, 2009, the Board of Directors and shareholders through written consent representing a majority of the total voting Class A and Class B Common stock voted to change the name of the Company to B Green Innovations, Inc.  On November 20, 2009, the Company filed an Amendment to the Certificate of Incorporation with the State of New Jersey to officially change the name of the Company.




Note 2Business Operations




B Green Innovations, Inc. ("B Green"), "Go Green" mission from its inception, is to create a "Green" company for the development of solutions to eliminate waste from the world's environment. B Green offers consumers a realistic and necessary solution to the problem of waste around the world. We believe that to truly have an impact on the planet, one must be committed to the environment and seek out environmentally-friendly products.




The first technology was to create new products from recycled tire rubber. EcoPod and VibeAwayTM address important environmental concerns and problems facing the planet today. EcoPod and VibeAwayTM are 100% recycled rubber-based products that can be utilized as support pads under any units that vibrate and make noise, including washing machines, dryers, compressors, commercial condensers, and many other units that advantageously benefit from sound and vibration control. In addition, we announced that we had filed a new patent application for a process described as “Recycled Tire Pod with Appliance Recess Guide.”




Recently, the Company released its new 100% Degradable / Biodegradable Compactor Bags. These bags include Oxo-Biodegradable additive using the latest technology that supports the 3 R’s of Packaging Reduce, Reuse, Recycle and provides a fourth R, Remove. Independent Scientific Testing show that plastics incorporated with an additive called RenaturaTM will degrade and then fully biodegrade, without leaving behind harmful residues in the soil.




5
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B GREEN INNOVATIONS, INC.


NOTES TO CONDENSED FINANCIAL STATEMENTS (continued)


March 31, 2011 and 2010




Note 2       Business Operations (continued)




These Oxo-Biodegradable plastic products are scientifically proven to be non-toxic and are FDA compliant, meaning they are safe for food packaging applications and have been awarded approved food film contact ‘no migration’ status. Regular plastic bags can take up to 100 years to break down causing plastic pollution and harm to both domestic and wild life. Standard plastics are filling our landfills and greatly impacting our planet. Plastics incorporating this additive in the presence of oxygen disappear when exposed to UV light or thermal heat. Our product is designed to allow plastics to degrade like a leaf, slowly yielding CO2 (which through photosynthesis becomes oxygen), water, bio-waste, and mineral salts that condition the soil in the process.




The Company continues to evaluate additional products to its product line as well as expanding its distribution channels.




The Company will also continue to support the Interactive Voice Response ("IVR"), software that was developed by iVoice. The Company's Interactive Voice Response line is designed to read information from and write information to, databases, as well as to query databases and return information.




IVR is an application generator that allows full connectivity to many databases, including Microsoft Access, Microsoft Excel, Microsoft Fox Pro, and Paradox, or to standard text files. The IVR software is sold as an application generator that gives the end user the ability to develop its own customized IVR applications or as a customized turnkey system. IVR performs over 40 different customizable commands. Examples of IVR range from simply selecting announcements from a list of options stored in the computer (also known as audio text) to more complex interactive exchanges such as querying a database for information.




Note 3       Going Concern




The accompanying condensed financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplates continuation of the Company as a going concern.




As of March 31, 2011, the Company had a net operating loss, and negative cash flow from operations.  These matters raise substantial doubt about the Company’s ability to continue as a going concern. Therefore, recoverability of a major portion of the recorded asset amounts shown in the accompanying balance sheets is dependent upon continued operations of the Company, which in turn, is dependent upon the Company’s ability to raise capital and/or generate positive cash flow from operations.




Management plans to increase the development, manufacture, and distribution of “green” products to generate a positive cash flow. However, these plans are dependent upon obtaining additional capital. There can be no assurance that the Company will be able to obtain the necessary capital, and achieve its growth objectives. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event the Company cannot continue in existence.




6
 Table of Contents





B GREEN INNOVATIONS, INC.


NOTES TO CONDENSED FINANCIAL STATEMENTS (continued)


March 31, 2011 and 2010




Note 4        Summary of Significant Accounting Policies




a)    Basis of Presentation




The accompanying condensed unaudited interim financial statements included herein have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). The condensed financial statements and notes are presented as permitted on Form 10-Q and do not contain information included in the Company's annual statements and notes. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. It is suggested that these condensed financial statements be read in conjunction with the December 31, 2010 audited financial statements and the accompanying notes thereto. While management believes the procedures followed in preparing these condensed financial statements are reasonable, the accuracy of the amounts are in some respects dependent upon the facts that will exist, and procedures that will be accomplished by the Company later in the year. These results are not necessarily indicative of the results to be expected for the full year.




These condensed unaudited financial statements reflect all adjustments, including normal recurring adjustments, which, in the opinion of management, are necessary to present fairly the operations and cash flows for the periods presented.




b)    Use of Estimates




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




c)    Revenue Recognition




With respect to IVR customer support services, the Company offers customers an optional annual software maintenance and support agreement for subsequent periods. Sales of purchased maintenance and support agreements are recorded as deferred revenue and recognized over the respective terms of the agreements.




For the “green” products revenues are recognized at the time of shipment to, or acceptance by customer, provided title and risk of loss is transferred to the customer. Provisions, when appropriate, are made where the right to return exists.




Shipping and handling costs charged to customers are classified as revenue, and the shipping and handling costs incurred are included in cost of goods sold.




7
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B GREEN INNOVATIONS, INC.


