UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





FORM 10-Q/A-1





(Mark One








[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934





FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2009








[   ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT OF 1934











FOR THE TRANSITION PERIOD FROM ___________ TO __________








COMMISSION FILE NUMBER:000–30215








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





Utah
87-9369569(State or other jurisdiction of incorporation or
(IRS Employer Identification No.)organization)3940-7 Broad Street, #200, San Luis Obispo, CA 93401(address of principal executive offices)866-297-7192(Registrant's telephone number)N/A(Former name, former address and former fiscal year, if changed since last report)





Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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.  Yesx         No ̈





Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.





Large accelerated filer           ̈
Accelerated filer                       ̈Non-accelerated filer             ̈
Smaller reporting company    X





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








State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date:  As of June 30, 2009, the issuer had 28,956,884 shares of its common stock issued and outstanding.











Page - 1














POWER SAVE ENERGY COMPANY


FORM 10-QSB


QUARTER ENDED JUNE 30, 2009





TABLE OF CONTENTS





Part I - Financial Information





Item 1- Financial Statements


Balance Sheet at June 30, 2009


Statement of Operations for the three and six months ended June 30, 2009 and 2008


Statement of Cash Flows for the six months ended June 30, 2009 and 2008


Notes to Financial Statements





Item 2 - Management's Discussion and Analysis or Plan of Operations





Item 3 Quantitative and Qualitative Disclosures about Market Risk





Item 4- Controls and Procedures





Part II - Other Information





Item 1 - Legal Proceedings


Item 1A- Risk Factors





Item 2 - Changes in Securities and Use of Proceeds





Item 3 - Default upon Senior Securities





Item 4 - Submission of Matters to a Vote of Security Holders





Item 5 - Other Information





Item 6 - Exhibits and Reports on Form 8-K





Signatures
















Page - 2

















PART 1 - FINANCIAL INFORMATION








POWER SAVE ENERGY COMPANY


BALANCE SHEET


AS OF JUNE 30, 2009


Unaudited




June 30, 2009


December 31, 2008(Unaudited)Current AssetsCash and Cash Equivalents

$
627,937


$
513,249Accounts receivable


677,982



945,053Inventory


446,882



873,872Prepaid expenses


246,722



76,528Other current assets


9,597



-Total current assets


2,009,120



4,408,702Equipment, net of accumulated depreciation


54,281



47,469Investments


60,000



-Intangible assets, net of accumulated amortization


9,869



10,286Other assets


28,705



28,705Total assets

$
2,161,975


$
2,495,162LIABILITIES AND STOCKHOLDERS' EQUITYLiabilitiesCurrent liabilitiesAccounts payable

$
57,027


$
55,687Income taxes payable


11,971



228,148Other Current Liablilities


-



125,520Total current liabilities


68,998



409,355Stockholders' equityPreferred stock, $.001 par value, 10,000,000 sharesAuthorized, none issued and outstandingCommon stock, $.001 par value, 100,000,000 shares


28,957



28,957Authorized, 28,956,884 issued and outstandingAdditional paid-in-capital


1,292,914



1,292,914Retained earnings


771,106



763,936Total stockholders' equity


2,092,977



2,085,807Total liabilities and stockholders' equity

$
2,161,975


$
4,495,162










The accompanying notes are an integral part of these financial statements
















Page - 3








POWER-SAVE ENERGY COMPANY


STATEMENT OF OPERATIONS


FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2009 and 2008


Unaudited








Six Months


Three Months2009


2008


2009


2008Revenue

$
2,896,807


$
2,115,276


$
1,552,746


$
1,460,469Cost of salesMerchandise


1,194,434



394,777



483,546



266,996Other costs


115,858



90,916



54,332



66,083Total cost of sales


1,310,292



485,693



537,878



333,079Gross margin


1,586,515



1,629,583



1,014,868



1,127,390Operating expensesAdvertising and promotion


255,482



129,680



118,675



88,006Sales commissions


807,676



546,164



450,103



293,316General and administrative


521,962



312,787



307,170



218,802Total operating costs and expenses


1,585,120



988,631



875,948



600,124Net income (loss) before provision for income taxes


1,395



640,952



138,920



527,266Provision for (recovery of) income taxes


(5,775
)


193,989



34,737



146,677Net income (loss)

$
7,170


$
446,963


$
104,183


$
380,599Earnings per common share:Basic

$
0.00


$
0.02


$
0.00


$
0.01Diluted





$
0.02






$
0.01Shares used in computing earnings per shareBasic


28,965,884



27,833,549



28,956,884



28,635,931Diluted






27,949,863







28,868,549








The accompanying notes are an integral part of these financial statements










Page - 4





POWER SAVE ENERGY COMPANY.


