UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549





FORM
10-Q





(Mark
One)








[X]
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2010








[  
] 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 March 31, 2010, the issuer had
30,856,884 shares of its common stock issued and outstanding.











Page
- 1














POWER
SAVE ENERGY COMPANY


FORM
10-QSB


QUARTER
ENDED MARCH 31, 2010





TABLE
OF CONTENTS





Part I - Financial Information





Item 1-
Financial Statements


Balance Sheet at March 31,
2010


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


Statement of Cash Flows for the
three months ended March31, 2010 and 2009


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





Controls and Procedures (Evaluation of
and Report on Control over Financial Reporting)




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


Unaudited


March
      31, 2010
            
            
            December
      31, 2009ASSETSCurrent
      AssetsCash
      and Cash Equivalents
            
            $
            505,016
            
            
            $
            321,637Accounts
      receivable, net of allowance
            
            
            331,083
            
            
            
            321,128Inventory
            
            
            365,439
            
            
            
            433,783Prepaid
      expenses
            
            
            4,144
            
            
            
            7,744Federal
      income taxes recoverable
            
            
            279,000
            
            
            
            233,615Deferred
      tax asset
            
            
            10,550
            
            
            
            50,128Other
      current assets
            
            
            9,597
            
            
            
            9,597Total current
      assets
            
            
            1,504,829
            
            
            
            1,377,632Equipment,
      net of accumulated depreciation
            
            
            52,219
            
            
            
            52,853Intangible
      assets, net of accumulated amortization
            
            
            9,243
            
            
            
            9,452Direct
      response advertising-net
            
            
            117,720
            
            
            
            135,220Other
      assets
            
            
            28,705
            
            
            
            28,705Total
      assets
            
            $
            1,712,716
            
            
            $
            1,603,862LIABILITIES
      AND STOCKHOLDERS' EQUITYLiabilitiesCurrent
      liabilitiesAccounts
      payable
            
            $
            132,285
            
            
            $
            93,549Total
      current liabilities
            
            
            132,285
            
            
            
            93,549Stockholders'
      equityPreferred
      stock, $.001 par value, 10,000,000 sharesAuthorized,
      none issued and outstandingCommon
      stock, $.001 par value, 100,000,000 sharesAuthorized, 30,856,884 and 28,956,884 issued and
    outstanding
            
            
            30,857
            
            
            
            28,957Additional
      paid-in-capital
            
            
            1,481,014
            
            
            
            1,292,914Retained
      earnings
            
            
            68,560
            
            
            
            188,442Total
      stockholders' equity
            
            
            1,580,431
            
            
            
            1,510,313Total
      liabilities and stockholders' equity
            
            $
            1,712,716
            
            
            $
            1,603,862


The
accompanying notes are an integral part of these financial
statements








F
- 1


POWER-SAVE
ENERGY COMPANY


STATEMENT OF OPERATIONS


FOR
THE THREE MONTHS ENDED March 31, 2010 and 2009


Unaudited





2010
            
            
            2009Revenue,
      net
            
            $
            573,819
            
            
            $
            1,344,061Cost
      of salesMerchandise
            
            
            153,153
            
            
            
            710,888Other
      costs
            
            
            27,622
            
            
            
            61,525Total
      cost of sales
            
            
            180,775
            
            
            
            772,413Gross
      margin
            
            
            393,044
            
            
            
            571,648Operating
      expensesAdvertising
      and promotion
            
            
            90,390
            
            
            
            136,808Sales
      commissions
            
            
            187,877
            
            
            
            357,573General
      and administrative
            
            
            240,432
            
            
            
            214,792Total
      operating costs and expenses
            
            
            518,699
            
            
            
            709,173Net
      income (loss) before provision for income taxes
            
            
            (125,655
            )
            
            
            (137,525
            )Provision
      for (recovery of) income taxes
            
            
            (5,773
            )
            
            
            (40,512
            ).Net
      income (loss)
            
            $
            (119,882
            )
            
            $
            (97,013
            )Earnings
      per common share:
            
            $
            (0.004
            )
            
            $
            (0.003
            )Shares
      used in computing earnings per share
            
            
            30,443,662
            
            
            
            28,956,884



















The
accompanying notes are an integral part of these financial
statements










F
- 2











POWER
SAVE ENERGY COMPANY.


