UNITED
STATES




SECURITIES AND EXCHANGE COMMISSIONWashington, 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 JUNE 30, 2008






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






FOR THE
TRANSITION PERIOD FROM ___________ TO __________








COMMISSION FILE NUMBER:0 – 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.
 YesxNo ̈





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, 2008, the issuer had
28,956,884 shares of its common stock issued and outstanding.







Page
- 1





POWER
SAVE ENERGY COMPANY


FORM
10-Q


QUARTER
ENDED JUNE 30, 2008


TABLE OF
CONTENTS


Part I - Financial
Information


Item
1- Financial StatementsBalance Sheet at June 30,
2008





Statement of Operations for the three and six months ended
June 30, 2008 and 2007





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





Notes to
Financial Statements





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


Item 3- Controls and
Procedures


Part
II - Other Information


Item 1 - Legal
Proceedings





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, 2008


ASSETS




ASSETSCurrent
      AssetsCash
      and Cash Equivalents
            
            $
            570,956Accounts
      receivable
            
            
            274,912Inventory
            
            
            1,266,507Prepaid
      expenses
            
            
            127,361Total
      current assets
            
            
            2,239,736Equipment,
      net of accumulated depreciation
            
            
            18,641Intangible
      assets, net of accumulated amortization
            
            
            10,703Other
      assets
            
            
            28,705Total
      assets$
            2,297,785LIABILITIES
      AND STOCKHOLDERS' EQUITYLiabilitiesCurrent
      liabilitiesAccounts
      payable
            
            $
            36,206Income
      taxes payable
            
            
            276,300Total
      current liabilities
            
            
            312,506Stockholders'
      equityPreferred
      stock, $.001 par value, 10,000,000 sharesAuthorized,
      none issued and outstandingCommon
      stock, $.001 par value, 100,000,000 sharesAuthorized, 28,956,884 issued and outstandingAdditional
      paid-in-capital
            
            
            1,336,461Retained
      earnings
            
            
            619,861Total
      stockholders' equity
            
            
            1,985,279Total liabilities and
      stockholders' equity
            
            $
            2,297,785











The
accompanying notes are an integral part of these financial
statements







F
- 1







POWER-SAVE
ENERGY COMPANY


STATEMENT OF OPERATIONS


FOR
THE THREE AND SIX MONTHS ENDED JUNE 30, 2008 and 2007




SIX
      MONTH
            
            
            THREE
      MONTHS2008
            
            
            2007
            
            
            2008
            
            
            2007Revenue,
      net
            
            $
            2,115,276
            
            
            $
            1,057,406
            
            
            $
            1,460,469
            
            
            $
            582,548Cost
      of salesMerchandise
            
            
            394,777
            
            
            
            151,079
            
            
            
            266,996
            
            
            
            94,265Other
      costs
            
            
            90,916
            
            
            
            39,423
            
            
            
            66,083
            
            
            
            22,674Total
      cost of sales
            
            
            485,693
            
            
            
            190,502
            
            
            
            333,079
            
            
            
            116,939Gross
      margin
            
            
            1,629,583
            
            
            
            866,904
            
            
            
            1,127,390
            
            
            
            465,609Operating
      expensesAdvertising
      and promotion
            
            
            129,680
            
            
            
            165,531
            
            
            
            88,006
            
            
            
            91,310Sales
      commissions
            
            
            546,164
            
            
            
            278,530
            
            
            
            293,316
            
            
            
            189,440General
      and administrative
            
            
            312,787
            
            
            
            145,677
            
            
            
            218,802
            
            
            
            94,116Total
      operating costs and expenses
            
            
            988,631
            
            
            
            589,738
            
            
            
            600,124
            
            
            
            374,866Net
      income (loss) before provision for income taxes
            
            
            640,952
            
            
            
            277,166
            
            
            
            527,266
            
            
            
            90,743Provision
      for income taxes
            
            
            193,989
            
            
            
            80,821
            
            
            
            146,677
            
            
            
            74,935Net
      income (loss)
            