STATEMENTS OF CASH FLOWS


FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)





2009


2008Cash flows from operating activitiesNet income (loss)

$
7,170


$
446,963Adjustments to reconcile net income (loss) to net cashProvided by operating activities:Depreciation and amortization


4,634



741Stock based compensation expense






43,547Changes in operating assets and liabilities( Increase) decrease in accounts receivable


267,071



(228,489
)( Increase) decrease in inventory


426,990



(1,155,639
)( Increase) in prepaid expenses


(170,194
)


(117,361
)(Increase) in other assets


(9,597
)Increase (decrease)  in accounts payable liabilities


1,340



(10,827
)Increase (decrease) other liabilities


(125,520
)Increase (decrease) in taxes payable


(216,177
)


158,142Net cash provided (used) by operating activities


185,717



(862,923
)Cash flows from investing activitiesIncrease in equipment


(11,029
)


(13,276
)Increase in security deposits






(28,705
)Investments


(60,000
)Net cash provided (used) by investing activities


(71,029
) )


(41,981
)Cash flows from financing activitiesProceeds from sale of common stock






1,033,871Net cash provided (used) by financing activities


0



1,033,871Net increase (decrease) in cash and cash equivalents


114,688



128,967Cash and cash equivalents at beginning of period


513,249



441,989Cash and cash equivalents at end of period

$
627,937


$
570,956Supplemental disclosure of cash flow information:Income taxes paid


220,000



35,747














The accompanying notes are an integral part of these financial statements










Page - 5








POWER SAVE ENERGY COMPANY.


NOTES TO FINANCIAL STATEMENTS





The following financial information is submitted in response to the requirements of Form 10-Q and does not purport to be financial statements prepared in accordance with generally accepted accounting principles. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted, although Power Save Energy Company (the "Company") believes the disclosures that are made are adequate to make the information presented not misleading. Further, in the opinion of the management, the interim financial statements reflect fairly the financial position and results of operations for the periods indicated.





It is suggested that these interim financial statements be read in conjunction with the financial statements and notes thereto included in the Company's Form 10K containing the Company's audited financial statements as of and for the year ended December 31, 2008 filed with the Securities and Exchange Commission. The results of operations for
the six months ended June 30, 2009 are not necessarily indicative of results to be expected for the entire fiscal year ending December 31, 2009.





Note 1 - Organization and Principal Activities





Organization and Description of Business





Power-Save Energy Company ("the Company") is the successor corporation of Mag Enterprises, Inc., a Utah corporation incorporated on July 30, 1980. On September 10, 1993, an Amendment to the Articles of Incorporation was filed to change its name from Mag Enterprises, Inc. to Safari Associates, Inc. On September 12, 2006, an amendment to the
articles of incorporation was filed to change its name from Safari Associates, Inc. to Power-Save Energy Company.





The Company manufactures, markets, and sells renewable energy and energy savings products.





The Company has evaluated subsequent events through August 3, 2009, Form 10Q was filed with the Securities and Exchange Commission on August 14, 2009, which is the date the financial statements were issued. No events have occurred subsequent to August 3, 2009 that require disclosure or recognition in these financial statements.





Note 2 - Summary of Significant Accounting Policies





Basis of Presentation





The financial statements are prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of the financial statements requires management to make estimates and assumptions that affect the reported amounts in the financial statements, including the estimated useful lives of tangible and
intangible assets. Management believes the estimates used in preparing the financial statements are reasonable and prudent. Actual results could differ from these estimates.





Financial Instruments





The Company's financial instruments include cash and cash equivalents, accounts receivable and accounts payable. As of June30, 2009, the carrying cost of these instruments approximate their fair value.





Cash Equivalents





Cash equivalents include highly liquid investments with maturities of three months or less.





Accounts Receivable





Accounts receivable are recorded at the invoiced amount and are not interest bearing. The Company maintains an allowance for doubtful accounts to reserve for potentially uncollectible receivables. The Company reviews its accounts receivable by aging category to identify significant customers or invoices with known disputes or collectibility issues. For those invoices not specifically reviewed,
the Company provides reserves based on the age of the receivable. In determining the amount of the reserve, we make judgments about the creditworthiness of significant customers based on ongoing credit evaluations. The Company also considers historical levels of credit losses and current economic trends that might impact the level of future credit losses. When the Company determines that amounts are uncollectible they are written off against the allowance.