STATEMENTS OF CASH FLOWS


FOR
THE THREE MONTHS ENDED MARCH 30, 2010 AND 2009 (UNAUDITED)





2010
            
            
            2009Cash
      flows from operating activitiesNet
      income (loss)
            
            $
            (119,882
            )
            
            $
            (97,013
            )Adjustments
      to reconcile net income (loss) to net cashProvided
      by operating activities:Depreciation
      and amortization
            
            
            842
            
            
            
            2,317Changes
      in operating assets and liabilities( Increase)
      decrease in accounts receivable
            
            
            (9,955
            )
            
            
            283,016( Increase)
      decrease in inventory
            
            
            68,344
            
            
            
            171,859( Increase)  decrease
      in prepaid expenses
            
            
            21,101
            
            
            
            (213,113
            )(Increase
      ) in other assets
            
            
            
            
            
            
            (40,935
            )(Increase)
      in income taxes recoverable
            
            
            (45,385
            )Decrease
      in deferred tax credits
            
            
            39,578Increase in accounts payable and other
    liabilities
            
            
            39,536
            
            
            
            43,251Increase
      (decrease) in taxes payable
            
            
            (800
            )
            
            
            (219,577
            )Net
      cash provided (used) by operating activities
            
            
            (6,621
            )
            
            
            (70,195
            )Cash
      flows from investing activitiesIncrease
      in equipment
            
            
            
            
            
            
            (7,616
            )Investments
            
            
            
            
            
            
            (60,000
            )Net
      cash provided (used) by investing activities
            
            
            
            
            
            
            (67,616
            )Cash
      flows from financing activitiesProceeds
      from sale of common stock
            
            
            190,000Net
      cash provided (used) by financing activities
            
            
            190,000Net
      increase (decrease) in cash and cash equivalents
            
            
            183,379
            
            
            
            (137,811
            )Cash
      and cash equivalents at beginning of period
            
            
            321,637
            
            
            
            513,249Cash
      and cash equivalents at end of period
            
            $
            505,016
            
            
            $
            375,438Supplemental
      disclosure of cash flow information:Income
      taxes paid
            
            
            34
            
            
            
            220,000





The
accompanying notes are an integral part of these financial
statements







F
- 3








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, 2009 filed with the Securities and Exchange Commission. The
results of operations for the three months ended March 31, 2010 are not
necessarily indicative of results to be expected for the entire fiscal year
ending December 31, 2010.





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





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. At March 31, 2010 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
collectability 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.














F
- 4











POWER
SAVE ENERGY COMPANY.


NOTES
TO FINANCIAL STATEMENTS





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.





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 ASC Topic
718, "Share-Based Payment, and 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 period ended March
31, 2010.





Income
Taxes





Income
taxes are accounted for in accordance with ASC Topic 740, 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 ASC Topic 260, “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 potential dilutive common shares outstanding during
the period.





Advertising





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





Direct
Response Advertising





Direct
response advertising and associated costs capitalized and amortized to selling,
general and administrative expenses on a straight line basis after production.
Costs are amortized on a straight line basis over 3 years. Management assesses
the realizability of the amounts of direct-response advertising costs reported
as assets at each balance sheet date by comparing the carrying amounts of
direct-response advertising costs reported as assets at each balance sheet date
by comparing the carrying amounts of such assets to the probably remaining
future net cash flows expected to result directly from such advertising.
Advertising that does not meet the capitalization requirements is expensed in
the current period.





F
- 5


POWER
SAVE ENERGY COMPANY.


NOTES
TO FINANCIAL STATEMENTS





Net
realizable value is determined by comparing the carrying amounts of
direct-response advertising costs capitalized as assets at each balance sheet
date to the probably remaining future net cash flows expected to result directly
from such assets, and impairment loss is recognized in an amount equal to that
excess.





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





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





The
adoption of these accounting standards had the following impact on the Company’s
statements of income and financial condition:





FASB ASC
Topic 855, “Subsequent events”. In May 2009, the FASB issued FASB ASC Topic 855,
which establish general standards of accounting and disclosure of events that
occur after the balance sheet date but before financial statements are issued or
available to be issued. In particular, this Statement sets forth: (i) the period
after the balance sheet date during which management of a reporting entity
should evaluate events or transactions that may occur for potential recognition
or disclosure in the financial statements, (ii) the circumstances under which an
entity should recognize events or transactions occurring after the balance sheet
date in its financial statements, (iii) the disclosure that an entity should
make about events or transactions that occurred after the balance sheet date.
The FASB ASC Topic should be applied to the accounting and disclosure of
subsequent events. The FASB ASC Topic does not apply to subsequent events or
transactions that are within the scope of other applicable accounting standards
that provide different guidance on the accounting treatment for subsequent
events or transactions. This FASB ASC Topic was effective for interim and annual
periods ending after June 15, 2009, which was June 30, 2009 for the Corporation.
The adoption of this Topic did not have a material impact on the Company’s
financial statements and disclosures.