            $
            446,963
            
            
            $
            196,345
            
            
            $
            380,599
            
            
            $
            15,808Earnings
      per common share:Basic
            
            $
            0.016
            
            
            $
            0.007
            
            
            $
            0.013
            
            
            $
            0.001Diluted
            
            $
            0.016
            
            
            
            N/A
            
            
            $
            0.013
            
            
            
            N/AShares
      used in computing earnings per shareBasic
            
            
            27,833,549
            
            
            
            27,031,168
            
            
            
            28,635,931
            
            
            
            27,031,168Diluted
            
            
            27,949,863
            
            
            
            N/A
            
            
            
            28,868,549
            
            
            
            N/A








The
accompanying notes are an integral part of these financial
statements




F
- 2





POWER
SAVE ENERGY COMPANY.


STATEMENTS OF CASH FLOWS


FOR
THE SIX MONTHS ENDED JUNE 30, 2008 AND 2007 (UNAUDITED)








2008
            
            
            2007Cash
      flows from operating activitiesNet
      income (loss)
            
            $
            446,963
            
            
            $
            196,345Adjustments
      to reconcile net income (loss) to net cashProvided
      by operating activities:Depreciation
      and amortization
            
            
            741
            
            
            
            729Stock
      based compensation expense
            
            
            43,547Changes
      in operating assets and liabilitiesIncrease
      in accounts receivable
            
            
            (228,489
            )
            
            
            (32,925Increase
      in inventory
            
            
            (1,155,639
            )
            
            
            (5,564Increase
      in prepaid expenses
            
            
            (117,361
            )(Increase)
      Decrease in accounts payable
            
            
            (10,827
            )
            
            
            4,645Increase
      in taxes payable
            
            
            158,142
            
            
            
            80,821Net
      cash provided (used) by operating activities
            
            
            (862,923
            )
            
            
            244,051Cash
      flows from investing activitiesIncrease
      in equipment
            
            
            (13,276
            )
            
            
            (4,468Increase
      in security deposit
            
            
            (28,705
            )Net
      cash provided (used) by investing activities
            
            
            (41,981
            )
            
            
            (4,468Cash
      flows from financing activitiesIssuance
      of common stock
            
            
            1,033,871Proceeds
      from line of credit, net
            
            
            
            
            
            
            (13,005Net
      cash provided (used) by financing activities
            
            
            1,033,871
            
            
            
            (13005Net
      increase (decrease) in cash and cash equivalents
            
            
            128,967
            
            
            
            226,578Cash
      and cash equivalents at beginning of period
            
            
            441,989
            
            
            
            89,910Cash
      and cash equivalents at end of period
            
            $
            570,956
            
            
            $
            316,488Supplemental
      disclosure of cash flow information:Income
      taxes paid
            
            $
            35,747











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 consolidated financial statements be read in
conjunction with the financial statements and notes thereto included in the
Company's Form 10KSB containing the Company's audited financial statements as of
and for the year ended December 31, 2007 filed with the Securities and Exchange
Commission. The results of operations for the six months ended June 30, 2008 are
not necessarily indicative of results to be expected for the entire fiscal year
ending December 31, 2008.




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 June 30, 2008 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.




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.







F
- 4





POWER
SAVE ENERGY COMPANY.


NOTES
TO FINANCIAL STATEMENTS





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 has adopted Statement of Financial Accounting Standards No. 123,
"Accounting for Stock-Based Compensation" ("SFAS No. 123"), which establishes a
fair value method of accounting for stock-based compensation plans.




The
provisions of SFAS No. 123 allow companies to either record an expense in the
financial statements to reflect the estimated fair value of stock options to
employees, or to continue to follow the intrinsic value method set forth in
Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees", but to disclose on an annual basis the pro-forma effect on net
income (loss) and net income (loss) per share had the fair value of the stock
options been recorded in the financial statements. SFAS No. 123 was amended by
SFAS No., 148, which now requires companies to disclose in interim financial
statements the pro-forma effect on net income (loss) and net income (loss) per
common share of the estimated fair value of stock options issued to
employees.