Inventory





Inventory is stated at the lower of cost or market, with cost determined on a FIFO basis. Inventory includes electric savings devices and renewable energy solar systems.





Intangible Assets





In accordance with SFAS No. 142, "Goodwill and Other Intangible Assets," the Company evaluates intangible assets and other long-lived assets for impairment, at least on an annual basis and whenever events or changes in circumstances indicate that the carrying value may not be recoverable from its estimated future cash flows. Recoverability
of intangible assets and other long-lived assets is measured by comparing their net book value to the related projected undiscounted cash flows from these assets, considering a number of factors including past operating results, budgets, economic projections, market trends and product development cycles. If the net book value of the asset exceeds the related undiscounted cash flows, the asset is considered impaired, and a second test is performed to measure the amount of impairment loss.







Page - 6











POWER SAVE ENERGY COMPANY.


NOTES TO FINANCIAL STATEMENTS





Revenue Recognition





Revenue is recognized in accordance with SEC Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements". The Company recognizes revenue when the significant risks and rewards of ownership have been transferred to the customer pursuant to applicable laws and regulations, including factors such as when there has been evidence
of a sales arrangement, delivery has occurred, or service have been rendered, the price to the buyer is fixed or determinable, and collection is reasonably assured. The Company is responsible for warehousing and shipping the merchandise.





Stock - Based Compensation





The Company may periodically issue shares of common stock for services rendered or for other costs and expenses. Such shares will be valued based on the market price of the shares on the transaction date.





The Company may periodically issue stock options to employees and stock options or warrants to non-employees in non-capital raising transactions for services and for financing costs.





The Company accounts for its stock-based compensation in accordance with SFAS No. 123R, "Share-Based Payment, an Amendment of FASB Statement No. 123." The Company recognizes in the statement of operations the grant-date fair value of stock options and other equity-based compensation issued to employees and non-employees. There were no stock options granted during the year ended December 31,
2008 and 2007.





Income Taxes





Income taxes are accounted for in accordance with SFAS 109, Accounting for Income Taxes, using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective
tax bases and tax credit carry forwards. 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. 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.





Earnings Per Common Share





Statement of Financial Accounting Standards No. 128, “Earnings Per Share”, requires presentation of basic earnings per share (“Basic EPS”) and diluted earnings per share (“Diluted EPS”). Basic earnings (loss) per share is computed by dividing earnings (loss) available to common stockholders by the weighted
average number of common shares outstanding (including shares reserved for issuance) during the period. Diluted earnings per share gives effect to all potentially dilutive common shares outstanding during the period.





Advertising





Advertising, promotion and marketing programs are charged to operations in the period incurred.








Page - 7




POWER SAVE ENERGY COMPANY.


NOTES TO FINANCIAL STATEMENTS


Segmented Information





Management has determined that the Company operates in one dominant industry segment. Additional segment disclosure requirements will be evaluated as it expands its operations.





Concentration of Credit Risk





Financial instruments, which potentially subject the Company to concentrations of credit risk, consist of cash and cash equivalents and accounts receivables. The Company places its cash with high quality financial institutions and at times may exceed the FDIC $100,000 insurance limit. The Company extends credit based on an evaluation of the
customer’s financial condition, generally without collateral. Exposure to losses on receivables is principally dependent on each customer’s financial condition. The Company monitors its exposure for credit losses and maintains allowances for anticipated losses, as required. Accounts are “written-off” when deemed uncollectible.





Special – purpose entities





The Company does not have any off-balance sheet financing activities.





Use of estimates





The preparation of financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the amounts reported in the financial statements. The Company bases its estimates on historical experience, management expectations for future performance, and other
assumptions as appropriate. Key areas affected by estimates include the assessment of the recoverability of long-lived assets, which is based on such factors as estimated future cash flows. The Company re-evaluates its estimates on an ongoing basis. Actual results may vary from those estimates.





Website Development Costs





The Company accounts for website development costs in accordance with Emerging Issues Task Force (EITF) No. 00-2. Accordingly, all costs incurred in the planning stage are expensed as incurred, costs incurred in the website application and infrastructure development stage are accounted for in accordance with Statement of Position (SOP) 98-1
which requires the capitalization of certain costs that meet specific criteria, and costs incurred in the day to day operation of the website are expensed as incurred.