FASB ASC
Topic 320, “Recognition and presentation of Other-Than Temporary Impairment”. In
April 2009, the FASB issued FASB ASC Topic 320 amends the other-than –temporary
impairment guidance in GAAP for debt securities to make the guidance more
operational and to improve the presentation and disclosure of
other-than-temporary impairments on debt and equity securities in the financial
statements. The FASB ASC Topic does not amend existing recognition and
measurement guidance related to other-than –temporary impairment of equity
securities. The FASB ASC Topic shall be effective for interim and annual
reporting periods after June 15, 2009, with early adoption permitted for periods
ending after March 15, 2009. Earlier adoption for periods ending before March
15, 2009 is not permitted. This FASB ASC Topic does not require disclosures for
earlier periods presented for comparative purposes at initial adoption. In the
periods after initial adoption, this FASB ASC Topic requires comparative
disclosure only for periods ending after initial adoption. The adoption of this
Topic did not have a material impact on the Company’s financial statements and
disclosures.





F
- 6


POWER
SAVE ENERGY COMPANY.


NOTES
TO FINANCIAL STATEMENTS





FASB ASC
Topic 860, “Accounting for Transfer of Financial Assets”. In June, 2009 the FASB
issued additional guidance under FASB ASC Topic 860, Accounting for Transfer and
Servicing of Financial Assets and Extinguishment of Liabilities”, which improves
the relevance , representational faithfulness, and comparability of the
information that a reporting entity provides in its financial statements about a
transfer of financial assets; the effect of a transfer on its financial position
, financial performance, and cash flows; and a transferor’s continuing
involvement, if  any, in transferred financial assets. The Board
undertook this project to address (i) practices that have developed since the
issuance of FASB ASC Topic 860, that are not consistent with the original intent
and requirements of that statement and (ii) concerns of financial statement
users that many of the financial assets (and related obligations) that have been
derecognized should continue to be reported in the financial statements of
transferors. This additional guidance requires that a transferor recognize and
initially measure at fair value all assets obtained (including a transferor’s
beneficial interest) and liabilities incurred as a result of a transfer of
financial assets accounted for as a sale. Enhanced disclosures are required to
provide financial statement users with greater transparency about transfers of
financial assets and a transferor’s continuing involvement with transferred
assets. This additional guidance must be applied ads of the beginning of each
reporting entity’s first annual reporting period that begins after November 15,
2009, for interim periods within the first annual reporting period and for the
interim and annual reporting periods thereafter. Earlier application is
prohibited. This additional guidance must be applied to transfers occurring on
or after the effective date.





FASB ASC
Topic 810, “Variables Interest Entities”. In June 2009, the FASB issued FASB ASC
Topic 810 which requires an enterprise to perform an analysis to determine
whether the enterprise’s variable interest or interests give it a controlling
financial interest in a variable interest entity. This analysis identifies the
primary beneficiary of a variable interest entity as the enterprise that has
both of the following characteristics: (i) The power to direct the activities of
a variable interest entity that most significantly impact the entity’s economic
performance and (ii) The obligation to absorb losses of the entity that could
potentially be significant to the variable interest entity or the right to
receive benefits from the entity that could be potentially significant to the
variable interest entity. Additionally, an enterprise is required to assess
whether it has an implicit financial responsibility to ensure that a variable
interest entity operates as designed when determining whether it has the power
to direct the activities of the variable interest entity that most significantly
impact the entity’s economic performance. This FASB Topic requires ongoing
reassessment of whether an enterprise is the primary beneficiary of a variable
interest entity and eliminate the quantitative approach previously required for
determining the primary beneficiary of a variable interest entity, which was
based on determining which enterprise absorbs the majority of the entity’s
expected losses, receives a majority of the entity’s residual returns, or both.
This FASB ASC Topic shall be effective as of the beginning of each reporting
entity’s first annual reporting period that begins after November 15, 2009, for
the interim periods within that first annual reporting period, and for interim
and annual reporting periods thereafter. Earlier application is
prohibited.