NOTES TO CONDENSED FINANCIAL STATEMENTS (continued)


March 31, 2011 and 2010




Note 4        Summary of Significant Accounting Policies (continued)




d)    Product Warranties




The Company estimates its warranty costs based on historical warranty claims experience in estimating potential warranty claims. Due to the limited sales of the Company's products, management has determined that warranty costs are immaterial and has not included an accrual for potential warranty claims. Presently, costs related to warranty coverage are expensed as incurred. Warranty claims are reviewed quarterly to verify that warranty liabilities properly reflect any remaining obligation based on the anticipated expenditures over the balance of the obligation period.




e)    Research and Development Costs




Research and development costs are charged to expense when incurred. The Company has not incurred any research and development costs for the three months ended March 31, 2011 and 2010.




f)    Advertising Costs




Advertising costs are expensed as incurred and are included in selling expenses. For the three months ended March 31, 2011 and 2010, the Company incurred $436 and $177, respectively.




g)    Cash and Cash Equivalents




The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. There were no cash equivalents at March 31, 2011 and December 31, 2010. The Company maintains cash balances at a financial institution that is insured by the Federal Deposit Insurance Corporation. The Company maintains cash balances at financial institutions that are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to federally insured limits. At times balances may exceed FDIC insured limits. The Company has not experienced any losses in such accounts.




h)   Marketable Securities




The Company has evaluated its investment policies consistent with ASC 320-10-25, “Classification of Investment Securities”, and determined that all of its investment securities are to be classified as marketable securities. Marketable securities are carried at fair value, with the unrealized gains and losses reported in Stockholders' Equity (Deficit) under the caption Accumulated Other Comprehensive Income.




i)   Concentration of Credit Risk




Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of trade accounts receivable and cash.  As of March 31, 2011 the Company believes it has no significant risk related to its concentration within its accounts receivable.




8
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B GREEN INNOVATIONS, INC.


NOTES TO CONDENSED FINANCIAL STATEMENTS (continued)


March 31, 2011 and 2010




Note 4        Summary of Significant Accounting Policies (continued)




j)    Accounts Receivable




Accounts receivable are non-interest bearing obligations due under normal trade terms. Senior management reviews accounts receivable on a monthly basis to determine if any receivables will be potentially uncollectible. Historical bad debts and current economic trends are used in evaluating the allowance for doubtful accounts. The Company includes any accounts receivable balances that are determined to beuncollectible, along with a general reserve, in its overall allowance for doubtful accounts. After all attempts to collect a receivable have failed, the receivable is written off against the allowance. Based on the information available, the Company believes its allowance for doubtful accounts as of March 31, 2011 and December 31, 2010 is adequate.




k)   Property and Equipment




Property and equipment is stated at cost. Depreciation is computed using the straight-line method based upon the estimated useful lives of the assets, generally five to seven years. Maintenance and repairs are charged to expense as incurred.




l)   Intangible Assets




Registration and maintenance costs associated with the filing and registration of patents are prepaid and amortized over the remaining life of the patent, not to exceed 20 years. Costs associated with such patents are not approved or abandoned.




m)   Income Taxes




The Company accounts for income taxes using the asset and liability method described in FASB ASC 740-10 (Prior authoritative literature: FASB Statement 109, “Accounting for Income Taxes,”). Under this pronouncement, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under FASB ASC 740-10, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.




The Company accounts for income taxes using the asset and liability method described in FASB ASC 740. Deferred tax assets arise from a variety of sources, the most significant being: a) tax losses that can be carried forward to be utilized against profits in future years; b) expenses recognized in the books but disallowed in the tax return until the associated cash flow occurs; and c) valuation changes of assets which need to be tax effected for book purposes but are taxable only when the valuation change is realized.




Deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using enacted tax rates and laws that are expected to be in effect when such differences are expected to reverse.  The measurement of deferred tax assets is reduced, if necessary, by a valuation allowance for any tax benefit which is not more likely than not to be realized. In assessing the need for a valuation allowance, future taxable income is estimated, considering the realization of tax loss carryforwards. Valuation allowances related to deferred tax assets can also be affected by changes to tax laws, changes to statutory tax rates and future taxable income levels. In the event it was determined that the Company would not be able to realize all or a portion of our deferred tax assets in the future, we would reduce such amounts through a charge to income in the period in which that determination is made. Conversely, if we were to determine that we would be able to realize our deferred tax assets in the future in excess of the net carrying amounts, we would decrease the recorded valuation allowance through an increase to income in the period in which that determination is made.




9
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B GREEN INNOVATIONS, INC.


NOTES TO CONDENSED FINANCIAL STATEMENTS (continued)


March 31, 2011 and 2010




Note 4        Summary of Significant Accounting Policies (continued)




m)   Income Taxes (continued)




The Company has adopted FASB ASC 740-10, Accounting for Uncertainty in Income Taxes. ASC 740-10 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC 740-10 requires that the Company determine whether the benefits of its tax positions are more-likely-than-not of being sustained upon audit based on the technical merits of the tax position. The Company recognizes the impact of an uncertain income tax position taken on its income tax return at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position is not recognized if it has less than a 50% likelihood of being sustained. The Company has no uncertain tax positions. Despite the Company’s belief that its tax return positions are consistent with applicable tax laws, one or more positions may be challenged by taxing authorities. Settlement of any challenge can result in no change, a complete disallowance, or some partial adjustment reached through negotiations or litigation. Interest and penalties related to income tax matters, if applicable, will be recognized as income tax expense. During the three months ended March 31, 2011 and 2010 the Company did not incur any expense related to interest or penalties for income tax matters, and no such amounts were accrued as of March 31, 2011 and December 31, 2010.




n)    Reclassifications




Certain prior year amounts have been reclassified to conform to the current year presentation. The reclassifications have had no effect on the results of operations or cash flows for the period ended March 31, 2010.




o)     Fair Value of Financial Instruments




The carrying amounts reported in the consolidated balance sheets as of March 31, 2011 and December 31, 2010 for cash and cash equivalents, marketable securities, accounts receivable, inventories, prepaid expenses and other current assets, accounts payable and accrued expenses other current liabilities approximate the fair value because of the immediate or short-term maturity of these financial instruments.  The fair value of debt approximates its carrying value at the stated or discounted rate of the debt to reflect recent market conditions.




p)     Long-Lived Assets




The Company assesses the recoverability of the carrying value of its long-lived assets whenever events or changes in circumstances indicate that the carrying a-mount 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 cash flows expected to be generated by an asset.  If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceed the fair value of the assets.  Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.  For the three ended March 31, 2011 the Company recorded an impairment loss of $19,582 related to fixed asset no longer utilized in the amount of $17,258 and for patents rejected in the amount of $2,324. Such amounts in accompanying statement of operations in operating expenses.  No impairment losses were recognized for the three months ended March 31, 2010.