Note 3 – Recently issued accounting pronouncements





In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities an amendment of FASB Statement No.  133.” This Statement changes the disclosure requirements for derivative instruments and hedging activities. Entities are required to provide enhanced disclosures about (a) how
and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under Statement 133 and its related interpretations, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. Based on current conditions, the Company does not expect the adoption of SFAS 161 to have a significant impact on its results of operations or financial position.





In April 2008, the FASB issued 142-3 “Determination of the useful life of Intangible Assets”, which amends the factors a company should consider when developing renewal assumptions used to determine the useful life of an intangible asset under SFAS142. This Issue is effective for financial statements issued for fiscal years beginning
after December 15, 2008, and interim periods within those fiscal years. SFAS 142 requires companies to consider whether renewal can be completed without substantial cost or material modification of the existing terms and conditions associated with the asset. FSP 142-3 replaces the previous useful life criteria with a new requirement—that an entity consider its own historical experience in renewing similar arrangements. If historical experience does not exist then the Company would consider market participant
assumptions regarding renewal including 1) highest and best use of the asset by a market participant, and 2) adjustments for other entity-specific factors included in SFAS 142. The Company is currently evaluating the impact that adopting SFAS No.142-3 will have on its financial statements.





In May 2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles.” This Statement identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity
with generally accepted accounting principles (GAAP) in the United States (the GAAP hierarchy). This Statement will not have an impact on the Company’s financial statements.













Page - 8








POWER SAVE ENERGY COMPANY.


NOTES TO FINANCIAL STATEMENTS





In May 2008, the FASB issued SFAS No. 163, “Accounting for Financial Guarantee Insurance Contracts, an interpretation of FASB Statement No. 60.” The scope of this Statement is limited to financial guarantee insurance (and reinsurance) contracts, as described in this Statement, issued by enterprises included within the scope of
Statement 60. Accordingly, this Statement does not apply to financial guarantee contracts issued by enterprises excluded from the scope of Statement 60 or to some insurance contracts that seem similar to financial guarantee insurance contracts issued by insurance enterprises (such as mortgage guaranty insurance or credit insurance on trade receivables). This Statement also does not apply to financial guarantee insurance contracts that are derivative instruments included within the scope of FASB Statement No.
133, “Accounting for Derivative Instruments and Hedging Activities.” This Statement will not have an impact on the Company’s financial statements.





In 2009, the FASB issued Statement 165, Subsequent Events,which defines the period after the balance sheet date that subsequent events should be evaluated and provides guidance in determining if the event should be reflected in the current financial statements. Statement 165 also requires
disclosure regarding the date through which subsequent events have been evaluated. The Company adopted the provisions of Statement 165 as of June 28, 2009. See Note 1





Note 4 - Commitments and Contingencies





The Company entered into a lease for showroom and warehouse space beginning on June 15, 2008 for a period of five years expiring on June 14, 2013.





The following is a schedule of minimum future rental payments:


Year EndingDecember 31,2009

$
22,6992010


46,4822011


47,8772012


49,3132013


25,021Total minimum future rental payments

$
191,392





The Company has negotiated a line of credit with a bank in the amount of $71,000. The line of credit bears interest at 12.00% as of June 30, 2009. The balance due on the line of credit is $-0-.





Note 5 - Income Taxes


The provision for income taxes consists of the following:2009


2008Federal income tax

$
(7,275
)

$
146,710State income tax


1,500



47,179Total

$
(5,775
)

$
46,852Income taxes based on statutory tax rates are as followsFederal income taxes

$
475


$
215,000State income tax


115



61,300Other


(6,365
)


(82,311
)Total

$
(5,775
)

$
193,989










Page - 9




POWER SAVE ENERGY COMPANY.


NOTES TO FINANCIAL STATEMENTS


Note 6 - Intangible Assets





Intangible assets consist of those acquired in the asset purchase agreement with Advanced Builder Energy Technologies LLC (ABET), and U.S. Energy Conservation Corp. which includes ,logos, rights, licenses, designs and approvals, the customer lists. A summary of intangible assets as of June 30, 2009 is as follows:





Intangible assets, at cost


12,510Less - amortization allowed


2,6419,869





Note 7 - Common Stock





Private Placement




During the period ended June, 2008, the Company issued a total of 1,925,716 shares of restricted common stock in a private placement with net proceeds of $1,033,871 received
by the Company. The company issued a warrant to the underwriter to purchase 75,078 share of restricted common stock at $.58 per share.  The Company recorded the fair value of the warrant as an expense of the private offering resulting in a charge directly to stockholders’ equity.  The Company estimates that the fair value of this warrant is approximately$109,853 ($ 1.46 Per Unit) using a Black-Scholes option pricing model.  The fair value of the Private
Placement warrant granted to the underwriter is estimated as of the date of grant using the following assumptions:  (I) expected volatility of 40 %, (2) risk free interest rate of 2.75 % and (3) expected life of 2 years.