FASB ASC
Topic 820, “Fair Value measurement and Disclosures”, an Accounting Standard
Update. In September 2009, the FASB issued this Update to amend Subtopic
82010,”Fair Value Measurements and Disclosures”. Overall, for the fair value
measurement of investments in certain entities that calculates net asset value
per share (or its equivalent). The amendments in this Update permit, as a
practical expedient, a reporting entity to measure the fair value of an
investment that is within the scope of the amendments in this Update on the
basis of the net asset value per share of the investment( or its equivalent) if
the net asset value of the investment (or its equivalent) is calculated in a
manner consistent with the measurement principles of Topic 946 as of the
reporting entity’s measurement date, including measurement of all or
substantially all of the underlying  investments of the investee in
accordance with Topic 820. This amendments in this Update also require
disclosures by major category of investment about the attributes of investments
with the scope of the amendments in this Update, such as the nature of any
restrictions on the investor’s ability to redeem its investment at the
measurement date, any unfunded commitments( for example, a contractual
commitment by the investor to invest in a specific amount of additional capital
at a future date to fund investments that will be made by the investee),and the
investment strategies of the investee. The major category of investment is
required to be determined on the basis of the nature and risks of the investment
in a manner consistent with the guidance for major security types in GAAP on
investments in debt and equity securities in paragraph 321-10-50-1B. The
disclosures are required for all investments within the scope of the amendments
in this Update regardless of whether the fair value of the investment is
measured using the practical expedient. The amendments in this Update apply to
all reporting entities that hold an investment that is required or permitted to
be measured or disclosed at fair value on a recurring or non recurring basis
and, as of the reporting entity’s measurement date, if the investment meets
certain criteria. The amendments in this Update are effective for the interim
and annual periods ending after December 15, 2009. Earlier application is
permitted in financial statements for earlier interim and annual periods that
have not been issued.





F
- 7





POWER
SAVE ENERGY COMPANY.


NOTES
TO FINANCIAL STATEMENTS





FASB ASC
Topic 740, “Income Taxes”, an Accounting Standard Update. In September 2009, the
FASB issued this Update to address the need for additional implementation
guidance on accounting for uncertainty in income taxes. The guidance answers the
following questions: (i) Is the income tax paid by the entity attributable to
the entity or its owners? (ii)What constitutes a tax position for a pass-through
entity or a tax-exempt not-for-profit entity? (iii) How should accounting for
uncertainty in income taxes be applied when a group of related entities comprise
both taxable and nontaxable entities? In addition t, this Update decided to
eliminate the disclosure required by paragraph 740-10-50-15(a) through (b) for
nonpublic entities. The implementation guidance will apply to financial
statements of nongovernmental entities that are presented in conformity with
GAAP. The disclosure amendments will apply only to nonpublic entities as defined
in Section 740-10-20. For entities that are currently applying the standards for
accounting for uncertainty in income taxes, the guidance and disclosure
amendments are effective for financial statements issued for interim and annual
periods ending after September 15, 2009.





Note
4 - Commitments and Contingencies





The
Company has 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
      Ending December 31, 20102010
            
            
            $34,8612011
            
            
            47,8772012
            
            
            49,3132013
            
            
            25,021Total
      minimum future rental payments
            
            
            $157,072





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 December 31, 2009. The current
balance due on the line of credit is $-0-.








Note
5 - Income Taxes


The
      provision for income taxes consists of the following:2010
            
            
            2009Federal
      income (recovery) tax
            
            ($45,385)
            
            
            ($32,026)State
      income tax
            
            34
            
            
            (8,486)Deferred
      tax credit
            
            39,578Total
            
            ($5,773)
            
            
            ($40,512)Income
      taxes based on statutory tax rates are as followsFederal
      income taxes
            
            (36,967)
            
            
            (46,758)State
      income tax
            
            (11,061)
            
            
            (8,687)Other
            
            2,677
            
            
            14,933Valuation
      allowance
            
            39,578Total
            
            ($5,773)
            
            
            ($40,512)







F
- 8


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 March 31, 2010 is as follows:





Intangible
      assets, at cost
            
            $
            12,510Less
      - amortization allowed
            
            
            3,267$
            9,243





Note
7- Private Placement





On
January 29, 2010, the Company issued total of 1,900,000 shares of restricted
common stock in a private placement. The Company received net proceeds from the
offering of $190,000.





Note
8- Other Developments





February
9, 2010, Power-Save Energy Company announced a contract from
California Power-Save to supply a complete photovoltaic solar system for
installation on a lighted Billboard in Sonoma County California. On the back of
the Sonoma County Energy Independence Program, Power-Save Energy Co. and CA
Power-Save will be installing 1.225k grid-tie solar systems complete with new
retrofit high efficiency lighting on a Billboard owned by Veale Investment
Properties. The first installation for Veale Investment Properties will be on a
high profile Billboard along the U.S. Route 101 Freeway in Santa Rosa,
CA.