10
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B GREEN INNOVATIONS, INC.


NOTES TO CONDENSED FINANCIAL STATEMENTS (continued)


March 31, 2011 and 2010




Note 5        Earnings (Loss) Per Share




FASB ASC 260-10 requires the presentation of basic earnings per share ("basic EPS") and diluted earnings per share ("diluted EPS").




The Company’s basic income (loss) per common share is based on net income (loss) for the relevant period, divided by the weighted average number of common shares outstanding during the period.  Diluted income per common share is based on net income, divided by the weighted average number of common shares outstanding during the period, including common share equivalents, such as outstanding stock options and beneficial conversion of related party accounts. The computation of diluted loss per share for the three months ended March 31, 2011 does not assume conversion, exercise or contingent exercise of warrants, and securities as they would have an anti-dilutive effect on the earnings resulting from the Company’s net loss position in that period.




For the three months ended March 31, 2010 there were 2,764,702,366 average share equivalents which are included in the calculation of diluted earnings per share.  The computation of diluted loss per share for the three months ended March 31, 2011 does not assume conversion, exercise or contingent exercise of warrants, and securities in the amount of 3,092,109,197 shares as they would have an anti-dilutive effect on the earnings resulting from the Company’s net loss position in that period.




Note 5        Income (Loss) Per Share




Three Months Ended


Three Months EndedMarch 31, 2011


March 31,2010Basic net income (loss) per share:Net income (loss)

$
(127,909
)

$
1,377,137Weighted-average common shares outstanding


604,415,387



599,115,387Basic net income (loss) per share

$
(0.00
)

$
0.00Diluted net income (loss) per share:Net income (loss)

$
(127,909
)

$
1,377,137Weighted-average common shares outstanding


604,415,387



599,115,387Incremental shares attributable to the common stock

equivalents


-



2,964,702,366Total adjusted weighted-average shares


604,415,387



3,563,817,753Diluted net income (loss) per share

$
(0.00
)

$
0.00




11
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B GREEN INNOVATIONS, INC.


NOTES TO CONDENSED FINANCIAL STATEMENTS (continued)


March 31, 2011 and 2010




Note 6       Intangible Assets




Intangible assets consist of patents pending in the amount of $54,223 and $59,934 for the periods ended March 31, 2011 and December 31, 2010. For the three months ended March 31, 2011, the Company had an impairment of $2,324 for patents that were rejected, and amortization expense of $3,387 on patents that have been issued. There was no amortization expense for the three months ended March 31, 2010.




Note 7       Note Receivable – Related Party




The Company has an administrative services agreement with iVoice, Inc., a related party. The Company will provide iVoice, Inc. administrative and financial services as well as providing iVoice, Inc. with office space. On March 10, 2011, the Company and iVoice, Inc. entered into a new administrative services agreement which supersedes all prior agreements. The terms of the agreement are as follows: In consideration of the services, iVoice, Inc. will pay B Green $5,000 per month. On March 10, 2011, the agreement was modified to increase the administrative service fee from iVoice from $5,000 to $15,000 per month. This agreement will continue on a month-to-month basis unless terminated by either party by providing 30 days written notice.




a)
The agreement is on a month-to-months basis unless terminated by either party providing thirty (30) days advance notice to the non-terminating party. This agreement cannot be terminated until B green has redeemed all of the B Green Series A 3% Preferred Stock that is held by the Company.


b)
In consideration of the services, iVoice, Inc. will pay B Green $15,000 per month.


c)
B Green shall receive payment by redeeming the number of B Green Series A 3% Preferred Stock shares held by iVoice using the formula set below:


i.
calculate the number of iVoice Class A Common Stock shares by dividing (x) the dollar value of the fees that B Green is to be paid by fifty percent (50%) of the lowest issue price of iVoice Class A common Stock.


ii.
The iVoice market value shall be equal to the number of iVoice Class A Common Stock shares calculated above multiplied by the highest closing ask price of iVoice Class A Common stock in the previous thirty (30) trading days prior to the date of the calculation.


iii.
The number of B Green Series A 3% Preferred Stock shares to be redeemed hereunder shall be calculated by dividing the iVoice Market value calculated above by the Series A Initial Value, as defined in the B Green Certificate of Incorporation.




On January 5, 2011, the Company converted $66,104 of the principal amount and accrued interest of the iVoice Note Receivable, dated April 30, 2010 for redemption of 1,057.664 shares of B Green Innovations Series A 3% Preferred Stock in accordance with the terms of the Promissory Note. For the three months ended March 31, 2011 the Company recorded income of $26,500 which is included in other income in the accompanying statement of operations as compared to $15,000 for the three months ended March 31, 2010.




As of March 31, 2011 and December 31, 2010, the note receivable balance was $21,500 and $60,000, respectively. Additionally, the Company recorded interest expense of $53 and $-0- for the three months ended March 31, 2011 and 2010, respectively.  Accrued interest was $18 and $1,070 as of March 31, 2011 and December 31, 2010, respectively.