Preferred Stock


On May 5, 2008, the Company amended its Articles of Incorporation to include authorization to issue up to 10,000,000 preferred shares at $.001 par value.  The Preferred Stock will be designated as “Series a Preferred Stock” which will carry 100 to 1 conversion and voting rights and entitles the holder thereof to 100 common
votes for each one Preferred Share.  There are no preferred shares issued.





Note 8 -Acquisition





Power-Save Energy Co. has made an investment into a well established solar energy integrator by purchasing 10% of Arizona Power-Save. Arizona Power-Save located at 4111 E. Valley Auto Dr. #103 in Mesa, AZ is owned and operated by General Manager Ray Baxter. Arizona Power-Save specializes in the sales and installation of energy saving and renewable
energy products to homeowners throughout Arizona.













Page - 10








Item 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS





FORWARD-LOOKING STATEMENTS





This quarterly report contains forward-looking statements as that term is defined in Section 27A of the United States Securities Act of 1933 and section 21E of the United States Securities Exchange Act of 1934.  These statements relate to future events or our future financial performance.  In some cases, you can identify forward-looking
statements by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology.  These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled “Risk Factors”
that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.





Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.  Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements
to conform these statements to actual results.





Our financial statements are stated in United States dollars and are prepared in conformity with generally accepted accounting principles in the United States of America for interim financial statements.  The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in
this quarterly report.





The following discussion should be read in conjunction with the Company’s interim consolidated financial statements and the notes related thereto included in item 1 above which have been prepared in accordance with the accounting principles generally accepted in the United States of America. The discussion of results, causes and trends
should not be construed to imply any conclusion that such results, causes or trend will necessarily continue in the future.





(a) Plan of Operation


Power-Save Energy Co. manufactures, markets, and sells electricity saving devices for homeowners, Power-Save 1200, 3200, and 3400.Power-Save also markets and sells renewable energy devices, photovoltaic electric electricity systems, Power-Save Solar and Power-Save Wind Turbine that produce electricity generated from wind energy. The product
lines are intended to reduce the homeowner's electricity consumption, generate renewable energy and overall reduce the consumer's electric utility bill. Power-Save Energy Company intends to market quality, tested products and continue to seek out and offer innovative new energy savings products to the consumer.





Power-Save will continue to utilize the power of television and purchase national cable commercial time to run its 60 second and 120 second DRTV spot. Power-Save will continue to sell its residential unit directly to the public and continue to add value to its brand through aggressive advertisement.





Cash Requirements and of Need for additional funds: twelve months. We continue to face certain minimal cash requirements for corporate maintenance, legal and professional and auditing expenses. Our cash requirements for these purposes are not in issue.





Cautionary Statement: There can be no assurance that we will be successful in raising capital through private placements or otherwise. Even if we are successful in raising capital through the sources specified, there can be no assurances that any such financing would be available in a
timely manner or on terms acceptable to us and our current shareholders. Additional equity financing could be dilutive to our then existing shareholders, and any debt financing could involve restrictive covenants with respect to future capital raising activities and other financial and operational matters.





Critical Accounting Policies and Recent Accounting Pronouncements





Management believes the estimates, assumptions and judgments involved in the accounting policies described below have the greatest potential impact on the Company’s financial statements. Because of the uncertainty inherent in these matters, actual results could differ from the estimates used in applying the critical accounting policies.
Within the context of these critical accounting policies, management is not currently aware of any reasonably likely event that would result in materially different amounts being reported.





Recent accounting pronouncements





In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities an amendment of FASB Statement No.  133.” This Statement changes the disclosure requirements for derivative instruments and hedging activities. Entities are required to provide enhanced disclosures about (a) how
and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under Statement 133 and its related interpretations, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. Based on current conditions, the Company does not expect the adoption of SFAS 161 to have a significant impact on its results of operations or financial position.