In
accordance with SFAS No. 123, the cost of stock options and warrants issued to
non-employees is measured at the grant date based on the fair value of the
award. The fair value of the stock-based award is determined using the
Black-Scholes option-pricing model. The resulting amount is charged to expenses
on the straight-line basis over the period in which the Company expects to
receive benefit, which is generally the vesting period.




Pro Forma
Financial Disclosure - In accordance with SFAS No. 123, the Company will provide
footnote disclosure with respect to stock-based employee compensation. The value
of a stock-based award will be determined using the Black-Scholes option-pricing
model, whereby compensation cost is the fair value of the award as determined by
the pricing model at the grant date or other measurement date. The resulting
amount will be charged to expense on the straight-line basis over the period in
which the Company expects to receive benefit, which is generally the vesting
period.




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 potential dilutive common
shares outstanding during the period.




Advertising




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




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.







F
- 5





POWER
SAVE ENERGY COMPANY.


NOTES
TO FINANCIAL STATEMENTS





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
February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for
Financial Assets and Liabilities, including an amendment of FASB Statement No.
115" ("SFAS No. 159"). SFAS No. 159 permits entities to choose, at specified
election dates, to measure many financial instruments and certain other items at
fair value that are not currently required to be measured at fair value.
Unrealized gains and losses shall be reported on items for which the fair value
option has been elected in earnings at each subsequent reporting date. SFAS No.
159 is effective for fiscal years beginning after November 15, 2007. Early
adoption is permitted as of the beginning of a fiscal year that begins on or
before November 15, 2007, provided the entity also elects to apply the
provisions of SFAS No. 157 "Fair Value Measurements" ("SFAS No. 157"). The
Company is currently assessing the impact that SFAS No. 159 will have on its
financial statements.




In
December 2007, the FASB issued SFAS No. 160, "Noncontrolling Interests in
Consolidated Financial Statements", which is an amendment of Accounting Research
Bulletin ("ARB") No. 51. This statement clarifies that a noncontrolling interest
in a subsidiary is an ownership interest in the consolidated entity that should
be reported as equity in the consolidated financial statements. This statement
changes the way the consolidated income statement is presented, thus requiring
consolidated net income to be reported at amounts that include the amounts
attributable to both parent and the noncontrolling interest. This statement is
effective for the fiscal years, and interim periods within those fiscal years,
beginning on or after December 15, 2008. Based on current conditions, the
Company does not expect the adoption of SFAS 160 to have a significant impact on
its results of operations or financial position.


In
December 2007, the FASB issued SFAS No. 141 (revised 2007), "Business
Combinations." This statement replaces FASB Statement No. 141, "Business
Combinations." This statement retains the fundamental requirements in SFAS 141
that the acquisition method of accounting (which SFAS 141 called the purchase
method) be used for all business combinations and for an acquirer to be
identified for each business combination. This statement defines the acquirer as
the entity that obtains control of one or more businesses in the business
combination and establishes the acquisition date as the date that the acquirer
achieves control. This statement requires an acquirer to recognize the assets
acquired, the liabilities assumed, and any noncontrolling interest in the
acquiree at the acquisition date, measured at their fair values as of that date,
with limited exceptions specified in the statement. This statement applies
prospectively to business combinations for which the acquisition date is on or
after the beginning of the first annual reporting period beginning on or after
December 15, 2008. The Company does not expect the adoption of SFAS 160 to have
a significant impact on its results of operations or financial
position.










F
- 6





POWER
SAVE ENERGY COMPANY.


NOTES
TO FINANCIAL STATEMENTS





Note 4 - Commitments and
Contingencies




Lease




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
      EndingDecember
      31,2008
            
            $22,5002009
            
            45,3982010
            
            46,4822011
            
            47,8772012
            
            49,3132013
            
            25,021Total
      minimum future rental payments
            $236,591





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, 2008. The balance due
on the line of credit is $-0-.




On or
about September 2007, the Company was served with lawsuit from a former
director/officer in the United States District Court, Southern District of New
York (Case No. 07CIV4770 (SCR)), for breach of contract, quantum meruit, and
unjust enrichment. Between November 2000 and April 2006, the former director /
officer claim the company owes $113,400.00 from loans the defendant made and
approximately $500,000.00 in compensation. The Company was unaware of the
allegations prior to the commencement of the lawsuit. The company's former Chief
Executive Officer, on behalf of the Company, has hired counsel to defend the
lawsuit which is in the early stages of discovery.