12
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B GREEN INNOVATIONS, INC.


NOTES TO CONDENSED FINANCIAL STATEMENTS (continued)


March 31, 2011 and 2010




Note 8        Related Party Transactions




As of February 10, 2010, the Administrative Services Agreement with iVoice, Inc. and the Company was terminated, and the Company entered into an Exchange Agreement to exchange the Convertible Promissory Note having a principal and accrued interest of approximately $119,000 and $1,100,000, respectively, for 1,219 shares of the Company’s 3% Preferred Stock. As a result the Company recorded a gain from the extinguishment of the derivative liability in the amount of $1,636,695 and is included as other income in the accompanying statement of operations for the three months ended March 31, 2010 (See Notes 7 and 11).




The Company has assumed an outstanding promissory demand note in the amount of $190,000 payable to Jerry Mahoney, President and Chief Executive Officer of iVoice and Non-Executive Chairman of the Board of B Green Innovations, Inc.  This amount is related to funds loaned to iVoice and is unrelated to the operations of B Green Innovations, Inc.  The note will bear interest at the rate of prime plus 2.0% per annum (5.25% at March 31, 2011) on the unpaid balance until paid.  Interest payments are due and payable annually. Under the terms of the Promissory Note, at the option of the Note holder, principal and interest can be converted into either (i) one share of Class B Common Stock of B Green Innovations, Inc., par value $.01, for each dollar owed, (ii) the number of shares of Class A Common Stock of B Green Innovations, Inc. calculated by dividing (x) the sum of the principal and interest that the Note holder has requested to have prepaid by (y) eighty percent (80%) of the lowest issue price of Class A Common Stock since the first advance of funds under this Note, or (iii) payment of the principal of this Note, before any repayment of interest.




The Board of Directors of the Company maintains control over the issuance of shares and may decline the request for conversion of the repayment into shares of the Company. As of March 31, 2011 and December 31, 2010, the outstanding balances were $3,003, plus accrued interest of $117,122 and $113,394, respectively.




On May 8, 2007, the Company executed a Security Agreement providing Jerome Mahoney, President and Chief Executive Officer of the Company, with a security interest in all of the assets of the Company to secure the promissory note dated August 5, 2005 and all future advances including, but not limited to, additional cash advances: deferred compensation, deferred expense reimbursement, deferred commissions and income tax reimbursement for the recognition of income upon the sale of common stock for the purpose of the holder advancing additional funds to the Company.




The Company entered into a five-year employment agreement with Jerome Mahoney to serve as Non-Executive Chairman of the Board of Directors, effective August 1, 2004. On March 9, 2009, the term of the employment agreement between the Company and Mr. Mahoney, the Company’s CEO, was extended to July 31, 2016.  The Company will compensate Mr. Mahoney with a base salary of $85,000 for the first year with annual increases based on the Consumer Price Index. Mr. Mahoney had a consulting agreement with the Company’s former subsidiary B Green Innovations for annual compensation of $24,000 and upon every annual anniversary thereafter, at the rate based on the increase in the Consumer Price Index for All Urban Consumers (New York-Northern N.J.-Long Island). Effective January 1, 2010, this amount was added to Mr. Mahoney’s base salary. On June 15, 2010, Mr. Mahoney’s employment agreement was amended to increase the base salary to $195,000 effective July 1, 2010. All other terms of the Employment Agreement shall remain in full force and effect. A portion of Mr. Mahoney’s compensation shall be deferred until such time that the Board of Directors determines that the Company has sufficient financial resources to pay his compensation in cash.





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B GREEN INNOVATIONS, INC.


NOTES TO CONDENSED FINANCIAL STATEMENTS (continued)


March 31, 2011 and 2010




Note 8        Related Party Transactions (continued)




The Board has the option to pay Mr. Mahoney’s compensation in the form of Class B Common Stock. Mr. Mahoney will also be entitled to certain bonuses based on mergers and acquisitions completed by the Company. Pursuant to the terms of the Class B Common Stock, a holder of Class B Common Stock has the right to convert each share of Class B Common Stock into the number of shares of Class A Common Stock determined by dividing the number of Class B Common Stock being converted by a 20% discount of the lowest price for which the Company had ever issued its Class A Common Stock. As of March 31, 2011 and December 31, 2010, total deferred compensation due to Mr. Mahoney was $352,333 and $312,750 respectively.




Note 9        Convertible Promissory Note and Derivative Liability




The Company had entered into a temporary administrative services agreement with iVoice. The administrative services agreement continued on a month-to-month basis until the Company found replacement services for those services being provided by iVoice or could provide these services for itself. In March 2008, the administrative services agreement was amended to provide that accrued and unpaid administrative services be aggregated and converted into a Convertible Promissory Note. The principal and interest shall be due and payable as follows: (a) interest shall accrue monthly on the unpaid balance and shall be paid annually, and (b) principal shall be payable on demand. As of October 1, 2009 iVoice, Inc. suspended all charges for the Administrative Service Agreement.





In accordance with FASB ASC 815-10 the Company determined that the conversion feature of the Debenture met the criteria of an embedded derivative, and therefore the conversion feature of this Debenture needed to be bifurcated and accounted for as a derivative.




As of February 10, 2010, the Administrative Services Agreement with iVoice, Inc. was terminated, and the Company entered into an Exchange Agreement to exchange the Convertible Promissory Note having a principal and accrued interest of approximately $119,000 for 119 shares of the Company’s 3% Preferred Stock. As a result the Company recorded a gain from the extinguishment of the derivative liability in the amount of $1,636,695 and is included as other income in the accompanying statement of operations for the three months ended March 31, 2010. For the three months ended March 31, 2010, the Company recorded a loss on Valuation of Derivative in the amount of $382,128. No gain or loss was recorded for the three months ended March 31, 2011. The fair value of the embedded conversion was estimated at the February 10, 2010 using the Black-Scholes model with the following assumptions: risk free interest rate: 2.69%; expected dividend yield: 0%: expected life: 5 years; and volatility: 234.66%.