Page - 11








In April 2008, the FASB issued 142-3 “Determination of the useful life of Intangible Assets”, which amends the factors a company should consider when developing renewal assumptions used to determine the useful life of an intangible asset under SFAS142. This Issue is effective for financial statements issued for fiscal years beginning
after December 15, 2008, and interim periods within those fiscal years. SFAS 142 requires companies to consider whether renewal can be completed without substantial cost or material modification of the existing terms and conditions associated with the asset. FSP 142-3 replaces the previous useful life criteria with a new requirement—that an entity consider its own historical experience in renewing similar arrangements. If historical experience does not exist then the Company would consider market participant
assumptions regarding renewal including 1) highest and best use of the asset by a market participant, and 2) adjustments for other entity-specific factors included in SFAS 142. The Company is currently evaluating the impact that adopting SFAS No.142-3 will have on its financial statements.





In May 2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles.” This Statement identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity
with generally accepted accounting principles (GAAP) in the United States (the GAAP hierarchy). This Statement will not have an impact on the Company’s financial statements.





In May 2008, the FASB issued SFAS No. 163, “Accounting for Financial Guarantee Insurance Contracts, an interpretation of FASB Statement No. 60.” The scope of this Statement is limited to financial guarantee insurance (and reinsurance) contracts, as described in this Statement, issued by enterprises included within the scope of
Statement 60. Accordingly, this Statement does not apply to financial guarantee contracts issued by enterprises excluded from the scope of Statement 60 or to some insurance contracts that seem similar to financial guarantee insurance contracts issued by insurance enterprises (such as mortgage guaranty insurance or credit insurance on trade receivables). This Statement also does not apply to financial guarantee insurance contracts that are derivative instruments included within the scope of FASB Statement No.
133, “Accounting for Derivative Instruments and Hedging Activities.” This Statement will not have an impact on the Company’s financial statements.





(b) Management's Discussion and Analysis of Financial Condition and Results of Operations.




This discussion and analysis of our financial condition and results of operations includes "forward-looking" statements that reflect our current views with respect to future events and financial performance. We use words such as "expect," "anticipate," "believe," and "intend" and similar expressions to identify forward-looking statements.
You should be aware that actual results may differ materially from our expressed expectations because of risks and uncertainties inherent in future events and you should not rely unduly on these forward looking statements. We will not necessarily update the information in this discussion if any forward-looking statement later turns out to be inaccurate. Reference in the following discussion to "our", "us" and "we" refer to our operations and the operations of our subsidiaries, except where the context otherwise
indicates or requires.

This discussion and analysis of financial condition and results of operations should be read in conjunction with our audited Financial Statements included in this filing. Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, and reflect our historical financial
position, results of operations, and cash flows. The financial information included in this filing, is not necessarily indicative of our future performance.


Revenue for the three months ended June 30, 2009 was $1,552,746 compared to $1,460,469 for the three months ended June 30, 2008. This was an increase of $92,277 or 6.3%. Sale of solar and solar related products for the quarter ended June 30, 2009 was approximately $252,000. The Company introduced these products in the third quarter of 2009
and so there were no comparable sales in 2008. Sales of the electrical savings devices for the quarter ended June 30, 2009 decreased by approximately $160,000 from the comparable three months ended June 30, 2008. The decrease was due to weakness in the economy and the housing market. The Company’s primary markets are in California and the southwestern states where both unemployment and the housing market are among the weakest in the country.

Gross profit for the three months ended June 30, 2009 was $1,014,868 compared to $1,127,390 for the three months ended June 30, 2008. This was a decrease of $112,522 or 10%. The gross profit margin for the three months ended June 30, 2009 was 65% compared to a gross profit margin for the three months ended June 30, 2008. There are several
factors that have caused the overall gross profit and gross profit margin to decline. Solar products are sold in a competitive market and are a material cost when renovating residences and commercial buildings. Solar products typically have a lower gross profit margin than the retail and wholesale gross profit on power savings devices. There has also more competition in the wholesale market reducing the gross profit on power savings devices. The cost of sales includes the cost of the power savings products manufactured
for the Company and solar products purchased from outside vendors. Other costs included in costs of goods sold are warehouse costs and shipping expenses.

Advertising and marketing expense for the three months ended June 30, 2009 was $118,675 compared to $88,006 for the three months ended June 30, 2008. This is an increase of $30,669. Television advertising during the three months ended June 30, 2009 was $37,000 compared to $62,000 for the three months ended June 30, 2008, a decrease of $25,000.
In the first quarter of 2009, Power-Save commissioned the creation of a DRTV spot for its newly launched ES35 Kit. Power-Save also launched test DRTV spots on National Cable Television. Marketing expenses during the quarter ended June 30, 2009 prepared for additional marketing on DRTV and Cable Television.