See note
8 for additional commitment regarding the acquisition of U.S. Energy
Conservation Corporation.




Note
5 - Income Taxes




The
provision for income taxes consists of the following:




2008
            
            
            
            2007Federal
      income tax
            $
            146,710
            
            
            $
            62,955State
      income tax
            
            47,179
            
            
            
            17,866Total
            $
            193,889
            
            
            $
            80,821Income
      taxes based on statutory tax rates are as followsFederal
      income taxes
            $
            215,000
            
            
            $
            95,638State
      income tax
            
            61,300
            
            
            
            24,986Other
            
            (82,311
            )
            
            
            (39,803)Total
            $
            193,889
            
            
            $
            80,821











F
- 7




















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, 2008 is as follows:




Intangible
      assets, at cost
            $
            12,510Less
      - amortization allowed
            
            1,807$
            10,703





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 intends to account for 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 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.





Options


On May
16, 2008, the Company issued 1,450,000 stock options to several service
providers and consultants to purchase shares of common stock at $2.01 per share.
These options expires on May 16, 2008and are subject to certain vesting
requirements.  The options were valued at $43,547 using the
Black-Scholes formula for valuing options.  The variables used in the
calculation were a risk-free interest rate of 2.75%, expected volatility of 40%
and a two year maturity.





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




Acquisition


On April
15, 2008, the Company entered into a Acquisition Agreement with U.S. Energy
Conservation Corporation (hereinafter "U.S. Energy"), a California corporation
pursuant to which the Company agreed to acquire substantially all of U.S. Energy
in exchange for cash and common shares of the Company outlined
below.




The
Company paid Twenty Five Thousand Dollars ($25,000.00) in cash for upon closing
with additional future payments outlined below.




Purchase Price upon UL
Certification of Wattman 180. The Company agreed to pay U.S. Energy upon
UL Certification of the Wattman 180 $50,000.00 in cash, and One Hundred Thousand
(100,000) common shares and Five Hundred Thousand (500,000) options strike price
of $0.75 of Power-Save Energy Co. common shares rule 144 issued with vesting
period of 1 year from date of issue.  As of July 28, 2008, UL
certification has not been received.




Additionally,
the Company has agreed to pay $1,200,000.00 in the form of royalty payments of
$600.00 for each sale of the Wattman (current 180 amp model), Four Hundred
Dollars $400.00 for each sale of new 120 amp Wattman, and Two Hundred Dollars
$200.00 for each sale of new 60 amp Wattman. In the event at the end of Eighteen
(18) months after the date of UL Certification of the Wattman 180 the Buyer has
not paid the full $1,200,000.00 of royalty payments to the Seller, the Buyer
agrees to alter the payment to be a minimum of $5,000 per month.




Note 9 -
Litigation


On or
about September 6, 2007, the Power-Save Energy Company was served with a lawsuit
from a former officer of the Predecessor Company, Safari Associates, Inc. The
former officer, Stephen Steeneck, alleges breach of contract, quantum meruit,
unjust enrichment and other state causes of actions for failure to remit payment
on loans Mr. Steeneck alleges he made to Safari Associates, Inc. and for failure
to pay deferred compensation in the amount of $500,000.00. Power-Save Energy
Company is in the discovery stage.


On or
about July 18, 2008, Power-Save Energy Company was served with a lawsuit for
wrongful death from an auto accident involving Michael Forster’s son, Alex
Forster.  Although Michael Forster is the Company’s Chief Executive
Officer and Chairman, Power-Save Energy believes this is a frivolous lawsuit
against the Company because Alex Forster has never worked for the Company in any
capacity.  Power-Save Energy intends to rigorously defend this
suit.






F
- 8




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.