March 1,
2010, Solar Acquisition Corp. (OTCBB: SLRX) announced an agreement to form a
joint venture with Power-Save Energy (OTCBB: PWSV) to offer solar products and
services to the retail market. Under the proposed joint venture, SA and Power
Save will offer products and services to individual users in the U.S. market.
Power-Save currently markets its solar panels directly to the end user through a
national network. Solar Acquisition expects to develop additional opportunities
as a result of its anticipated activities in the commercial and municipal
markets. Power Save's expertise in the retail sector will allow SA to monetize
these opportunities faster and more efficiently.





On March
30, 2010, Power-Save announced the Patent Pending Status number 61/318,445 for
Green Billboard Design. The Power-Save provisional patent application titled,
"Solar Powered Illumination Apparatus" was filed with the USPTO on March 29,
2010 and now entitles Power-Save to market the Green Billboard package as Patent
Pending.








F
- 9













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


We
currently manufacture and sell three products. The PS1200 is our initial product
which is designed for residential use. Our PS3200 and PS3400 products are
designed for light commercial and light industrial use.





All of
our products are designed to reduce our customer's electricity consumption and
reduce their electric utility bill. Our products reduce the amount of power
drawn from the utility by storing (in their capacitors) otherwise lost
electricity (watts) derived from the inductive motors in your home or business.
Inductive motors are found in such devices as air conditioning units,
refrigerators, freezers, washers, dryers, dishwashers, pool pumps, vacuum
cleaners, furnace blower motors, and fans. The technology applied by our
products collects that otherwise lost electricity and stores it. When your
inductive motors are initiated, electricity is drawn from that stored
electricity back to your inductive loads, thus reducing your demand for
electricity.





The
PS1200 is a single phase 200 amp power factor correction device. It is commonly
installed on single family residence. The unit weighs approximately 7 lbs,
measures 6" x 6" x 4", and installs using a 20 amp double pull breaker into the
electrical panel of any home. The Power-Save 1200 is typically installed by a
licensed electrician.





The
PS3200 is a three phase 200 amp power factor correction device. The PS3400 is a
three phase 400 amp power factor correction device. They have been designed for
installation in light commercial applications. Target customers for these
products are gasoline service stations, corner grocery stores, fast food
restaurants, car wash facilities, Laundromats, and similar businesses. The units
weigh 11 lbs, measure 10"x 10" x 6", and install using a 30 amp triple pull
breaker into the electrical panel of any commercial establishment. The units are
typically installed by a licensed electrician.





Power-Save
purchases wholesale and resells at retail our Solar and Wind Turbine
products.  Power-Save does not own or manufacture these products
independently, instead we are just a reseller of these products direct to the
public.  We purchase and sell standard photovoltaic systems consisting of
Solar Panels, Roof Racking and Inverters.  We purchase and sell standard
wind turbine technologies consisting of Mounting Structure, Poles, a Wind
Turbine, and an Inverter.





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.





Page
- 12


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





The
adoption of these accounting standards had the following impact on the Company’s
statements of income and financial condition.





FASB ASC
Topic 855, “Subsequent events”. In May 2009, the FASB issued FASB ASC Topic 855,
which establish general standards of accounting and disclosure of events that
occur after the balance sheet date but before financial statements are issued or
available to be issued. In particular, this Statement sets forth: (i) the period
after the balance sheet date during which management of a reporting entity
should evaluate events or transactions that may occur for potential recognition
or disclosure in the financial statements, (ii) the circumstances under which an
entity should recognize events or transactions occurring after the balance sheet
date in its financial statements, (iii) the disclosure that an entity should
make about events or transactions that occurred after the balance sheet date.
The FASB ASC Topic should be applied to the accounting and disclosure of
subsequent events. The FASB ASC Topic does not apply to subsequent events or
transactions that are within the scope of other applicable accounting standards
that provide different guidance on the accounting treatment for subsequent
events or transactions. This FASB ASC Topic was effective for interim and annual
periods ending after June 15, 2009, which was June 30, 2009 for the Corporation.
The adoption of this Topic did not have a material impact on the Company’s
financial statements and disclosures.