Sales commissions for the three months ended June 30, 2009 were $450,103 compared to $293,316 for the three months ended June 30, 2008. This was an increase of $156,787 (53%).

General and administrative expenses for the three months ended June 30, 2009 were $307,170 compared to $218,802 for the three months ended June 30, 2008. This is an increase of $88,368 (40%). The major increases in general and administrative expenses included officer’s compensation of $105,000. There was no officer compensation in
2008. Rent expense for the three months ended June 30, 2009 was $16,282 compared to $6,320 for 2008. The Company leased its showroom and warehouse facilities in June of 2008. Professional fees, accounting and legal expenses increased to $29,950 from $12,000 and increase of $17,950. Travel expense for the three months ended June 30, 2009 increased by $24,000 over 2008 primarily for travel to trade shows, meeting with customer and overseas travel to meet with suppliers in Asia. Credit processing and collection
fees for three months ended June 30, 2009 increased by approximately $13,000 over the three months ended June 30, 2009. License fees, consulting, printing and other miscellaneous administrative expenses decreased by approximately $23,000 for the quarter ended June 30, 2009. In 2008, the Company recorded a stock option expense of $43,500. The options were subsequently cancelled.












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Sales commissions for the six months ended June 30, 2009 were $807,676 compared to $546,164 for the six months ended June 30, 2008. This was an increase of $261,512 (48%). The increase in commissions is due to an increase in sales to wholesale customers as opposed to internet sales.








General and administrative expenses for the six months ended June 30, 2009 were $521,692 compared to $312,787 for the six months ended June 30, 2008. This is an increase of $209,175 (67%). The major increases in general and administrative expenses included officer’s compensation of $145,000. There was no officer compensation in 2008.
Rent expense for the six months ended June 30, 2009 was $26,000 compared to $6,000 for 2008. The Company leased its showroom and warehouse facilities in June of 2008. Professional fees, accounting and legal expenses increased to $60,000 from $40,000 and increase of $20,000. Travel expense for the six months ended June 30, 2009 increased by $48,000 over 2008 primarily for travel to trade shows, meeting with customer and overseas travel to meet with suppliers in Asia.





Liquidity and Capital Resources.


As of June 30, 2009 the current assets exceeded the current liabilities by $1,940,122. The Company has been able to generate sufficient funds from its current operations to fund its current level of activity.





ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK





Investors should consider each of the following risk factors and the other information in this Quarterly Report, including Power-Save’s financial statements and the related notes, in evaluating the Company’s business and prospects. The risks and uncertainties described below are not the only ones that impact on Power-Save’s
business. Additional risks and uncertainties not presently known to the Company or the Company currently considers immaterial may also impair its business operations. If any of the following risks actually occur, the Company’s business and financial results could be harmed. In that case, the trading price of Power-Save’s Common Stock could decline.





1. Power-Save’s stock price is volatile with wide fluctuations in the past that are likely to continue in the future. The Company’s common stock trades domestically on the OTC-BB, a relatively illiquid and extremely volatile market. In order to maintain its listing status on the OTC-BB, the Company must file periodic reports with
the SEC in a timely manner. If the Company does not maintain its reporting status it may have its securities delisted from the OTC-BB.





2. A small number of Power-Save’s stockholders own a substantial amount of the Company's Common Stock, and if such stockholders were to sell those shares in the public market within a short period of time, the price of Power-Save’s Common Stock could drop significantly.





3. Power-Save may not be able to attract and retain qualified personnel necessary for the implementation of its business strategy. If the Company is not able to attract or retain qualified personnel, it is likely that the Company would be unable to remain competitive in its business resulting in a material adverse effect on Power-Save’s
operations.





4. Power-Save does not expect to pay dividends in the foreseeable future. Because the Company does not intend to pay dividends in the foreseeable future, the potential return on an investor’s investment in the Company’s common stock cannot include any dividend income.





5. “Penny Stock” rules may make buying or selling Power-Save’s Common Stock difficult, and severely limit market liquidity. The Company’s common stock is defined as a “penny stock” under applicable federal securities laws. As such, the Company’s shares are more difficult to purchase and sell than other
securities not subject to the “penny stock” rules.





6. Future Equity Financings May Dilute Your Ownership Interests. The Company relies upon the availability of equity capital to fund its growth, which financing may or may not be available on favorable terms or at all. We cannot guarantee that additional financing, refinancing or other capital will be available in the amounts we desire or on
favorable terms.