The derivative liability was $-0- at March 31, 2011 and December 31, 2010, respectively.




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B GREEN INNOVATIONS, INC.


NOTES TO CONDENSED FINANCIAL STATEMENTS (continued)


March 31, 2011 and 2010




Note 10        Income taxes




The tax effect of temporary differences, primarily net operating loss carryforwards, asset reserves and accrued liabilities give rise to a deferred tax asset. Deferred income taxes are recognized for the tax consequence of such temporary differences at the enacted tax rate expected to be in effect when the differences reverse. Because of the current uncertainty of realizing the benefit of the tax carry forward, a valuation allowance equal to the tax benefit for deferred taxes has been established. The full realization of the tax benefit associated with the carry forward depends predominantly upon the Company's ability to generate taxable income during the carry forward period.




On January 7, 2010, the Company received $232,491 from the sale of New Jersey state net operating losses. This amount is included in other income in the accompanying Statement of operations for the three months ended March 31, 2010.




Note 11       Capital Stock




Pursuant to the Company’s certificate of incorporation, as amended, the Company is authorized to issue 1,000,000 shares of Preferred Stock, par value of $1.00 per share, 10,000,000,000 shares of Class A Common Stock, no par value per share, 50,000,000 shares of Class B Common Stock, par value $0.01 per share, and 20,000,000 shares of Class C Common Stock, par value $0.01 per share. Below is a description of the Company’s outstanding securities, including Preferred Stock, Class A Common Stock, Class B Common Stock and Class C Common Stock.




a)
Preferred Stock




The Company is authorized to issue 1,000,000 shares of Preferred Stock, par value $1.00 per share.




Of the 1,000,000 shares of Preferred Stock, 10,000 shares are designated Series A 10% Preferred Stock, par value $1.00 per share, with a stated value of $1,000 (the “Series A Preferred Stock”). The stated value is used for calculation of dividends and liquidation preferences. On March 12, 2008, the Company sold 1,444.44 shares of Series A 10% Preferred Stock to iVoice, Inc. for $1,444,444.  With consent of the holders of the Series A Preferred Stock, on March 6, 2009, the Company amended its Certificate of Incorporation and amended the rights of the Series A Preferred by: (i) eliminating all voting rights for the Series A Preferred Stock and (ii) eliminating the conversion feature of the Series A Preferred Stock.




In February 2010, the Company filed with the State of New Jersey an Amendment to the Certificate that revised the rights of the holders of the Company’s Series A 10% Secured Convertible Preferred Stock. The revisions included:




a.
The preferred stock will be referred to in the Company’s Certificate of Incorporation as: “Series A 3% Preferred Stock”.


b.
The holders of the preferred stock will have a new dividend rate of 3%.


c.
The holders of the Series A 3% Preferred Stock shall have no voting rights.





15
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B GREEN INNOVATIONS, INC.


NOTES TO CONDENSED FINANCIAL STATEMENTS (continued)


March 31, 2011 and 2010




Note 11        Capital Stock (continued)




a)
Preferred Stock (continued)




d.
Series A 3% Preferred Stock is convertible, at the option of the holder with the consent of the Corporation, at any time after the date of issuance of such share into such number of fully paid and non-assessable shares of Common Stock as is determined by dividing the Series A Initial Value, as may be adjusted from time to time, by the Conversion Price applicable to such share. The "Conversion Price” per share shall be calculated as the closing bid price of the Class A Common stock on the last trading day immediately prior to the date that the Notice of Conversion is tendered to the Corporation, subject to certain adjustments.


e.
The holders of shares of Series A Preferred Stock shall be prohibited from converting shares of Series A Preferred Stock, and the Corporation shall not honor any attempted conversion of Series A Preferred Stock, if, and to the extent, the shares of Common Stock held by such converting holder of Series A Preferred Stock following any attempted conversion would exceed 9.99% of the outstanding shares of Common Stock of the Corporation after giving effect to such conversion.




On February 10, 2010, iVoice, Inc. agreed to purchase 1,100 shares of the Company’s 3% Preferred Stock for $1,100,000 in cash.




On February 10, 2010, the Company issued 119 shares of Series A Preferred Stock in exchange for $112,058 Convertible Promissory Note and accrued interest of $6,708 to iVoice, Inc.




On January 5, 2011, the Company converted $66,104 of the principal amount and accrued interest of the iVoice Note Receivable, dated April 30, 2010 for redemption of 1,057.664 shares of B Green Innovations Series A 3% Preferred Stock in accordance with the terms of the Promissory Note. This transaction result in a reduction in Preferred Stock in the amount of $1,057,664 and a credit to additional paid-in capital in the amount of $991,560.


As of March 31, 2011 and December 31, 2010 1,606 shares and 2,663 shares of Series A 3% Preferred Stock are issued and outstanding, respectively.




In February the Board of Directors authorized the Company to sell up 350 shares of the Series A 3% Preferred Stock.




b)           Class A Common Stock




As of March 31, 2011, there are 10,000,000,000 shares of Class A Common Stock authorized, no par value, and 605,609,870 shares were issued, and 604,415,387 shares were outstanding, and 1,194,483 shares were issued pending conversion by YA Global Investments.




Each holder of Class A Common Stock is entitled to receive ratably dividends, if any, as may be declared by the Board of Directors out of funds legally available for payment of dividends.  The Company has never paid any dividends on its common stock and does not contemplate doing so in the foreseeable future.