FASB ASC
Topic 105, “The FASB Accounting Standard Codification and the Hierarchy of
Generally Accepted Accounting Principles”. In June 2009, the FASB issued FASB
ASC Topic 105, which became the source of authoritative GAAP recognized by the
FASB to be applied by nongovernmental entities. Rules and interpretive releases
of the SEC under authority of federal securities laws are also source of
authoritative GAAP for SEC registrants. On the effective date of this FASB ASC
Topic, the Codification will supersede all then-existing non SEC accounting and
reporting standards. All other non-SEC accounting literature not included in the
Codification will become non-authoritative. This FASB ASC Topic identify the
source of accounting principles and the framework for selecting the principles
used in preparing the financial statements of nongovernmental entities that are
presented in conformity with GAAP. Also, arranged these sources of GAAP in a
hierarchy for users to apply accordingly. In other words, the GAAP hierarchy
will be modified to include only two levels of GAAP: authoritative and
non-authoritative. This FASB ASC Topic was effective for interim and annual
periods ending after September 15, 2009.  The adoption of this Topic
did not have a material impact on the Company’s financial statements and
disclosures.





FASB ASC
Topic 320, “Recognition and presentation of Other-Than Temporary Impairment”. In
April 2009, the FASB issued FASB ASC Topic 320 amends the other-than –temporary
impairment guidance in GAAP for debt securities to make the guidance more
operational and to improve the presentation and disclosure of
other-than-temporary impairments on debt and equity securities in the financial
statements. The FASB ASC Topic does not amend existing recognition and
measurement guidance related to other-than –temporary impairment of equity
securities. The FASB ASC Topic shall be effective for interim and annual
reporting periods after June 15, 2009, with early adoption permitted for periods
ending after March 15, 2009. Earlier adoption for periods ending before March
15, 2009 is not permitted. This FASB ASC Topic does not require disclosures for
earlier periods presented for comparative purposes at initial adoption. In the
periods after initial adoption, this FASB ASC Topic requires comparative
disclosure only for periods ending after initial adoption. The adoption of this
Topic did not have a material impact on the Company’s financial statements and
disclosures.





FASB ASC
Topic 860, “Accounting for Transfer of Financial Assets”. In June, 2009 the FASB
issued additional guidance under FASB ASC Topic 860, Accounting for Transfer and
Servicing of Financial Assets and Extinguishment of Liabilities”, which improves
the relevance , representational faithfulness, and comparability of the
information that a reporting entity provides in its financial statements about a
transfer of financial assets; the effect of a transfer on its financial position
, financial performance, and cash flows; and a transferor’s continuing
involvement, if  any, in transferred financial assets. The Board
undertook this project to address (i) practices that have developed since the
issuance of FASB ASC Topic 860, that are not consistent with the original intent
and requirements of that statement and (ii) concerns of financial statement
users that many of the financial assets (and related obligations) that have been
derecognized should continue to be reported in the financial statements of
transferors. This additional guidance requires that a transferor recognize and
initially measure at fair value all assets obtained (including a transferor’s
beneficial interest) and liabilities incurred as a result of a transfer of
financial assets accounted for as a sale. Enhanced disclosures are required to
provide financial statement users with greater transparency about transfers of
financial assets and a transferor’s continuing involvement with transferred
assets. This additional guidance must be applied ads of the beginning of each
reporting entity’s first annual reporting period that begins after November 15,
2009, for interim periods within the first annual reporting period and for the
interim and annual reporting periods thereafter. Earlier application is
prohibited. This additional guidance must be applied to transfers occurring on
or after the effective date.





Page
- 13


FASB ASC
Topic 810, “Variables Interest Entities”. In June 2009, the FASB issued FASB ASC
Topic 810 which requires an enterprise to perform an analysis to determine
whether the enterprise’s variable interest or interests give it a controlling
financial interest in a variable interest entity. This analysis identifies the
primary beneficiary of a variable interest entity as the enterprise that has
both of the following characteristics: (i) The power to direct the activities of
a variable interest entity that most significantly impact the entity’s economic
performance and (ii) The obligation to absorb losses of the entity that could
potentially be significant to the variable interest entity or the right to
receive benefits from the entity that could be potentially significant to the
variable interest entity. Additionally, an enterprise is required to assess
whether it has an implicit financial responsibility to ensure that a variable
interest entity operates as designed when determining whether it has the power
to direct the activities of the variable interest entity that most significantly
impact the entity’s economic performance. This FASB Topic requires ongoing
reassessment of whether an enterprise is the primary beneficiary of a variable
interest entity and eliminate the quantitative approach previously required for
determining the primary beneficiary of a variable interest entity, which was
based on determining which enterprise absorbs the majority of the entity’s
expected losses, receives a majority of the entity’s residual returns, or both.
This FASB ASC Topic shall be effective as of the beginning of each reporting
entity’s first annual reporting period that begins after November 15, 2009, for
the interim periods within that first annual reporting period, and for interim
and annual reporting periods thereafter. Earlier application is
prohibited.