7. As of the date of this Report, we have raised equity capital through the issuance of shares of our restricted common stock and will continue to do so for the foreseeable future. Subject to the implementation of our ongoing plan of operations and any revenues generated in relation thereto, we anticipate continuing to rely on equity sales
of our common stock in order to fund our business operations. Issuances of additional shares will result in dilution to our existing stockholders. There is no assurance that we will achieve any additional sales of our equity securities or arrange for debt or other financing to fund our planned business activities.





8. The Company does not carry Officer and Director Liability Insurance coverage which would reduce the ability of investors to recover damages in the case of a claim against the Company and or its officers and directors for breach of duties or other liability claims.










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ITEM 4. CONTROLS AND PROCEDURES





Evaluation of Disclosure Controls and Procedures


We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) that are designed to be effective in providing reasonable assurance that information required to be disclosed in our reports under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission (the “SEC”), and that such information is accumulated and communicated to our management to allow timely decisions regarding required disclosure.





In designing and evaluating disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute assurance of achieving the desired objectives. Also, the design of a control system must reflect the fact that there are resource constraints
and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. The design of any system of controls is based, in part, upon certain assumptions about
the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.





As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of management, including our chief executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based upon that evaluation, management
concluded that our disclosure controls and procedures are effective as of June 30, 2009 to cause the information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods prescribed by SEC, and that such information is accumulated and communicated to management, including our chief executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.





Item 4(T). CONTROLS AND PROCEDURES





Evaluation of and Report on Internal Control over Financial Reporting


The management of Power-Save Energy Company is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of,
the company’s principal executive and principal financial officers and effected by the company’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America and includes those policies and procedures that:





−
Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company;−
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors
of the company; and−
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.





Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures
may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features
of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.





Management assessed the effectiveness of the Company’s internal control over financial reporting as of June 30, 2009. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework.





Based on its assessment, management concluded that, as of June 30, 2009, the Company’s internal control over financial reporting is effective based on those criteria.










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Changes in Internal Control over Financial Reporting





There was no change in our internal controls over financial reporting identified in connection with the requisite evaluation that occurred during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.











PART II - OTHER INFORMATION





ITEM 1 Legal Proceeding.


None.





ITEM 1A. Risk Factors.


None.





ITEM 2 Unregistered Sales of Equity Securities and Use of Proceeds.


None.





ITEM 3 Defaults upon Senior Securities.


None.





ITEM 4 Submissions of Matters to a Vote of Security Holders.


None.





ITEM 5 Other Information.


None.





ITEM 6 Exhibits.


Exhibit No.
Description
Location31.1
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Filed herewith31.2
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Filed herewith32.1
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Filed herewith32.2
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Filed herewith
















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SIGNATURES





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





POWER SAVE ENERGY COMPANY











Date: August 14, 2009
By /s/ Michael ForsterMichael ForsterChief Executive Officer








Date: August 14, 2009
By/s/ Louis FoxLouis FoxChief Financial Officer










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EXHIBIT 31.1




POWER-SAVE ENERGY
CERTIFICATIONS PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002


CERTIFICATION


I, Michael Forster, certify that:


1. I have reviewed this quarterly report on Form 10-Q for the quarter ending June 30, 2009 of Power-Save Energy Company;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this
report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted
accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s
internal control over financial reporting; and


5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Dated: August 14, 2009
By:/s/ Michael ForsterMichael ForsterChief Executive Officer




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EXHIBIT 31.2











POWER-SAVE ENERGY
CERTIFICATIONS PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002


CERTIFICATION


I, Louis Fox, certify that:


1. I have reviewed this quarterly report on Form 10-Q for the quarter ending June 30, 2009 of Power-Save Energy Company;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant
and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during
the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially
affect, the registrant’s internal control over financial reporting; and


5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Dated: August 14, 2009
By: /s/ Louis FoxLouis FoxChief Financial Officer





Page - 18


EXHIBIT 32.1


CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


In connection with the Quarterly Report of Power-Save Energy Company. (the “Company”) on Form 10-Q for the period ending June 30, 2009 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Michael Forster, President, Chief Executive Officer
of the Company and a member of the Board of Directors, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: August 14, 2009
By:/s/ Michael ForsterMichael ForsterChief Executive Officer















Page - 19


EXHIBIT 32.2





CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


In connection with the Quarterly Report of Power-Save Energy Company. (the “Company”) on Form 10-Q for the period ending June 30, 2009 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Louis Fox, Chief Financial Officer
of the Company and a member of the Board of Directors, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: August 14, 2009
By: /s/ Louis FoxLewis FoxChief Financial Officer




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