The Company anticipates that any earnings generated from operations will be used to finance its growth objectives.




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B GREEN INNOVATIONS, INC.


NOTES TO CONDENSED FINANCIAL STATEMENTS (continued)


March 31, 2011 and 2010




Note 11        Capital Stock (continued)




c)           Class B Common Stock




As of March 31, 2011, there are 50,000,000 shares of Class B Common Stock authorized, par value of $.01 per share and 99,858 shares issued and outstanding.  Each holder of Class B Common Stock has voting rights equal to 100 shares of Class A Common Stock. A holder of Class B Common Stock has the right to convert each share of Class B Common Stock into the number of shares of Class A Common Stock determined by dividing the number of Class B Common Stock being converted by a 20% discount of the lowest price that B Green Innovations, Inc. had ever issued its Class A Common Stock. Upon our liquidation, dissolution, or winding-up, holders of Class B Common Stock will be entitled to receive distributions. On July 27, 2009, the Company amended its Certificate of Incorporation as follows: a holder of Class B Common Stock has the right to convert each share of Class B Common Stock into the number of shares of Class A Common Stock determined by dividing the number of Class B Common Stock being converted by a 20% discount of the lowest price that B Green Innovations, Inc. had ever issued its Class A Common Stock. Each holder of Class B common stock has voting rights equal to the number of Class A shares that would be issued upon the conversion of the Class B shares, had all of the outstanding Class B shares been converted on the record date used for purposes of determining which shareholders would vote. Previously, each holder of Class B Common Stock has voting rights equal to 100 shares of Class A Common Stock. In February 2011, the Board of Directors authorized the Company to buyback up to 115,025 shares of Class B common stock at $1.00 per share. During the three months ended March 31, 2011, the Company repurchases 15,167 shares of its Class B Common Stock at $1.00 per share, which was the same price that it was originally purchased from a related party.




d)           Class C Common Stock




As of March 31, 2011, there are 20,000,000 shares of Class C Common Stock authorized, par value $.01 per share.  Each holder of Class C Common Stock is entitled to 1,000 votes for each share held of record. Shares of Class C Common Stock are not convertible into Class A Common Stock. Upon liquidation, dissolution or wind-up, the holders of Class C Common Stock are not entitled to receive our net assets pro rata. As of March 31, 2011, no shares were issued or outstanding.




Note 12Stock Options




During 2005, the Company adopted the 2005 Stock Incentive Plan and the 2005 Directors’ and Officers’ Stock Incentive Plan (“Plan”) in order to attract and retain qualified personnel.  Under the Plan, the Board of Directors, in its discretion may grant stock options (either incentive or non-qualified stock options) to officers, directors and employees.  The Company has not issued any stock options as of March 31, 2011.




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B GREEN INNOVATIONS, INC.


NOTES TO CONDENSED FINANCIAL STATEMENTS (continued)


March 31, 2011 and 2010




Note 13         Fair Value Measurements




FASB Codification Topic 820-10, Fair Value Measurements and Disclosures defines fair value, establishes a framework for measuring fair value under generally accepted accounting principles and expands disclosures about fair value measurements; however, it does not require any new fair value measurements, rather, its application is made pursuant to other accounting pronouncements that require or permit fair value measurements.




As defined in FASB ASC 820-10, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique.




Fair value measurements are generally based upon observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our view of market assumptions in the absence of observable market information. The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. FASB Codification Topic 820-10, Fair Value Measurements and Disclosures includes a fair value hierarchy that is intended to increase consistency and comparability in fair value measurements and related disclosures. The fair value hierarchy consists of the following three levels:




Level 1 – Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, marketable securities and listed equities.




Level 2 – Pricing inputs are other than quoted prices in active markets included in level 1, which are either directly or indirectly observable as of the reported date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Instruments in this category generally include non-exchange-traded derivatives such as commodity swaps, interest rate swaps, options and collars.




Level 3 – Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value.




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B GREEN INNOVATIONS, INC.


NOTES TO CONDENSED FINANCIAL STATEMENTS (continued)


March 31, 2011 and 2010




Note 13        Fair Value Measurements (continued)




The valuation techniques that may be used to measure fair value are as follows:




Market approach — Uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities




Income approach — Uses valuation techniques to convert future amounts to a single present amount based on current market expectations about those future amounts, including present value techniques, option-pricing models and excess earnings method




Cost approach — Based on the amount that currently would be required to replace the service capacity of an asset (replacement cost)




The Company adopted the Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) No. 2010-06, Improving Disclosures about Fair Value Measurements (“ASU 2010-06”) which requires additional disclosures about the various classes of assets and liabilities measured at fair value, the valuation techniques and inputs used, the activity in Level 3 fair value measurements and the transfers between Levels 1, 2, & 3.




The following table sets forth by level within the fair value hierarchy the Company’s financial assets and liabilities that were accounted for at fair value as of March 31, 2011 and December 31, 2010. As required by FASB ASC 820-10, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.




The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels.




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B GREEN INNOVATIONS, INC.


NOTES TO CONDENSED FINANCIAL STATEMENTS (continued)


March 31, 2011 and 2010




Note 14        New Accounting Pronouncements




In December 2010, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (ASU) 2010-29, “Business Combinations (ASC Topic 805): Disclosure of Supplementary Pro Forma Information for Business Combinations.” The amendments in this ASU affect any public entity as defined by ASC Topic 805 that enters into business combinations that are material on an individual or aggregate basis. The amendments in this ASU specify that if a public entity presents comparative financial statements, the entity should disclose revenue and earnings of the combined entity as though the business combination(s) that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only. The amendments also expand the supplemental pro forma disclosures to include a description of the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings. The amendments are effective prospectively for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2010. The adoption of ASU 2010-29 did not have a material impact on the Company’s results of operations or financial condition.