FASB ASC
Topic 820, “Fair Value measurement and Disclosures”, an Accounting Standard
Update. In September 2009, the FASB issued this Update to amend Subtopic
82010,”Fair Value Measurements and Disclosures”. Overall, for the fair value
measurement of investments in certain entities that calculates net asset value
per share (or its equivalent). The amendments in this Update permit, as a
practical expedient, a reporting entity to measure the fair value of an
investment that is within the scope of the amendments in this Update on the
basis of the net asset value per share of the investment( or its equivalent) if
the net asset value of the investment (or its equivalent) is calculated in a
manner consistent with the measurement principles of Topic 946 as of the
reporting entity’s measurement date, including measurement of all or
substantially all of the underlying  investments of the investee in
accordance with Topic 820. This amendments in this Update also require
disclosures by major category of investment about the attributes of investments
with the scope of the amendments in this Update, such as the nature of any
restrictions on the investor’s ability to redeem its investment at the
measurement date, any unfunded commitments( for example, a contractual
commitment by the investor to invest in a specific amount of additional capital
at a future date to fund investments that will be made by the investee),and the
investment strategies of the investee. The major category of investment is
required to be determined on the basis of the nature and risks of the investment
in a manner consistent with the guidance for major security types in GAAP on
investments in debt and equity securities in paragraph 321-10-50-1B. The
disclosures are required for all investments within the scope of the amendments
in this Update regardless of whether the fair value of the investment is
measured using the practical expedient. The amendments in this Update apply to
all reporting entities that hold an investment that is required or permitted to
be measured or disclosed at fair value on a recurring or non recurring basis
and, as of the reporting entity’s measurement date, if the investment meets
certain criteria. The amendments in this Update are effective for the interim
and annual periods ending after December 15, 2009. Earlier application is
permitted in financial statements for earlier interim and annual periods that
have not been issued.





FASB ASC
Topic 740, “Income Taxes”, an Accounting Standard Update. In September 2009, the
FASB issued this Update to address the need for additional implementation
guidance on accounting for uncertainty in income taxes. The guidance answers the
following questions: (i) Is the income tax paid by the entity attributable to
the entity or its owners? (ii)What constitutes a tax position for a pass-through
entity or a tax-exempt not-for-profit entity? (iii) How should accounting for
uncertainty in income taxes be applied when a group of related entities comprise
both taxable and nontaxable entities? In addition t, this Update decided to
eliminate the disclosure required by paragraph 740-10-50-15(a) through (b) for
nonpublic entities. The implementation guidance will apply to financial
statements of nongovernmental entities that are presented in conformity with
GAAP. The disclosure amendments will apply only to nonpublic entities as defined
in Section 740-10-20. For entities that are currently applying the standards for
accounting for uncertainty in income taxes, the guidance and disclosure
amendments are effective for financial statements issued for interim and annual
periods ending after September 15, 2009.








(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.





Page
- 14


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.





Three
Months Ended March 31, 2010 compared to 2009





Revenue
for the three months ended March 31, 2010 was $573,819 compared to $1,344,061
for the three months ended March 31, 2009. This was a decrease of $770,242 or
57%. Sale of solar and solar related products for the quarter ended March 31,
2010, were negligent. During the three months ended March 31, 2009 sales from
solar and related products were approximately $300,000. The decrease was due to
lack of new construction and home improvements as a result of the recession,
particularly in California. Sales to electricians and wholesale clients were
also weak. In prior quarters, they would purchase multiple units, but during the
current period they reduced their inventories and purchased products only when
needed for installation. Retail sales of the Company’s power savings devices
have also decreased The Company has seen increases in units in April 2010 and
the beginning of May 2010.





Gross
profit for the three months ended March 31, 2010 was $393,044 compared to
$571,648 for the three months ended March 31, 2009. This was a decrease of
$178,604 or 31 %. The gross profit margin for the three months ended March 31,
2010 was 68% compared to 42% for the three months ended March 31, 2009. There
are several factors that have caused the overall gross profit and gross profit
margin to increase. 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. The
product mix during the three months ended March 31, 2010 was primarily retail
sales of the Power Save 1200, 3200 and 3400 which has a higher profit margin
than solar or other products.