On April
15, 2008, we entered into a Acquisition Agreement with U.S. Energy Conservation
Corporation (hereinafter "U.S. Energy"), a California corporation pursuant to
which the Company agreed to acquire substantially all of U.S. Energy in exchange
for cash and common shares of the Company. The Company paid Twenty Five Thousand
Dollars ($25,000.00) in cash for the assets upon closing with additional future
payments. Purchase
Price upon UL Certification of Wattman 180 . The Company agreed to pay
U.S. Energy upon UL Certification of the Wattman 180 $50,000.00 in cash, and One
Hundred Thousand (100,000) common shares and Five Hundred Thousand (500,000)
options strike price of $0.75 of Power-Save Energy Co common shares rule 144
issued with vesting period of 1 year from date of issue.




Additionally,
the Company has agreed to pay $1,200,000.00 in the form of royalty payments of
$600.00 for each sale of the Wattman (current 180 amp model), Four Hundred
Dollars $400.00 for each sale of new 120 amp Wattman, and Two Hundred Dollars
$200.00 for each sale of new 60 amp Wattman. In the event at the end of Eighteen
(18) months after the date of UL Certification of the Wattman 180 the Buyer has
not paid the full $1,200,000.00 of royalty payments to the Seller, the Buyer
agrees to alter the payment to be a minimum of $5,000 per month.




U.S.
Energy the business of manufacturing, sales and distribution of certain
proprietary products and operates under the name U.S. Energy Conservation Corp,
(the "Business"), with its principal place of business located in California.
HID lighting applications include streetlights, parking garages, outdoor parking
areas of all types, warehouse applications like big box stores, and commercial /
industrial workplaces.




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
- 11







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




SFAS No.
155, "Accounting for Certain Hybrid Financial Instruments"





In
February 2006, the FASB issued SFAS No. 155, "Accounting for Certain Hybrid
Financial Instruments", which amends SFAS No. 133, "Accounting for Derivatives
Instruments and Hedging Activities" and SFAS No. 140, "Accounting for Transfers
and Servicing of Financial Assets and Extinguishment of Liabilities". SFAS No.
155 amends SFAS No. 133 to narrow the scope exception for interest-only and
principal-only strips on debt instruments to include only such strips
representing rights to receive a specified portion of the contractual interest
or principle cash flows. SFAS No. 155 also amends SFAS No. 140 to allow
qualifying special-purpose entities to hold a passive derivative financial
instrument pertaining to beneficial interests that itself is a derivative
instrument. We do not anticipate that the adoption of this standard will have a
material impact on our financial statements.





SFAS No.
156, "Accounting for Servicing of Financial Assets"





In March
2006, the FASB issued SFAS No. 156, "Accounting for Servicing of Financial
Assets", which provides an approach to simplify efforts to obtain hedge-like
(offset) accounting. This Statement amends FASB Statement No. 140, "Accounting
for Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities", with respect to the accounting for separately recognized servicing
assets and servicing liabilities. The Statement (1) requires an entity to
recognize a servicing asset or servicing liability each time it undertakes an
obligation to service a financial asset by entering into a servicing contract in
certain situations; (2) requires that a separately recognized servicing asset or
servicing liability be initially measured at fair value, if practicable; (3)
permits an entity to choose either the amortization method or the fair value
method for subsequent measurement for each class of separately recognized
servicing assets or servicing liabilities; (4) permits at initial adoption a
one-time reclassification of available-for-sale securities to trading securities
by an entity with recognized servicing rights, provided the securities
reclassified offset the entity's exposure to changes in the fair value of the
servicing assets or liabilities; and (5) requires separate presentation of
servicing assets and servicing liabilities subsequently measured at fair value
in the balance sheet and additional disclosures for all separately recognized
servicing assets and servicing liabilities. SFAS No. 156 is effective for all
separately recognized servicing assets and liabilities as of the beginning of an
entity's fiscal year that begins after September 15, 2006, with earlier adoption
permitted in certain circumstances. The Statement also describes the manner in
which it should be initially applied. The adoption of SFAS No. 156 did not have
a material impact on our financial statements.





SFAS No.
157, “Fair Value Measurements”





In
September 2006, the FASB issued SFAS No. 157, which defines fair value,
establishes a framework for measuring fair value in generally accepted
accounting principles, and expands disclosures about fair value measurements.
 This Statement applies to other accounting pronouncements that require or
permit fair value measurements.  This Statement is effective for financial
statements issued for fiscal years beginning after November 15, 2007, and
interim periods within those fiscal years.  The adoption of SFAS No. 157
did not have a material impact on our financial statements.