In December 2010, the FASB issued ASU 2010-28, “Intangibles — Goodwill and Other (ASC Topic 350): When to Perform Step 2 of the Goodwill Impairment Test for Reporting Units with Zero or Negative Carrying Amounts.” The amendments in this ASU modify Step 1 of the goodwill impairment test for reporting units with zero or negative carrying amounts. For those reporting units, an entity is required to perform Step 2 of the goodwill impairment test if it is more likely than not that a goodwill impairment exists. In determining whether it is more likely than not that a goodwill impairment exists, an entity should consider whether there are any adverse qualitative factors indicating that an impairment may exist. The qualitative factors are consistent with the existing guidance and examples, which require that goodwill of a reporting unit be tested for impairment between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. For public entities, the amendments in this ASU are effective for fiscal years, and interim periods within those years, beginning after December 15,2010. The adoption of ASU 2010-28 did not have a material impact on the Company’s results of operations or financial condition.




Management does not believe that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying financial statements.




Note 15         Segment Data




FASB ASC 280, “Disclosures about Segments of an Enterprise and related information”, establishes standards for reporting information regarding operating segments in annual financial statements and requires selected information of those segments to be presented in interim financial statements. Operating segments are identified as components of an enterprise for which separate discrete financial information is available for evaluation by the chief operating decision maker (the Company’s President and Chief Executive Officer) in making decisions on how to allocate resources and assess performance. In accordance with FASB ASC 280 the Company has determined it has two reportable segments – “green” technology products, and support of Interactive Voice Response (“IVR”) software. There are no inter-segment revenues.




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B GREEN INNOVATIONS, INC.


NOTES TO CONDENSED FINANCIAL STATEMENTS (continued)


March 31, 2011 and 2010




Note 15         Segment Data (continued)




The Company is organized primarily on the basis of its “green” technology products. The “green” technology segment is dedicated to the development, manufacture, and distribution of “green” products, focusing on acquiring and identifying promising technologies that address environmental issues. The Company also continues to support its IVR business. The Company currently has no plans to engage in future research and development, to launch any additional versions of the IVR software or other products, or to continue to market this product. Management evaluates the performance of its segments by allocatingresources to them based on gross margin. The Company’s general and administrative costs are not segment specific. As a result, all operating expenses are not managed on a segment basis. Most costs are related to the “green” technology segment. Costs associated with its IVR business are specifically allocated at the gross profit level. Segment assets include accounts receivable and inventory.




The tables below present information about reportable segments for the three months ended March 31, 2011 and 2010.




Three Months Ended March 31, 2011




“Green” Products


IVR


Corporate/

Reconciling

Items


TotalNet sales

$
35,278


$
6,343


$
-


$
41,621Cost of sales


11,660



-



-



11,660Gross profit


23,618



6,343



-



29,961General and administrative


-



-



162,060



162,060Interest, net


-



-



2,728



2,728Impairment of assets


-



-



19,582



19,582Other income


-



-



(26,500
)


(26,500
)-



-



157,870



157,870Income (loss) before taxes

$
23,618


$
6,343


$
(157,870
)

$
(127,909
)




Three Months Ended March 31, 2010




“Green” Products


IVR


Corporate/

Reconciling

Items


TotalNet sales

$
41,189


$
1,211


$
-


$
42,400Cost of sales


25,412



-



-



25,412Gross profit


12,765



1,211



-



16,988General and administrative


-



-



139,777



139,777Interest, net


-



-



2,132



2,132Gain on extinguishment of  derivative


-



-



(1,636,695
)


(1,636,695
)Other income


-



-



(247,491
)


(247,491
)Loss on valuation of derivative


-



-



382,128



382,128-



-



(1,360,149
)


(1,360,149
)Income before taxes

$
12,765


$
1,211


$
1,360,149


$
1,377,137




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Item 2.                      MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS




Forward Looking Statements




A number of the statements made by the Company in this report may be regarded as “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.




Forward-looking statements include, among others, statements concerning the Company’s outlook, pricing trends and forces within the industry, the completion dates of capital projects, expected sales growth, cost reduction strategies and their results, long-term goals of the Company and other statements of expectations, beliefs, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts.




All predictions as to future results contain a measure of uncertainty and accordingly, actual results could differ materially.  Among the factors that could cause a difference are:  changes in the general economy; changes in demand for the Company’s products or in the cost and availability of its raw materials; the actions of its competitors; the success of our customers; technological change; changes in employee relations; government regulations; litigation, including its inherent uncertainty; difficulties in plant operations and materials; transportation, environmental matters; and other unforeseen circumstances. For a discussion of material risks and uncertainties that the Company faces, see the discussion in the Form 10−K for the fiscal year ended December 31, 2010 entitled “Risk Factors”.




Results of Operations




Total revenues decreased $779 (1.8%) for the three months ended March 31, 2011 to $41,621 as compared to $42,400 for the same period in the prior year. An increase in maintenance services for the IVR business was offset by a decrease in revenues for our “green” products. Lower and more competitive prices of our “green products.”  was mostly offset by the substantial increase in volume attributed to the lower prices. The Company continues to evaluate additional products to its product line as well as expanding its distribution channels. Recently, the Company released its new 100% Degradable / Biodegradable Compactor Bags. The Company continues its efforts to market and sell its products through a distribution network. B Green has entered into distribution agreements with reputable distributors that have proven themselves within their territories and industry segments.




Gross profit increased $12,973 (76.4%) for the three months ended March 31, 2011 to $29,961 as compared to $16,988 for the same for the same period in the prior year as a result of the lower manufacturing costs of the “green” products and the increase in revenues on IVR maintenance services which has a high gross profit.