Advertising
and marketing expense for the three months ended March 31, 2010 was $90,390
compared to $136,808 for the three months ended March 31, 2009. This is a
decrease of $46,418. The Company reduced its television advertising during the
three months ended March 31, 2010. During the three months ended March 31, 2010,
the Company completed the installation of a demonstration model of a solar
paneled roof, incorporating the solar panels as a component of the roof tile as
an alternative to using a rack system and solar panels. Power-Save incorporated
Open Energy solar tiles in the demonstration model. The cost of the model was
$41,000.





Sales
commissions for the three months ended March 31, 2010 were $187,877 compared to
$357,573 for the three months ended March 31, 2009. This was a decrease of
$169,696 (47%). Commissions are based primarily on retail rates and wholesale
rates without discounts. During the period ended March 31, 2010, the decrease in
retail sales was approximately 50% from the prior year.





General
and administrative expenses for the three months ended March 31, 2010 were
$240,432 compared to $214,792 for the three months ended March 31, 2009. This is
an increase of $25,640 (12%). The major increases in general and administrative
expenses included officer’s compensation of $20,000; consulting of $16,500: and
professional fees of $10,000. Credit and collection costs decreased by
approximately $13,000 during the three months ended March 31, 2010 compared to
2009, due to the decrease in credits sales.





Due to
the losses during the period the Company has recorded a recovery of Federal
income taxes in the amount of $45,385 which was reduced by a reduction in
deferred tax credits. The Company will carry back any net operating loss to
recover taxes paid in prior periods.











Liquidity
and Capital Resources.





As of
March 31, 2010 the current assets exceeded the current liabilities by
$1,372,544.  This is an increase of approximately $89,000 from
December 31, 2009.The Company loss of $120,000 was more than offset by the
$190,000 raised in a private placement in January 2010. Cash for the period
ended March 31, 2010 increased by $183,379, which included $190,000 from the
proceeds of the private placement. The Company expects to receive approximately
$255,000 back from the IRS from the tax return filed in March 2010 and the
carryback loss filed in April 2010. The Company has seen improvements and made
adjustments to its cost structure that should provide a positive cash flow. The
Company does not have any current commitments for capital expenditures or any
other commitments that would result in a change in cash flow or cash
requirements.








Page
- 15





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 which the Company currently considers to be 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 limits 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.





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 December 31, 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.








Page
- 16


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 March 31, 2010. 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 March 31, 2010, the Company’s
internal control over financial reporting is effective based on those
criteria.





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.








Page
- 17










PART II - OTHER INFORMATION





ITEM
1 Legal Proceeding.





On
October 27, 2009, the Company filed a lawsuit against Ray Baxter, Daniel Acosta,
Scott Francis and Arizona Power-Save L.C. for breach of contract.  The
Company alleges the Defendants owe the Company $296,750.00 from renewable energy
products sold to Defendants.





ITEM
1A. Risk Factors.


None.





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





On
January 29, 2010, the Company issued total of 1,900,000 shares of restricted
common stock in a private placement. The Company received net proceeds from the
offering of $190,000.





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 of2002
            Filed
      herewith31.2
            Certification of Chief Financial Officer pursuant
      to Section 302 of the Sarbanes-Oxley Act of2002
            Filed
      herewith32.1
            Certification of Chief Executive Officer pursuant
      to Section 906 of the Sarbanes-Oxley Act of2002
            Filed
      herewith32.2
            Certification of Chief Financial Officer pursuant
      to Section 906 of the Sarbanes-Oxley Act of2002
            Filed
      herewith

















Page
- 18








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:
      May 13, 2010
            By /s/
      Michael ForsterMichael
      ForsterChief
      Executive Officer














Date:
      May 13, 2010
            By/s/
      Louis FoxLouis
      FoxChief
      Financial Officer











Page
- 19























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 March
31, 2010 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:
      May 13, 2010
            By:/s/ Michael
      ForsterMichael
      ForsterChief
      Executive Officer







Page
- 20

















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 March
31, 2010 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:
      May 13, 2010
            By:/s/
      Louis
      FoxLouis
      FoxChief
      Financial Officer











Page
- 21











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 March 31, 2010 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:
      May 13, 2010
            By:/s/ Michael
      ForsterMichael
      ForsterChief
      Executive Officer











Page
- 22











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 March 31, 2010 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:
      May 13, 2010
            By:/s/ Louis
      FoxLouis
      FoxChief Financial
      Officer














Page
- 23