SFAS No.
158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement
Plans”





In
September 2006, the FASB issued SFAS No. 158, “Employers’ Accounting for Defined
Benefit Pension and Other Postretirement Plans, an amendment of FASB Statements
No. 87, 88, 106 and 132-R.”  SFAS No. 158 requires an entity to recognize
in its statement of financial condition the funded status of its defined benefit
postretirement plans, measured as the difference between the fair value of the
plan assets, and the benefit obligation.  SFAS No. 158 also requires an
entity to recognize changes in the funded status of a defined benefit
postretirement plan within accumulated other comprehensive income, net of tax,
to the extent such changes are not recognized in earnings as components of
periodic net benefit cost.  SFAS No. 158 is effective as of the end of the
fiscal year ending after December 15, 2006.  The adoption of SFAS No. 158
did not have a material effect on the Company’s financial condition, results of
operations, or cash flows.





In
December 2007, the FASB issued SFAS No. 141(R) “Business Combinations”,
(“SFAS 141(R)”). This Statement replaces the original FASB Statement No. 141.
This Statement retains a fundamental requirements in Statement 141 that the
acquisition method of accounting (which Statement 141 called the purchase
method) be used for all business combinations and for an acquirer to be
identified for each business combination. The objective of this SFAS 141(R) is
to improve the relevance, and comparability of the information that a reporting
entity provides in its financial reports about a business combination and its
effects. To accomplish that, SFAS 141(R) establishes principles and requirements
for how the acquirer: (1) Recognizes and measurers in its financial statements
the identifiable assets acquired, the liabilities assumed, and any
noncontrolling interest in the acquiree. (2) Recognized and measurer the
goodwill acquired in the business combination or a gain from a bargain purchase.
(3) Determines what information to disclose to enable users of the financial
statements to evaluate the nature and financial effects of the business
combination. This Statement apples prospectively to business combinations for
which the acquisition date is on of after the beginning of the first annual
reporting period beginning on or after December 15, 2008 and may not be applied
before that date. The Company does not expect the new standard to have any
material impact on its financial statements.




Page
- 12





In
February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
Financial Assets and Financial Liabilities.” SFAS 159 permits entities to choose
to measure many financial instruments, and certain other items, at fair value.
SFAS 159 applies to reporting periods beginning after November 15, 2007. The
adoption of SFAS 159 is not expected to have a material impact on the Company’s
financial condition or results of operations.





In
December 2007, the FASB issued SFAS No. 160 “Noncontrolling Interests in
Consolidated Financial Statements – an amendment of ARB No. 51”.(“SFAS
160”). This Statement amends the original Accounting Review Board (ARB) NO. 51
“Consolidated Financial Statements” to establish accounting and reporting
standards for the noncontrolling interest in a subsidiary and for the
deconsolidation of a subsidiary. It clarifies that a noncontrolling interest in
a subsidiary is an ownership interest in the consolidated entity that should be
reported as equity in the consolidated financial statements. This Statement is
effective for fiscal years and interim periods within those fiscal years,
beginning on or after December 15, 2008 and may not be applied before that date.
The Company does not currently expect the new standard to have any material
impact on its 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 six month period ended June 30, 2008 was $2,115,276, compared to
$1,057,406 for the corresponding period in 2007. This was an increase of
$1,057,870, or 100% as the Company continued to increase sales of its electric
saving devices for both homes and commercial establishments. During The month of
June, 2008, the Company started promoting its solar line of products which did
not have a material effect on revenue for the period ended June 30, 2008. The
gross profit for the six months ended June 30, 2008 was $1,629,583, an increase
of $762,079 or 88% over the six months ended June 30, 2007. The gross profit
margin for the six months ended June 30, 2008 was 77% compared to 82% for the
six months ended June 30, 2007. The decrease in gross profit was due to the
increase in commercial sales and the introduction of the new line of solar
products.