Total operating expenses increased $41,865 (30%) for the three ended March 31, 2011 to $181,642 as compared to $139,777 for the same period in the prior year. This increase is mainly attributed to an increase in officer’s salaries and impairment of assets.




For the three months ended March 31, 2011, the Company had a loss from operations of $151,681 as compared to a loss from operations of $122,789 for the three months ended March 31, 2010 as a result of the factors discussed above.




Total other income was $23,772 for the three months ended March 31, 2011 as compared to other income of $1,499,926 for the three months ended March 31, 2010. This decrease in other income is primarily due to the gain on the extinguishment of the derivative liability as a result on the conversion to preferred stock in 2010. The decrease in other income is also a result of the sale of net operating loss carryforwards in the prior year in the amount of $232,491.


22
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Net loss for the quarter ended March 31, 2011 was $127,909 as compared to net income of $1,377,137 for the three months ended March 31, 2010. The changes were the result of the factors discussed above.




Liquidity and Capital Resources




To date, the Company has incurred substantial operating losses, and will require financing for working capital to meet its operating obligations.  We anticipate that we will require financing on an ongoing basis for the foreseeable future.




If the Company cannot find sources of additional financing to fund its working capital needs, the Company will be unable to obtain sufficient capital resources to operate our business. We cannot assure you that we will be able to access any financing in sufficient amounts or at all when needed. Our inability to obtain sufficient working capital funding will have an immediate material adverse effect upon our financial condition and our business.




The Company currently has no other significant sources of working capital or cash commitments. However, no assurance can be given that the Company will raise sufficient funds from such financing arrangements, or that Company will ever produce sufficient revenues to sustain its operations, or that a market will develop for its common stock for which a significant amount of the Company’s financing is dependent upon.




During the three months ended March 31, 2011, the Company had a net decrease in cash of $992,508.  The Company’s principal sources and uses of funds were as follows:




Cash used in operating activities. The Company used $77,341 in operating activities for the three months ended March 31, 2011 as compared generating $130,836 in the prior year. The decrease in cash used in operating activities is primarily the result of cash received from the sale of New Jersey state net operating losses in the amount of $232,491 in 2010.


Cash used in investing activities.  The Company used $900,000 in investing activities for the three months ended March 31, 2011 for the purchase of marketable securities.


Cash (used in) provided by financing activities. The Company used $15,167 in financing activities for the three months ended March 31, 2011 as compared to generating $1,100,000 from financing activities for the three months ended March 31, 2010 as a result of net proceeds from the sales of Series A Convertible Preferred Stock.




There was no significant impact on the Company’s operations as a result of inflation for the three months ended March 31, 2011.




Critical Accounting Policies




The discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). 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 on-going basis, we evaluate these estimates, including those related to bad debts, inventory obsolescence, intangible assets, payroll tax obligations, and litigation. 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 values of certain assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions.




We have identified below the accounting policy on revenue recognition, related to what we believe is the most critical to our business operations and is discussed throughout Management’s Discussion and Analysis of Financial Condition or Plan of Operation where such policy affects our reported and expected financial results.




Revenue Recognition




For “green” products, revenues are recognized at the time of shipment to, or acceptance by customer, provided title and risk of loss is transferred to the customer. Provisions, when appropriate, are made where the right to return exists.




With respect to customer support services for IVR, upon the completion of one year from the date of sale, the Company offers customers an optional annual software maintenance and support agreement for subsequent one-year periods. Sales of purchased maintenance and support agreements are recorded as deferred revenues and recognized over the respective terms of the agreements.




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Due to the nature of the business and one-time contracts, it is unlikely that one customer will impact revenues in future periods. All revenues for 2011 and 2010 related to the Company’s IVR operations were derived from annual maintenance and support agreements.




Item 4.                      Controls and Procedures.




Evaluation of Disclosure Controls and Procedures




Management of the Company has evaluated, with the participation of the Chief Executive Officer and Chief Financial Officer of the Company, the effectiveness of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) promulgated by the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer of the Company had concluded that the Company's disclosure controls and procedures as of the period covered by this Quarterly Report on Form 10-Q were not effective for the following reasons:




a)           The Company has limited segregation of duties amongst its employees with respect to the Company's control activities. This deficiency is the result of the Company's limited number of employees. This deficiency may affect management's ability to determine if errors or inappropriate actions have taken place. Management is required to apply its judgment in evaluating the cost-benefit relationship of possible changes in our disclosure controls and procedures.




b)           The Company's has a limited number of external board members. This deficiency may give the impression to the investors that the board is not independent from management. Management and the Board of Directors are required to apply their judgment in evaluating the cost-benefit relationship of possible changes in the organization of the Board of Directors.




Changes in internal control over financial reporting.




Management of the Company has also evaluated, with the participation of the Chief Executive Officer of the Company, any change in the Company’s internal control over financial reporting that occurred during the period covered by this Quarterly Report on Form 10-Q and determined that there was no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.




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PartII.  Other Information




Item 6.                      Exhibits




31.1           Certification required under Section 302 of the Sarbanes-Oxley Act of 2002.




32.1           Certification required under Section 906 of the Sarbanes-Oxley Act of 2002.




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SIGNATURES




In accordance with the requirements of the Exchange Act, the Registrant caused this report on Form 10-Q to be signed on its behalf by the undersigned, thereunto duly authorized.




B GREEN INNOVATIONS, INC.Date: May 13, 2011
By:
/s/ Jerome MahoneyJerome MahoneyPresident, Chief Executive Officer and Chief Financial Officer




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INDEX OF EXHIBITS




31.1Certification by Chief Executive Officer and Chief Financial Officer pursuant to Rule 15d-14 under the Securities Exchange Act.




32.1Certification by Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.







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