Advertising
and marketing expenses for the six months ended June 30, 2008 were $129,680, a
decrease of $35,851 from the six months ended June 30, 2007, due to television
advertising in early 2007. The Company expects advertising and marketing
expenses to increase in the second half of the year due to new television
advertising for the solar energy products which began in June 2008.Sales
commissions for the six months ended June 30, 2008 were$546,164 compared to
$278,530 for the corresponding period in 2007. The increase of $267,634 or 96%
is directly correlated to the increase in revenue.





General
and administrative expenses for the six months ended June 30, 2008 were
$312,787, an increase of $167,110, or 114%. The major increase during the six
months ended June 30, 2008 were for travel, consulting and product certification
and other fees related to the new solar and wind products. In addition, the
general and administrative expenses include $43,547 in stock based compensation
for the six months ended June 30, 2008.





The
Company recorded a provision of approximately $194,000 for federal and state
income taxes compared to $80,000 for the six months ended June 30,
2007.





Three Months Ended June 30,
2008 Compared to Three Months ended June 30, 2007


Revenue
for the three months ended June 30, 2008 were $1,460,469 compared to $582,548
for the three months ended June 30, 2007, or an increase of $877,921 or
approximately 150% for the quarter.  Gross profit for the three months
ended June 30, 2008 was $1,127,390 compared to $465,609, an increase of $661,781
or 142%. The gross profit margin for the three months ended June 30, 2008 was
77% compared to 80% for the three months ended June 30, 2007.





Operating
expenses for the three months ended June 30, 2008 were $600,124 compared to
$374,866 for the three months ended June 30, 2007, an increase of $221,257 or
60%, which was a much smaller increase than that of revenue growth. As a result
of sales which were 250% higher than the corresponding period in 2007and
operating expense increasing at 60%, the net income before provision for income
taxes increased to $527,286 from $90,743 or 481% for the three months ended June
30, 2007.





Liquidity
and Capital Resources.


As of June 30, 2008 the current assets
exceeded the current liabilities by $1,927,230. During the period ended June 30,
2008, the Company issued a total of 1,925,716 restricted shares of common stock
with the Company receiving net proceed of approximately $1,033,081.The proceeds
were used to purchase for inventory Solar and Wind products, fund the
acquisition of "US Energy" and prepay for television commercials for the two new
products. The Company is profitable and has been able to generate sufficient
funds from its current operations to fund its current level of
activity.




Page
- 13




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.





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, 2008 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:




Page
- 14





−
            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, 2008. 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, 2008, 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.





PART
II - OTHER INFORMATION





ITEM
1 Legal Proceeding .




On or
about September 6, 2007, the Power-Save Energy Company was served with a lawsuit
from a former officer of the Predecessor Company, Safari Associates, Inc. The
former officer, Stephen Steeneck, alleges breach of contract, quantum meruit,
unjust enrichment and other state causes of actions for failure to remit payment
on loans Mr. Steeneck alleges he made to Safari Associates, Inc. and for failure
to pay deferred compensation in the amount of $500,000.00. Power-Save Energy
Company is in discovery stage of this lawsuit.





On or
about July 18, 2008, Power-Save Energy Company was served with a lawsuit for
wrongful death from an auto accident involving Michael Forster’s son, Alex
Forster.  Although Michael Forster is the Company’s Chief Executive
Officer and Chairman, Power-Save Energy believes this is a frivolous lawsuit
against the Company because Alex Forster has never worked for the Company in any
capacity.  Power-Save Energy intends to rigorously defend this
suit.





ITEM
1A. Risk Factors.




Not
applicable.




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




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 intends to account for 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 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.




Page
- 15





Options


On May
16, 2008, the Company issued 1,450,000 stock options to several service
providers and consultants to purchase shares of common stock at $2.01 per share.
These options expires on May 16, 2008and are subject to certain vesting
requirements.  The options were valued at $43,547 using the
Black-Scholes formula for valuing options.  The variables used in the
calculation were a risk-free interest rate of 2.75%, expected volatility of 40%
and a two year maturity.





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





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 5, 2008
            By /s/
      Michael
      ForsterMichael
      ForsterChief
      Executive Officer










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